The Multinational
corporations (MNCs) are non-state actors, engaged in economic activity for profit
in more than one country. Their activity crosses national borders and has a
direct impact on the daily lives of people around the world. Due to the
concentration of huge financial resources and lobby levers, MNCs are able to
directly influence the decisions made by governments, especially those of the
developing countries.
For them, the MNCs are
a vital source of foreign direct investments, a critical mean to increase the
employment of the population and to contribute for the implementation of new
technologies and know-how. Many governments of the developing countries often
act to suit their legislation with the interests of international corporations
aiming at their attraction.
MNCs are a direct product of the globalized economy
that has a contradictory character. Many of these corporations have financial
resources often greater than the GDP of most countries in the world, which
frequently leads to the inability of the countries to protect their interest and
ultimately to make concession in favor of the corporations.
Along with supporting
the growth and spread of new technologies, they are often being accused of
irresponsible attitude towards the environment and the exploitation of workers.
In a globalized economy, the tendency of increasing corporate power at the
expense of reduced state power rises. This is due largely to the origin of
MNC’s- the most powerful of them are a product of the economic systems of the
developed countries which support their corporations.
With the increasing
power of the multinationals for the developing countries it is becoming
increasingly difficult to regulate their activity as corporations follow
closely their interests and in the same time the economic growth of the
countries is strongly linked to their presence. For many countries low
unemployment means increased social instability- a factor of extreme importance
for the relations between governments and corporations.
Big number of the
leading MNCs operate in areas of vital importance for the development of the
economy- energy and finance, putting these sectors fully under their control.
An important aspect regarding the MNCs is the creation of business circles that
lobby in favor of free market access and labor force in the developing
economies.
Common trait for the MNCs is their connections with figures involved
in the political life in their countries of origin or even interference in the
electoral process in foreign countries to ensure tax reliefs or other
advantages. They use the process of donations in election campaigns in return
of political and economic favors. A direct hiring of lobbies that operate in
the political life in foreign country is also widely spread practice.
Largely, there exists
interdependence between corporations and governments, especially when it comes to
energy policy. The wars in Iraq and Libya can serve as proof when after the
military intervention, major Western companies from the petroleum industry
gained access to the reserves of resources and started their exploitation.
Thus, there has been a symbiotic relationship between the state and the
corporations. On the one hand, government entities have the power to ensure
access to sources of resources, on the other hand, corporations have the means
to exploit the resources and supply them back to the markets of the
mother-country.
This, of course, no
matter how contradictory, seems to be a distinct characteristic only for
companies in the energy sector. Other corporations, such as "Google"
for example, are subject to restrictions by various regimes- a vivid example is
the censorship on the search results on the Internet, imposed by China. In
Brazil, the activity of a number of corporations is the reason for inflicting
enormous damage on the environment.
Another company,
"Monsanto", engaged in the production and use of GMOs in agriculture
had been refused access to the European market under the pretext of
insufficient clarity about the effects of GMOs on agriculture and human health.
All this shows the contradictory nature of MNCs, but also the extent of their
influence.
The multinational
corporations establish control over the goods and services that are needed for everyday
life of societies, exploit the resources required for manufacturing and manage cash
flows, which surpass state economies multiple times by size. That concentrates
enormous power in the hands of the private entities to which countries are
forced to comply.
The openness of the global economy and the strong
interconnection between international players is a prerequisite for
strengthening of the MNCs’ influence and their widespread distribution. The
tendency of globalization will continue and the presence of the multinational
corporations will be an integral part of the political, economic and social
life of communities.
The lack of mechanisms
for control over the MNCs will continue to maintain conditions for possible
abuse, but the overall global trade will increasingly be carried out by
international corporations. Another trend may be increasing linkages between
MNCs and governments in the countries of origin, because of similarities in
goals and interests of both.
International corporations will have an increasing
role in the arrangement of the international order, especially the companies in
the energy business and in the hi-tech sector. This entity of international
relations will be among the main instruments of the developed countries to
protect the national interest, or their rival in terms of power and influence
on the international arena.
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