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Moral & Ethical Dimension: MNCs & TNCs

Certainly we are living in an environment where not only distances are becoming shorter, and communications are becoming faster, the social fabric of the society and moral and ethical dimensions are also weakening and means of mass destruction are also becoming more and more powerful. The global challenges therefore are: to promote global harmony and integration; to promote the development of all societies so as to: eliminate poverty, minimize unemployment, and reduce inequalities of income and wealth, minimize crime, tensions and anomie and to promote family and social harmony.

The effective and harmonious functioning of all human institutions, some of the most important of which are the market, the family, the society and the government is needed. All these are closely interrelated and do not operate in watertight compartments. None of these institutions can work effectively on the basis of self- interest only. Serving of self-interest is essential for increasing efficiency: but sacrifice is also necessary to realize equity as well as efficiency. Self interest therefore should accompany social interest. As to the question that why would a rational person be willing to make a sacrifice for serving social interest, we need incentives and deterrents and injection of a moral dimension and a global accountability. Poverty alleviation should not be seen as an act of charity by the rich for the poor but on investing in areas where the poor can be brought into the market.

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It is therefore extremely necessary to create an atmosphere of one global village with better mutual understanding and greater peace, harmony and cooperation: absence of such an atmosphere may lead to clash of civilizations. Putting in Gerhard Schroeder’s words “the tasks we are facing require a strong multilateral system based on the rule of law rather than on the idea of the survival of the fittest”51. Prosperity of all nations depends on such globalization. The point that needs to be emphasized is that economic, social and Political integration without accompanying justice, mutual help and cooperation is not going to integrate the mankind.

The present globalization lead by MNCs while emphasizes economic integration, it does not emphasize justice. One can not agree more with what Nelson Mandela said in the “Bridging the Divide” conclave 2006 held by India Today: “it worries me that our world is becoming a global village only for the exchange of goods and information - not as a place of shelter, livelihood, security and dignity for all who live in it”.

A just economic system requires a growth production and exports from the developing countries along with the same from the industrialized nations. It is needed to reduce unemployment and poverty and developing nations. The capacity of developing countries cannot rise until all barriers in the way of their productive capacity are removed. Human resource, infrastructure development and access to technology are indeed required for the same. Developed countries should help the developing countries by means of technology transfer and technical assistance. This will be useful for rich countries themselves, as a higher growth world over will also be beneficial for them. The economists note that greater equality (of opportunity, not out-comes) ‘implies more efficient economic functioning, reduced conflict, greater trust, and better institutions, with dynamic benefits for investment and growth.” Assuming “dynamic benefits” reward nations that pay more attention to inequality; this would become a self-reinforcing trend.

Through the process of Globalization the world need to move towards a universal village while maintaining its cultural diversity. Diversity is the beauty of life and is a great human asset. Any effort by a dominant group to impose a particular culture on the rest of the world will create problems for the whole world. What we really need is a human face of globalization. (First published in IPS journal, Policy Perspectives, Vol. 4. No. 2, July-Dee 2007)

Khalid Rahman


Source: Essays on Muslims and the Challenges of Globalisation, Institute of Policy Studies, Islamabad. Republished with permission.