Appendix 6
Protecting National Interests
in the Use of Investments
by TNCs
Dr. Giao su Mac Duong
The world has experienced profound and sudden changes
in the past 30 years. The revolution of modern science and technology has
enabled transnational corporations (TNCs) to regulate the world economy.
Through the trade war and investment projects carried out in developing
countries, these corporations put into operation the process of
super-exploitation of workers and resources aiming at realizing profits
and mobilizing capital in many countries, especially developing countries.
Thus, at present, “capitalism remains a system of coercion, exploitation
and injustice.”1
At the same time, “contradictions between developed capitalist countries
and developing countries are daily on the increase”2 and not
subsiding. Because TNCs are at present appropriating nearly 50% of the
world’s natural resources and three-fourths of mankind’s material wealth,
they possess 80% of patent rights in capitalist countries with thousands
of establishments of science and research, hundreds of centers of
experimental production and scores of millions of scientists and hired
workers.
In 1990, TNCs controlled more than one-third of manufactured goods and
half of the world’s foreign trade activities, manipulated 75% of the
world’s market of petroleum products, 78% of rubber, 80% of tin and brass.
85% of coffee, cacao, tobacco and 90% of the world market of iron ore.
According to U.N. statistics, these corporations operate about 90,000
subsidiaries in 125 countries. It is due to investments made to exploit
industrial natural resources on the spot in developing countries and to
hire low-waged workers that big capitalist countries have become rich
rapidly and in which TNCs have realized astonishingly high profits. For
example, banks of American TNCs operated abroad in 1970 with working
capital of US$ 59.7 billion, which by 1980 had jumped to US$478.8 billion.
Meanwhile, hundreds of millions of indigenous people in developing
countries where there are subsidiaries of these corporations live in dire
poverty. Annually, there are nearly 40 million people in Africa, Asia and
Latin America who die of starvation. This horrible situation keeps getting
worse, making it necessary for the United Nations to launch urgent
programs to fight poverty and starvation in order to allay the threat of
destruction of a portion of humankind.
This is the picture of modern capitalism and its relationship with people
all over the world in which the TNCs of big capitalist countries ‘play an
important role. From another viewpoint, however, it is precisely thanks to
the investment process of TNCs that a number of developing countries have
in a short time achieved modernization. These corporations have
established modern plants, taught workers new skills, developed modern
science and technology and spurred the rapid development of commodity
economies. As a result, the present struggle to defend developing
countries’ national interests proves to be very difficult and complicated.
It consists of “fighting poverty and backwardness, neo-colonialism under
any form, imperialism’s interference and aggression in order to defend
national independence and sovereignty.”3
To impose limitations on the process of exploitation by TNCs, developing
countries, especially Asian countries, have to proceed with common
programs of cooperation, to exchange experiences related to the efficient
use of investment capacities of these corporations and to coordinate
actions to limit the negative effects of their operations likely to harm
the developing countries’ supreme national interests. This is the main
objective of this scientific seminar and also what we expect from the
exchanges with the international guests.
Foreign investment is capitalism’s law of existence. It is important to
understand that it is the nature of modern capitalism to invest overseas
in order to solve its internal crisis cycles. TNCs assume the main
responsibility for this process of foreign investments.
In the light of this understanding, it is easier to explain why TNCs need
to move to developing countries that are endowed with rich and precious
natural resources and with a pool of skilled workers. It is easier to
understand why they demand a policy whereby Third World economies open up
to the world and why they require a stable society. Ultramodern industries
in capitalist countries daily need enormous quantities of raw materials
capable of oiling and maintaining the stability of their economies. On the
other hand, wage rates and worker productivity are factors that induce
TNCs to invest in and implant themselves in developing countries, chiefly
in Asia.
American investors have compared domestic wage rates to be nearly 100
times higher than wage rates in Asian countries. The prices for raw
materials are also scores of times cheaper in Asia than in America. Thus,
investing abroad is the law of survival for TNCs. In other words,
developing countries are feeding and fattening these enterprises.
Moreover, their foreign investments constitute mainly of exports of modern
science and technology. According to American businessmen, if one U.S.
dollar worth of science and technology is invested in developing
countries, it will have accrued to US$14 in 10 years, and the rate of
interest will have reached 100% to 200%. N. Zommer, vice president of
American Cyanide, has declared that the symbol in the U.S. dollar must be
placed at the gate of science and technology.4
Exports of the most modern science and technology from capitalist to
developing countries represent at present a law for these international
corporations. This can be alternatively interpreted to mean that in the
present era developing countries have opportunities to catch up and forge
ahead strongly to build systems of science and technology of their own as
bases to rebuild their backward economies. Thus, “developing countries
must expand their economic relations with all countries, international
organizations, foreign companies and persons,” including groups of TNCs,
on the principles of “firmly maintaining national independence and
sovereignty of equal and mutual benefit”5 so that each national
economy may “develop on their own initiative.”
Defending national interests is the highest need of these times. In the
process of diversifying foreign economic relations, of utilizing the
investment capacity of big capitalist countries in which TNCs have a
determining role, we must be resolute in our stand to defend the interests
of our nations. This is so because national interests
- the development of each nation - is the highest need of the present day.
On the other hand, these corporations have the tendency to monopolize
every aspect of economic activity in the countries where they are. A good
number of them have taken advantage of the weaknesses of local economies,
their laxity in management, to dominate the economies of developing
countries. Availing themselves of the market mechanism and their own
strengths in terms of the quantity of goods they possess, these
corporations have caused bankruptcies and created socio-economic crises in
developing countries with the input of their capital in which extreme
stratification between rich and poor have also taken place at an
unpredictably quick pace. Social policies of developing countries are not
efficient enough to arrest spiritual decadence, discrimination and
hostility within society, resulting in racial and national hatred because
a small segment of the citizenry have become rich whereas the remainder
have fallen into poverty.
TNCs usually embark on programs to attract skilled labor, intellectuals
and young people from developing countries. This gradually deprives them
of their capacity to develop skills which are relevant to their country’s
needs. They eventually submit to the demands of the capitalists and forget
society’s needs. They display materialistic ways of life that undermine
traditional moral values of the East; they promote the philosophy of “the
big fish eating up the small fish.” Asia’s traditional value for “mutual
assistance and love for others as one loves himself or herself’ is
gradually challenged.
Moreover, TNCs deeply penetrate the internal body politic of many
countries and create fierce social contradictions. They oppose the labor
movement and democratic progressive forces. The American bauxite company
of Surinam, for example, cooperated with the CIA in 1985 in eight
instances to overthrow the local government. American and British TNCs are
known to have made investments in Angola to help the UNITA reactionaries
against the national emancipation movement. Evidence related to the Gulf
War made public recently reveals the real nature of these corporations (80
corporations from Germany, 12 from Italy, 18 from the United States, 16
from France and 18 from Britain), which have supplied armaments for the
war to make profits out of the blood of other people.
In some other countries, TNCs also provide leadership to political
parties, arouse the psychology of opposition, participate in Mafia
activities and control whole governments of developing countries. They
also support the irrational boycott orders imposed by big countries.
Nevertheless, there are a number of TNCs who identify with the stable
growth of developing countries and who are inspired by the independent
thinking of the capitalist. There are American TNCs striving to circumvent
their government’s trade embargo against Vietnam, advocating assistance
and cooperation for mutual benefits and who develop reciprocal confidence.
There are Japanese, French, Australian, Italian and Canadian TNCs which
have overcome diplomatic and political constraints in investing in
Vietnam, China, the countries of the Association of Southeast Asian
Nations (ASEAN) and India. It can be said that the recent inauguration of
Japan’s Mitsubishi office in Hanoi reflects a positive manifestation of
TNCs in the present situation.
In brief, investing in developing countries is an imminent law of
existence of TNCs. This investment process represents a good opportunity
for developing countries to start off quickly on the road towards
modernization. However, TNCs of big capitalist countries generally attempt
to control or influence portions of or the whole society of developing
countries. The defense of national interests is, therefore, the highest
need of developing countries, which constitutes also the highest principle
governing their cooperation with TNCs.
Labor Federation Activities in Developing Countries
This is the age of science and technology. Agriculture,
fisheries and forestry were hitherto non-industrialized economic spheres.
Today these are gradually being mechanized and automated. Chemicals are
gradually being introduced in production. That is to say, the production
process in agriculture and fisheries is being industrialized.
Corresponding to the development of science and technology is the
important continued growth of the class of modern industrial workers, both
in quantity and quality. The stratum of intellectuals is a component of
this class because they are closely involved in industrial realities as
they invent new machinery, industrial processes and labor management
organizations for unskilled workers. These workers, although unskilled,
must acquire a certain standard of education from the university, however,
if they work in spheres of modern technique. That is why the
differentiation between intellectuals and workers under conditions of
activities of TNCs is therefore very relative. For example, it is
difficult for us to distinguish between intellectuals and workers in TNCs
such as IBM. They all share the same fate: they are hired for a
remuneration by the same master.
In the present world, the roles of the working class and labor federations
have not diminished in importance. In fact, their importance has
increased. Workers have also increased substantially in many countries,
both in quantity and quality. Even so, the workforce requires younger
people with a higher education than before to keep in stride with
scientific and technological development and with the growth of technical
investment by TNCs in developing countries.
The growing number of young and well-educated workers will rapidly occupy
union positions. They will grow in importance each day. New federations
and organizations will emerge which will be financed by workers
themselves. They will show trends for close cooperation on the basis of
technical interests and concrete living conditions rather than on the
basis of political objectives. International corporations will then
readily satisfy the technical needs and concrete living conditions of the
workers in developing countries.
Labor federations in the new era are thus under the obligation to change
activity content and methods in order to adapt themselves to newly
emerging historical situations.
In my opinion, labor federations must motivate the working class to adopt
modern industrial processes, management methods and scientific and
technological achievements rapidly and effectively. They must fight for
modern science and technology to be introduced into their country. It is
only in so doing that they are able to spur the country to overcome
backwardness and crisis in a short time and to defend long-term national
interests and to consolidate national independence.
According to line occupations, federations should: look after and give
counsel to workers in regard to family life; should struggle to raise real
wages for the benefit of each worker; organize effective methods to
restore health; and work out social policies appropriate to each firm.
These are basic needs of the working class in countries that accept
foreign investments through TNCs.
In Asian countries, the working class and intellectuals are keenly aware
of and want to preserve their traditional culture and moral values,
especially those that protect their traditional national culture and
morality. Unfortunately, they are usually influenced and challenged by
negative factors in Western culture.
Materialism and corrupting modes of living spread by capitalist countries
come together with the investment process of TNCs. The Asian labor
movement should be conscious of this problem. They should be supported in
this realization by the majority of intellectuals and workers. It is only
normal for labor federations, especially those who have political
orientations and who have had political experiences, to struggle to
preserve culture and tradition in the ranks of the working class while
struggling for modernization.
The struggle of workers in Asia cannot be reduced to wage standards alone.
There is a need for workers to protect their culture and broader national
interests. These struggles are capable of uniting countries together to
form a political force aimed at reducing the negative aspects resulting
from the activities of TNCs operating in a number of countries.
Endnotes
1. Platform of National Edification (Hanoi: Publishing House Su That
[Truth], 1991) p. 7.
2. Ibid.
3. Ibid.
4. Modern International Capitalist Monopolistic Organizations (Moscow:
Publishing House Khoa Hoc [Science], 1980) p. 16.
5. Ibid.
