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Corporations Playing Bigger Role in Economic Development


Government and business leaders have concluded their annual meeting in Davos, Switzerland with a discussion on the impact corporations are having in promoting economic advancement in developing countries. From Davos, VOA's Barry Wood reports the consensus is that the impact is a positive one.

China Mobile is one of the world's fastest growing companies and its chief executive, Wang Jianzhou, is a co-chairman of this year's economic forum. In a session on corporate responsibility, Wang described how his company is bringing phone service to first time users in rural areas.

"We now have [a] 370 million subscriber base," he said. "And every month we still get 6 million net additions to our subscriber base. And more than 60 percent of new subscribers [come] from rural areas, because of the lower cost [we provide]."

China, with its fast growing economy, leads the world in reducing poverty. The World Bank says China has brought up to 300 million people out of poverty in the past two decades.

British Prime Minister Gordon Brown told the panel that governments have been slow to recognize their limitations in economic development.

"If you look at the biggest distribution networks in Africa, they have nothing to do with governments now," he said. "It's probably Coke and Pepsi. If you look at the change in telecommunications, you know, where previously 50 years ago governments ran post offices and telecom companies in the public sector, the telecommunications network hold within them the possibility of transferring financial products, of making it possible for micro credit, for remittances to happen, as well as communications."

Angel Gurria, the head of the OECD economic research agency in Paris, said foreign direct investment is propelling economic growth in Egypt, a country that until recently lagged behind in development.

"If a country [Egypt] goes in five years from having $500 million to $10 billion of foreign direct investment, with very dramatic changes in the governance, very dramatic changes in the decision making process and the politics, those countries get into the radar screen [for investors] by themselves," he noted.

The message presented by numerous panelists from developing countries at Davos is that they want to be part of the export oriented trade patterns known as globalization. Increasingly, China and India, which have opened themselves up to an expanded private sector, are seen as the new models for economic development.

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