Multinationals and the Third World

Multinationals are large international companies which produce goods in several countries. Some well-known ones are Ford, Shell, Coca-Cola, Sony, Akzo, Nestle and others. Their turnover is huge, being greater in some cases than the national income of countries such as Switzerland or the Netherlands. Because they are so big they attract a lot of attention. Usually their business methods are carefully watched by foreign governments.

People are particularly interested in their activities in poor and developing countries. They ask the question: How have multinationals improved the economies of these countries? In reply, a manager working in a multinational will say something like this: “Well, for a start we provide the capital which poor countries need for their economic growth. Another thing, we share our technology with local business –we introduce our scientific and technical methods to them. And they increase the productivity of their workers.

Don’t forget also that we produce a wide variety of goods. And let’s face it, we employ thousands of people all over the world. No one can accuse us of not paying good wages. So, I think you’ll agree, we’re responsible for raising living standards.”

Critics of multinationals don’t accept such arguments. They say the big corporations are not major suppliers of capital. In Latin America, for example, multinationals have mostly used capital provided by local banks and investors, and have not brought in capital from the USA and Europe. Because of this, there is a shortage of money to finance local businesses.

The critics agree that multinationals introduce new technologies. However, it’s often unsuitable for developing countries. The imported technology is too expensive and complicated. In agriculture, for instance, most countries don’t need tractors, which are expensive to buy and operate. Another disadvantage is that it will probably reduce jobs. Wage costs in the US and Europe are high. Poor countries can do without such technology – they have large numbers of workers looking for employment.

2. Enact the television debate.

A television broadcasting organization has invited a small group of multinational executives, to participate in a panel discussion. They are to start the ball rolling by speaking in support of the following debating theme:

“Multinationals are, on balance, a force for good in the world and strong restrictions on their activities are unnecessary”.

A critical studio audience has been assembled to challenge the views of the executives.

A neutral chairman will guide the discussion. An eminent politician will listen to the debate, sum up at the end and choose the most effective group-executives or studio audience.

A studio manager will organize the debaters and will have the right to speak when necessary.