Ladies and gentlemen,
Small and medium-sized enterprises and sustainable global development. I am pleased to be able to address you on a subject with such far-reaching implications. Johannesburg is still fresh in our minds, and our government is working out a plan of action based on its conclusions.
Most of you who represent small and medium-sized enterprises in the West might feel that it’s all very far away. I can well imagine that, as there is plenty to worry about closer to home. But when you stop to think about the continuing integration of the world economy, that viewpoint simply doesn’t hold water.
You, as SMEs, are exporting and importing more and more products to and from developing countries. And you are contracting more of your production to firms abroad – often to developing countries. So you will also have to stop and ask whether the wood used to manufacture the furniture you sell comes from sustainably managed forests. Whether the people who make those cute baby clothes in India are getting a minimum wage. And what about the insecticides they spray on green beans in Senegal?
Supply chain management is rapidly becoming everybody’s business. This afternoon’s theme affects us all. Your very presence at this breakout session acknowledges that fact.
I would like to discuss three points in particular. How can SMEs play a bigger role in developing countries? What can women do? And how do we exercise social responsibility in business?
A bigger role for SMEs
SMEs play a key role in every economy. In the Netherlands, our six thousand commercial giants might be at the helm of the economy. But it’s the sixhundred thousand thousand small and medium-sized businesses that keep it afloat. And it’s the same all over the world.
The World Bank tells us that in some countries small-scale trading by women accounts for thirty to fifty percent of GDP. SMEs also play an extremely important role as suppliers to larger companies. Foreign investments in transitional and developing countries are no more than islands if they fail to draw local SMEs into the chain. For the host country this is often precisely where the main benefit lies. In my view, SMEs could play a bigger role in several ways.
We ourselves are concerned to promote transfer of knowledge, investment, and financial instruments. We are going to extend our programmes for stimulating the involvement of the private sector. Both in money and in number of countries. I have asked our embassies in the developing countries we work with most to discuss these matters with local business communities and community-based organisations. And to identify any obstacles to investment and private initiative.
Removing those obstacles has far-reaching consequences for SMEs. Large companies are usually in a position to make their own arrangements. But small businesses are far more dependent on good governance, land reform and infrastructure.
During a visit to Ethiopia and Eritrea earlier this month, we discussed improvements to the ports of Eritrea and better communications with the Ethiopian hinterland. These projects would benefit small businesses in both countries. On top of that, they would help to thaw the frosty relations between Ethiopia and Eritrea. Just remember what the port of Rotterdam did to restore our relationship with Germany after the Second World war.
One of the problems we keep encountering is the low level of cooperation among SMEs in the developing countries we work with. Organisations representing SMEs in the West must do all they can to help their counterparts in developing countries improve their representation.
Needless to say, you yourselves will benefit as well, because SME organisations in developing countries make excellent contacts when you’re looking for new business partners. They also play an important role in developing their countries’ poverty reduction strategies. In fact, donors insist that civil society, including SMEs, take part in the process.
The role of women
One of the principles of sustainable global development is equal opportunity for all. And one of the implications is that we’d like to see more women in business. We’d also like to see more women in our trade and investment missions to the Global South. Next month I shall be visiting India with Joop Wijn, our Minister for Foreign Trade, and then too, I hope to find more businesswomen on the list of participants.
Studies have repeatedly shown that women make reliable entrepreneurs. They are industrious and dependable when it comes to repaying loans. They don’t squander their profits, but reinvest in their businesses.
What a pity, then, that women in many developing countries have less access to the means of production. It’s a pity for the women themselves, and an even greater pity for the economies of those countries. A World Bank survey shows that more gender equality in the sub-Saharan region would boost economic growth by up to one-and a-half percent annually.
Our missions in developing countries campaign for the right of women to own land. For women to have better access to information on the Internet and better access to credit facilities.
For our part, we discuss these issues with developing countries, seeking ways in which they could implement the women’s rights enshrined in international conventions. The Netherlands is eager to help.
But the business community, and SMEs in particular, have an important role to play. It’s in your own interest to work with reliable partners, whether in trade or investment. Make the extra effort and find those women entrepreneurs.
Corporate social responsibility
Another cornerstone of sustainable global development is the principle of corporate social responsibility. The Johannesburg Summit underscored this point yet again. The guidelines for multinationals issued by the Organisation for Economic Cooperation and Development include a wide-ranging code of conduct. One that covers everything from human rights to fair taxation. The UN Global Compact prescribes a slightly less comprehensive code.
Both are relevant to SMEs as well. You, too, will be under growing pressure from consumers to show your commitment to social and environmental standards. Your commercial interests are at stake, but even more important, I believe, is your personal responsibility in these matters.
During a visit to Vietnam two years ago, I saw how Dutch businesses operating there were responding to these moral demands. They invest more in training, in family-planning and road-safety campaigns, and in measures to combat Aids and child labour. In short, they go a step further than the law requires. That’s what corporate social responsibility is all about. And that’s the attitude we need.
Hans de Boer, chairman of the Royal Association MKB-Nederland, has put forward the excellent idea of establishing a monitoring institute authorised to issue a seal of approval to reliable companies. This would separate the wheat from the chaff and facilitate contact with SMEs in other parts of the world. Moreover, there are two sides to the coin. A seal of approval would make life easier for SMEs in developing countries. This is exactly the kind of extra step I mean. A step taken by the sector itself, in its own interests, without any need for government to get involved. So congratulations for this initiative!
In conclusion, I would like to solicit your support for SME organisations in developing countries. I would ask you to be aware of the contribution women can make, and of your own responsibility to society. Help to foster sustainable global development. And perhaps we women can help the men along.