Firms Fostering Peace
*This blog was written by Shadé Brown, Research Assistant with the Sustainable Economies Center of Innovation at USIP
Violence and instability persist in much of the world and spending trillions of dollars on military activity each year is unsustainable. We must engage alternative methods of fostering peace. One valuable, yet underutilized asset is the business community. Business and peace are often understood as opposing concepts, but growing evidence of their association suggests that firms should not be excluded from the broad array of stakeholders working toward peace. As the engine behind economic activity, business can foster peace in a multitude of ways and facilitate transitions from aid dependency to self-sustained progress. Fostering peace through business however, effectively serves as a compliment to, not a substitute for, traditional foreign policy initiatives.
Firms face a host of challenges in conflict-affected environments, ranging from violent conflict itself, to market, governance, security, and social challenges that extend into post-conflict periods. Effectively addressing these challenges can reduce business costs, increase efficiency, and improve governance and livelihoods in fragile regions. Moreover, rather than distracting from profit maximization, a commitment to corporate citizenship can manifest as a strategic response to market or governance conditions that affect the bottom line. Coca-Cola for example, provides pushcarts to entrepreneurs in rural Vietnam, allowing them to create a revenue stream while making it easier for Coca-Cola to expand into underdeveloped areas that are harder to reach using more conventional transportation methods.
Firms can promote stability by providing jobs and economic opportunity; observing rule of law and international labor and environmental standards; espousing principles of corporate citizenship; conducting risk assessments unique to the political environments; and in some circumstances, engaging in track-two diplomacy. During tensions between India and Pakistan in 1998, after Pakistan’s testing of a nuclear device, New York Times columnist Thomas Friedman reported that executives from General Electric persuaded leaders of both governments to stand down.
USIP’s Special Report How Business Can Foster Peace highlights ways for stakeholders to make changes to allow business to more effectively engage in peace-promoting activities. The U.S. government can better integrate the private sector into foreign policy and national strategy plans and documentation. Local governments can improve land tenure management, enhance security measures, improve access to finance and monitor, evaluate, and facilitate resettlement processes. NGOs can foster peace by acknowledging when firms succeed, and engaging companies before they invest, when firms have the most leverage to affect conflict on a larger scale. Furthermore, the association between business and peace is well known but not well understood. The academic community can engage in a more detailed analysis to challenge existing assumptions and to inform both business leaders and policymakers on the details of causality, impact, relative costs, and outcomes.
The contributions of business toward peace manifest differently depending on firm type. While multinational corporations (MNCs) attract a lot of attention, domestic microenterprises and small and medium sized enterprises (SMEs) may have the greatest potential to foster peace given their proximity and connection to local networks. By integrating domestic firms into a substantial portion of their supply chain, MNCs can help magnify peace-promoting activities. In addition, micro-multinationals, which have emerged as a result of decreased barriers through technological advancements, have paved the way for small and medium sized firms to positively impact local markets while maintaining a global reach. Regardless of firm type, the business community can make environmental, social, and economic impact assessments standard practice when they operate in conflict-affected regions. In the same way that companies assess financial, political, and security risks before committing to a project, so too can they measure their effects on the communities in which they operate.
Peacebuilding in conflict-affected regions requires more than boots on the ground, peace accords, security arrangements and focused diplomacy. Practitioners, scholars, and policymakers agree that success requires the effective leverage of all stakeholders—including the business sector. By the same token, advancements in business and peace should not license business to replace existing foreign policy initiatives but instead engage the two in a tandem effort toward peace.