The Multinational Monitor


N E W S   R O U N D U P

Multinationals: Third World Style

by Tim Shorrock

Some of the fastest growing multinationals in the world today are found not in Japan or California's Silicon Valley, but in the Third World. Based primarily in the newly industrialized countries and India, these companies have expanded rapidly, from a few hundred subsidiaries in the 1960s to several thousand today. Nearly all their investments are in other developing countries.

One of the few studies made of Third World multinationals was done by the Geneva-based Institute for Research and Information on Multinationals, and is scheduled to be published as a book at the end of 1983. Among its findings:

  • The Third World country with the highest level of investment overseas is Hong Kong, which had over $2 billion in overseas investments in 1982. Although most of this was held by expatriate British firms based in the colony, much of the capital was from Chinese capitalists producing textiles, garments, plastic goods, and consumer electronic products.

  • The second largest capital exporter is Brazil, which through its state oil corporation Petrobras - the largest company in the Third World - has invested in oil exploration, construction, and agriculture. The third largest is Singapore.

  • The leading exporter of manufacturing technology in the Third World is India. The largest pulp and paper mill in less developed Africa is an Indian venture; Indian companies are also assembling vehicles in Malaysia and Greece and participating in a machine tool plant in Nigeria.

The accompanying list of the ten largest Third World multinationals was drawn from the Fortune International 500. As in the rest of the world, most are petroleum corporations; fully half are from South Korea. Korean firms, in fact, may be leading the next wave of investments in the U.S.: Gold Star Electronics, a division of the Lucky conglomerate, owns a television plant in Alabama; both Hyundai and Samsung have set up "listening posts" in Silicon Valley and are considering setting up production facilities in the U.S.; and, finally, the state-run Korean steel corporation runs a coal mine in Pennsylvania.

The Institute for Research and Information on Multinationals can be contacted at 45-47, rue de Lausanne, 1201 Geneva, Switzerland.

The Top Ten Third World Multinationals

Company Country Industry Sales ($mil) Rank in Int. 500*
Petrobras Brazil Petroleum 19,005 7
Petroleos de Venezuela Venezuela Petroleum 16,451 11
Kuwait Petro Kuwait Petroleum 12,234 31
Hyundai South Korea Shipbuilding, motor vehicles, industrial equipment 8,036 41
Sunkyong South Korea Petroleum, textiles, chemicals 6,270 62
Samsung South Korea Electronics, appliances, food products, textiles 5,967 67
Chinese Petroleum Taiwan Petroleum 5,561 79
Lucky South Korea Petroleum, electronics, appliances 5,461 82
Ssangyong South Korea Petroleum, building materials 2,892 161
Philippine National Oil Philippines Petroleum 2,890 162
* All companies on list derive more than 50 percent of sales from manufacturing and/or mining.
Fortune Magazine, August 22, 1983

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