Multinationals must take care in Third World, says UN
Tuesday 28 September 1999
Foreign direct investment - companies set up operations in another country - surged by 40 per cent in 1998 to hit a new record of $644bn (pounds 402bn), according to the UN's Conference on Trade and Development (Unctad).
It said investment flows would hit another record this year according to early investment. But Unctad said it was concerned about growing disquiet among Third World countries about the impact on local workforces, the environment and the lack of investment.
"A failure by transnational corporations to be constructive ... could exacerbate a backlash already seen against liberalisation policies in some quarters," it said in its World Investment Report.
It contrasted the multinationals' active lobbying for local governments to respect international laws protecting their foreign investments with their "aversion to binding international legal standards regarding corporate operations".
Lynn Mytelka, the Unctad investment director, said: "Transnational corporations have to be told that they have to be responsible corporate citizens and increase their social responsibility. You have to balance rights and responsibilities."
But she said it was up to the host countries to toughen up their legislation to ensure that corporate investors knew what rules they had to obey. "If you don't have traffic lights then people will think they can come in and ride everywhere - even on the sidewalk," she said.
Unctad's concerns included the failure of transnationals to invest in hi-tech facilities, the focus on non-tradable sectors such as financials which did not benefit the host countries' current account, and the export of polluting industries to the Third World.
ChristianAid, the charity, said the report showed that "premature" liberalisation could harm the economies of the host countries. "Investment in host countries will not work without special circumstances and the message of this report is that these circumstances do not exist but have to be created."
The Unctad report also showed that the UK is the sixth most globalised country in the developed world with foreign direct investment making up to 15 per cent of GDP.
- 4 #JeSuisEd: People share photos of themselves eating awkwardly in solidarity with Labour leader
- 5 Women think Irish men are the sexiest, survey finds
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
Florida couple forced to register as sex offenders for having sex on public beach
Who should I vote for in the general election? Take The Independent's interactive quiz to find out which party is the right choice for you
General election: Conservatives mocked online over Boris Johnson's claim of SNP 'jockalypse'
In defence of liberal democracy
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...
£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...