By I. IVANOV

The entire range .of unlawful
actions resorted to by the multi-
national companies in the devel-
oping countries may be boiled
down to financial abuses, re-
- strictive business, economic sa-
botage and, finally, corruption.

Among the financial abuses
we should mention above all
monopoly price formation, i.e.,
establishment and maintenance
of monopoly prices in the reci-
pient country. Thus, at the turn
of the 1970’s there were 122 ex-
porting cartels in Japan. Their
main purpose was to “maintain
the price level” for their pro-
ducts in the developing coun-
tries.

For instance, the Kaishmilon
cartel fixed higher prices for sale
of synthetic fibre to the develop-
ing countries, than those at
which this fibre is sold to de-
veloped capitalist countries.

Cartels of U.S. companies ad-
hered to similar practices in
export of phosphorous, phos-
phate, carbon soot, soda, paper,
rice and photographic film. Ad-
vertising by the international

~ corporations helps establish high
monopoly prices.

Profits Hidden

United Nations experts write
in their report on the practices
of these companies:

“The competition between the
_ multi-nationals . . . often assumes
_. the form of sophisticated meth-
ods of marketing and does not

affect the real difference in the

price and quality. They will urge
the consumers to buy goods which
the latter would not buy other-
wise. To this end the companies
resort to much advertising. With
limited financial resources of the
overwhelming majority of the
people in the developing coun-
tries, such practices may divert
their meagre resources from the
basic to secondary needs.”
The profits secured are often
concealed from the authorities
of the recipient country when
settling tax accounts. P. Ahimi,

deputy finance minister of Ni- {

geria, said:

MEXICO CITY (Prensa La-
tina) — Transnational corpora-
tions, the majority U.S.-based,
extracted more than $22-billion
from Latin America during the
_ last seven years, it was reveal-
ed here.

A study conducted by the
Political Science School of the
Autonomous National University
of Mexico (UNAM) showed that
this. figure corresponds to the
capital extracted from Latin
_ America by 2,700 transnational
corporations subsidiaries.

It says that “these astronomi-
cal profits flowing mainly toward
the United States have substan-
tially prevented Latin America

from obtaining financial resour-
ces to overcome underdevelop-
ment.”

MULTI-NATIONALS.
_ The big monopolies in action | |

“We are sure that some of the
international corporations con-
ceal their profits in the form of
remuneration for management
and other levies. In the end of
each year they declare to the
tax authorities that far from get-
ting any profits they have suf-
fered losses instead. This is mys-
ticism. Then why don’t they shut
down and how can they carry on
their operations?”

Feigned Competition

The multi-national companies
also widely resort to what is
known as restrictive business
practices. The simplest form of
‘these practices is division be-
tween the cartels of. the markets
in the developing countries. This
is done in keeping with the “old
colonial” system. Competition is
feigned by participation in the
the given cartel.

But with the exception of the
international corporation which
is the “owner of the market”
they offer obviously unaccept-
able prices.

®

am

Widespread interest in the ac-
tivities of the multi-nationals, is
heightened by the approach of
the World Conference on Multi-
National Corporations to be held
in Toronto, Nov. 14-16, 1975.

This is the first of a four-part
article which appeared under the
title, Multi-nationals and_ the
Young States, in the USSR pub-
lication, Asia and Africa Today

(No. 6, 1975). I. Ivanov, D.Sc. is _

a Soviet economics expert.

However, as a rule, restrictive
business practices are better
camouflaged. These companies
form alliances at tenders, force
upon the local firms and com-
panies exclusive sources of sup-
ply. (This includes, in cases of
purchases of production pro-
cesses, units and assemblies for
it, etc.). They prevent the con-
sumer from buying in other mar-
kets;*

For instance, the members of

the International Nitrogen Cartel:

(companies of Austria, Belgium,

It states that “Latin America
has become aware of its national
interests and is adopting meas-
ures for putting an end to the

PACIFIC TRIBUNE—SEPTEMBER 26, 1975—Page 6

rapaciousness of these firms,
“despite threats contained in the
U.S. trade act against countries
that try to avoid the rules of the
game set by the global corpora-
tions.

“Basically Latin America
wants to stop being the supplier
of raw materials and the buyer
of expensive finished products,”
says the document. “‘A large part
of the money received by the
transnational companies comes
from the sale of technology
which is very often out-dated
and therefore slows up indus-
trial development,” it adds. It

defines the U.S. Foreign Trade
Act as a tool for keeping Latin
America as a supplier of cheap
raw materials.

the Netherlands, Italy, Norway,
France, the Federal Republic of
Germany) offered identical prices
for fertilizer to.the state purch-
asing bcdies of India, Indonesia,
Pakistan and South Korea. The
Ciba Co. of Switzerland and
American Cyanamide of the
United States forced on - their
licenses pharmaceutical — semi-
finished products at _ prices
double those on the world mar-
ket.

Appreherision and
Disillusionment

It is not surprising, therefore,
that though the demand for ca-
pital and processes is high in the
Third World, the operations of
the international corporations in
the developing countries have
given rise to apprehension and
disillusionment. As a rule, these
feelings are directly proportional
to the time of operation of the
company in the given country.
Summing up ‘the results of their
investigations in their report,
the United Nations experts on
multi-nationals write:

“Intensification of the growth

~

Protect jobs’ demands Luken

WINNIPEG — Communist
Councillor Joe Zuken called on
the Winnipeg City Council at its
last meeting to join with the
provincia! government in de-
manding that Ottawa step in to
protect the jobs of Winnipeg
railway workers. 2

Referring to the announce-
ment by Canadian Pacific Rail-

ways that 760 shop workers
from Winnipeg will be laid off

next month, Councillor Zuken

-said that would have a severe

impact on thousands of city re-’
sidents. The CPR not only gets
subsidies from the Federal Gov-
ernment but also receives tax
concessions from the City of
Winnipeg. He called on Council
to put pressure on the MP’s to
compel the CPR to cancel the
layoffs. However, City Council
took no action.

The Winnipeg Labor Council
has written to the president of

rates with the help of interna)
tional corporations does not 4
ways form a basis for steady]
and optimal development. — |
“The extraction of natural Tf)
sources creates few processife|
industries and helps upgrade th}
skills of local labour but ve)
little. The subsidiaries whit!
operate only as branches of the .
main companies, i.e., as depel|
dent production units, can hare) —
ly be integrated in the local ec)
nomy... .%
“The international corpor |
tions can nullify the attempts |
the recipient countries to rais? |
taxes or introduce restrictions % |
the export of foreign currency: |
That is precisely why this pat! |
of the world is less and less sy™ |
pathetic to the western theorie |
about-the “exclusive” and ull |
que” character of the service is
the companies render to the
veloping countries in the soll |
tion of their problems. ;
: Political Objectives
Said Mr. L. Ja, governor % |
the Indian State of Jammu and
Kashmir and chairman of ®

group of UN experts on -

—
soit

nationals: +
“Tt would be a mistake to hop? |
that to open the doors to
international corporations '
mean to find the answer to al :
the problems of the developiné
countries.” eS
It is worth noting that th?)
conflict between the young T
cipient states and the intern
tional corporations has nev®
been purely economic.
The attempts of the intern’,
tional corporations to retain an”
consolidate their domination
the now sovereign nation? |
states show that their operation’ |
in the Third World have mare :
edly political and social obje |
tives. This is all the more true
because owing to “heredital | —
habits” the companies have ofte? |
sought to defend their privileg®
with the help of virtually the |
same old methods of extfa
economic compulsion, i.e., au
the methods that enabled the™ iy
to obtain these privileges in ti.
epoch of colonialism.

_ Alderman Zuken

the CPR asking why layoffs wert
coming at a time when hundre
of cars were in need of rep# is .
Delegates from railway loc@ |
expressed the opinion that thé |
layoffs might be intended to i”
timidate the railway workers
the coming wage negotiations: 4
The Labor Council also deci
ed to write to Prime Minis
Trudeau calling for the nation®
lization of the CPR.

—