MNCs as harbingers of Neo-Colonialism and the exploitation of the Third World

Akin to the colonial era, even in the twenty-first century, the world is perceived from the standpoint of a handful of neo-imperialist hegemons who lay down dictates of conscience, designate the terrorist and the revolutionary, and predestine the Third World. Primarily, trade prospects stirred the Age of Exploration, and although diverse nations established relations with the European powers, the relations eventually came to be colonial subjugation far from bilateral. Political consciousness blended with utilitarian nationalist ideologues uprooted the colonialists post-war, limitless ambitions of whom fostered ingenuity, giving rise to multifarious indirect techniques, one of them multinational enterprises, to preserve dominance over weak governments. This continued economic domination of sovereign nations by their past colonial masters may be termed neo-colonialism. Simply put, colonialism, which earlier was spread through tanks, now comes through banks. 

Multinational corporations, historically, were founded with colonial objectives. Probably the first MNC of the modern world — the British East India Company was established in the sixteenth century to undertake imperial excursions in India and plunder its riches. Soon after, the company ascended to prominence and started governing the nation. This strategy is still in place today, having been adopted by several other similar companies. As for other approaches, it can be firmly asserted that they are imperialistic in nature; nevertheless, MNCs are unique in that they appear favourable and are perceived as the agents of modernization and prosperity, yet in actuality, the opposite is the case. This deception adds to the gravity of the issue at hand. These conglomerates serve as instruments of a contemporary imperialist agenda, cementing the hold of the parasite, or the home nation, over the host nation. 

Underdeveloped nations are preyed upon, for they present the ideal setting for exploitation to wit impotent labour laws affording cheap labour, for instance, a company may be required by law to pay a fixed minimum wage to the working class in a fairly developing country like Bharat, but in a poor African country, a burger and a water bottle a day would suffice in drawing in thousands of workers. Furthermore, the current deluge of climate regulations covers barely the capitalist nations; as a result, severe environmental and land damage brought on by industries may not be an issue in less developed countries. A while back, Coca-Cola made headlines when Bharatiya traders boycotted the company for reportedly degrading water resources. Cost-effective investment combined with an abundance of readily available, low-cost resources elevates the monopolistic profit potential, denoting exorbitant returns. The host nation loses out on resources and anticipated reinvestment if the enormous profits made by these businesses are allowed to be repatriated to their metropole country, and on the contrary, controlling foreign ownership and the political clout of these corporations might ensue if a sizable portion of their revenues are reinvested in the host country. Without a doubt, both of these instances occur simultaneously. At the outset of the Cuban revolution, American companies virtually commanded the Cuban economy, owning half of the land, having significant stakes in its industries, and being ingrained in the nation’s infrastructure, weakening it and inciting discontent. In the end, who wins? The home country, from both a financial and an influential angle, as well as, to a certain extent, the elites of the non-elites.

Meanwhile, the indigenous businesses succumb—from their incapacity to meet product standards; from the perception of being “imported,” primarily contributing to the market hegemony of the foreign entities; and mainly from the diversion of otherwise obtainable government investment towards enticing these corporations with tax holidays, subsidies, concessions, and other perks without comprehending the challenges that are being invited. Crucial is to emphasise that “Made in India” is an excellent strategy to promote domestic products and encourage healthy competition.

Gaddafi stated in an intriguing speech that Coca-Cola was an African product, not a European one, because its producers brought cheap raw materials from Africa, manufactured them into a drink, and then charged the people of the continent exorbitant prices for the finished product, depleting their otherwise valuable capital in the process. Typically, host countries lack the necessary technologies to fully utilise their resources. One of the desired benefits of inviting MNCs is having access to modern technology, which is rarely achieved because of the purposeful provision of either outmoded useless technology or incorrect technology or know-how, or expensive transfer fees that place a severe strain on the economies of the already poor countries. Because of the aforementioned factors, the host country ends up serving as the source, the market, and the disposal site, thereby letting underdeveloped nations become increasingly dependent on their developed counterparts as the former rely more heavily on imports than on domestic production and advancement, which keeps them under-industrialized—a phenomenon termed development of underdevelopment or the retardation of development.

Given their capacity to manipulate the policies of host nations in their favour, these rich Leviathans are regularly employed by home governments as devices for advancing their foreign policy goals, humiliating the political sovereignty of the Third World. Both of these partners-in-crime demand that the host be aligned with their interests, and a concerted effort from their side ensures the same. Françafrique serves as the chief illustration that has been strictly maintained through coups, assassinations, and whatnot. MNCs routinely indulge in deliberate demographic changes by inducing workers with alluring opportunities to relocate, threats of boycott and layoffs as a means of coercion seen in Italy after unfavourable results in local elections, association with political parties, i.e., acting as interest groups, and lobbying done by United Fruit Company to advance commercial interests in Guatemala. Transfer pricing aids in avoiding taxes. Securing interest often involves bribing the host government. Notable examples include the bribery of a Bangladeshi minister by a Canadian company, Niko Resources. To further advance their commercial interests, MNCs have occasionally even funded violent conflicts and orchestrated coups against well-established governments, such as Royal Dutch Shell’s campaign against the Mexican government or the French orchestrated killing of Thomas Sankara. On a global scale, options include support from their home countries, which are forever willing to safeguard them. A few years ago, a top German minister tried to get a tainted defence company off the Bharatiya corruption list, but in vain. The majority of Chinese businesses are present in Pakistan, further entangling the nation under the former’s sway.

Similar to the Anglicists of the British Raj, these transnational enterprises import their own cultures, demeaning the indigenous way of life and enforcing the degenerate, anarchical Western ideals through propaganda advertisements and media. This influences the national character and divides society into classes, with those who adopt these foreign values and those who do not. Western lifestyle, music, fashion, languages, and film industries are widely disseminated over the globe, encouraging various forms of violence and depravity, a process called McDonaldization—stereotyping the extensive exportation of fast-food notions by the McDonalds chain, violating traditional cuisines. Compulsory Chinese language in Pakistani educational institutions need not be explained.

Degrading and draining the region’s natural resources is only one of the countless transgressions of these multinational corporations; in addition to the atrocities listed above, these corporations have also been found guilty of violating human rights and showing blatant disrespect for the public health of the Third World. All legal offences, including kidnapping, xenophobia, and slavery, may be linked to the operations of these global businesses. The infant formula case of Nestle, for instance, resulted in millions of fatalities and a consequent global boycott of the company. The Hathi Committee Report of 1974 exposed to light the nefarious acts committed by pharma giants in Bharat and the activities of Union Carbide Corporation in Bhopal, which are already well documented. Evidence links well-known corporations such as Chevron and BMW to child labour, and prominent international hotel chains like Hilton and Intercontinental have been implicated in sex trafficking. Though it is unnecessary to inquire, how do host countries, or the Third World, respond? Hopelessly helpless. 

Given that the foregoing is widespread, one could wonder what the international community is doing to address it all. There are, at most, a few guiding principles for multinational businesses, which have evidently failed to effect a significant shift. A decade ago, a legally binding convention on the subject was proposed by the United Nations, but it is still in the draft stage and faces strong opposition from the main imperial nations that headquarter some of the largest business organisations. A long-standing demand persists for these firms to be regulated. Even though the UN and other areas of international law have remained largely ineffective, efforts must be made to develop laws that shall hold these businesses accountable, which, if left unchecked, could seriously threaten the global order.

In international politics, multinational corporations (MNCs) make up the non-state actors who, having previously taken a more passive role in the global arena, have grown to dominate the world to the point where they seriously threaten national sovereignty. Ironically, the worth of many prominent MNCs surpasses the GDP of some nations. Frequently cited advantage of these actors as in employment generation is more of a byproduct than their objective. Globalization ushers Hobson’s choice for the less developed nations, as total isolation coupled with rigorous nationalization as well as the unchecked business practices of MNCs might both result in dystopia. Thus, a complex paradigm has emerged in which the Third World continues to be influenced by neocolonialism. Nevertheless, a way out ought to be at odds with these entities, considering their ill effects outweigh their benefits. 

In a desert, getting a Pepsi is easier than getting a water bottle.