TAKING STOCK: MNCs: Roll out the red carpet
Multinational corporations (MNCs) are vilified by some countries and courted assiduously by others. The annual profits of a handful of MNCs like Microsoft, Coke, and Exxon exceed the budget of small countries like Nepal. Hence, many are awed by their power and regard MNCs as more powerful than countries.
Is that really so? There can, be no comparison between the power of a corporation and political power wielded by those who run a country. Gillette, Nike, Sony or Toyota cannot force anyone to give them money. The economic clout of these companies comes from making products that all of us desire.
We voluntarily shell out money to buy Nokia’s phones, Lever’s soaps and Honda’s motorcycles. At every step of the way these companies face competition. In order to survive they constantly find ways to serve us better. Out of the world’s 12 largest corporations of the US from a 100 years ago just one — General Electric — exists today.
Thus, we have General Motors trying to make its cars safer and more fuel efficient; Motorola adding features to its cellphones and simultaneously cutting prices in an attempt to match Nokia’s popularity; Microsoft bringing out revised versions of its ‘Windows’, versions which are faster and easier to use.
The history of MNCs is one of continuous innovation to give us products which make our life easier. How can it be otherwise? If we are not satisfied with computers supplied by Dell, there is always IBM, Acer or Toshiba. The power lies in our hands as consumers. We pick, we choose.
Contrast this with the power of the government. Yes, we do vote at election time to choose our representatives, but, this is very much unlike the choices we make as consumers in the marketplace.
When you buy a trouser, you choose the one which is the right size for you, of the colour and the pattern you want, the style is appropriate, and the price suits your budget. You have an infinite variety to select from and are guaranteed of finding something which you like.
However, when we vote we have a limited choice; it is a matter of choosing the lesser evil. We may vote for a political party most of whose policies we may not like, but, on balance, are preferable to another party whose policies, practices, and leaders we like even less. This is reason enough to restrict the political power exercised over us by the government.
Further, government alone has monopoly over the use of force. That is why we pay taxes. MNCs cannot force us to part with our money. No one holds a gun to our head and says, ‘drink Pepsi,’ ‘wear Nike’ or ‘drive a Pajero’. The ideal thus is to have a limited government, but, unlimited competition.
Let the MNCs come to Nepal and compete not only to provide us with better, cheaper, and safer goods but also to compete equally strongly to hire employees. This is what will raise salary levels and make Nepalis earn a decent standard of living.
In India cellphone companies, ‘fighting’ with each other, have dropped rates to levels where everyone can afford to make calls. ‘Reliance’ now offers long distance rates of just 40 paise a minute. All this even as thousands of crores of taxes were collected by the government and vast new employment opportunities created.
This is great for India and will be for Nepal too, if MNCs are freed to invest here. Each cell operator in India has an MNC as its technical & financial collaborator.
China, with its communist ideology, had banned MNCs. Yet, three decades ago, it abruptly changed course and laid out the red carpet for them. Today, China gets 10 times more foreign investment than India. Thanks to the MNCs, China’s economic clout continues to grow by the day much to the chagrin of its neighbours.
Russia today bears no resemblance to the Soviet Union of Lenin and Stalin. Moscow has McDonald, perhaps the most poignant symbol of American capitalism?
The message for Nepal is clear: If China and Russia now regard MNCs as saviours, Nepal too must shed its policy of hostility to MNCs and foreign investment. Nepal and Nepalis will win. Bigtime.
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