Renewing our faith in institutions

Two important global gatherings will take place in Indonesia this week. Both provide an opportunity to reflect on how we ought to address the deficiency of trust that confronts our institutions today.

The first gathering is the World Economic Forum on East Asia, which returns to Indonesia since the last in 2011.

The second is the Asia-Africa Conference, which celebrates its 60th anniversary of Indonesia’s extraordinary role in the pivotal 1955 conference in Bandung. The conference was significant because it brought together the world’s emerging nations in the wake of colonialism and gave them a collective voice in shaping policies that had hitherto been dominated by Western powers.

Since then, our world has seen unprecedented change. Asia and Africa are no longer colonialized peoples fighting for a voice in the world, but rather two of the fastest growing and most dynamic regions of the world, which today comprise over half of the world’s global output.

Existing in an increasingly multipolar world and recognizing our inevitably interdependent and shared futures, we must work together in spite of our differences. Divisive issues such as the conflicts in the South China Sea and in Ukraine will always exist and cause tension, but it should not be allowed to outweigh a greater commitment to our common future.

Moreover, governments no longer hold a monopoly on power. Technology has empowered the individual and democratized power across and within countries. A complete and legitimate forum must include non-state actors and individuals. This new equilibrium requires a new approach.

Risk of paralysis

Our institutions – whether they be the government, religion, business, or the market – are at risk of paralysis. This is true because many of them do not adequately mirror today’s reality, and over the years have depleted the trust they once enjoyed. As a result, our institutions no longer command the credibility and trust required to lead, particularly during these changing times.

To be effective, today’s institutions must be recalibrated to reflect this democratization of power and promote a more inclusive view of collaboration across countries and different stakeholders of our society. Organizations like the World Economic Forum provide a platform for governments, businesses, civil society and academia to finding shared solutions.

It is appropriate that in January of this year, the World Economic Forum, as the largest multi-stakeholder organization, gained formal status as an International Institution for public-private cooperation.

But even as we work toward improving our institutions, it is also imperative to recognize that we face an even deeper problem of trust. Moises Naim writes in the The End of Power that “those in power today are more constrained in what they can do with [power] and more at risk of losing it than ever before”. We live in an era of great change and volatility across economics, politics, faith, society and the environment. These changes are testing the efficacy and strength of our institutions to continue to lead.

In too many countries citizens are questioning their forms of government, whether democratic or otherwise, and many no longer believe that their leaders are able to carry out their mandate.

Societies find it difficult to trust business and markets to fairly create and allocate wealth and opportunities. Religion faces an existential crisis as more people than ever claim they do not participate in organized religion in its many shades. Universities, too, have come under scrutiny for not producing graduates with the right skills.

Commitment to stewardship

This week’s East Asia meeting of the World Economic Forum, which focuses on the topic of anchoring trust, is critical. I believe the key is a renewed commitment to stewardship. Recognizing that what we have – whether as an individual, a society, a country, or a civilization – is not ours to use as we desire, but rather to cultivate for the benefit of those around us, and to grow for generations to come.

This is acutely true for business, which has attracted widespread cynicism after the 2008 subprime crisis. While one may have ownership over assets and resources, this is perhaps merely a legal construct.

More crucial is the moral imperative that we should strive to be better stewards of what have been entrusted to us by growing, innovating and allowing our businesses to better the lives of those around us.

For many of us doing business in the world’s emerging markets where societies’ needs are greater, we have an unparalleled opportunity to greatly impact our surroundings, and through stewardship, provide a deeper meaning to business.

Paul Laudicina inspires us well when he writes: “Society and business need to move away from a system in which people do good by doing well – that is, benefit others and the planet only as a byproduct of focusing on personal profit – to a system in which one does well by doing good – when providing true leadership and service is the central priority and financial returns and personal enrichment are merely the corollaries.” – Rappler.com

John Riady is co-chair of the East Asia meeting of the World Economic Forum. An Indonesian lawyer, professor, and businessman, he is currently executive director of the Lippo Group; professor of law at Universitas Pelita Harapan; editor at large of the Jakarta Globe, an Indonesian English-language newspaper; and director of Berita Satu Media Holdings, a diversified Indonesian media conglomerate.