Multinationals: curse or blessing for the developing world?

Saturday 18 October, 17.30 until 18.45, Garden Room, Barbican Austerity Dilemmas

With the increasing ‘globalisation’ of the world economy in the past 25 years, multinational corporations have been moving into more and more areas of the developing world. This has led to accusations that multinationals are using their size and ability to relocate to undermine working conditions, avoid local taxes and ignore environmental regulations. Given that some very large corporations control assets larger than the GDP of their host countries, the ability of poorer countries to regulate multinationals is limited. The ability for capital to move around has led, some commentators argue, to a ‘race to the bottom’ in wages and environmental standards. Such ease of movement also allows multinationals to avoid responsibility for incidents like the pollution of the Niger Delta or the deadly gas leak in Bhopal, India.

However, living standards in countries that have opened up to multinationals have often risen sharply. While the working conditions in East Asian ‘sweatshops’ or African farms may be far below those deemed acceptable in the developed world, nonetheless such jobs may provide better living standards, providing income and resources that have knock-on effects for wider economic prosperity. Raising productivity may cost jobs in some traditional industries, but – just as happened in developed countries – economic development has provided new sources of work, including jobs for better-educated workers who might once have left to work overseas. Multinationals also claim they are often easy to blame for environmental problems and may sometimes be at the forefront of improving standards.

What is the best way forward for developing countries? Does welcoming large, foreign companies undermine workers’ rights and democracy? Should Westerners boycott companies with low ethical standards or do such campaigns actually end up costing local workers much-needed jobs?

Watch the debate:

Listen to the debate:

Dr Stephanie Blankenburg
senior lecturer in economics, School of Oriental and African Studies (SOAS)

John Hilary
executive director, War on Want; author, The Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes Next

Rob Lyons
science and technology director, Institute of Ideas; convenor, IoI Economy Forum

Andy Woodfield
Lead Partner for the International Aid Development Consulting practice, PwC

Rob Killick
CEO, Clerkswell; author, The UK After The Recession
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