Jemima Agyare comments

Jemima Agyare
Jemima Agyare

Developing states are increasingly encouraged through international economic institutions such as the IMF and World Bank to try to make themselves attractive to foreign direct investment (FDI) by lowering tariff barriers and by creating stable political environments for multinational companies (MNCs) to invest.

The relationship between MNCs and developing countries is one that causes huge amounts of controversy. Some view them as benign companies that enhance global efficiency and global wealth- transferring technology and other resources to developing countries, whilst others see them as the faceless side of global capitalism that undermines democracy, national autonomy and promotes exploitation and neo-imperialism.

MNCs are ultimately profit-driven organisations, committed to the growth of trade and markets that serve their commercial interests. I have no objections to this per se however, I do feel that this does not necessarily have to be to the detriment of developing countries as is currently the case. The pursuit of profits is not necessarily incompatible with serving the needs of developing countries, especially their poor. If such companies were able to exercise some kind of moral ethic with regards to their practices, this would go some way in benefiting the host country, as well as the company. I am not merely talking about the token AIDS clinic designed to enhance the public image of the company and slightly appease the critics, but a genuine commitment to social responsibility through their work conduct.

However, until MNCs such as Monsanto and Shell cease employing aggressive tactics in pursuit of greater market shares and higher profits, MNCs stand to hinder indigenous technological development, drain host countries of resources and inhibit the growth of indigenous entrepreneurship in developing countries. CR

The opinions expressed in this article are not necessarily those held by Cross Rhythms. Any expressed views were accurate at the time of publishing but may or may not reflect the views of the individuals concerned at a later date.