Unless the business community acts forcefully and creatively, years of progress toward open markets could be upended amid the worsening global financial crisis. This was the message delivered on November 12 by Muhtar Kent, president and chief executive officer of The Coca-Cola Company, who was presented with USCIB’s 2008 International Leadership Award at a gala dinner, at the Waldorf-Astoria in New York.
“Even at this historic time and place in America, and for that matter the world, I worry that we in the global business community are at risk of losing an important battle,” said Mr. Kent. “The global financial crisis, coupled with growing rhetoric from the anti-globalization movement, threatens to promote economic isolationism in America and around the world.”
Over 250 USCIB members and distinguished guests attended this year’s International Leadership Award Dinner. The award is presented each year to a leading corporate executive who has made significant contributions to world trade, investment and finance, and to improving the global framework in which American business operates.
Senator Chuck Hagel addressed guests at the dinner. He praised the vision of those who built the multilateral economic organizations after World War Two, institutions built upon a foundation of common interest that effectively framed the boundaries of international behavior and engagement. He said these institutions were clearly still relevant, but would need to be reinvented to address 21st-century challenges, and that other countries were looking to the United States to lead in the effort.
“They don’t want us to dictate, but they do want us to lead,” stated Senator Hagel. “They’re not so sure that the next leader of the world, if America is absent from that equation, will be as benevolent with its powers as America has been with hers.”
Senator Hagel drew a connection between this hunger for U.S. leadership abroad with the clear mandate for change endorsed by American voters in the previous week’s elections. “Setting a new course, framing a new reference, requires we bring together an international purpose to help lead the world.”
Addressing Mr. Kent, Senator Hagel said: “I was asked recently what the most important attribute of leadership is. I’ve always said it’s very simple: you make a better world. That’s why we’re all here. Your honoree tonight has fulfilled that high standard.”
USCIB Chairman William G. Parrett praised Mr. Kent’s “global outlook” and said that, while CEO only since July, he had already put his mark on his company. “Coca-Cola derives about 73 percent of its revenue, and 81 percent of its profit, from overseas sales. The countries of the former East Bloc which Muhtar helped open up are now among the company’s most profitable and innovative.
Mr. Parrett further applauded The Coca-Cola Company’s continued overseas growth strategy, which has included a recent bid for China’s largest juice manufacturer. This came on the heels of the company’s high-profile sponsorship efforts at the Beijing Olympic Games. He said Mr. Kent – born in the United States, son of a distinguished Turkish diplomat, educated in Britain and with management experience all over the world – personified the type of internationalist credentials that are increasingly sought after at top companies.
In remarks accepting the USCIB award, Mr. Kent cited a “significant disconnect” between business and the general public, with recent opinion polls showing that big business is held in high esteem by just seven percent of the American public. Less than three in 10 Americans and Europeans believe that global trade and business ties are good for their nations, he noted.
“Clearly, we have our work cut out for us,” he said. “And clearly, none of us can reverse this course alone. Business, government and civil society must come together, and partner like we’ve never partnered before, to promote the social, economic and environmental benefits of … greater trade, investment and development.”
Mr. Kent identified four priority areas for such partnerships: improved education, increased job retraining, more overseas business diplomacy by American companies, and policies to promote innovation at home. “We have to learn from history,” he said. “In the process of innovating and creating a technology and service-driven economy, America replaced 40 million antiquated jobs with 80 million new high-paying and high-skilled jobs between 1980 and 2000.”
Also at the dinner was Hal Scott, a professor at Harvard Law School and director of the Committee on Capital Markets Regulation, who assessed the state of financial regulation amid ongoing market turmoil. He said the U.S. would need to avoid repeating the mistakes of Japan’s “lost decade” by implementing effective regulatory reform and restructuring as soon as possible.
“Our current fragmented structure has not fared well in the credit crisis,” according to Professor Scott. “We need better disclosures for securitized debt offerings. We need to fix our accounting rules, and we need to make sure credit ratings agencies properly disclose their methodology.”
USCIB President Peter M. Robinson told those at the gala that next year’s event would be held in conjunction with the worldwide 90th anniversary celebrations of the International Chamber of Commerce, the world business organization that is USCIB’s oldest and largest international affiliate. He said ICC planned to mark the milestone with an event at the United Nations and a two-day high-level workshop at Harvard Business School on the future of market capitalism, both held around the time of the USCIB award dinner, tentatively set for October 8, 2009.
Mr. Robinson also noted that next year would marks the 40th anniversary of USCIB’s appointment by U.S Customs as the national issuing and guaranteeing association for ATA Carnet, the export service that enables temporary duty-free import overseas for good destined for trade shows and product demonstrations, as well as professional equipment.
“In 1969, few Americans understood what a Carnet was or how it worked,” said Mr. Robinson. “Nowadays, USCIB and our designated service providers issue some 15,000 Carnets each year, providing an essential service for American companies and laying the ground for future growth in U.S. exports and investments overseas.
Text of remarks by Muhtar Kent
