Home Committees and topics ECOSOC TOPIC


The role of multinational corporations in sustainable development

Sustainable development is the pathway to the future we want for all. It offers a framework to generate economic growth, achieve social justice, exercise environmental stewardship and strengthen governance.“

                                                                                                   Ban Ki-moon

It is broadly considered that sustainable development cannot be achieved without its economic influence. The United Nations recognize this phenomenon through its new sustainable development agenda which involves the sustainable development goals (SDGs) such as ending poverty, achieving decent work conditions and economic growth, as well as setting responsible production and consumption chains. Bearing in mind that, in a globalized and interdependent world, the multinational corporations (MNCs) are the main motors of economic growth.

  The economic role of multinational corporations is simply to channel physical and financial capital to countries with capital shortages. As a consequence, wealth is created, which directly creates new jobs. New tax revenues from MNC generated income allow developing countries to improve their infrastructures and to strengthen their human capital. By improving the efficiency of capital flows, MNCs reduce world poverty levels and provide a positive effect that is consistent with the United Nations’ mission — countries are encouraged to cooperate and to seek peaceful solutions to external and internal conflicts.

It follows that a supporting role for the UN would be to motivate developing countries to provide a suitable environment, both economic and physical, that would in turn attract foreign direct investment (FDI). Nations lacking FDI, provided by the multinational corporations, have common characteristics: their economies are heavily dependent on government regulations, as well as being controlled by state owned monopolies over the market. As a consequence, these nations are experiencing extreme rates of poverty, repressed human rights, as well as excessive environmental damage.

As a consequence to the rise of creation of multinational corporations (MNCs) and the strengthening of their economic role, their improvement throughout the years has called upon nations to primarily empower collaboration amongst each other.

However, in spite of them promoting the established goals for sustainable development, numerous problems have occurred in the meantime, thus having a paramount over the issue of tackling their way of work. Namely, one of the core issues present is the increasing percentage of corrupt parliaments and governments within the nations where multinational corporations exist and are active. Moreover, by utilizing bribery as a method of obtaining support and strength from the government, MNCs are succeeding in reducing their taxes and therefore degrading the national economies in general. As a consequence, that leads to an even greater difference amongst developed and developing countries, since the products and the profit remains in the originating country.

  The real conflict comes to the national economy being against their work, since it does a direct harm. Although it remains as a conundrum in this field, the actual question would be what the exact way of MNCs motivating the national economy and industry to function better in order to develop a healthy competition between them is.

By insisting and calling upon an improved coordination among existing mechanisms and implementing effective and targeted capacity-building in developing countries. Likewise, in order to support national plans to be complemented by multi-stakeholder partnerships, the nations would succeed in developing and sharing knowledge, technology and financial resources, it would be manageable to support the achievement for the sustainable development goals in all countries.

In spite of multinational corporations being possible allies of national companies and in the position to empower developing countries, it seems as though they are creating a contrary effect to their progress. The society has come to the time where a vibrant economy and the installed democratic system require social investment, healthy and educated workforce and self-centered communities, where MNCs are failing in promoting and involving lifelong knowledge, thus leaving the national industry in a fragile state. Nonetheless, in the attempt to keep up with the developed countries, the developing nations are expanding their investments within education, training and skills formation. However, the inevitable economic and political dependence on developed countries exploiting their resources for the sake of the profit of their nations is causing significant delay in the process. Hence, it goes without saying that they cause essential damage to the future fulfillment of ending poverty in all its forms everywhere, with a special emphasis on promoting well/being for all at all ages.

However, their core benefit of successful advocating for women’s education, introducing new working places for the locals and provide better infrastructure, as well as inaugurating new technologies cannot be omitted. In addition to this, they have made tremendous advancement in the fields of research and development, which contributed to the general economic and political progress.

With the role of UN in promoting international collaboration on this matter being at stake now, what is the power of ECOSOC and its countries to react now?

The question still remains: with their impact, do multinational corporations harm or aid sustainable development?



!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+"://platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","twitter-wjs");

Contact us

Belgrade International Model UN - BIMUN

United Nations Association of Serbia

Tel/Fax: + 381 11 322 46 48

Address: 22 /III Makedonska street,
11000 Belgrade, Serbia

bimun.unaserbia@ gmail.com

 UNA-Serbia - Member of  WFUNA