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We make available the following commentary, previously presented on the People-Centered Development Forum’s web page, with the permission of the author.

Dr. Korten, a specialist in international business and development, received his MBA and PhD degrees at Stanford University after military service during the Vietnam War as a captain in the U. S. Air Force. He has authored ten books and contributes regularly to professional journals.



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By David C. Korten

[U.N. Headquarters,<br>New York City]
On June 24, 1997, the CEOs of ten transnational corporations met over lunch at the United Nations with the UN leadership and a number of senior government officials to chart a formalization of corporate involvement in the affairs of the United Nations. I attended the lunch. It is rare that any of us from the nongovernmental organization (NGO) community has such an opportunity to sit in on a meeting of the power holders in the private chambers. I found it a shattering experience for it revealed a seamless alliance between the public and private sectors aligned behind the consolidation of corporate rule over the global economy. It raised serious questions in my mind as to whether progressive civil society organizations should in fact be aligned behind the United Nations and its funding. The following is a personal report.

It was a true power lunch of lobster and an exotic mushroom salad held in a private dining room at the United Nations on June 24, 1997. Thirty seven invited participants were co-hosted by Ambassador Razali Ismail, President of the UN General Assembly, and Mr. Bjorn Stigson, Executive Director of the World Business Council on Sustainable Development (WBCSD) to examine steps toward establishing terms of reference for business sector participation in the policy setting process of the UN and partnering in the uses of UN development assistance funds. The players in the meeting were fifteen high level representatives of government, including three heads of state, the Secretary General of the UN, the Administrator of UNDP, and the UN Under Secretary General responsible for presiding over the UN Commission on Sustainable Development, the Secretary General of the International Chamber of Commerce, ten CEOs of transnational corporations (TNCs). The CEOs were mostly members of the WBCSD, a council of transnational corporations originally organized by Stephan Schmidheiny and Maurice Strong to represent the interests of global corporations at the United Nations Conference on Environment and Development in Rio in 1992.

In a limited gesture toward transparency and multi-stakeholder participation, two “academics” and two NGOs were invited to observe. The academics were Jonathan Lash of World Resources Institute and myself. Chee Yoke Ling of the Third World Network and Victoria “Vicki” Tauli-Corpuz of the Indigenous Peoples’ Network, Philippines, were the NGO participants.

The meeting’s outcome was preordained. It closed with Ambassador Razali, President of the General Assembly, announcing that a framework for the involvement of the corporate sector in UN decision making would be worked out under the auspices of the Commission on Sustainable Development.

Listening to the presentations by the governmental and corporate representatives left me rather deeply shaken, as it revealed the extent to which most of the messages the world’s NGOs have been attempting to communicate to the UN and its governmental members at UNCED and the other UN conferences have fallen on deaf ears. On the positive side, Mr. Thorbejoern Jagland, the Prime Minister of Norway, called for a tax shift to place the burden of taxation on environmentally damaging consumption. Both Ms. Clare Short, Secretary of State for International Development of the United Kingdom, and Mrs. Margaret De Boer, Minister of Environment for the Netherlands, called for giving high priority to ending poverty.

Ms. Chee Yoke Ling of the Third World Network, the only non-corporate stake holder voice given the floor, spoke eloquently of the growing concentration of wealth being created by the corporate sector and of the corporate commitment to the unattainable agenda of creating a universal consumer society. She observed that there are not enough resources in the world for everyone to live even at the current level of consumption of the average Malaysian, let alone the level of the United States or Europe. She further noted that people are becoming increasingly cynical about the professed corporate commitment to sustainability given that in corporate-dominated forums such as World Trade Organization (WTO) they talk only of the rights of corporations and nothing of their obligations.

Such moments of enlightenment were the exception. On the less enlightened side, we were treated to the views of Mr. Samuel Hinds, the President of Guyana. He was the only speaker to take any note of Chee Yoke Ling’s comments and he dismissed them out of hand. Indeed, he accused NGOs of causing popular unrest by trying to postpone in the name of environmental protection the development that people so desperately want. Besides, he pointed out, if he does not cut down his country’s forests someone might grow marijuana in them.

The United States sent Larry Summers, Deputy Secretary of the Treasury, as its representative to the luncheon. The Clinton administration could hardly have sent a clearer message as to how it views the trade-off between its commitment to sustainability and its commitment to its corporate clients. Summers is the former chief economist of the World Bank who gained public fame for advocating the shipping of more toxic wastes to low income countries because people there die early anyway and they have less income earning potential so their lives are less valuable. Summers treated the luncheon guests to a litany of neo-liberal platitudes. He praised privatization, noting that people take better care of their homes when they own them, implying that environmental resources will be better cared for when they are all privately owned by the corporate sector. He assured us that economic growth leads the way to creating both the will and the means to deal with the environment. In other words, he believes that the more a person consumes the more careful that person will be of the environment. And he noted that by attracting private foreign capital to build bridges and roads on a fee-for-use basis, the receiving countries will eliminate their need to use scarce public funds for physical infrastructure. He might well have noted as a further advantage that the private toll roads and bridges will be less congested than open public facilities as fees will exclude their use by the poor.

Mr. Kofi Annan, Secretary General of the UN, gave the corporate CEOs a warm welcome with his message that he sees opportunities for the private sector and the UN cooperating at many levels. He referred to the Rio meeting as an example of where the private sector participated in setting the standards rather than the UN or government imposing them. He of course made no mention that corporate participation in Rio helped assure that few standards were actually set and that even fewer have been met. He called on the private sector to come up with alternative energy sources for the poor so they “don’t have to cut down every tree in sight,” while making no mention of the corporations that are strip mining the world’s forests. He praised the UNDP for its role in preparing the way for private investment to come into Third World countries and called on governments to provide incentives to move business in this direction. In short, he is firmly committed to using UN and other public funds to subsidize the corporate buy-out of Third World economies.

Gus Speth, the administrator of the UNDP, said that the best hope for the three billion people in the world who live on less than $2 a day is to bring them into the market by redirecting more private investment flows to low income countries. UNDP is apparently facilitating this process by giving priority to using its limited funds to “leverage,” read “subsidize,” private foreign investment. He mentioned that peace and justice will require a particular kind of development, but did not elaborate as to what kind that might be.

Underlying the words of everyone who was allowed to speak, with the sole exception of NGO spokesperson Chee Yoke Ling, was an embrace of the neo-liberal logic of market deregulation and economic globalization. According to the prevailing official wisdom, economic globalization and the economic dominance of corporations are irreversible realities to which we must simply adapt. Since global corporations have the money and the power, any viable approach to dealing with poverty and the environment must center on providing market incentives (read public subsidies) that will make it profitable for them to invest in job creation and environmentally friendly technologies. Thus it follows, by the twisted official logic, that corporations need to be brought in as partners in public decision process to assure that the resulting policies will be responsive to their needs. If any speaker other than Chee Yoke Ling saw any problem in giving over ever more power to global corporations, they revealed no hint of it at this power luncheon.

The underlying commitment to the use of public resources to advance unrestrained global corporate expansion brought to mind the central message of a book that first appeared in 1980 written by Bertram Gross titled Friendly Fascism: The New Face of Power in America. Gross looked beyond the familiar racism, hatred and brutal authoritarian rule associated with the practice of fascism to describe the institutional structure of fascist regimes. Herein he revealed a nasty little secret. The defining structure of fascist regimes is a corporate-dominated alliance between big business and big government to support the expansion of corporate empires.

Those of us who have been studying these issues have long known of the strong alignment of the World Trade Organization, the World Bank, and the IMF to the corporate agenda. By contrast the United Nations has seemed a more open, democratic and people-friendly institution. What I found so shattering was the strong evidence that the differences I have been attributing to the United Nations are largely cosmetic.

It seems that all our official forums function within the culture of ideological dogmatism that international financier George Soros denounced in his Atlantic Monthly article on “The Capitalist Threat.” With dissenting voices quickly silenced, there is no challenge within the halls of power to flawed logic and assumptions.

So long as official forums remain captive to this closed and deeply flawed ideological culture, our governmental and corporate institutions will almost surely lead our world ever deeper into crisis. The burden of providing alternative leadership that falls on those elements of civil society that are not captive to the official culture is thus enormous. We must speak fearlessly with force and clarity in an effort to penetrate the veil of silence that shields our official and corporate institutions from confronting the devastating consequences of their ideologically driven leadership.

© Copyright 1997 by David C. Korten

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