Xu Haoliang: Common Prosperity and Win-win Cooperation: Industrial Opportunities along the Belt and RoadNov 11, 2016
Opening Remarks Business Dialogue
UN Assistant Secretary General, UNDP Assistant Administrator and RBAP Director
Dear Mr. Zhang Xiaoqiang,
Mr. Ji Bin,
Distinguished guests, Ladies and gentlemen,
On behalf of the United Nations Development Programme, I would like to thank you all for joining us today for this Business Dialogue that brings together members of the private sector, government officials and UNDP representatives from many Belt and Road countries. Let me start by acknowledging the China Center for International Economic Exchanges (CCIEE) and Outlook Weekly for their support in co-organizing this key event with us.
Today’s discussions will focus on a crucial aspect of our work at UNDP, specifically on enhancing common prosperity and win-win cooperation looking at the business opportunities that can derive from the Belt and Road Initiative (BRI).
As we have a whole morning of discussion ahead, I will try to keep my speech a concise one, reflecting with you on three main points.
First, the role of the private sector for the BRI. The initiative promises to bring great opportunities to the countries along the routes in the Asian, European and African regions, countries that are for the majority emerging economies and developing countries. Considering that up to now about 70 countries have already engaged in the initiative, we can estimate that the BRI might involve about 4 and a half billion people with a total of about more than US$ 20 trillion aggregate economic volume.
Those numbers signify how this initiative touches important economic aspects and the role of the private sector will be particularly crucial to generate growth, bring new investments and create business opportunities for a big part of the world population.
Worldwide the private sector accounts for more or less 60% of GDP, 80% of capital flows, and it generates 90% of jobs in developing countries. This can make us understand how the role of the private sector not only serves to push economic growth but it is also key in contributing to human development. I would like to cite China as an example where in the past decades there has been a fifty-fold increase in per capita income, and hundreds of millions of people have been lifted out of poverty. This would not have happened without the contribution of thriving businesses. The Chinese example shows the instrumental role of the private sector in China’s successful attainment of development in the past and makes us also understand how crucial private sector contribution will be in supporting the implementation of the SDGs in the years to come.
With critical human resources and technological capacities, the private sector is one of the fundamental driving forces behind economic growth and societal transformation. Driven by market forces and with appropriate amount of government regulations, the private sector is not only able to generate short-term profits, but also serves as the center for technological innovation and job creation, providing long-term benefits for the entire society.
Second, while the investments can be attractive on their own right, responsible and sustainable business practices are essential. Risks and challenges are also connected to the role of the private sector in the sustainable development of our societies especially when speaking about investments abroad, a case that applies particularly well to the Belt and Road initiative. Chinese companies are the third largest investor in the world – their direct investments overseas reached US$123.1 billion in 2014 – and they are key actors in the Belt and Road investments projects. This is certainly very encouraging news for global development. However, to guarantee long-term success of these investments and thus the success of the BRI, the private sector should consider a series of practical issues particularly crucial when investing abroad.
These include making sound investments and ensuring that they match recipient countries’ needs, effectively promoting sustainable development for countries involved, bringing real benefits to local populations, managing risks and generating returns on investments, while fully considering local context. In other words this can be summarized with the strengthening of sustainable business practices. By doing so, companies can increase their competitive edge, advance their market share, fuel innovation and new profit areas and boost stakeholder value. On the other hand sustainable business practices will also contribute to the improvement of the livelihood of the people and countries along the Belt and Road promoting eventually regional stability and mutual trust.
UNDP is committed to convene and facilitate various stakeholders, including the private sector to ensure an integrated approach tackling this enormous multi-dimensional task of sustainable development. We recognize that strong partnerships with the private sector and with civil society organizations all play an essential role in the development process to ensure good governance, improvements in institutional capacities, an equitable trade regime and sustainable development dividends.
Third, Solutions to ensure sustainable development go hand-in-hand with economic gains. UNDP can assist effectively on these matters. UNDP can provide support to governments in recipient countries and foreign private investors in the development of sustainable planning methods and strategies. We can facilitate and enable an investment environment which will ultimately ensure long-term development financing for infrastructure and productive capacity with green financing principle. Specifically, UNDP’s projects if coupled well with investments, can help de-risk investments, remove policy barriers, and build constructive linkages with local and national governments. UNDP can support the private sector through innovative business practices building on sustainable development approaches as an integral part of daily business operations.
Ladies and Gentlemen,
In conclusion, it’s crucial to keep in mind that while economic progress produces substantial dividends for people as we have witnessed in China, when social and environmental responsibility are embedded at the core of business practices, the human development gains will be certainly enlarged. The key stakeholders of the Belt and Road Initiative such as the members of the private sector will have a pivotal role to play especially if their objective will be to go beyond solely economic prospects.
By embracing the core strategy of the Belt and Road Initiative, they can help create new opportunities in actualizing development and building connections towards shared prosperity for the countries and people involved. We at UNDP stand ready to support and work together with all stakeholders to guarantee the long-term success and sustainable development of the Belt and Road initiative.
The event today provides a key opportunity for effective exchanges between business sectors and BRI countries, to match the investment interests with the local actual needs. It also represents a key occasion to discuss various experiences and draw from those important lessons learned. This will serve as a basis to explore what the best future actions will be. In that spirit, I invite all of you present today to share your views and to be as challenging and as innovative as possible. Once again, I would like to thank you all for joining us today, and I sincerely look forward to the dynamic exchange of ideas!