Former diplomat Sir Ronald Sanders discusses the demise of the Commonwealth Business Council and the importance of assisting small states.
Thursday July 31, 2014 - Amid the success of the Glasgow 2014 Commonwealth Games in Scotland, there has been a troubling development for the Commonwealth. The Commonwealth Business Council (CBC) went into liquidation.
CBC was mandated by a Commonwealth Heads of Government Meeting (CHOGM) in another Scottish City, Edinburgh, in 1997. I was a part of the Antigua and Barbuda delegation at that Meeting which I later described, in an article in The Round Table: the Commonwealth Journal of International Affairs, as “a beneficial encounter for Small States”.
There were two reasons for the judgment I made about the Edinburgh CHOGM’s value for Small States. The first was the attention that Commonwealth leaders paid to a study entitled “A Future for Small States: Overcoming vulnerability”. As the Prime Minister of St Lucia, Dr Kenny Anthony, said at the time the significance of the study lay “in its advocacy for a priority to be created on the international agenda in favour of states that are becoming increasingly difficult to survive in an environment that is becoming insensitive”. Largely as a result of the work of Caribbean countries, strongly supported by Africa, that preceded the CHOGM, the small states study formed part of a wider economic debate by the Heads of Government and many of its key recommendations were reflected in the economic declaration of the Meeting.
If the Small States study and its recommendations were not worked into the commitments made at the 1997 Edinburgh CHOGM, the economic plight of Small State – grave as it now is – would have been worse today. This serves to underscore the continuous task of Small States to build strategic alliances with other countries to press their case for special and differential treatment based on the reality of their vulnerabilities.
The second reason that I judged the Edinburgh Summit to be beneficial for Small States was the decision to set up a Business Council “made up of a small group of major private sector leaders from different regions of the Commonwealth (my emphasis), as well as other mechanisms in consultation with the Commonwealth Secretary-General, to encourage greater private sector involvement in the promotion of trade and investment”.
The CBC was established shortly after the 1997 CHOGM, but despite the participation on its Board of Directors of a few hard working leaders of industry from some regions of the Commonwealth, its governance structure and operations were weak. Its work programme also did not sufficiently include Small States in the Commonwealth and it became far too focussed on organising a single event – a Commonwealth Business Forum alongside meetings of Commonwealth heads of government. No other initiatives were taken to boost business within Commonwealth countries or to facilitate trade. The forum itself served too narrow a purpose and while at the end of each of them announcements were made about the number and value of contracts that had been signed, only a small number of countries actually benefitted – Small States least of all.
At the 2013 Business Forum in Sri Lanka, for instance, the majority of contracts signed were between Chinese and Asian companies with little increase in investment and trade between Commonwealth countries. The same observation hold true for the previous Forum held in Perth, Australia alongside the Heads of Government meeting.
When the Eminent Persons Group (EPG) – of which I was a member – was established by Commonwealth leaders in 2010 to produce a report and recommendations on reform of the Commonwealth, the CBC was one of the non-governmental organisations with whose representatives we engaged. In our report, A Commonwealth of the People: Time for Urgent Reform, we said: “During the course of the meeting with CBC representatives, concern was expressed that the CBC’s fee structure for membership appeared to discourage membership by small and medium enterprises. This can be unhelpful to the promotion and investment in, and trade participation from, smaller Commonwealth States”. We went on to say: “We encourage the CBC to mount programmes specifically for investment from all Commonwealth countries in to the smaller Commonwealth states, and to organise seminars and conferences that would utilise the knowledge and expertise of economically successful developing countries in those Commonwealth member states that are lagging behind across all geographical regions”. Importantly, we also said that “we see merit in the CBC reviewing its governance arrangements”.
Sadly, the business of the CBC continued as usual, and its liquidation is the result. But, the objectives set for the CBC by the Edinburgh 1997 CHOGM should not be lost with its demise. Those objectives remain crucial to the development of business, investment and trade in the Commonwealth and to improving the economic conditions of its countries, particularly its Small States.
The Commonwealth Secretary-General, Kamlesh Sharma, has taken an initiative to facilitate the rise of a new entity from the ashes of the CBC. He has moved quickly to give office facilities to a small group who are working independently of the Secretariat to establish a successor to the (CBC). While the new entity – probably to be called the Commonwealth Enterprise and Development Council – will be a private sector undertaking, it is right that the Commonwealth Secretariat should enable its establishment. It was governments that recognised the value in the creation of an institution that fostered private sector links across the Commonwealth, and they mandated it in 1997. Of even greater importance is that the need for such an institution has increased not diminished.
What is important now is that those who are establishing the new entity put the right focus on it. That focus is to increase investment in Commonwealth countries by companies from other Commonwealth countries and so expand trade in both goods and services between them. In putting that focus, recognition should also be given to the importance of creating machinery that will finance investment and trade, particularly in – and for – Small States that need it most. There would be little point in creating another institution that promotes trade and investment unless it also works out how such trade and investment will be financed.
The views and opinions expressed are those of the author and do not necessarily represent those of The Royal Commonwealth Society. Copyright to this article is held by Sir Ronald Sanders and may not be reproduced, republished, shared, hosted, transmitted, or distributed without prior written permission unless indicated otherwise.