Links New Infrastructure Plans
Related ~ Obama's Job Plans
September 7, 2011
CEOs Call for Less Regulation, Better Infrastructure
Chief executives of some of the world's largest companies would support a U.S. effort to update aging infrastructure, financed in part by private money, as a way to create jobs and make U.S. business more competitive.
"I travel the world on a regular basis, and U.S. infrastructure is simply not competitive," says Tom Albanese, CEO of Rio Tinto Group, the global mining company. "We are living off the capital of 50 years ago. If the government can't fix our infrastructure crisis, [it should] allow private capital to be employed."
Marcelo Claure, chief executive of Brightstar Corp., the telecommunications-services company, agrees: "Upgrading our subpar infrastructure in the U.S., and even considering options like privatizing infrastructure if needed for funding purposes...would be a good place to start delivering meaningful jobs in the U.S."
Dominic Barton, managing director of McKinsey & Co., said pension funds, asset managers, sovereign wealth funds and private-equity firms are all prepared to invest in infrastructure projects, and estimates they could contribute "$250 billion to $500billion of equity capital over the next three years."
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Journal Community
..The CEO suggestions come in response to a request to members of its CEO Council—a group of roughly 100 global chief executives who meet annually to deliberate on public-policy issues—asking their suggestions for a global growth agenda. Thirty-five of them responded. The Journal's request preceded the announcement of the president's plan to speak about jobs before a joint session of Congress on Thursday.
Many of their suggestions are familiar. The CEOs want lower corporate taxes in the U.S., which has among the highest tax corporate tax rates in the world, and a moratorium or a rollback of business regulation.
"The government needs to be a better partner with the business world," said Magellan Health Services CEO Rene Lerer, echoing a sentiment expressed by many.
Yet the CEOs also exhibited a practical streak that is often absent from the Washington debate, and a willingness to embrace compromise. Mr. Albanese, for instance, wrote that on the budget deficit, "both political parties are right, and wrong. The government needs to increase revenue and reduce costs [including entitlements and military spending]." And Terry Marks, president and chief executive of The Pantry Inc., which operates convenience stores that sell gasoline, even suggested an increase in the gas tax "to invest in transportation infrastructure."
"We have to confront reality," wrote Roger Wood, chief executive of Dana Holdings Inc., the auto-parts company. "Political infighting and seemingly disparate objectives...are keeping the U.S. from finding real solutions to real problems."
The members of the CEO Council, which includes global companies some of which are domiciled abroad, generally agreed that indebted U.S. consumers can no longer drive economic growth in the U.S., and impetus will need to come from developing countries. As a result, they urged the U.S. to embrace global free trade, and make changes that will encourage the growth of export industries here. Many of their recommendations focused on developing human capital as the key to global competitiveness.
"Create more charter schools and teaching jobs for young graduates," wrote Thomson Reuters CEO Tom Glocer. "Train more engineers and German-quality skilled labor." Several also called for reform of the immigration system, to allow more skilled professionals to live and work in the U.S.
Encouraging innovation in the U.S. was also a common theme.
Klaus Kleinfeld, chairman and CEO of Alcoa Inc. called on the U.S. to "reignite innovation" by creating regional alliances that join local governments, universities and investors to spark new business creation, and to invest in "research and development clusters" in areas like clean energy and life sciences. He and others also recommended an overhaul of the patent system, to reduce backlogs and address inefficiencies and the growing problem of "patent trolls."
Several of the CEOs also counseled patience. Deleveraging, they pointed out, takes time. "Slowdowns are to be expected after the rapid pace of growth in the world's economies over the past couple of decades, and businesses should take advantage of the time to re-focus on the basics and prepare for the resumption of growth," wrote Jack Ma, CEO of the Alibaba Group, the Chinese Internet company. "It's like Tai Chi [the Chinese martial art]—sometimes you need to go slow in order to go fast again."
Below are excerpts of the CEOs responses:
http://online.wsj.com/article/SB10001424053111903648204576554473003946728.html?mod=WSJ_hp_mostpop_read
