From opulence to crisis

When one actually takes the time to analyse the current situation, it is surprising to note how much our minds are eager to focus on the present and the future without actually looking to understand what mistakes we made and why we didn’t see the crisis coming.

In giving my report the title “From opulence to crisis”, I took inspiration from two books written by the economist John Kenneth Galbraith (1908-2006) and simply inverted his chronology given that he published “The 1929 crisis” in 1951 and “The Era of Opulence” in 1961. Although many may have preferred Milton Friedman (1912-2006), Galbraith has suddenly come back into fashion.

I would like to point out that the deep crisis of 1929 was followed by a period of opulence and that economies tend to be subject to balancing forces. Brilliant economists will write in a few years’ time about the crisis we are currently going through - a crisis which the media tells us over and over again is the worst the modern world has ever experienced.

We don’t know anything for certain and it is reasonable to suggest that many a theory constructed today will be disproved tomorrow.

We do not know how long it will take for the world economy to recover and for its indispensable driving force, namely trust, to be restored. It is essential that we ready ourselves for the new beginning that our companies will see coming before other sectors. Isn’t this the privilege of an industry whose role is to prepare raw materials?

We did not see this crisis coming, but we shouldn’t blame ourselves because nobody else saw it coming either. Our modern world seemed to be enjoying a magnificent era, with an average annual growth rate of 5% for five straight years! Markets appeared insatiable, monetary reserves climbed to levels never seen before, and the world’s population became greedy for progress and consumption. This was the era of opulence.

We did not know and could not have anticipated that part of this economic growth had been created in a virtual manner.

Today’s awakening has been brutal. And while we are all suffering from a hangover, worry is often one step ahead of reason. It is now that we need to question our convictions and assess our ability to react, organise and develop because our businesses will be in the vanguard of the economic upswing.

Two years as President of our organisation has strengthened me in my belief that we possess the instruments and means to prepare a more solid future for our companies - on condition that we understand the need to build our future together.

First of all, we must bear in mind that cycles change; many times during recent years, we had mentioned the potential for markets to decline when everything seemed to be going too well and, more particularly, growing too fast. But sometimes, we didn’t want to acknowledge those first signs: credit notes that were more difficult to negotiate, less encouraging financial information from consuming industries, etc.

Reinforcement of ethical rules and those of good governance should not be the sole prerogative of the larger financial or industrial organisations. We should have the same preoccupations and force ourselves to adopt criteria adapted to the size of our companies. We should also reinforce our professionalism by enhancing: the quality of our products; our respect for the environment; and the training and safety of our employees.

The raw materials that we produce should correspond to contractual agreements - precisely and in accordance with material standards of which we should promote the implementation and use by all operators within our industry. This matter concerns all of us.

We should also redouble our vigilance and our efforts in support of free trade given that the current crisis may lead to protectionist behaviour by certain states. Our recently-created International Trade Council is the ideal vehicle for addressing these issues and was created for this very reason.

The imminent publication of the study commissioned and validated by us on carbon dioxide emission savings achieved through recycling proves the importance of our activities from an environmental perspective which, when combined with economic criteria, form the basis for the future of companies in our sector. Soon, we should also publish statistics relating to some of the larger countries of the world which will confirm the importance of our activities to the global economy and also their perfect alignment with sustainable development.

It will not surprise you to learn that, during these times of crisis, our world organisation has ceaselessly continued on its mission to represent the interests of the recycling industry in dealings with international institutions.

Our European associations - EFR, EUROMETREC and ERPA - fulfil their role perfectly with the EU authorities, while our relationship with ISRI is also very important and enables the real-time follow-up of issues of interest to our American colleagues. Our meetings bring together professionals and are particularly important during this period for exchanging and challenging ideas; but above all, these gatherings enable us to produce comprehensive analyses that truly reflect all the latest developments impacting on our sector. Whatever the size of a company, it lives off its market and needs to understand every relevant international issue so as to ensure its development.

This justifies your personal involvement in the life of our organisation.

BIR draws its membership from more than 70 countries in the form of national federations and almost 800 directly-affiliated companies. It is the only world organisation that can claim to help you - thanks to its twice-yearly Conventions - to understand the needs of your business and to anticipate developments that will affect your activities, while at the same time fostering business contacts between members.

The opinions we express have earned the reputation of being the voice of our profession. Therefore, it is vital that you maintain an on-going and trustful relationship with those who you have mandated to represent you. Do not hesitate to submit questions or to contribute on any topic.

During the past couple of years, we have appointed new Presidents and Chairmen of our divisions and committees: passion, perseverance and devotion are the words that best describe their approach to this task. I am proud to be able to count on a team that is both motivated and available - even in difficult times. I would like to thank them all for their commitment.

We also have an excellent team of permanent staff at our offices in Brussels. They are exposed to many challenges and their determination is vital with regard to our capacity to respond to all the requests coming from our national federations and from individual members. I would like to thank them for their work and their loyalty. It is rare to have the chance to work with so many talented people who are fuelled by so much conviction.

It is with great pleasure that I look forward to seeing you in May at our 2009 World Recycling Convention in Dubai.

Dominique Maguin.
BIR President