The Akufo-Addo administration’s zeal to involve the private sector in implementation and attainment of the Sustainable Development Goals (SDGs) is a policy that is in tandem with current development practice.
In a speech at the UN General Assembly last year, President Nana Addo Dankwa Akufo-Addo underscored the need for African countries to empower the private sector to contribute toward attainment of the Sustainable Development Goals (SDGs).
Two weeks ago the president met with CEOs of local and multinational companies in Ghana, during which time he urged them to support the SDGs’ implementation and attainment.
What are SDGs?
The most widely-cited definition of sustainable development (SD) is one put forward by the World Commission on Environment and Development (1987), which says that SD is “Development that meets the needs of the present generation, without compromising the ability of future generations to meet their own needs”.
With the concept of sustainability, it is better understood that authentic development enhances the sustainability of a country. It is a process of political, social and environmental change that need not necessarily involve growth. In fact, growth can be recorded without development, depending on a country’s priorities. In practice, some countries in the past attained real GDP growth without the involvement of a large proportion of the population contributing to economic activities.
In 2015, more than 190 world leaders committed to 17 Sustainable Development Goals (SDGs) to help all of us end extreme poverty and fight inequality in society.
The goals are in order of importance: 1. No poverty; 2. No hunger; 3. Good health; 4. Quality education; 5. Gender equality; 6. Clean water and sanitation; 7. Renewal energy; 8. Jobs and economic growth; 9. Industry, innovation and infrastructure; 10. Reduced inequality; 11. Sustainable cities and communities; 12. Responsible consumption; 13. Climate action; 14. Life below water; 15. Life on water; 16. Peace and Justice; 17. Partnership for the goals.
Each of the CEOs carried a miniature placard that contained one of the 17 goals, perhaps to demonstrate their commitment. But the extent to which they can volunteer the resources of their companies to the SDGs’ cause (more on this below) remains to be seen.
The 17 goals collectively emphasise the need for economic development that leaves no one behind and gives everyone a fair chance of leading a decent life. It is interesting to note that the 17th Goal calls for a global “Partnership for the attainment of the goals”. This underscores the importance of government (the state) reaching out to the private sector for support.
Rolling back the state
In the 1980s and 1990s, there were attempts by donors to cut the size of the state so that the private sector could take up some of its functions. This was called the New Public Management (NPM). The NPM argued that some services were better delivered by the private sector; hence, the state needed to bail out of services like education, health and even water and sanitation. With time it was realised that the private sector, by its nature and orientation, could not be trusted to deliver goods and services which are essential for the survival of all people. Thus, even in the west, there have been market failures which led the state to intervene in order to restore sanity.
It has now become clear that the state remains the strongest development and change agent – with emphasis now on equipping and building strong institutions as catalysts of development. In its 1997 World Development Report, the World Bank noted that: “The state is central to economic and social development; not as a direct provider of growth, but as a partner, catalyst and facilitator. So, it has become acceptable, once more, that the state and its agencies have essential roles to play in development. Undoubtedly, the success of the Asian Tigers with economic growth is often cited as a strong reason for state-led development”.
However, attention needed to be paid to the issues of governance and the recognition of public sector bureaucracy as more responsive and accountable to the people. The World Bank defines governance as: “The manner in which power is exercised in management of a country’s economic and social resources for development”. On its part, the UNDP defines governance as: “The exercise of political, economic and administrative authority to manage a country’s affairs, putting emphasis on the role of civil society”.
Inherent in the two definitions above are three significant outcomes for sustainable development. First, is the recognition of the state’s changing role – the state is no longer seen as a barrier to development. Second, private sector companies – especially multinational companies operating in poor countries – should make significant contributions to development of the host countries through their corporate social responsibility interventions. These companies are expected to be viable as well as promote social entrepreneurship in the communities. Third is effects of the multiplicity of agents; that is, the interrelationship among development agents and agencies for the promotion of sustainable development. Governments are also encouraged to engage civil society in a more constructive relationship, so as to create a better balance for attainment of the SDGs.
There are three idealised forms of shared vision among the development actors – government, the private sector and civil society. First, government mobilises the resources through legitimate coercion, in the form of taxes, social order and social control. Second the private sector carries out the tasks of producing goods and services through the mechanism of exchange; they offer financial incentives to gain access to materials, information and human resources required. Third, CSOs moibilise resources and social energy through the mechanism of shared values and expectations. Of late the role of NGOs in development all over the world has become high profile and influential. Their position as deliverers of services, as campaigners, and as direct advisors to the private sector organisations has increased.
This has generated fresh debate about the role of private sector organisations in development, as well as what the approaches to the profit motive can bring to the development agenda. There are now blurring boundaries in development, since the state and its agencies, the private sector and civil society are being urged to complement each other.
CSR and the SDGs
One tool that business organisations can use to support the SDGs is corporate social responsibility activities or corporate community investments (CCI).
This is debatable, however. In his oft‐quoted essay, ‘The Social Responsibility of Business is to Increase its Profits’, Friedman (1970) distinguishes the responsibilities of business managers from those of government. He argued that desirable social ends such as creating employment, eliminating discrimination, avoiding pollution etc., amounts to unadulterated socialism, which works against a free society. Friedman wondered why business should have social responsibility, adding that only people should have responsibility. The basis of Friedman’s argument is that a corporation is an artificial person, and in this same way may have artificial responsibility – no matter how vague.
He further argued that it is businessmen who should be held responsible. According to him, in a free enterprise, a corporate executive is an employee of the owners of the business and has direct responsibility to his/her employers to make profits, while conforming to basic rules of society (both in law and ethical custom). He calls social responsibility window-dressing because it harms the foundations free society.
Friedman’s distinction was premised on utilitarian and accountability grounds. His utilitarian case is that political representatives and public officials are trained for and experienced with addressing public policy issues, whereas business managers are trained for and experienced in managing business organisations.
The accountability case is both that business managers’ prime responsibility should be to shareholders who, he presumes, generally expect profits; while in democratic systems the accountability of government officials to the electorates is secured through elected political representatives. This perspective is shared by many sceptics of CSR, who are concerned that acceptance of its legitimacy by firms may compromise effective functioning of markets.
That notwithstanding, one emerging notion is how CSR in developing countries can be used to represent “the formal and informal ways in which business makes a contribution to improving the governance, social, ethical, labour and environmental conditions of the developing countries in which they operate” (Visser et al., 2007).
In fact, the challenge for CSR in developing countries is framed by a vision that was distilled in 2000 into the Millennium Development Goals — “a world with less poverty, hunger and disease; greater survival prospects for mothers and their infants; better educated children, equal opportunities for women; and a healthier environment” (UN, 2006).
The question then was: what is the role of business in tackling the critical issues of human development and environmental sustainability in developing countries? More poignant is the anticipated role of CSR in the newly-agreed Sustainable Development Goals (SGDs). The UN Sustainable Development Goals (SDGs) were introduced in 2015 to build on the MDGs and complete what they did not achieve. A new timeline has been set for these to be achieved by 2030.
CSR is normally understood from one of two conflicting views. Blowfield and Frynas, 2005, (in Hanlon, 2009) emphasised two factors — the ethico‐political case and the business case. The ethico-political case suggests that as ‘corporate citizens’ of the country, it is in the interest of corporations to contribute toward stable societies in order to gain the social licence to operate.
The business case suggests that CSR is good provided it does not damage profitability, and that the corporation’s primary obligation remains its shareholders. Protagonists however argue that CSR is or is not good for profitability, and it is this profitability that will ultimately decide the issue. According to Matten and Crane (2005), these corporate citizens engage in CSR for self‐interest and hence their ethical contribution is perhaps somewhat tarnished (Hanlon, 2009).
In CSR and development discourse, it is generally accepted that Multinational Enterprises (MNEs) have the potential to bring economic development to poorer countries where they operate. In fact, in some cases MNEs are bigger and more stable than the countries they are operating in. MNEs have the political and economic power to influence the domestic and international policies of their host nations.
This makes the nature and impact of their operations very significant, and they have the potential to positively shape the lives of millions of people. Sadly, it is the human rights abuses and destruction of livelihoods that have often dominated the relationship between MNEs and their host communities. In adopting the Philadelphia Declaration, the ILO enjoined MNEs to work in harmony with the development priorities and social aims of the countries where they operate.
So, President Akufo-Addo’s advocacy for businesses and corporations to play a key role in the implementation and attainment of SDGs is prudent; and it is my prayer that the MNEs and their CEOs will respond positively. The advocacy should not just be a photo-opportunity, it should be backed by public policy and action.
Crane, A., and Matten, D. 2005. ‘Can Corporations be Citizens? Corporate Citizenship as a Metaphor for Business Participation in Society’. Business Ethics Quarterly
Freeman, M. (1984) Strategic Management: A Stakeholder Approach. Boston: Pitman. 1984.
Friedman, M. (1970) “The corporate responsibility of business is to increase profit.” New York Times Magazine.
Hanlon, G. (2009) Rethinking Corporate Social Responsibility and the Role of the Firm—On the Denial of Politics. Oxford Handbooks Online.
Visser, W. (2009). Corporate Social Responsibility in Developing Countries. Oxford Handbooks Online
(***The writer is a Development and Communications Management Specialist, and a Social Justice Advocate. All views expressed in this article are my personal views and do not, in anyway represent those of any organisation(s).
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