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Dominican Republic

Business should play a greater role in improving Caribbean society

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The View from Europe

David Jessop, Dominican Today senior Op-Ed contributor

Older readers of this column may remember a time when most Caribbean economies were dominated by family owned and run companies. Often linked by a family name to an older generation of Caribbean businessman but much less so women, they were usually paternalistic, influential and often philanthropic.

Such companies could be found in almost every Caribbean nation in CARICOM, as well as in the Dominican Republic, and the French and Dutch speaking Caribbean.

Although they were in business to succeed, were sometimes autocratic, often tried to maintain a monopolistic position in their sector or country, and sometimes held back development, most coupled this with a belief that they had a social responsibility.

While aggressively pursuing commercial opportunity, these early Caribbean entrepreneurs were concerned about the welfare of their employees, and their personal engagement ensured that their company was about more than just delivering results for family, shareholder or investors.

These were, and in some cases still are, the companies whose leadership was willing to support the growth of national, regional and external bodies able to represent the interests of the private sector and aspects of civil society.  They did not do this just because they wanted to have greater influence over governments, the unions or others, but because they saw value in supporting for example improvements in education, health care and the public good on issues broader than their immediate commercial interests.

Although some may quibble or be able to cite negative experiences, to take three at random from a quite long list, they would include Goddard enterprises in Barbados, Grace Kennedy in Jamaica,  Vicini (now Incia) in the Dominican Republic, as well as others with family names that have faded from view.

These and similar socially responsible Caribbean companies continue to operate in nations from Guyana to Dominica and the Dominican Republic, and remain imbued with a social ethos not found in many North American or European corporations. Others, however, have become publicly quoted or have been the subject of takeovers or mergers. These are often run by younger very able graduates with MBAs who are focussed to a much greater extent on delivering shareholder value, maximising profits and defending a narrow range of interests.

It is a development that has occurred in many other parts of the developing world and has been facilitated by the development of capital markets, the creation of regional stock exchanges, and the ease with which money can flow between once relatively isolated markets and jurisdictions.

In the last few decades this has been the way of the world, driven by large corporations and ultra-wealthy individuals whose behaviour in response to economic globalisation at worst is summed up in the movie ‘Wall Street’ when Gordon Gekko says that not only is greed good but that it “captures the essence of the evolutionary spirit”.

This over simplified and corrupting world view has however begun to change as significant numbers of major corporations and some thought-provoking writers have begun to question the role of business and its social utility.

In August, the US Business Roundtable which brings together about 200 of the country’s largest corporations including names such as Amazon and General Motors updated its thinking about the role of a corporation.

Since 1997 the powerful business body has regularly published a ‘Principles of Corporate Governance’ document which has stated that corporations exist principally to serve their shareholders. However, in a ground-breaking statement it said this year that it had become clear to its members that such language does not accurately describe the ways in which CEOs ‘endeavour every day to create value for all our stakeholders, whose long-term interests are inseparable’.

It also noted that many Americans were struggling, too often hard work was not rewarded, and ‘not enough is being done for workers to adjust to the rapid pace of change in the economy’. ‘If companies fail to recognise that the success of our system is dependent on inclusive long-term growth, many will raise legitimate questions about the role of large employers in our society’, the US Business Roundtable observed.

This near revolutionary thought is encapsulated in an influential book published last year which

focuses on the failures of modern capitalism. Written by Paul Collier, a respected development economist, ‘The Future of Capitalism’ provides a thought provoking conservative critique of the deep problems facing market economies, the inequalities that have been created, and the need to find ethical and economically rational ways to address the social imbalances that are in danger of tearing them apart.

Professor Collier argues that the answer lies in ‘shared belonging’ and setting aside ‘entitled individualism’ and ‘revivalist ideologies’ so that those who are successful accept ‘a web of reciprocal obligation’.  This he suggests should be the basis for addressing the widening social inequalities that modern capitalism has created, and which have led to the rise of potentially dangerous populist movements. His answers, which are as much about ethics as economics, suggest that business, individuals and governments steer capitalism towards long-term solutions that provide for the common good.

To be clear, his is an argument about the emergence of just societies in which business plays a leading, more balanced and equitable role in social development; ideas, although subject to justifiable caveats and criticism, that have found support from individuals like Bill Gates and the leader writers of the Financial Times.

What Professor Collier proposes in a highly accessible way is a new model for society that would fit well with and find resonance in the modern Caribbean, enabling it to build on its unique sense of identity, social awareness and religion-based values.

If the region’s failing education, health and social care systems, and its stagnating public service are ever to be resuscitated, Caribbean companies ought to be debating how in their own self-interest they can do more to encourage and deliver social outcomes that ensure national and regional growth.

The new dialogue on the purposes of capitalism suggests that there is a much wider, strategic and direct social role that corporations can play while still delivering profits and shareholder value. These are issues that the Caribbean’s largest companies should be meeting to discuss with Professor Collier and others.

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@caribbean-council.org

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

October 11th, 2019





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Dominican Republic

Trade deal brought unhealthy foods to Dominican Republic, other countries: Buffalo University study

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Re-published on public interest

Buffalo, N.Y. — How do free trade agreements impact diet and health?

A study on a trade deal between the U.S. and smaller, developing countries in Central America and the Caribbean highlights the need for policymakers to consider this question, says Marion Werner, PhD, associate professor of geography in the University at Buffalo College of Arts and Sciences and co-director of the Center for Trade, Environment and Development at UB.

Werner led the research, published online this August in the journal Social Science and Medicine. The study analyzes the availability of non-nutritious food in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic in the years after the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) was signed between those countries and the U.S., going into effect in 2006.

The research was a collaboration between Werner and colleagues at UB and the Santo Domingo Institute of Technology (INTEC) in the Dominican Republic.

With regard to the Central American signatories and the Dominican Republic, “Our main finding is that the trade agreement is associated with the importation of much less healthy food,” Werner says. “This includes industrial sweeteners, edible oils high in saturated fats, and processed foods.”

“We’re trying to think about the health effects of trade agreements,” she says. “The U.S. is exporting ever-more processed foods, as well as meat, to the region, while making it harder for farmers there to supply healthy foods for the local market. This situation has an impact on the health of Central Americans, especially low-income folks, as an unhealthy diet can lead to higher rates of obesity and overweight populations.”

Frozen potatoes offer one example of the dynamics at play. As Werner and her co-authors write in the paper, “We take frozen potatoes as a proxy for increasing penetration of processed vegetables in local diets because of the product’s near exclusive use for french fries in the hotel and restaurant sectors, especially fast food chains.”

CAFTA-DR eliminated tariffs on frozen potatoes, and with the agreement in place, the Dominican Republic and Central American signatories saw sharp increases in imports of that food, the study finds. From 2006-16, frozen potato exports to those countries rose by 76%, with U.S. exports growing rapidly, according to the research.

An analysis of food prices in the Dominican Republic also shows that in that country, CAFTA-DR did not bring lower food costs — an oft-hoped for benefit of such agreements.

“Free trade deals are passed with the belief from mainstream economists that people will benefit from lower food prices,” Werner says. “But when we studied the Dominican Republic, there were really striking price changes in the cost of food, which increased at a higher rate than inflation.”

Werner and her co-authors found that the price of healthy foods like fresh fruits increased much faster than the price of unhealthy foods like sodas.

The research suggests that diet and health are important factors to consider when negotiating trade agreements, Werner says. The findings point to the need to explore how policies can address food insecurity in developing nations while also supporting farmers.

“How can you sustain small and medium farms, while also meeting the needs of low-income households to access healthy foods? It’s not responsible to address food insecurity by sacrificing the food-producing capabilities of a country, and causing them to be dependent on cheap imports,” Werner says.

The study’s authors include Werner; Pavel Isa Contreras, PhD, economist and research professor at INTEC; Yeeli Mui, PhD, Bloomberg Professor of American Health in Obesity and the Food System in the Johns Hopkins Bloomberg School of Public Health, who contributed to the project while she was a researcher at UB; and UB geography PhD student Hannah Stokes-Ramos.

UB’s Community of Excellence in Global Health Equity and Baldy Center for Law and Social Policy supported the research.





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Dominican Republic

Environment shutters 234 aggregate mines, seizes 2,256 vehicles

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Santo Domingo.-  Environmental Protection Service (Senpa) director Omar Gitte Mejía on Wed. said 234 aggregate mines and 48 illegal sawmills in different parts of the country were closed in the last 15 months.

He said that from August 29 to November 7, Senpa retained 2,256 vehicles, and levied fines of RD$13.9 million.

The official said the agency closed and incinerated about 3,000 coal furnaces that had been operating across the country, and seized wood, as the result of illegal lumbering.

Mejía said that most of the closed sand mines were operating illegally in the South and East areas of the country.





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Dominican Republic

Dominican politico reveals names, amounts of campaign donations

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Santo Domingo.- Former Modern Revolutionary Party (PRM) presidential candidate Hipólito Mejía, on Wed. submitted a list of 18 campaign donors for the primary elections held October 6.

It’s the first time that a Dominican politician published the names and amounts donated to them.

Total received RD $ 40.9 million:

Juan G. Julián Jiménez RD $ 500,000.00

Limbert Cruz RD $ 300,000.00

Consorcio Azucarero Central RD $ 500,000.00

Limbert Cruz RD $ 1, 250,000.00

Pantaleon Salcedo RD $ 400,000.00

José R. Brea González RD $ 1,000,000.00

Comercial Delta RD $ 500,000.00

Mejía Arcalá CxA RD $ 700,000.00

Omar Cornielle RD $ 100,000.00

Burgos Gómez RD $ 5, 886,000.00

Manuel Lara RD $ 1, 700,000.00

Alexis Victoria RD $ 2, 500,000.00

Miguel Vásquez RD $ 2, 625,000.00

Alberto Atallah RD $ 2, 500,000.00

Jesús Feris Iglesias RD $ 1, 800,000.00

Arsenio Borges RD $ 1,000,000.00

Rafael (Fellito) I raised RD $ 4,000,000.00

José Miguel Cabrera RD $ 3,000,000.00.





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