PRIVATE SECTOR FORUM’S RECOMMENDATIONS

(Sponsored by the OAS Trade, Growth and Competitiveness Unit

with support from the U.S. Departments of Commerce and State)

Introduction

            On June 5, 2005, the Organization of American States, with the support of the U.S. Departments of State and Commerce, convened the first OAS General Assembly Private Sector Forum, entitled “Delivering the Benefits of Democracy Through Increased Competitiveness.” Over 100 senior business leaders from the Hemisphere gathered at the Forum to provide recommendations in the following three areas: (1) improving competitiveness and productivity via education and technology; (2) promoting good governance and transparency; and (3) innovative strategies for job creation.
          The recommendations discussed in each of the Forum’s working groups are summarized below. Over the coming weeks, the Forum participants will discuss how best to implement these recommendations, which will assist member states in delivering the benefits of democracy.

Recommendations of the Working Group on Improving Competitiveness and Productivity via Education and Technology

1. Establish a dialogue between the private and public sectors so as to develop a focused agenda and bring about efficient use of education and technology spending;

2. Education systems should be designed in a way that supports small and medium-sized enterprises, since these are the principal source of employment in developing countries;

3. Reduce regulatory barriers and provide tax incentives;

4. Promote participation in education by executives and companies, such as through tutoring and internships, enabling them to share their business experience with students;

5. Promote the study of best practices in adapting technologies to education;

6. Governments should promote education at all levels, so that a good primary and secondary education will culminate in a good tertiary or professional education;

7. Adapt schools to a world that employs more technology;

8. Competitiveness is a broad concept.  Competitiveness incentives should take various forms, such as promoting computerization and interconnection of customs services and encouraging tax credits for worker training in technology-intensive sectors;

9. The private sector is ready to work with governments and international organizations, like the OAS, on programs to promote education and technology and thereby increase competitiveness in Latin America and the Caribbean;

10. We recommend the adoption of the recommendations issued in the document “Good Educational Practices in Latin America: A Project of the Latin American Business Council and the Latin American Institute of Educational Communication”;  

Recommendations of the Working Group on Promoting Good Governance and Transparency

We, the members of the Hemisphere’s private sector, reaffirm the importance of good governance and transparency in enhancing competitiveness and delivering the benefits of democracy.  A dynamic civil society requires the active involvement of a productive private sector community--supporting the rule of law, promoting democratic governance, fighting corruption, and fostering transparency in all aspects of government.  Transparency is the keystone of good governance.  Accountability to the governed requires that the actions and decisions of each branch of government be open to public purview and understood by those affected.  The private sector can most effectively increase competitiveness and job creation through its responsible participation in assisting government rule-making which, in turn, engenders business environments that are conducive to investment, economic growth, and job creation.

We propose that member states adopt the following specific recommendations:

Reporting and Journalism:

1. Protect the ability of journalists to report on issues of corruption, transparency, and governance;

2. Reform libel laws and cap award amounts in libel cases;

3. Foster balance in journalistic reporting through training and other means.

Civil Service Reform:

1. Ensure a merit-based/performance-oriented civil service with well-paid and educated workers;

2. Require financial disclosure for public servants as well as politicians.

Legal Reform/Public Disclosure/Administrative Reform:

1. Create lobbying laws and provide for adequate regulation and verification;

2. Reduce the time and cost involved in starting a business, so as to increase access of small and medium-sized firms to the formal economy;

3. Promote campaign finance reform and require contributing organizations to disclose political contributions;

4. Create whistle-blowing protection laws and witness protection programs;
5. Create freedom of information laws;

6. Require that public projects be tendered in a transparent and accessible way, including through the Internet; 

7. Modernize customs services in the Hemisphere by providing training, automation, and good management practices which will ensure consistency in the application of laws and regulations.

Private/Public Sector Consultation and Dialogue:

1. Institutionalize a formal process for the private sector and civil society to participate in rule-making and government decision-making;

2. Create an OAS Private Sector Rapporteur and/or Private Sector Advisory Council (similar to the IFC Advisory Council), which would meet regularly to further consider these topics;

3. Consider asking the OAS to facilitate the regional evaluation of countries in the areas of transparency, democracy, and competitiveness.

Foster Corporate Governance Standards in the Private Sector:

1. Companies should adopt internationally accepted standards of business ethics and corporate governance which will help promote accountability in the private sector.

Recommendations of the Working Group on Innovative Strategies for Job Creation

We recommend establishing a formal link between the public and private sectors through a permanent forum, coordinated by the OAS, and supported by other international organizations, in follow-up to this initial meeting, beginning with the Fourth Summit of the Americas, in Mar del Plata, Argentina, for the formulation of national and hemispheric agendas to define best practices for the development of policies aimed at:

• Improving the countries’ competitiveness through policies geared toward science, technology, and innovation, creating a favorable climate for national and foreign investment;

• Fostering the development of local capitalism and democracy;

• Providing ongoing investment in human resource development;

• Ensuring that economic vitality leads to more equitable and inclusive societies;

• Achieving sustainability, continuity, predictability, and transparency in investment and job-generation projects;

• Promoting political stability and security to bring about a relative absence of crime, terrorism, or any other type of violence, as a primary context for an environment of investment and development;

• Organizing meetings, forums, and seminars at the national level to sensitize all sectors of civil society and create awareness of, and active participation in, the application and monitoring of government policies and practices to improve conditions for investment and job generation.

We urge the OAS member states to:

1. Promote ongoing public-private dialogue, based on sectoral confidence, and geared toward concrete, efficient bilateral action;

2. Identify and eliminate bureaucratic, legal, and regulatory barriers, as well as all taxes that would discourage new business formation, with a focus on labor flexibility, innovation, entrepreneurship, and attracting foreign investment; and implement fiscal reform, including credit lines, extensions, and incentives to investment in research and development;

3. Promote modernization of government procedures and tools for new business formation;

4. Conclude the FTAA as soon as possible, to promote increased regional productivity, raise the living standards of our citizens, and foster competition with the regional blocs of Europe and Asia;

5. Invest in infrastructure and human resource development, including retraining of the labor force, particularly in regions of greater need, with the participation of local counterparts, thereby using the opportunities of free trade and regional agreements to good advantage;

6. Commit to implementing the business facilitation measures proposed at the Meeting of Ministers of Trade in Toronto in 1999; and adopt an ambitious agenda in this area in the Doha Development Agenda.

We urge the OAS member states and the private sector to:

1. Support and participate in public-private alliances so as to improve competitiveness in our region and consolidate freedom and democracy;

2. Focus efforts and resources on promoting education focused on the poorest sectors to bring them into the labor market;

3. Promote development of infrastructure programs, fostering competitiveness and job creation;

4. Approach business management programs in a comprehensive fashion;

5. Facilitate specific programs and policies for microenterprises, for persons active in the informal sector, and for entrepreneurs, with a special focus on young people;

6. Develop the concept that micro-, small, and medium-sized enterprises may form associations to attain acceptable levels of competitiveness.

Multilateral Institutions

1. We urge multilateral institutions to place the topic of job creation at the center of their policies;

2. We urge multilateral financial institutions to allocate financial development resources to job creation and competitiveness in the countries and subregions of greatest need, so as to promote long-term, sustainable economic development, including proper resource stewardship, performance evaluation, and impact assessment.

Business Sector

We accept our corporate and civic responsibilities, such as paying our taxes, fighting corruption, promoting good business practices, and providing community extension programs in the social, scientific,  sports, cultural, and environmental areas;

We recognize the importance of investing profits in Latin America and the Caribbean.

General Recommendation

In addition, at the closing plenary, participants agreed on the importance of the DR-CAFTA for economic advancement of the region and urged governments to ratify and implement the agreement as soon as possible.
 

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