Why Does Responsible Business Matter
[UMFCCI]
May 30, 2019
What do we mean by responsible business, responsible investment? Others here, who are more expert on this topic, I think have a better and fuller definition. To me that basically means you are doing business first according to laws and rules and with ethical standards – but also with a commitment to bringing ethics to a host community and to the country and to protecting and promoting human rights. It’s partly about following the rules, but it’s also very much about corporate culture and attitude. You need both of those.
But what I said worked, I think. While traveling around this country I’ve met many people, some of whom have said “you know, we don’t really want investment,” which is a little bit shocking to me. Why would you not want investment? And it’s because for some people here, their experience with investment hasn’t been very good, very largescale. And I will point out this is not unique to Myanmar (we have some history in the United States with problematic investment as well): investment that was done, business that was done involving lots of corruption – sorry I’m feeling a little bit undiplomatic here please forgive me – negative social impact, farmers having their land confiscated perhaps, projects that did a lot of harm to the environment, projects that didn’t bring any noticeable benefits to the local communities, projects that didn’t resulted in tax revenue going to the Union Government. That kind of business, which was more prevalent in the past, that’s how a small number of people gets rich while the rest of the country remains poor. And honestly, that’s not what the Myanmar people or Myanmar government wanted.
So again why does it matter? I would argue that there’s two end goals that you can look at for this. First, responsible business brings direct benefits to the people of Myanmar and to the nation. Responsible business means that global workers get hired, and get trained, and they get treated well according to international labor standards; that businesses consult with local communities and include local communities, and taxes result as part of those local communities. They pay their taxes. They work with local business partners. They practice transparency. And they avoid discrimination and promote diversity. They [engage in] corporate social responsibility. All these things bring real benefits to local communities, which is important.
This kind of business also over time will promote peace and stability, and prosperity, [and] in turn all those things are good for business. Second way of looking at this, is that the more Myanmar is capable of creating a culture of good business practices, the more high quality companies from around the world will want to come and join Myanmar. If you have a market in which companies are expected to follow the laws and regulations, and if those rules are clear, and if companies don’t feel like they have to deal with corruption problems, you are going to try and get more and more good companies to invest and work with you here.
Also, as Ambassador Schmidt highlighted, to the extent you are able to continue improving labor practices, environmental practices, you are going to find the markets, international markets, including in the U.S., more open. There is a big move in the U.S., just as in the EU, where consumers are demanding that products that they buy be developed with good labor, safe labor standards, and with care for the environment. So the more that you move up in the quality level there, the more that you have access to markets.
So fostering good business practices will directly benefit local communities and [the] national budget and the environment. But it will also help Myanmar do something that is critically important, which is integrate fully into the international economy. That’s the path to real prosperity that I think experience has shown. And – last point – for Myanmar companies, as international companies look to do business here, they’re going to look to do business with Myanmar companies that have the good reputations. Some of that, of course, will be that they are good business people, they have shown that they can make money. But certainly for U.S. companies it’s a broader definition of good business: good reputations, that they are honest, they treat their workers well, they pay their time slips. That’s the good business that U.S. companies will do business with.
But we always emphasize, here at the U.S. government, with our own companies, the importance of responsible investment. We are proud of the U.S. companies that are here and around the world. It is partly following the law but also corporate culture and attitudes, so the U.S. companies that are investing here, their time and training in promoting Myanmar workers. They’re following the laws and regulations. They’re paying their taxes. They’re refusing to pay bribes. (Most of this is corporate culture, but also under our laws, if they pay bribes they will go to jail in the United States.) They’re protecting the environment. They’re following the legal practices. I’m not saying that every U.S. company is perfect, but overall I think we have a pretty good track record.
The last point I want to make is that we’re seeing growing trade, we’re seeing growing investment. There’s a narrative that I hear, that I sometimes hear, that Myanmar is only going to get investment from the East. I’m here to say that’s not true. That’s not to discourage you from getting investment from the East; by all means, if there are good quality investments from the East, absolutely you should take them. But I would remind you that a lot of good companies in the West, in the United States, they are coming here. They are serious about doing good business, and doing business properly here. And they’re responding to the reforms that the Myanmar government is making. With every new set of economic reforms, we see more U.S. companies coming here and looking at opportunities. I congratulate UMFCCI and its efforts to date.
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