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1. Peaceful Economies: The Role of the Private Sector in
Pakistan Safwan A. Khan Economic Growth Unit
2. Objectives of the study Explore perceptions of business as
'Agents of Peace Assessment of individual and institutional
capacity- building needs for businesses with regards to Corporate
Social Responsibility (CSR) Explore peace-conducive business
practices that prevent conflicts in the society Identify economic
drivers of conflicts Identify nexus/cartels that keep conflict in
status-quo mode Explore the role of formal and informal
institutions in keeping conflict in status-quo mode
3. Perceptions on businesses as agents of peace Main
socio-economic issues that businesses could/should address The role
of business in internal conflicts in Pakistan Conflict sensitive
business practices and their affect on communities
4. Analysis of economic drivers of conflict Internal drivers of
conflicts External drivers of conflicts Business practices driving
conflicts
5. Network analysis Identification of nexus/cartels (from
within business or communities at large) which keep conflict in
status-quo mode Role of formal and informal institutions in keeping
conflict in status-quo mode
6. Corporate Social Responsibility According to the ISO
definition, CSR should consider issues such as: Human rights
Workplace and employee issues, including occupational health and
safety Unfair business practices Organizational governance
Environmental aspects Marketplace and consumer issues Community
involvement Social development
7. From the literature The Sadakhlo Market in the South
Caucasus is a startling example of businesses contributing to
peace. Economic ties between Armenia and Azerbaijan are severely
restricted. However, the market is a neutral territory between the
two countries and is used for trade of goods between Azeris and
Armenians. This way, the market allows for business to business and
people to people interaction between the two countries even during
periods of heightened volatility (Poghosyan, 2011)
8. Some of the important channels through which businesses can
contribute to conflict-prevention, crisis management, and
post-conflict peace building can be: Business operations (that
enhance shared value along the value chain) Social investment and
philanthropy programs Engagement in public policy dialogue,
advocacy, and institution building
9. Household-level survey 800 households from Balochistan, KP,
Punjab, and Sindh Districts covered: Quetta, Peshawar, Multan,
Faisalabad, Karachi, Sukkur
10. Issues affecting society 54.60% 45.40% Lack of Social
Services High Cost of Living
11. The role of business in local area development 55.5% 34.8%
1.0% 8.8% Agree Somewhat Agree Disagree Not sure
12. Top-most issues where businesses can help 3.8% 2.3% 1.0%
3.3% 3.5% 3.5% 4.5% 21.0% 1.6% 9.3% 5.0% 5.8% 9.8% 3.6% 7.0% 6.5%
3.0% 1.3% 4.5%
13. Issues contributing to internal conflicts 64.4% 67.0% Lack
of Employment Lack of Social Services
14. Is business expansion beneficial for communities? 63.4%
29.9% 1.9% 4.9% Agree Somewhat Agree Disagree Not sure
15. Will increased business lead to conflict? 2.5% 3.4% 65.4%
28.8% Agree Somewhat Agree Disagree Not sure
16. Business activities with regards to peace-building 13.8%
13.8% 6.5% 8.6% 3.3% 16.0% 2.3% 16.9% 17.0% 2.0%
17. Network analysis Primarily a sociological tool, NA has now
found extensive use in other disciplines, including economics Focus
on 'Actors' and 'Relations' (Nodes and Edges in NA terminology),
and not on 'Actors' and 'Attributes Basic premise: that social
phenomena can best be explained in terms of relations and patterns
formed by these relations Causation best explained by prevailing
social networks
18. Network analysis Relations: Directed and Undirected Ties
The network approach assumes that power and influence are
relational Assumptions for our NA: from Focus Group Discussions and
Key Informant Interviews
19. KIIs: The role of business in community development "If
businesses do not take care of communities, people will somehow
react in an unwanted way (leading to conflict in the society) "The
objective of profit maximization converges to welfare maximization
in the long run. Those businesses which have long term objectives
shall be committed to the community affairs "
20. The role of business in community development As
institutions, markets have a leveling affect on the society. They
are inherently secular in nature. However, markets create
individuals and make certain individuals that are wealthier than
others. In a market, the transaction that occurs does not consider
the background of the individual, but it creates and empowers
certain individuals in a distinct way. Thus, certain individuals
become influential because of how markets operate. These
individuals are conservative, unlike transactions that are actually
secular in nature
21. Responsible business practice Businesses should adopt a
framework for Corporate Social Responsibility because it is
built-in approach and makes their contribution to the society
inter-related with their own systems Responsible business practice
should be something that contributes to the public good. Something
that is continuous, unlike charity. For instance, the contribution
of businesses to The Citizens Foundation and organizations like
Edhi
22. According to the PCP, up to 52% public listed companies in
Pakistan are involved in giving of some kind or another "It needs
to be mentioned there is no regulation for CSR in Pakistan. In
2009, a regulation was drafted voluntarily by businesses. Since
then, nothing much has been pursued. In 2012, the Securities and
Exchange Commission of Pakistan called a round-table conference to
finalize a CSR framework"
23. KIIs (contd.) In the Hattar area in Haripur, there are a
number of factories that employ the local labor force, but continue
to add to environmental and health degradation in the area" "Many
of the CSR initiatives in Pakistan cater the urban clientele,
whereas most of our population is rural "Exploitative business
practices are present all across Pakistan with varying
degrees"
24. Business motivations for CSR There is a human-level
motivations but the private sector fails to see the perpetual
suffering of people from being underdeveloped Companies seek to
ensure an enabling environment for their business through these
contributions
25. Businesses do want to help communities and contribute
towards their welfare but as businesses, they do not have the
mandate or capacity to do so. They contribute by supporting civil
society organizations instead Vision of long term commitment by a
few businesses, while contributions from the rest come at the
pressure of civil society, media and other similar forums to keep
the integrity intact
26. Business and conflict By not contributing to community
development, businesses are contributing to conflict somehow
Businesses contribute to conflict so as to prevent competition.
Needless to say, it is the communities that suffer "The media is
causing conflict. They sensationalize and also propagate certain
mindsets that amplify the divide in the society
27. Business and peace Smaller businesses are more closely
connected to the local communities and play a very significant role
in community development, thereby preventing conflicts Green Star
is working with many NGOs in Sindh and Punjab for sexual health
awareness and education. The company provides contraceptives to the
poor free of cost. This way, it not only accomplishes its social
responsibility but also gets to market its products and thus create
new revenue streams
28. Risks involved The threats from elite club of the local
community and especially the insurgents in Baluchistan, target
killers and bhata mafia in Karachi, suicide killers in KPK are
impeding business to grow. And there is a different premium to risk
for different areas based on intensity and gravity of an issue
"Businesses are vulnerable to conflicts and any potential role in a
conflict situation can have a price in terms of money and
time"
29. Peace-friendly and conflict-inducing businesses Businesses
that may be contributing to conflict have close connections with
influential groups (such as local landlords). On the other hand,
businesses that are more peace-friendly maintain a closer
connection with communities on their own Community development on
part of businesses that can reduce conflicts, is very rare in
Pakistan. In terms of peace-building, the biggest contribution that
business can make is prevent further conflicts
30. Conflict sensitive business practices Land lords and feudal
groups do not allow community empowerment or development since they
view it as a threat to their own interests Due to the lack of
safety standards in many factories, fires erupting in KHI have
caused many lives. Businesses have failed to ensure worker safety
in many other industries a few milk producers have been selling
expired milk in the rural areas of Punjab and Sindh
31. Community perspectives on business "It can of real help if
businesses are taken on board for development programs. But that
would also depend on who will be the real beneficiaries of
businesses' contribution While smaller businesses contribute in the
form of faith-based charity, large businesses, operating from their
head offices located in cities, evade taxes CSR is a largely abused
fund in Pakistan
32. Business expansion "Having no business expansion is not an
option "Business expansion can reduce conflict (it will create
opportunities) if it is proper and businesses fulfill their social
responsibilities "If there is investment, there will be a trickle-
down effect that will benefit communities too"
33. Community-business partnerships for peace "Communities can
engage with businesses depending on what kinds of measures the
latter take with regard to community development Its a win-win
situation. It helps businesses to grow by having enabling
environment and with close coordination communities can make
businesses better understand the gaps in the social welfare and
roots of the conflicts. With that knowledge businesses can run
customized CSR programs"
34. Policy implications and recommendations A more powerful
model for businesses is to create and enhance livelihoods for
communities. This could be done by creating employment
opportunities for constituents. Smaller business from the area
could also become part of the supply- chain. This will prevent
community alienation and is likely to make reward-sharing more
equitable Peace-process in conflict-stricken areas should be
accelerated. Business can help in post-conflict peace-building by
investing locally and offering more employment opportunities to the
local population There is a need for having regulations on
implementation of clearly defined CSR activities by
enterprises
35. Businesses can contribute to peace-building measures by
mediating and promoting dialogue between conflicting parties. As
organizations with manpower from all sections of society, they can
help create an atmosphere of mutual respect, trust, and hope In
areas where conflict is known to be driven by lack of education and
poverty, businesses can contribute a great deal by promoting
education and empowering underprivileged groups Regulatory and
financial institutions will have to step-up their efforts to
implement government regulations on responsible business practices
and monitor compliance to these laws.
36. CSR initiatives by businesses, along with development work
by NGOs, help expose government inefficiencies in many areas and
set lessons for government to learn. Government can thus use these
programs as prototypes for its own interventions and projects that
have a broader theme to cater and are more focused to address
community issues Businesses can also help in conflict-prevention by
ensuring that their CSR activities are unbiased and non- partisan
There can be provision in the law that sets a certain percentage of
profits to be invested for the community's welfare. This percentage
can vary with the scale and local supply-chain footprint of each
business operating in any area. This can ensure better sharing of
profits generated by local resources
37. Areas for future research Reforms in the regulatory
structure for Corporate Social Responsibility Political influences
hampering community- business partnerships for peace Conflict and
peace: the role of international markets