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    • Archive for September, 2014

    The Challenge of Changing the Old Mindset

    Ruslan Stefanov

    The process of market transition in Eastern Europe has proven both unexpectedly easy and unexpectedly difficult. It was easy in a sense that no one thought this kind of transformation was possible even just a few years before it happened. Yet it has been difficult because building democratic and market institutions requires in-depth reforms and necessitates changing the old mindsets, which is a very difficult issue. One of the hard-to-overcome elements of the post-communist mindset has been the lack of personal responsibility and the expectation to be taken care of by the state. As a result, the transition to democratic market economy entailed the change in values toward making free choices – and toward taking responsibility for those choices.

     

    Transcript available in English and Russian

    Entrepreneurship and Innovation as Engines of Growth

    Ruslan Stefanov

    Entrepreneurship is the capacity of individuals and companies to undertake risk in pursuit of innovative ventures. Throughout history, individual efforts of entrepreneurs have been the driving force of modern market economy. But entrepreneurial drive in and of itself is not enough to deliver sustained economic growth and development in a modern economy. Institutions that support entrepreneurship, such as those that guarantee freedom of information or freedom and ease of establishing and growing a business, are necessary to translate innovative ideas into larger economic and social benefits. Free markets, protection of property rights, and the rule of law are at the core of the framework needed to make entrepreneurship work.

     

    Transcript available in English and Russian

    Private Sector Approaches to Fighting Corruption

    Ruslan Stefanov

    Corruption in the private sector and corruption in the public sector reinforce each other. Therefore, even though traditionally governments are tasked with fighting corruption, it is equally important that the private sector also takes the initiative. Several international conventions have been put in place to combat corruption in the private sector, such as the OECD Anti-Bribery Convention. Many other approaches can be adopted by businesses as well: good corporate governance and corporate citizenship frameworks, codes of conduct, rules of disclosure, or guidelines preventing conflicts of interest. At the same time, governments should ensure open and corruption-free business environment where the rules of the game are the same for all and business interests are legitimately represented.

     

    Video also available in Arabic
    Transcript available in English and Russian

    Corporate Social Responsibility in Developing Countries

    Yanti Triwadiantini

    Corporate social responsibility (CSR), or corporate citizenship, is a business strategy that produces long-term benefits for both communities and businesses. Given the common misconceptions, it is crucial to teach the private sector, governments, and the public the meaning of CSR. It is not simply charity; instead, it focuses on contributing to the society not just monetarily but also through other means. This applies in several categories: human capital, environment, accountability and transparency, local development, and minimizing social conflicts. CSR should not be forced upon the private sector through legislation – it works better as a voluntary endeavor. Many small-scale enterprises have already been operating in that way for years but do not call it CSR. Therefore, it is important to keep them engaged in their communities without imposing excessive burdens. As good corporate citizens, all businesses can thrive responsibly.

     

    Transcript available in English

    Corruption and Governance

    Daniel Kaufmann

    Global anti-corruption efforts in recent years have achieved some notable results. The sources and consequences of corruption are now better understood, and the international community has been able to work toward addressing the problem of collective action. Despite these successes, however, private sector corruption remains widespread in many countries. Incentives are the driving force behind each company’s actions, including bribery. That is why building a business case against corruption and tackling the issue of incentives is the most effective way of combating the problem. Another key element of reducing illicit business practices is greater transparency and disclosure, which requires not just corporate action, but a broader engagement from the media, civil society, and international organizations – all of which can increase the reputational cost of corruption. Without large-scale reforms that can create such an accountable business environment, the anti-corruption gains made so far may prove elusive.

     

    Video is also available in Arabic

    Transcript available in English

    Corporate Governance in Emerging Markets

    Jesus Estanislao

    The debate concerning corporate governance in developing countries often focuses on whether global principles of corporate governance, formulated in Europe and influenced by the United States, could and should apply to other parts of the world. As the evidence shows, there really is no geographic difference when it comes to these principles: their applicability is universal. Transparency, accountability, fairness, and responsibility – these are the principles that businesses everywhere, and especially in emerging markets, must heed in order to prosper and grow sustainably. The challenge is to increase awareness of the need for good corporate governance among policymakers and enterprises worldwide so that their respective countries can benefit from well-governed economies and better business environment.

     

    Transcript available in English

    The Theory and Practice of Foreign Aid

    Boris Begovic

    In the past, conventional wisdom explained that the plight of developing countries was due to lack of resources, technology, education, and infrastructure. Foreign aid was meant to fill such gaps. Yet despite massive aid flows empirical findings on economic growth and foreign aid demonstrate that there is no positive correlation between the two. The rationale behind foreign aid involves increasing investments and providing budgetary support. In theory, conditionality frequently attached to aid is supposed to lead to better governance and more accountability. In practice, however, political and strategic considerations of donor countries remain paramount in granting foreign aid. Similarly, the International Financial Institutions have structural incentives that tend to make the continuation of their lending operations a goal in itself.

     

    Transcript available in English, Arabic, Chinese, French, Russian, and Spanish

    The Sources of Corruption

    Hisham Awartani

    Understanding what corruption actually means is a prerequisite to recognizing cases of it when they occur. According to Transparency International, corruption is defined as any act involving an abuse of a public post for personal gain. There are many forms of corruption, with bribery being among those most common. Corruption is a big problem in many different countries around the world, developing and developed alike. The MENA region is no exception. Yet regardless of where it occurs, corrupt behavior always has two sides to it: supply and demand. Traditionally, governments have been tasked with fighting corruption on the demand side. But a more comprehensive effort should include the private sector as well and focus on issues such as better corporate governance, accounting standards, and business ethics.

     

    Transcript available in English, Arabic, and French