Opinion & Editorial – The Jakarta Post, 4 June 2002

Make our small space a better place to live

Yanuar Nugroho,
Researcher & General Secretary,
Uni Sosial Demokrat, Jakarta,
yanuar-n@unisosdem.org

Welcome to the world of the multinational corporation (MNC). This is the world where a cultural and
economic tsunami has been roaring across the globe and replacing the spectacular diversity of
human society with a Westernized version of the good life.

Whether you walk the streets of Paris, New York, Beijing, New Delhi, Canberra, Singapore or even
here in Jakarta or Denpasar, the advancement of global economics practiced by most MNCs has
introduced a level of commercial culture which is being McDonald's-ized, in a distinctly homogeneous
way.

Young people drink the same soft drinks and smoke the same cigarettes, wear identical brands of
clothes and shoes, play the same computer games, which run on the same system and platform,
watch the same Hollywood films and listen to the same Western pop music. The fast-food restaurants
persuade everybody to buy the same high carbohydrate food with less compromises for local tastes.
The gleaming, air-conditioned shopping malls and hotels are interchangeable. Karl Marx would call
this situation "crude cash nexus", where familial, communal and environmental bonds are
disintegrating as social relationships are "commodified" and reduced.

In this regard, the questions about human rights and sustainable development are relevant to be
addressed; where will all these global advancements -- with all its consequences -- take us?
Propelled by the policies of privatization, deregulation and trade liberalization and powered by the vast
innovations in communication and information technology over the past twenty years, a power shift
seems to have taken place. Examine carefully these following facts.

The 100 largest MNCs now control about 20 percent of global foreign assets; 51 of the 100 biggest
economies in the world are now corporations, only 49 are nation states (Anderson & Cavanagh,
1999). The sales of General Motors and Ford is greater than the gross domestic product of the whole
sub-Saharan Africa. The assets of IBM, British Petroleum and General Electric surpass the budgets of
most small nations. Wal-Mart earns higher revenues than most central and eastern European states.
Moreover, the size of corporations is increasing. Early this millennium, communications "goliath"
Vodafone merged with Mannesmann, giant pharmaceutical company Smith Kline Beecham with
Glaxo Wellcome and the largest Internet service provider America Online (AOL) with media company
Time Warner in which each merger seems bigger than the one before. And governments rarely stand
in the way.

Here we are. All the goods we buy or use -- fuel, medicine, water, transport, health and education,
even the computer software and the crops growing in the fields in our surroundings -- are increasingly
controlled by corporations which may, at their whims, choose to nurture, support or choke us.
It is clear that powerful businesses are now in the driver's seat, where instead of governments,
corporations determine the rules of the game and let the former become referees, enforcing rules
decided upon by the companies.

Since 1950 global economic output has soared from US$3.8 trillion to US$18.9 trillion, a five-fold
increase. What does it mean? We have consumed more of the world's natural capital in this brief
period than during the entire history of humankind.

According to World Bank (2001), in 1960, GDP in the richest 20 countries was 18 times that of the
poorest countries. By 1995, this gap had widened to 37 times. About 12 economies in Asia and Latin
America account for 70 percent of exports from the developing world and absorb almost 80 percent of
investment flows to the developing world and receive more than 90 percent of the portfolio investment
flows to the developing world.
However, Sub Saharan Africa, West, Central and South Asia and many economies in Latin America,
Asia and the Pacific have been left out of the global economy and are not favored by international
investors. Clearly, free trade-centered globalization distribution of benefits and costs are unequal.

Most Northern countries and many urban regions in the South already consume more than their fair
share -- they depend on trade, which means using someone else's natural resources, or on
exhausting their own natural capital. Such regions run an unaccountable ecological deficit. Their
population is either appropriating carrying capacity from elsewhere or from future generations. The
losers are the people of the South -- as well as the global environment.

This is the world of the silent take over, says Noreena Hertz, where the world is at the dawn of the
new millennium where governments' hands are tied and we are increasingly dependent on
corporations. Giant private companies have become the driving force behind economic globalization,
wielding more power than many nation states.

Business values of efficiency, calculability, predictability, control to non-human technology and

competition at all costs now dominate the debate on social policy, the public interest and the role of
government. The tendency to monopolize, combined with decreasing rates of profit drives and
structures corporate decision-making -- without regard for the social, environmental or economic
consequences of those decisions.

What can be clearly seen here is the fact that the power is no longer centralized in the governments'
or state's sphere of power because business power has emerged to become much stronger. It is
obvious that the consequence of talking about the dark side of neo-liberalism is that we cannot but
also touch upon the issue of business power.

When people bring to mind democracy or power control, what stays in mind is usually the
parliamentary character, in the form of many representative bodies (parliaments, unions, etc) and any
discussion on this issue is likely to hit a wall, for indeed we are all captured by the traditional
conception of "democracy" which only considers the state's power. We have, certainly, to go beyond
this conception.

Welcome to Bali, welcome to the PrepCom IV and IPF meetings. Welcome to the real challenge: As
corporations in this globalization euphoria promote and sell their dreams to consumers of wealth and
glamor, local cultures around the world are eroded, people are killed and the environment is
destroyed.

This is the time we, hand-in-hand, have to speak out with our concerns -- the weak have to be
empowered, the losers have to be treated, and the destroyed environment has to be recovered.
Together, we sustain our hopes for a better world.

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