MNEs have also tacitly aided corruption in the countries they operate in. For example, in Southeast Asian nations of Indonesia,Thailand; Asian nations of Bangladesh, India and Pakistan, and several East European countries such as Belarus,Georgia, Croatia and to a lesser extent in China, the levels of corruption have increased since the opening up of their economies. In other words, “as foreign firms entered and new firms were born within developing and transition economies, scholars and social commentators grew more aware of the magnitude of corruption and the need to understand and address it. Research on corruption over the past decade poses some fundamental questions and highlights the importance of many more. In the context of the MNE, corruption is the misuse of public power for private gain” (Verbeke, 2007).
Multinational Enterprises are also rightly criticized for their “contribution to global warming”, “contribution to the erosion of ozone layer”, “depleting fertile soils by industrial production policies”, “contribution to air and noise pollution”, etc (Stackhouse, 2007). Many sub-Saharan African nations such asZimbabwe,KenyaandMozambiquehave all been subject to these blatant injustices. In the more prosperous nation ofSouth Africa, the exploitation is not so much through external forces as through the institutionalized slavery of apartheid, until it was dismantled a decade ago. The economic structures of many developing countries are not designed to make business corporations pay for the damages induced by them. While those contributing capital are not affected in a major way as a result of this degradation to the environment, the dependent wildlife and the unsuspecting general population bear the brunt of the consequences. This blatant unfairness on part of MNEs has gained better awareness over the last decade or so – mainly through the persistent efforts of activists and intellectuals. The efforts of devoted activists are finally having an impact on the regulatory and legislative branches of governments to improve existing standards of accountability (Jere-Malanda, 2007).
In the context of MNE operations in developing countries, the issues of national sovereignty and commercial opportunity are intertwined. In other words, while large Internet portals such as Yahoo and Google, by way of exploiting global opportunities provided by the medium of the Internet have submitted to the imperatives of business. While their profits have shot up as a result of the new opportunities for advertisement, their tacit support of citizen censorship (as typified by the case ofChina) has attracted criticism. As a result of facilitating Chinese government censorship, these dotcom MNEs have done social injustice to the people ofTibet. Similar instances of thwarting democratic participation can be found in countries such as East Timor, Cambodia and the Indian subcontinent. In essence, MNEs such as Yahoo and Google don’t seem to care an iota about freedom of speech and democracy in the countries in which they function, as long as their revenues remain impressive. Such profiteering attitude is ethically very shallow and does not project globalization and MNEs in good light (Buckley & Ghauri, 2004).
In conclusion, it is quite clear that much of the criticism directed at MNE operations in developing countries is justified. The objections related to MNE operations are part of a broader critique of contemporary industrial societies. These criticisms include deceptive mass advertisements, over-population, environment damage, toxic dumping, corporate greed, etc. The MNEs, which are essentially headquartered in Western democracies, can virtually dictate terms of trade for the rest of the world due to their military and economic superiority. And being the torch bearers of unfettered laissez faire capitalism, the powerful business interests often dictate local government policies. This heady mix of wealth and power has so far led to outcomes that have harmed communities at large and the environment in which they live. The poor people in developing nations are especially badly hit by this phenomenon (Steinbock, 2007). While the rich are getting richer than ever before, the real incomes of the poor have stagnated or declined in most countries across the world. In this way the poor are disadvantaged twice, as the consumerist society keeps promoting ‘affluenza’. Hence, overall, there have been more negative consequences than positive consequences due to MNE operations in the developing world (Steinbock, 2007).