Balanced development and international regimes

The defining characteristic of global economic growth of the past six decades has been the closer integration of markets across regions. This is observed most distinctly in the growth of world trade, foreign direct investment (FDI) and migration. World trade grew 1.6 times as fast as world GDP (gross domestic product) between 1950 and 2015. Over the latter part of this period trade increased by 5.0 per cent annually while GDP grew by only 2.9 per cent. Between 1950-73 and 1974-2015 global FDI as a share of world GDP grew by a factor of five, reaching over 25 per cent in the latter period. As world trade has grown, so the pattern of exports has changed. The share of industrialised countries in world exports of manufactures has been declining since the 1950s, and more sharply from the 1980s. This decline reflects the increasing specialisation of the industrialised countries in services. The correlate is a rising share of developing countries in world manufactures exports to just over a third in 2006, twice the level of 25 years ago. Shifts in the geographical origins and in the composition of trade have major consequences for skills requirements. Economic transformation, for example, from agriculture to manufacturing and services, or changes within an economic sector, for example, from more labour-intensive manufactures to higher value-added manufactures, change skill requirements.
In this context, the role of the following segments is  crucial for balanced development:
BUSINESS: Business must have had clear idea about its motives and activities in the developing world. Companies focused on both their core impacts and competencies, and both presented and assessed activities from a business-case perspective. Civil society is prepared to accept that companies operating in the developing world are driven chiefly by the profit motive. When companies attempt to frame their activities only as good work or charity, they actually lose credibility.
NGO:  The non-governmental organisations (NGOs) are already viewed by many companies as providing valuable expertise and on-the-ground knowledge in developing countries. Business is often even willing to accept the tension of having NGOs monitor and assess corporate activities to ensure responsible conduct. However, as NGOs pursue collaboration and partnership with private sector they must keep in mind the drivers and realities of the marketplace within which companies operate and address business on this level.
MULTILATERALS: In order to fully leverage business' engagement, multilateral institutions must  communicate more clearly what specific benefits, competencies and value they provide to companies wishing to make a contribution to development. For example, multilaterals served as a perfect forum for the development of guidelines and standards for business activities in developing countries and add credibility and expertise to partnerships for development. Multilaterals also must recognise and publicly acknowledge the potential link between achieving the MDGs (millennium development goals) as well as SDGs (sustainable development goals) and enabling business to expand and responsibly grow their markets.
MEDIA: Business and NGOs both agree that media coverage of international development issues has a very influential role to play. General consensus across sectors is that the media must provide more robust and balanced reporting on the complexities of operating in the developing world and that, when covering business in the developing world, reporters should not limit themselves to negative stories.
GOVERNMENT: Governments - both in the developed and developing world - are viewed as playing a crucial role in providing an 'enabling environment' to facilitate international development in a range of ways including: trade agreements, sound policies, efforts to tackle corruption and ensuring the rule of law. In order to achieve international development goals within their own borders, or abroad, governments must be prepared, and organise themselves, to work with all of the relevant partners.
ROLE OF MULTINATIONAL COMPANIES: Multinational companies can help best by creating new jobs and building local businesses. The private sector's capacity to create jobs and build local businesses is the essential foundation for long-term development and the area where business could add most value or make the most impact. This activity must be top priority, followed by "ensuring environmental sustainability," "training a country's local workforce" and "tackling bribery and corruption." It is important that development outcomes has a direct relation to the core business area (e.g., combating HIV/AIDS for pharmaceutical companies, improving farmers' livelihoods and quality for food companies, increasing access to information technology for technology companies, promoting gender equality for companies marketing their products to female consumers). But creating new jobs and building local businesses have emerged as the dominant concern among all business leaders, regardless of their core business, regional penetration or scale of operation. The current expectations are often unrealistic and place far too much faith in the ability of the private sector to solve all development problems-whenever and wherever they occur.  
In addition to the strategic interests and internal capacities of corporations, conditions within countries and local communities also play a crucial-and often an inhibiting-role in determining the private sector's impact on international development. A number of concerns have been identified which currently limit investors' ability to invest in and support local communities, including:
* widespread bribery and corruption in country governments;
* political uncertainty and the ongoing threat of violence, terrorism and religious extremism;
* impact of AIDS, non-communicable diseases like diabetes, cardiovascular  and other health crises;
* government resistance to foreign investment and development (e.g., bias toward local investment, restrictive trade regulations, etc.);
* lack of judicial reform and reliable legal systems;
* substandard education;
* lack of technology and technical capacity;
* the absence of a free local media;
* poor infrastructure;
* the absence of uniform international standards for global business development.
ROLE OF DEVELOPING AND DEVELOPED COUNTRY GOVERNMENTS: The developing country governments must share responsibility and increase accountability. The developing country governments represent the most crucial-and currently the weakest-link in the international development chain. It is argued that it is ultimately the responsibility of country governments to provide stable and sustainable environments for investment. The most urgent areas needed to be addressed by country governments include: reducing corruption and increasing transparency; promoting judicial and political reform; enhancing local capacity in infrastructure, education, technology, fair wages and other areas that contribute to a stable environment for private sector investment; implementing policies that encourage foreign investment.
On the other hand, the governments of developed countries must ensure more trade and more effective aid. The primary role of developed country governments is to make it easier for the private sector to become actively and productively involved in the international development process. Developed country governments should work more aggressively to facilitate private sector involvement in international development in the following ways:
* providing direct financial investment in developing countries;
* providing financial incentives (e.g., tax breaks) for private sector involvement in international development;
* lowering tariffs and subsidies that distort the market and put producers in developing countries at a disadvantage.
 The writer, a former Secretary to the GoB and Chairman, NBR, is now Chairman, Chittagong Stock Exchange and Senior
Vice Chairman, South Asian
Federation of Exchanges.
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