The Role of Business in Conflict Prevention, Peacekeeping and Post-Conflict Peacebuilding
A Speech by Dr. Heinrich von Pierer

Mr. President,
Excellencies,
Ladies and Gentlemen,

It is a great and distinguished honor to be here today- and to have the privilege of addressing you. Thank you for giving me this opportunity - and the memorable experience of joining you here in this legendary chamber, which I have known so far only as a curious visitor.

I have been asked to say a few words about the role of business in conflict prevention, peacekeeping and post-conflict peacebuilding. This is a challenge we at Siemens know well. After 157 years of doing business around the globe, we have gained extensive experience working in different kinds of crisis situations.

I want to address three themes today. First, some concrete remarks about two conflict areas that are the focus of public attention right now: Afghanistan and Iraq. Secondly, what are the most urgent needs for the rebuilding process after a conflict. And third, what can be done over the long term to secure stability and to avoid conflicts or at least reduce their intensity.

First, Afghanistan. Less than two weeks ago, I met with President Karzai while he was in Berlin for the International Afghanistan Conference. Our talks concentrated on his country's reconstruction. At his special request, we jointly visited one of our Berlin factories. The same factory, in fact, that King Amanullah of Afghanistan visited on his tour of Germany way back in 1928. This shows that we have generations of experience in Afghanistan - like in most other countries around the world.

Our presence in Afghanistan was interrupted by war. But when it ended, we took some very specific steps to re-start our activities and to help rebuild the country.

First of all, we wanted to reopen our own office as quickly as possible. We looked for a highly qualified national to re-launch our business and we found the right man in our own company. A man who is fluent in Pashto, Farsi, German and English, he was eager to contribute to his country's rebirth. We acted fast and reopened our office in Kabul in February 2003.

Second: Parallel to setting up operations, we critically analyzed the most pressing infrastructure needs in the country. From our point of view, the top priorities were to restore power supplies, repair the water system in Kabul, and reconstruct the communications network.

Third: We were already on the spot when we received the first orders in these sectors. One project, for example, was to rehabilitate two hydro power plants that we built over fifty years ago. We simply pulled the original construction plans out of our archives and could begin work immediately. By the way, we trained a large number of Afghans for this special work at our facilities in Pakistan, India and only partly in Germany. Another project was getting Kabul's water system back in working order.

And fourth: The social side - always important for successful engagement. We are helping educate people. We are supporting UNICEF's "Back to School" initiative as an important investment in the country's future. With an emphasis on girls - to ensure they also participate in basic education. I know, of course, that these efforts are just the beginning. But they are visible, and this is important.

And now to Iraq. We would like to pursue the same basic strategy and help restore, for example, the country's power generation capacity and power grid, and communication networks. And we would also like to open local facilities, but as we all know, the situation is extremely difficult right now. Despite the security risks, we have already started to help in two concrete projects. One is setting up a mobile telephone network, in northern Iraq. The other is rebuilding a power plant. We all share the hope that the reconstruction of Iraq can be accelerated as soon as possible.

Of course all countries and all situations are unique. And there is no golden solution for all post-conflict scenarios. One must analyze each situation and tailor the response.

In general, I would say there are five basic factors that are critically important First: Security. Second: Infrastructure. Third: Financing. Fourth: Post-conflict planning. And fifth: Visible progress.

The first and foremost factor is obvious. It is security. This has been a chronic problem in many regions. But since September 11th, we also know that violence can strike anywhere - at any time. There are no more safe havens in the world. And we have to live with that fact.

But it is clear: For business to operate there must be a reasonable level of security and enough government control to provide basic law and order. The risk factors must be reduced to a manageable level.

In critical regions, business follows some basic rules. For example, a strong reliance on local employees - who best know their country, their culture and the local circumstances. And a few expatriates to push the process. Our principle in such cases is to send employees only on a voluntary basis. And these people are carefully chosen considering all religious, ethnic and cultural factors - and they do not come, necessarily, from Germany. Close cooperation with local authorities is a must for taking all proper measures. And above all, one needs good common sense, caution and prudence - as well as courage. But unfortunately, these rules may not always be enough. If the risks are too high, we sometimes have to pull back. Only as long as necessary, I must add. Because our basic philosophy is: We are here to stay.

To summarize my first message: Local government or provisional authorities must provide the necessary minimum of security. Business should draw on the experience of people who best know the country.

The second factor is infrastructure. Nothing can function without water, electricity, food supplies, transportation and communication systems - particularly in cities. One of the top priorities must therefore be to reconstruct - and secure -these services in order to restore functional authority, to meet the basic needs of the population and to provide the foundation for rebuilding the economy and the society.

So my second message is: Start as soon as possible with repairing and renewing the basic infrastructure.

The third factor is financing. The success of any reconstruction program depends on getting funds. The private sector must have partners - international organizations like the World Bank, bilateral partners, development agencies, governments and local authorities. Business can't bear the financial burden. As we all know, the process of securing financing can be complex, time-consuming and sometimes frustrating. But in post-conflict situations, speedy financing is critical for restoring a viable society.

And therefore my third message is: Financing instruments - including guarantees and Public Private Partnerships - must be made available as quickly as possible Nothing, is more dangerous to the peacebuilding process than a lack of action.

The fourth factor is post-conflict planning. And I mean - above all - timely planning. If at all possible, post-conflict plans need to be developed at the same time as military or conflict resolution strategies. There must be a seamless - and fast - transition.

And we have to be realistic. This means we cannot always expect all procedures to run in the standard forms that we are familiar with. I mean, for example, the bidding process. Extraordinary situations often demand extraordinary solutions and fast and uncomplicated decisions. One must accept that this is sometimes more effective than following the usual game rules because time is of the essence.

So my fourth message is: Plan as much as possible in advance. But don't waste critical time in unique situations by relying on too complex and time-consuming solutions.

None of these four factors are effective without the fifth factor. I am talking about visible progress. People must personally see that progress is being made, that their own lives are improving and that they can begin to support their families again. Not with extra-legal activities, but as part of a new civil order. This is elemental for regaining trust and long-term social stability.

My fifth message is: We have to give people a future. And it must be quickly tangible.

This leads me to my last point today: What can be done over the long term to secure stability?

One central source of conflict is hopelessness, or the feeling of being excluded from growing prosperity and from the benefits of globalization and of being overwhelmed by a process that one can't influence. These fears, these desperate outlooks lead to desolation and anarchy. Those who have nothing to lose become unpredictable - and capable of any deed.

We have to counteract these trends by giving people hope - and a way out of their situation, not only for a brief moment, but on a sustainable basis.

And I would like to give you three examples of what can and should be done. First example: education. We must build schools, educate children, and provide vocational training for youth. If we educate children, we open the future to them. A future in growing prosperity, and a future without violence and aggression.

Education for prosperity and peace could be a program of a Public Private Partnership.

Next example: healthcare. Basic public health services are a must. Even in countries with isolated communities, there are solutions like telemedicine to provide better health consultations. It is a tangible and effective way to bring part of the First World to the Third.

Third example: transferring knowledge and technology. This is a key step to integrate local economies with the world and to train people to help themselves.

And this could be done in coordination with local investments of global players. This is the way to build up networks of local business partners and suppliers - and to create jobs.

We took such an approach years ago under the guidance of Simon Peres. We set up a joint venture software company for Palestinian and Israeli developers in Ramallah, on the West Bank of the Palestinian Authority. It was so important to me that I personally took part in the inauguration ceremony in Ramallah. It was a moving moment. It worked well - and gave many people a future - until the project was tragically interrupted by the renewal of hostilities. But this idea - and many, many more like it - can work. I am convinced of it.

These examples show that development aid and programs have to - and can - do much more than fight poverty. They must also focus on solutions for ensuring long-term benefits and stability - and they can be provided by Public Private Partnerships.

Ladies and gentlemen,

Alone, business can't change the world. But together with public partners, business can make decisive contributions in the struggle against violence, against anarchy and against terrorism - and for civilization, for freedom and for prosperity. We have certain projects under way. And we are ready to do more.

Thank you.

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Dr. Heinrich v. Pierer is President and Chief Executive Officer, Siemens AG and a former AICGS Global Leadership Award recipient.

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This speech appeared in the May 6, 2004 AICGS Advisor.