DECEMBER 1981 - VOLUME 2 - NUMBER 12
ReportsTransnational Corporations: Direct Effects on the Balance of Payments.
A report by the Secretariat of the United Nations Commission on Transnational Corporations
Seventh session, Geneva, April 1981. Document No. EC 1084, 28 pages.
This report is one of a series of reports entitled Studies on the Effects of the Operations and Practices of Transnational Corporations. It examines the impact of transnational corporations on the balance of payments situations in both developed "home" countries, and developing "host" countries, using a case study of Mexico to illustrate its points.
The report's general conclusion is that transnational corporations positively affect the balance of payments in developed home countries by increasing their exports, while negatively affecting the balance of payments in developing host countries by increasing their imports and external borrowing, and depleting their available foreign exchange and international reserves.
The negative effects of transnational corporations on balance of payments raise a variety of policy issues, the most common of which are: many developing host countries legislate import reductions in order to limit account deficits; developing host countries often enact regulations designed to limit foreign investment as well as to curb the pace of their economic growth, countries with access to private capital markets may be forced to borrow on increasingly harsh terms to finance their payment deficits, and, often, host governments are unable to control those activities of transnational corporations which affect short-term capital flows.
The final section of the report consists of an analysis of the direct effect of transnational corporations on Mexico's balance of payments, based on a previous U.N. study that incorporated findings from every transnational operating in Mexico in every industry. The analysis includes data on trade in goods, service payment flows, and both long term and short term capital flows, as well as differences in these patterns by sector.
While emphasizing the difficulty of arriving at a comprehensive appraisal of the effects of transnational corporations on balance of payments, the study documents their positive effects on home countries, and concludes that the likelihood of a corresponding positive effect on host developing countries balance of payments is small.
To obtain copies of the report, write to:
Department of Public Information
- by Maria Brin, formerly an intern researcher at the U.N. Center on Transnational Corporations.
Bankrolling Ballots Update 1980: The role of business in financing ballot question campaigns.
Corporate spending in 1980 U.S. state and local referendums and other ballot initiatives paid off in impressive victories for the corporate point of view on business-related issues, the New York-based Council on Economic Priorities reports in this study, released November 1.
The report reveals that business interests outspent citizens' groups, in some cases, by as much as $79 to $1.
In detailed analyses of 18 campaigns concerning business-related issues-from a California initiative to require non-smoking areas in all enclosed public places, to a Massachusetts initiative limiting property taxes -the report lists all major funding sources on both sides of each issue. The business-backed side won I 1 of the 14 campaigns it dominated financially, but only one of the three in which it did not significantly outspend the opposition.
The study also notes such new campaign tactics used by business as choosing not to use radio and television advertising in order to prevent opponents from obtaining free air time, and timing contributions so that they become public only late in a campaign.
"Unless proponents are extremely experienced in grassroots organizing, it will be virtually impossible for them to overcome the advantages that money buys," says Steven D. Lydenberg, the author of the study. "The public hears only one side of an issue when corporations spend this much money to dominate the media and the mailbox."
For information on obtaining a copy of the study, contact:
- Robert Kurtz