SOCIO-ECONOMIC LIFE AND HUMAN COMMUNITIES

Large Corporations and Their Impact on Socio-Economic Life and Human Communities

Abstract The prime motivational forces behind globalization are the giant economies of the world: developed countries and multinational companies (MNCs). The host societies have their reservations about the perceived effects on their own economies. The role of these big economies in expediting the process of globalization calls for a scrutiny of the whole development.

This paper attempts to gauge the role of MNCs in influencing the decision making at the world stage and to study how the globalization will affect the poor countries. The paper analyzes the strengths, tools and strategies of the MNCs for extending their influence on the global affairs and traces out how the MNCs impact the host societies. Some recommendations to address the situation follow at the end.

Large Corporations and Their Impact on Socio-Economic Life and Human Communities

Introduction

In 1993, South African photojournalist Kevin Carter took a picture depicting an emaciated Sudanese girl struggling towards a nearby feeding center, while a vulture waited for her to die so it could eat her. The photograph sent shock waves across the world. Fourteen months later, Carter won the Pulitzer Prize for the photograph. Nobody ever knew what eventually happened to the child, although at the time, the photographer had chased the vulture away and the child had completed her trek to the feeding center. Three months after receiving the Pulitzer Prize, Kevin committed suicide due to depression.

The story highlights how an event can, in no time, affect people of faraway lands. This is the world today; it is fast and changing. People struggle against time to achieve their goals. This struggle often leaves little room for them to think and care for other people. And this process has been expedited by the effects of globalization.

According to the UN Committee on Trade and Development (UNCTAD), MNCs account for 70 percent of the total world foreign trade, which is US $7 trillion. The EU and US have, respectively, 43 and 25 officials working in Geneva who focus entirely on WTO issues. By contrast, 80 million people are completely unrepresented at the WTO as their countries cannot afford to maintain representatives in Geneva. In the recently concluded Hong Kong Ministerial, the EU had a delegation of over 800 people while the US had more than 350 delegates.  (ActionAid, op. cit.)

It was proved decades ago that there is a phenomenon of MNCs producing unlicensed items, overproducing licensed items, and violating the import and export regulations of the countries where they operate.  (See Singh, 1979, p. 95.)

The new investments by the MNCs are usually targeted towards the most lucrative business fields. As Pakistan's banking sector is posting profits, foreign banks are now turning to buy Pakistani banks. Making the biggest ever investment by any foreign bank in Pakistan, $413 million, Standard Chartered has acquired controlling stakes with 80.86 percent shares in Union Bank, a domestic private financial intuition. The amount is $24 million higher than the $389 million that ...