Rich Christians in an Age of Hunger: Moving from Affluence to Generosity by Ronald Sider

Author:Ronald Sider [Sider, Ronald]
Language: eng
Format: mobi
Tags: ebook, book
Publisher: Thomas Nelson
Published: 2005-04-12T04:00:00+00:00

Multinational Corporations in Developing Countries

Multinational corporations (MNCs) are largely children of the affluent North. Most of them began years ago as small, local firms. Slowly they expanded into sprawling corporations. For the most part their growth has been gradual, and they have evolved alongside the economy as a whole. Consequently, the developed world, although at times exasperated at the frequent indifference of large corporations to wider social goals, has learned, at least to a degree, to work constructively with them.

After World War II these big corporations moved in droves to set up overseas operations. Most of their activity went to other developed countries, but increasingly they moved into less-developed countries as well. Development economist Michael Todaro noted that in 1962 private investment in these countries was $2.4 billion. By 1980 it was $11 billion; by 1990, $35 billion, and by 1999, investments had surged to $185 billion.144

Today, most developing countries welcome MNCs. The frequent nationalization of MNCs’ assets that occurred in earlier decades has almost completely stopped. From 1970 to 1974, there were forty nationalizations per year. By 1992, that figure had dropped to zero. The powerful local elites that govern developing nations have largely concluded that MNCs are more blessing than bane.145

Proponents of MNCs view them as a major engine of economic development and growth in developing nations. They argue that MNCs help in a number of ways:146 (1) by providing access to scarce capital resources; (2) by increasing the flow of foreign exchange; (3) by providing developing governments with healthy businesses from which to generate the tax revenues needed for development projects; (4) by creating jobs; (5) by introducing technology and training local workers in technical and managerial skills; and (6) by providing goods and services that otherwise would be unavailable.

The possibilities look promising. If the developing nations were equally powerful bargaining partners, and if the poor in developing countries shared equitably in the benefits, this might work well. Unfortunately, however, evidence shows that MNCs also have some negative effects on poor nations.

This should not surprise people with a biblical view of sin. Powerful agents regularly dominate and take advantage of weaker ones. MNCs, obviously, are interested primarily if not exclusively in profits for themselves.

We often overlook the extent of their power. The 350 largest MNCs now control more than 40 percent of world trade.147 The largest MNC in 1990, General Motors, had gross sales that were greater than the GNP of all but the five largest developing nations.148 The five largest MNCs in 1990 had combined sales greater than the GNP of countries like Switzerland, Australia, Spain, Sweden, and Belgium.149 Today, “the hundred largest multi-national corporations now control about 20% of global foreign assets and fifty-one of the hundred biggest economies in the world are now corporations. The sales of General Motors and Ford are greater than the GDP of the whole of Sub-Saharan Africa; the assets of IBM, BP and General Electric outstrip the economic capabilities of most small nations;Wal-Mart, the supermarket retailer, has higher revenues

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