World Bank's Clausen Lauds Multinationals - U.N. Disagrees

Big business can rest assured that it has a loyal friend as president of the World Bank. In a speech to chief executives of major companies on September 21, Bank chief A.W. Clausen lavished praise on "the transnational corporation." ,

"No other entity is better equipped to bring together resources, expertise, capital, and markets on a global basis in such an efficient manner," Clausen proclaimed at the International Industrial Conference in San Francisco.

Clausen attacked critics who claim that the "phenomenal growth" of giant companies "smacks of a dangerous concentration of power." "I don't share that view," he said. "On the contrary, I see the transnational corporation as an important ally of creative and enterprising people everywhere who believe it's pragmatically possible to build a better and more productive global society that can enhance the living standards of everyone."

That multinationals "inspire mistrust and fear," Clausen did not deny. He simply attributed that phenomenon to the persistence of "misconceptions."

In recognition of Clausen's "distinguished contribution to the advancement of American foreign trade and investment," the National Foreign Trade Council announced on September 8 that the former Bank of America president would receive its annual Captain Dollar Memorial Award. (Captain Robert Dollar, the Trade Council explained, was "a pioneer of American World Trade.")

Clausen joins a select group of earlier recipients of the award, including corporation presidents J. Peter Grace, David Rockefeller, Thomas J. Watson, Jr., of IBM, Walter B. Wriston of Citibank, Stephen D. Bechtel, and J. Robert Fluor.

Clausen's rosy view of the role of multinationals is not shared by the United Nations Conference on Trade and Development (UNCTAD). Its 280-page annual report released on August 21, documents the effect of the "internationalization of trade and output" by giant companies.

"In such a global corporate structure, the role consigned to the bulk of developing countries continues to be that of producer of unprocessed commodities, whose export prices and marketing are largely outside of their control." UNCTAD cited examples: three conglomerates run 75 percent of the world banana trade; five corporations handle 75 percent of cocoa; and five leaf buyers account for 90 percent of the tobacco market. Such a situation invites price-fixing and transfer-pricing manipulations by the companies, the study noted.

The UNCTAD report recommends that developing countries should try to break out of this corporate stranglehold by taking advantage of "the immense possibilities of economic cooperation among themselves (to) become increasingly independent of circumstances in the rest of the world."