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The Mafia vs the MNCs

We are always complaining about how the underworld is slowly taking over our lives, our cities. But have we ever paused to ask ourselves why? Why are so many clever, educated young people migrating towards a life of crime when the Indian economy is opening up and readying to become an intrinsic part of the global scene? Why is it so sexy to break the law, so exciting to challenge the staid, unimaginative, corrupt establishment? In India; in Russia; in China; in Japan. Even in the United States, where there are so many opportunities to be successful within the framework of the law itself.

The reason is simple: The State has become weak and effete.

Therefore, there is no one left to question the tough, big, politically influential, all powerful corporate world. Which is growing at a such a pace that it has left behind all other institutions. Including those which have traditionally taken care of our basic concerns like jobs, homes, healthcare, education, security, human rights. No one talks about these any more. No one cares. As we hurtle towards a new millennium in which all that matters is pampering the artificial needs of one thousandth of one per cent of the world's population.

This leaves the rest to do their own thing. To create their own alternatives.

The only way they know how to do this is by taking the law in their own hands or by joining hands with those who do. Creating, in the process, an alternative morality, an alternative set of laws that mock the laws that society has put in place to protect the status quo. The status quo in which the rich get richer; the mighty, mightier; the influential, even more influential. The status quo which benefits those who are already benefiting from the way we are.

Did you know that 200 huge global companies today control a quarter of the world's economy? That these 200 are larger than many national economies and most of them are growing twice as fast? That they are weaving webs of production, consumption and finance influencing the lives of a third of the world's people? I did not. Till I read a report in The Economic Times about a study conducted by the Washington-based Institute for Policy Studies.

The report was remarkably revealing. There are over 40,000 global companies who, through 250,000 affiliates, drive the world market and most of them have the wealth, the power and the political influence to change everything to suit their convenience. The top 200 among them account for a galloping share of the world's economic activity and, according to the report, are unleashing global apartheid rather than the integrated global village that Marshall McLuhan spoke about.

They are also changing our lives. Fundamentally.

They are driving new consumption patterns, creating a craving for goods and services that we do not need and most of us cannot afford. They are killing jobs and forcing political turmoil on nations that have millions of unemployed people and do not know what to do with them. The most alarming fact is that, as corporate concentration grows, profits soar but workers and communities get a shrinking piece of the growing pie.

Even in the US, median family income fell by 1 per cent a year between 1989 and 1994 despite four decades of steady growth in corporate activity. Profits and CEO pay packages exploded but workers wages stagnated.

These are facts and figures we need to understand as India opens up to MNCs. I am not complaining against the liberalisation process. It is inevitable and necessary. We cannot seize global opportunities unless we become a part of the global scene ourselves. Unless we learn to play the game by the new rules which demand that we chase the very goals that the rest of the world does. Growth; productivity; profit; shareholder value.

But we cannot do this with our eyes closed. We cannot ignore the fact that today, out of the 100 largest economies of the world, 51 are corporations. Only 49 are nations. A decade into the next millennium and these figures will change even more dramatically. You will have less than thirty nations in the list and, unless India is among them, we will be a loser on all fronts.

No one will be interested in whether we have an atom bomb or the Taj Mahal is among the ten wonders of the world or the Maharishi's disciples can levitate. The end of this century will see the end of these limpid dreams. We are moving into an era of hardnosed economic realities where size and shareholder value will determine the future of all productive activity.

To get back to the IPS report, it shows that Wal Mart, which ranks 12 in the list of global majors, is bigger than 161 nations of the world. Including Israel, Poland and Greece. Or take the case of four companies that have just entered our automotive sector. Mitsubishi is larger, bigger, stronger than Indonesia, the fourth most populous nation on earth. General Motors is bigger than Denmark. Ford is bigger than South Africa. Toyota is bigger than Norway. And we are not even talking about Honda, Daewoo and Hyundai.

The combined sales of the top 200 companies is 7.1 trillion dollars which surpasses the combined economies of all 191 nations of the world barring the top nine: the US, Japan, Germany, France, Italy, Britain, Brazil, Canada and China. In other words, these 200 companies put together are bigger and stronger in economic terms than the 182 remaining nations of the world put together, whose combined GDP adds up to $ 6.9 trillion.

Put more simply, these top 200 companies have almost twice the economic clout of the poorest fourth-fifths of humanity whose economic activity add up to a paltry $ 3.9 trillion. Which means, they have the power to do enormous good or enormous bad, depending on whether their interests coincide with or conflict with the political goals of the different nations in which they operate.

Take jobs, for instance. In the past two decades, these 200 companies have steadily cut back on jobs. Their combined global employment today is 18.8 million which is less than a third of one one-hundredth of one per cent of the population. Or less than three-fourths of one per cent of the world's workforce. What is even more disconcerting is the fact this cutback has taken place precisely during the time when these companies have performed their best. In 1982, they achieved sales that were the equivalent of 24.2 per cent of the world's GDP. Today that figure exceeds 28.3 per cent.

Not only are these companies slashing jobs, their CEOs have benefited from these job cuts. Among those who had massive lay-offs are AT&T, Boeing, Lockheed-Martin, Bell-South, K-Mart, Chase Manhattan, GTE, Mobil and Texaco, the CEOs of which made millions of dollars by announcing the lay-offs. The very day they announced the lay-offs, the nine CEOs made $ 252 million in the increased value of their stock options, according to the report.

What are the key businesses of these 200 top companies? Trading, cars, banks, retailing and electronics. Half their $ 7.1 trillion sales come from these and, in each of the five areas, there is growing concentration. In cars, the top five firms account for 60 per cent of global sales. In airlines, aerospace, steel, oil, chemicals, personal computers and media, the top five control 30 per cent.

Yet none of them is interested in making the world a better place. The top telecom companies, for instance, have been growing at a lick and yet 90 per cent of the world's population has no access to phones. While the financial sector has grown exponentially and the 31 banks in the list of the top 200 have combined assets of $ 10.4 trillion, close to 4.8 billion of the world's 5.6 billion people still live in countries where the average per capita GNP is less than $ 1,000 a year, and they have no access to any credit. Millions of people cannot get the tiniest loan in their moments of deepest despair. Be it floods or famine or drought or riots.

Are there any Indian companies in the list? No. Japan has six in the top ten. The US, three. South Korea and Brazil are the only two developing nations to have broken into this exclusive club of 200, among whom 186 are based in just seven countries: Japan, the US, Germany, France, Britain, the Netherlands and Switzerland!

No wonder the mafiosi is so active in the rest. Once they consolidate their empires of crime, they will cross over to the first world and take on the might of these transnationals. For that's where the big money is.

That's what they are ultimately targeting.

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