Social-multinational companies and developing countries - Essay Example

Sathya Prakash Manimunda Manimunda 7 June 2008 Social- Multinational Companies and developing countries The Structural Adjustment Programme (SAP) is the prescription of World Bank and IMF for the woes of developing countries in the post second world war era. Intense debate is happening across the globe particularly after the catastrophic collapse of this programme throughout Latin America and a series of popular discontent unleashed against these measures (Totten, pars. 1-8). On the other hand two giant economies of Asia, India and China are often called booming economies and projected as the success of SAP.

Though these programmes are in existence since 1950s (Wikepedia) but it became a popular topic in the last decade of 20th century when large scale implementation of these measures were initiated in Latin America and Asia with a declared good intention of bringing prosperity to native population. Here the whole issue is analyzed keeping in mind the spirit of natural justice and well being of the majority. Lenin stated, "The general framework of formally recognized free competition remains, and the yoke of a few monopolists on the population becomes a hundred times heavier, more burdensome and intolerable" (para 26).

This statement puts in nutshell the whole issue of Multinational Companies and developing countries. To qualify to get loans from World Bank and IMF the borrowing country should abide by SAPs. The guiding principles and features of SAPs are export led growth, privatization and liberalization, and the efficiency of the free market (Whirlled bank group, para 1). Allowing multinational companies to the third world market is a part of this programme. The attractive agenda is redistribution and development.

Other appealing things are generation of employment and wealth in poor nations with the Manimunda hope that this wealth will trickle down to the bottom rung of the society (Gilbert and Vines 41-44). Latin America is the glaring example of what happened to the agenda of redistribution and development after two decades of economic engineering. Rather the political power is redistributed among the masses consequent to resurgent pink tide.

(Ballve' and Prashad). The fate of one more booming economy of Asia (i.e., India) after 15 years of economic prescription is dismal. India ranks 128 in Human Development Index (HDI). It has more number of underweight children than sub- saharan Africa. There is no decrease in infant mortality for past one decade. Gini coefficient, a standard measure of inequality is 0.73 and for adult schooling it is 0.56 (Bardhan). The development based economy redistributed hunger and destitution among the population in India!

The second point is employment and wealth generation. Here also India is a best example of failed prescription! The unemployment rate in country has grown up from 5.99% in 1993-94 to 7.32% in 1999-2000, after a decade of economic liberalization (Hensman 12-14). Of course wealth is created and there is 14.2% increase in the per capita income of Indians (Express india) but 77% of the Indians subsist on a meager income of Rupees 20 (0.5$) per day! This shows the income disparity and hollowness of trickle down theory (Ray).

Economic disparity is growing worldwide. The conditions of the modern capitalist society are too narrow to comprise the wealth created by them; it is facing acute shortage of market. Hence neocolonial conquest is attempted by various means. The monopoly houses in the developing world will collaborate as junior partners in this fratricidal venture and bargain for their share! Birds of same feather flock together! Manimunda Works Cited Ballve', Teo, and Prashad, Vijay.

Dispatches from Latin America: On the Frontlines Against Neoliberalism. South End Press 2006. 7 June2008 Bardhan, Pranab. Inequality in India and China: Is Globalisation to Blame 15 October 2007. Yale Global Online. 7 Jun2008 Expressindia.com Per Capita Income up by 14.2% in 2006-07. 31 January 2008. 7 June 2008 Gilbert, CL, and Vines, David. The World Bank: Structure and Policies. Cambridge University Press 2006. 7 June2008 Hensman, Rohini. The Impact of globalization on Employment in India and Responses from the Formal and Informal Sectors.

Clara Working Papers, No.15. Amsterdam 2001. 7 June 2008< http://www.iisg.nl/clara/publicat/clara15.pdf> Lenin, Vladimir I. "Concentration of Production and Monopolies". Imperialism the Highest Stage of Capitalism. 2005. Marxist Internet Archive. 7 June 2008 Ray, Partho S. Will the Great Indian Middle Class Show up, Please. 9 April 2008. 7 June 2008 The Whirled Bank Group. Home Page. Structural Adjustment programme. 7 June 2008 Totten, Shay. Behind the Fire: Ben Dangal on Struggles in Latin America.

22 March Manimunda 2007. Vermont Guardian. 7 June2008 Wikipedia: The Free Encyclopedia. 29 May 2008. 7 June 2008