Perverse Corporate Investment Benefits

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Let us look at forces that lock in perverse corporate investment benefits. The quality of political leadership of nations is often judged by the volume of corporate investments they are able to attract, or trigger. These investments could be from national or transnational corporations. A favoured manner of describing some of the inroads made by, or with, the transnational corporations is one that encourages foreign direct investment. Diplomatic travels by political leaders is often geared towards showcasing business opportunities in their home countries by selling the notion that such investors would enjoy political protection as well as the best business environments.

Nations also make laws and regulations to ensure that local businesses are integrated in the areas dominated by transnational corporations. Such moves are sometimes termed backward integration, economic empowerment or indigenisation processes. Whatever is the case, governments work hard to ensure that these entities enjoy a good level of ease of doing business. The quest for ease of doingbusiness has become such a desirable thing that indices for measuring achievements in that mode have been developed and governments work hard to ensure that they are not found on the wrong end of the measuring stick.

Transnational corporations are especially favoured in the viewing lenses of national governments because they are seen as a major source of foreign exchange earnings and their flourishing encourages the influx of other corporate entities. The corporations are also seen as major job creators and politicians do whatever they can imagine would help ensure that the job numbers are higher than those recorded by their predecessors, or are unassailable by the promises of their competitors.

Followers of international politics will notice the way some political leaders are fixated or deeply immersed in following the job indexes as well as the outcomes of each trading day at the stock exchanges.  To some of us who are not experts in the economic fields, the posture of political leaders with regard to the indexes and indices sometimes appear comparable to the way people focus on games, rejoicing when things go our way, then sulking and laying out blames when things turn against our favoured teams. Whereas spectators at a sporting event cannot determine the outcome of the competition, officials sometimes engage in what is termed match-fixing in the soccer arena, for example. Match-fixing distorts the spirit of the game and attracts sanctions when uncovered. However, political leaders engage in what can be regarded as match-fixing through tariff wars or when they manipulate the value of their national currencies. Who sanctions them?

Having political leaders deeply focussed on their national, and even global economic fortunes, does make sense to the extent that a state of health of the nation can be gauged by the health of her economy. However, the economy can give a distorted sense of the wellbeing of nations when the measures are inclined mostly to the production and movement of goods and services in the formal sectors.

The forgotten and often purposely ignored sectors are populated by citizens that are not employed by governments or by corporations. They lie in the informal or unorganised sectors, if we take note of the term ‘organised private sector’ as is used in countries, including Nigeria. The notion that government has no business in business has led to the general belief that it is not the duty of government to provide jobs for the people. This has pushed governments to strive to reduce their workforce and forever moan over the fact that recurrent expenditure spent on civil service wages is bloated and a blot on the health of national economies. While the workforce continues to be constricted, the work to be done by government remains and to justify keeping citizens in an endless search for jobs, duties that ought to be carried out by government workers are farmed out to the private sector.

While the private sector is a vital part of any nation’s economy, the general belief that government cannot effectively and efficiently deliver services is a myth entrenched by neoliberal propagandists. Making the distortion worse is the reality that after giving contracts to private entities, governments also provide financial coverage for these entities when they obtain loans for the execution of the contracts. The reality that governments access loans at a cheaper rate than the private sector does not bother the promoters of the dubious creed that government has no business in business. With layers of consultancies and a web of invisible services, corporations are sometimes able to obtain a pile of financial benefits for providing services that only they can see. This phenomenon has been characterised as official larceny by Nicholas Hildyard of The Corner House in his book, Licensed Larceny: Infrastructure, Financial Extraction and the global South.

The matter of invisible services is heightened in the extractive sector where transnational corporations enter into agreements with governments but act as the operators of the businesses, determining what needs to be done, how it is done and what is expended on carrying out such activities. This is the case in the petroleum sector in Nigeria, for example. The operators determine the cost of operations, and such costs are recovered at source and the balance of the earnings is what is then shared with the government and other players in such joint ventures. This state of affairs subsists, and the Petroleum Industry laws stagnate in their primordial forms, because the corporations ostensibly bring incredible benefits to the nation.

The ease of doing business requirement is also enhanced by the creation of export free zones where corporates escape the requirements of national laws and to a large extent operate more or less as colonial enclaves. Besides, in the quest to ensure corporate profits, there is no accounting with regards to health and environmental harms inflicted on the people and communities. And, although national laws governing the extractive sector demands that exit plans by made, and resources kept aside for closure of mine or oil wells at the onset of the projects, these are neither enforces nor adhered to. Thus, oil wells drilled in the 1950s have been abandoned and were never truly decommissioned and are leaking crude into the environment to this day. The benefits brought by transnational oil corporations remains perverse if the question as to when the damage done to the environment, people and communities will be accounted and when the heavily impacted environment will be evaluated and restored are not addressed.

 

 

 

 

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