Control of national economic sectors by transnational enterprises

Direct foreign investment by transnational enterprises can reduce the control that a country has over its own economy, particularly in the case of developing countries where this is the most usual form in which direct foreign investment takes place. Movement of capital, technology transfer, commodity movements and changes in the pattern of industrial organization may and do all take place within an enterprise but across national borders. This may lead to a three-cornered conflict among the enterprise, the government of its base country and the government of the country in which it is investing. A more balanced international legal framework, acceptable both to the corporations and to the countries in which they are investing, is essential.

The greatest part of the increase in employment in foreign affiliates of transnational corporations in recent years has taken place in developing countries, rising from 7 million persons in 1985 to an estimated 12 million in 1992. A large part of the increase was concentrated in East and South-East Asia, in particular in China and in export processing zones in that region and elsewhere.

Despite concerted calls, the four governments of the Windward Islands have not been able to challenge the exclusive position of a transnational operating their banana industry.