The idea of using trade to create political stability is not a new one. It took the form of imperialism in the late 19th century, when colonies were used to help the industrialization of the colonial powers. After centuries of change, the fundamental principle remains the same, though with a shift in focus. Now, private companies rather than governments are attempting to foster peace between groups in conflict by involving them in cooperative business ventures. David Lubetsky, CEO of one such company, Peace Works, says, “The more companies operate and profit together, the more they will gain a common interest in preserving and cementing those bonds… and hopefully someday, prosperity will make stability prevail.” This movement takes the socially conscious business practices of the last quarter century one step further; rather than just promoting donations, this new theory gives businesses an incentive to become involved in creating peace by establishing commercial and personal links between groups in conflict.
The need for socially conscious enterprise was initially recognized in the 1980s, when organizations like the Social Venture Network sought to create a network of entrepreneurs who would design and implement innovative ways in which business could be used to benefit society. Until recently, this agenda meant that companies gave away a certain percentage of their pre-tax earnings to a worthy cause or Organization and supported projects for social change, which benefited children, families, disadvantaged groups, and the environment. Since the 1990s, However, this original philosophy has evolved further. Businesses have realized that creating a highly profitable venture does not require a sole focus on increasing profitability: businesses can simultaneously create profit and foster long-term economic stability and peace in their countries of operation.
One such company is Barilla Alimentary. Founded in 1877 by an Italian family, it is now one of the largest producers of pasta in the world. Recently, it launched a subsidiary* in the Middle East with the joint Cooperation of Egypt, Jordan, the Palestinian Authority, and the Israel based Peres Center for Peace. This agricultural venture will create a new strain of wheat that will be used to make pasta for local consumption and export, providing employment and technology to local producers and fostering links between Israel and the Arab states.
Siemens Data Communications (SDC), an Israel-based electrical -engineering company, has similar goals. In October 1998, SDC and a Palestinian engineering company signed a pioneering joint venture in which SDC agreed to hire, train, and integrate Palestinian engineers into company projects. This contract neatly solved two problems: first, it lowered the high rates of unemployment among Palestinian engineers; and second, it filled the gaps in the Israeli labor market. As for the success of this joint venture, Ari Ben-Zichri, the head of research and development at SDC, noted, “during the training period at SDC there was no tension of any kind even though many of the Israeli employees were in the army and helped to put down the uprisings in Ramallah.” One of the Palestinian employees stressed that “As engineers, we all speak the same language and have the same goals. I think the only real hope for a peaceful settlement Lies in such cooperative projects.”
Peace Works, founded in 1994, also believes that peace may be reached through joint enterprise, but it is unique because it was established expressly for the purpose of encouraging the development of cooperative business ventures between different groups of people. To qualify for PeaceWorks’ aid, companies must be crowned by persons of different nationalities or ethnicities that have habitually been in conflict. Peace Works serves as a consultant for marketing these companies’ products and facilitating distribution and sales. Peace Works is now a multinational corporation with more than 3,000 sales outlets in the United States alone. Peace Works Specialty Foods, a subsidiary of Peace Works, supports ventures between Israeli manufacturers who buy their raw materials from Palestinian farmers; it also directs a project involving a Texan manufacturer and farmers in the strife filled Mexican state of Chiapas. Peace Works provides similar services to the textile and clothing industries. The Arab co-owner of a company with which PeaceWorks collaborates commented, “Companies like this are good for the Arab people, better than making war.” Peace Works’ local partners are not the only ones acknowledging its work so far. Global leaders have also acknowledged the success of Peace Works.
Theoretical support for these ventures comes from a report produced at the 2000 Annual Meeting of the World Economic Forum. A group of global leaders in business, politics, public interest advocacy, the media, and the arts and sciences started the Business of Cooperation (BOC) Project to address the difficulty of building peace after war, and in its first report the group outlined the basic concepts of the theory of economic cooperation.
The BOC model is built on the idea that business can create the setting necessary to reach long-lasting Social understanding and prosperity in conflict regions while simultaneously achieving its business objectives. It works at three levels. First, human interaction: when people work together under conditions of equality, they overcome cultural stereotypes. Second, commercial cooperation: all businesses profiting from joint Ventures achieve a fixed interest in preserving those business ties. And finally, regional participation: the people participating in joint ventures “gain a stake in the system,” which eventually leads to even greater stability.
Essentially, the model establishes a connection between states and private sector companies that secure employment and technology for the areas where they operate. Barilla, SDC, and Peace Works have all put this theory into practice; not only do they provide links between different groups of people that have been at odds with each other, but they also Create local employment, technological development, and profits.
While there is some risk in creating partnerships and branches in conflict areas, there are certainly benefits in doing so. Because these businesses are joint ventures backed by the personal interests of each party, they are more likely to succeed, and the parent company will also share in this prosperity. Additionally, such ventures will increase innovation through the diversity of the workers and raise employee performance, as people who see a greater purpose in their work usually work harder. Finally, a company that develops joint enterprises will cultivate the company image and gain international recognition, thus further increasing profitability.
The BOC report outlines these potential gains, but it also warns of some difficulties in applying the model to real life. Furthermore, the socioeconomic impact of the model is limited by the number of companies incorporating it into their operations framework. BOC committee members believe that before their model can have a powerful effect, it must reach “critical mass,” with a sufficient number of corporations following its guidelines. The success of the model also depends on the assumption that joint business ventures are based on a relationship of equality between partners. If these relations are not rooted in an equal and honest alliance, the ventures may not succeed in reducing tensions between groups in conflict. Daily commercial interaction alone does not guarantee a peaceful coexistence.
Clearly, the social benefits of joint ventures have a limited scope; they merely touch their local communities. But the failure of peace talks and negotiations only serves to emphasize that politics are not sufficient, and that the BOC model may indeed be one of the better ways to guide the Middle East and similarly troubled regions to peace.
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