Good governance and increased prosperity

On recent trips to Asia both the British Prime Minister, David Cameron and the US President, Barack Obama have made the point of highlighting one of things that can make the Commonwealth stand out in the future – the importance of the link between good governance and increased prosperity.

Addressing the tricky topic at his lecture in a Chinese’s university, David Cameron said ‘I am convinced that the best guarantor of prosperity and stability is for economic and political progress to go in step together.’. This approach is key to the Commonwealth future success, I have always argued that the Commonwealth should give an equal focus to both the Harare Principles, on good governance and human rights and to the Edinborough Economic Declaration. This is proven by many Commonwealth members, who are required to abide by certain rules regarding governance, human rights and the rule of law, or face expulsion from the association. It is no coincidence that the same countries are nearly always investment destinations of choice.

Making this point very clearly, President Obama in his address to the Joint Session of the Indian Parliament during his recent trip said "As India marks 60 years with a strong and democratic constitution, the lesson is clear: India has succeeded, not in spite of democracy; India has succeeded because of democracy,"

Britain, India and other Commonwealth countries can help in the development of other countries by explaining how their focus on good governance has led to increased investment and increased prosperity. Commonwealth successes, are based on a respect for the rule of law, human rights, etc as it is these things that give investors the confidence to invest in the association’s member states rather than other countries.

BP and Oil

The BP Oil disaster has been badly mishandled by all concerned. President Obama's personal attacks on Tony Hayward were not warranted. I have had interactions with Tony and heard him recently at our Business Forum in Port of Spain. He takes corporate social responsibility very seriously. However most people think that BP's initial reaction was not well thought out, Tony Haywood's gaffes about wanting his life back were not appreciated in the US. This has led to greater than was necessary pressure on the Oil Company. It is a good sign that BP has now agreed to suspend its dividend payments this year, and will instead pay into a compensation fund for those affected. This news has been met with a rise, the first since the crisis began, in BP's oil price. BP needs to reflect on whether its existing CSR policy is sufficient, or whether it was badly implemented in this situation.

BP's interaction with the US Government have not been well handled, neither the Company nor the President are currently considered to have handled the situation well. The company's initial reaction angered the American public and resulted in strong statements from the White House. The Presidents desire to 'kick some arse' was not good for the Company's share price. Tony Haywood faces congress this week in an exchange that is not going to be good for the Company's image. The Line taken by the US government in this crisis appears to disregard that BP is jointly listed in the US and London with nearly 30% of its shareholders based in America.

The Company's apparent lack of preparation for this disaster has left the BP open to criticism. All energy companies, including BP, need to invest more time and money in R&D to help prevent accidents of these types and have better plans in place to deal with the consequences of inevitable failures. On a similar note a renewed focus on developing alternative energy solutions would make drilling for oil in these difficult and dangerous locations unnecessary altogether.

Presidents Optimistic about African Future

Over the Weekend I was pleased to catch President Obama’s speech to the Ghanaian Parliament. The US President focused on many issues that I and CBC believe are important for the future prosperity of the African Continent.

President Obama spoke of Africa’s future being in African hands, “aid is not an end in itself. The purpose of foreign assistance must be creating the conditions where it is no longer needed”. He went on to talk of a Continent not only rich in natural resources, but also entrepreneurs where “cell phone entrepreneurs to small farmers, have shown the capacity and commitment to create their own opportunities”
This optimistic view of Africa is shared by HE Paul Kagame who I met last week while he was in the UK to speak at our Africa Business Forum. He commented that the only thing holding Africa back now was the lack of a vibrant business-public sector relationship. “We have the people, we have the recourses and we have proven that investing in Africa gives you the highest possible returns available anywhere in the world”.

I believe that Africa is well positioned to emerge from the recession stronger than ever, and am glad to see that there is a general consensus around the world, after all the continent is still displaying growth rates above the global average. There is a new confidence both within and outside the continent in the African future.

Dealing with Cuba the Commonwealth Way

I am extremely pleased to see the approach the new US President has taken towards Cuba during his first 100 days in office. Moves to lift some of the travel and trade restrictions could open a dialogue between the 2 countries that has been closed since President Kennedy isolated the Island in the 60s.

Engaging the countries that were previously given pariah status is a good step forward, talk that leads to understanding is always preferable to conflict. President Obama is using strategies similar to those we use in the Commonwealth in his dealings with Cuba, by lessening the restriction on Cuba a white house press spokesman reported that the president hopes “that creating independence, creating space for the Cuban people to operate freely from the regime is the kind of space they need to start the process toward a more democratic Cuba”

By engaging in direct dialogue change can be encouraged in good governance, human rights and economic development, this is the approach the Commonwealth has taken and now we are a community of 53 democracies.