TORONTO (ResourceInvestor.com) -- Barrick's founder and chairman Peter Munk recently gave a half-hour speech about globalisation to The Empire Club and Canadian Club in Toronto. Munk is known as something of a rainmaker, and has built several businesses into billion dollar entities operating in markets world-over. For that reason, some of his words and ideas bear repeating.
Indeed, as globalisation is perennially under attack, it is refreshing to hear Munk's pro-globalisation viewpoint, about which he is adamant. A selection of some choice excerpts follows.
BACKGROUND
Peter Munk emigrated from Hungry in 1948 and settled in Canada, earning an engineering degree from University of Toronto in 1952. From that point he began building. He founded Clairtone Sound Company, an audio equipment manufacturing company, and listed on the TSE, and then moved into the hotel business in Australasia as CE of Southern Pacific Hotel Corp.
Finally, he came back to Canada and took over what is now Barrick Gold Corp. [TSX:ABX], building it up and still finding time to acquire and grow real estate company Trizec Corporation [TSX:TZC.sv] along the way. He received the Order of Canada in 1993.
BELIEF IN FREE TRADE AND GLOBALISATION
Munk says he has been an advocate of opening borders for 50 years. In his words, "In the 1960's, free trade in North America became part of my religion, part of my conviction."
He recounts the story as essentially a selfish person that nonetheless benefited others: as he sought new markets to sell his products, his success paid dividends for shareholders and created wealth in the developing world.
Today, he says, "Free trade is universally acknowledged to be the greatest generator of wealth in the history of mankind." The fight by entrepreneurs to open up markets to create growth and profits over the last 25 years "has allowed the world to lift up one half of its population that up until then was mired in eternal poverty to a level throughout Asia, China, India that they can now look forward to enjoying the kinds of standards that we have traditionally enjoyed. No government, no public agency, no WTO, no NATO, can do what a combination of millions of people engaged in the task of creating and generating capital can do, if its properly applied."
Munk believes that it is the responsibility of CE's "to move capital, people, expertise to those areas where shareholders have the best chance of maximizing returns," and this is what he did at Barrick.
BARRICK'S CONTRIBUTION
"Ultimately its not about money. Money is a measurement we use. It's all about self-fulfilment - optimising our potential. Barrick has been able to do that in 17 countries in every remote corner, over and over and over again. Barrick has transferred technology, advanced high-tech know how and competence in areas where the word was totally unknown, let alone the practice of high-tech applications and operations; and that technology often left us and moved on to other areas in those countries where it created additional benefits and ongoing benefits."
"The employees of Barrick in Tanzania, or in Nevada, or in Chile, or in the highlands of Peru have been able to elevate themselves where most of them lived below subsistence level existence, to a point where they have wages equal to Canadian wages. Their children have been educated. The people who we employed, the tens of thousands especially in remote areas, we have provided health facilities that in some cases, and I refer specifically to our hospital in a remote part of Tanzania where our big mine is, we provide healthcare that not only has given them a health unit that they have never seen before, not just the workers but the whole community. We brought in fresh water not because we are so generous, not because we are church going Christians, not because we want to share the wealth - we did it because of our own self-contained interest. You don't want people working for you who are not healthy. You don't want people working for you who do not get the benefits - and suddenly water lines, pure high quality water lines that were never available in the eastern part of Tanzania have provided water for tens of thousands of people all the way through."
"Of course Barrick also has a cultural inclination to do the right thing for its people. Every miner who works for Barrick for at least 3 years has his kids educated at company cost throughout university. That policy by the way has been adopted throughout out the world and has been responsible for thousands of children who now can fulfil their human potential to maximum extent."
GLOBAL COMMERCE
"I'm totally convinced, regardless of what you read in the newspapers, that corporate America, corporate Germany, corporate Australia, corporate Japan, the corporate entities of the free world are driven by the same morality, the same motivation and the same desire to do the right thing as we are. And if you add together the totality of that much human effort, of that much capital, of that much focus and determination, then you understand how free trade, how free markets, how globalisation move the world."
THE ANTI-GLOBALISATION CROWD
"The problem is that the naysayers, and there are many of those, is that they focus on the micro; the macro [benefits] gets overlooked, the micro becomes human. The micro becomes good stuff for local advertising. That is why this diversified grouping of the most un-united people who are only united by their wish to defy globalisation, but united in nothing else. The unifying force of the anti-global people is the ability to say no, but they stand for nothing united. They consist of animal rights activists and greens, they consist of Trotskyites and extreme greens, and they are all together and there they go to Davos, Switzerland where the World Economic Forum is located, there they go to Seattle to smash windows, but boy do they get the press, boy do they get sympathy."
CONCLUSION
"Globalisation is one of the most wonderful things that has happened to mankind, the benefits are clear and obvious to everybody who is prepared to look away from the mini and the micro and look at it globally. Go to India, go to Indonesia, go to where the world's population is in Latin America and see what it has done."
"And yet I think it is not a perfect system, and there are very many areas where there is room for improvement. And we corporations have a fundamental responsibility, a major self-interest, and a high ability to undertake the improvements, but I am talking about improvements in governance, improvements in methodology, but not changing the system."
"Because, as Churchill once said, 'Democracy is a dreadful system but is by far the best we have so far come up with in humanity.' Globalisation may have many, many flaws but by God it is by far the best we have ever come up with."
