Global market forces or bust?
The United Nations Conference on Trade and Development (UNCTAD)'s World Investment Report 1994: Transnational Corporations, Employment and the Workplace, published last month (The Jakarta Post, Aug. 31, 1994), can be read in two ways. For the converted, it paints a rosy picture about the multinationals.
Some 73 million people are directly employed by the multinationals, representing just short of 10 percent of non- agricultural waged labor force worldwide. Another 10 percent is estimated to be employed indirectly. In total, the multinationals directly and indirectly employ in excess of 150 million workers globally.
In the report UNCTAD claims that Third World workers employed by the multinationals "typically -- but not always -- enjoy better wages, conditions of work and social security benefits" than their co-nationals in domestic employment. Reciting the accepted wisdom, UNCTAD claims that multinationals are beneficial particularly to the Third World because they enable the latter's work force to acquire new and better skills.
However, for those who are not entirely sold on the idea of effectively surrendering all economic decision making to the multinationals, there are reasons for caution. Despite invariably optimistic promises of job creation, during the last decade the multinationals have created no more than 12 million jobs. Indeed even UNCTAD admits that, despite the current complaint by labor unions in the OECD about jobs being lost to the Third World and despite the massive increase in foreign direct investment (FDI) since 1985, the amount of jobs created in the Third World is according to UNCTAD's own words, "very limited" even when compared with the OECD's relatively small total labor force.
Further, because the multinationals carry so much financial clout, they are in the position to exercise growing economic and, ultimately, political influence which most Third World governments are poorly placed to do much about. Indeed, more and more Third World governments can do less and less in the way of political control precisely because of the increasing globalization of capital as a whole. Following the end of the Cold War, with more and more countries opening up their markets to foreign investment, demand for capital has reached such a point that Third World governments are forced increasingly to liberalize their economies to foreign capital incursion. Indeed, albeit the Report for obvious reasons does not mention it, OECD- headquartered multinationals are keen to play one Third World government against another by making big play of the increasingly acute competition among recipient countries for scarcer capital in order to wring more and more concessions. The multinationals are even demanding that they be accorded standards of treatment on the same par as domestic companies. What the multinationals leave unsaid is whether they are prepared to accept standards and/or degrees of responsibilities that go with the rights demanded from and incumbent upon domestic corporations. It's not without reason the latter often complain that the playing field is far from being level.
DR. A.R.T. KEMASANG
London