Research activity of the UN Conference on trade and development on the issues of employment and activities of transnational corporations

Nargis Muminova (Department of International Relations, University of World Economy and Diplomacy, Uzbekistan) [BIO]

Email: leo_nargis@yahoo.com

 

ABSTRACT:

Integration processes of industrially developed countries had prepared the preconditions for development of globalization which has provided them more effective solution of many economic, political and social problems. As for developing countries, this integration way represents not natural historical process, and consequently is interfaced to the forced approach of the above-stated problems solution. Globalization highlights the differences in quality of the countries, and strengthens their differentiation, caused by different level of their economic development, unequal scales and structure of economic activity, a various degree of integration into global economy, geopolitical position, demographic situation, climatic conditions of the countries, and etc.

In this context, international financial institutions determine universal rules of interaction between national economies in global economic system: the UN General Assembly and Economic and Social Council (ECOSOC) coordinate questions of the international economic cooperation; issues of global currency-financial and economic-trade regulations are the prerogative of the International Monetary Fund (IMF) and General Agreement on Trade and Tariff and World Trade Organization (GATT – WTO) with the support of the World Bank; the UN Conference on trade and development (UNCTAD) researches the issues of interactions of industrially developed countries and developing ones ( the so-called “North – South” Dialogue), as well as Foreign Direct Investment (FDI) and Transnational corporations (TNCs).

The problems, emerging during the interaction of industrially developed countries and developing ones with different levels of economic development are considered by the Structural Transformation (Adjustment) Programme (Policies) of the IMF and the World bank, received in 1989 the term of the “Washington Consensus“, covered ten principles. Nowadays, the IMF and the World bank policy considers a consensus, the basis of which are the recognition of the complementarity of market and state functions, and also the originality of certain country demanding special approach to its development.

At present, there are additional principles, which are included into the development programme of developing countries and named the “ Washington Plus” (poverty reduction, the level of education, health, the issues of governance and corruption, and etc.), Millennium Development Goals (MDG), Monterrey Consensus. In contrast to the IMF and the World Bank, working out general socio-economic development principles of the countries, UNCTAD inquires into and researches these strategies by the case studies on the economies of concrete developing countries (New Industrial Countries), obtained greater results in political and socio-economic problems solutions. At the same time, UNCTAD is engaged in the coordination of all questions concerning FDI and TNCs (the understanding of the nature of TNCs and their contribution to the development of world economy, the creation an enabling environment for international investment and enterprise development) (1). The concepts of UNCTAD are realized through discussions on intergovernmental level, activities on technical assistance, carrying seminars, working meetings and conferences.

The UN Conference on trade and development had begun its activity in 1964 in Geneva by the signing of the Final Act, which contained fifteen general and thirteen special principles, called to govern “international trade relations and trade policies conductive to development”. (2) UNCTAD holds the forum every four years. There have been eleven UNCTAD Sessions since 1964. Historically three stages characterize the dynamics of the Organization’s work:

• 1964–1980s – the “North-South” Dialogue formation and development;
• 1980s – “the rise of neo-liberalism and the decline of the “North-South” Dialogue”;
• since the early 1990s – a new and positive standards of the “North-South” Dialogue – “the relevance and importance of UNCTAD’s research work” in the sphere of globalization, financial crises, FDI and TNCs’ activity. (3)

Legal documents of UNCTAD, adopted by the UN General Assembly are: Declaration on the Establishment of a New International Economic Order (1974), The Programme of Action on the Establishment of a New International Economic Order (1974), Charter of Economic Rights and Duties of States (1974).

The scales of TNCs’ activity and their contribution to the development of world economy constitute the main trends of the UNCTAD Secretariat’s work. Transnational corporations act as the leading forces of globalization. TNCs’ organizational structure includes parent (headquarter) ventures and their foreign branches (affiliated companies). Nowadays, there are 77 000 TNCs in the world with 770 000 foreign branches. (4)

Historically the TNCs’ development has passed through several stages. Four generations of TNCs have been noticed (5): “colonial raw material TNCs”; TNCs of military-technical manufacture; TNCs, that widely used achievements of the scientific-technological revolution; and global TNCs.

If political aspects of TNCs’ activity are differently estimated in the parent countries, the host countries, and the system of the world economy as a whole, then unequivocally, the TNCs’ activity in the world labor market, in effective utilization of labor resources of both industrially developed and developing countries has positive estimation.

The population of developing countries will grow much faster, than the population of industrially developed countries. At the same time, the share of an elderly part of the population will raise, and the smaller share of people will be engaged in productive labor in industrially developed countries. The lack of labor can be compensated for the overabundant labor resources of developing countries, experiencing problems of unemployment. The TNCs’ activity in these conditions is connected with:

• the attraction of foreign labor to industrial countries from developing countries;
• the increased introduction of a robotics and the further development of automation;
• the movement of the industrial enterprises to developing countries for use of the big local labour potential. (6)

The questions of employment and providing with (ensuring) workplaces have been reflected in the corporate strategies of TNCs. These corporate strategies are determined by the measures of interaction of TNCs and national economies of host countries. In this context, three TNC strategies are distinguished as: stand-alone strategy, simple-integration strategy, complex integration strategy. Also, there have been studied the range of factors of potential effects of FDI on the quality, quantity and location of employment. (7)

It is necessary to note, that the legal aspects of labor migration of TNCs are regulated by the International Labor Organization (ILO) (created in 1919), International Confederation of Free Trade Unions (ICFTU), World Federation of Trade Unions (WFTU), World Confederation of Labor (WCL), «International Code of Conduct in the industry», developed by the OECD and ILO.

Uzbekistan has its own model of economic development and basic priorities for the realization of economic reforms. They are aimed at successive decrease in the state’s presence in economy and creation of maximum favourable conditions for private national and foreign capital. According to one of the major priorities of economic reforms of the year 2007, “the most important factor of our forward movement towards free economy is the strengthening of cooperative ties and consolidation of cooperation with – and where it is purposeful, to enter into the structure of transnational corporations (TNCs). […] The broadening and deepening of cooperative ties and the cooperation with the largest TNCs from our perspective should take into account our specific conditions and should, first of all, facilitate modern management, introduction of modern forms of manufacturing management and the organization of labour, access to the most progressive technologies, and, what is specially important, should lead to the entry to the world commodity market. While speaking of cooperation, we have in view not only the offer of unique mineral and raw material riches, but also the potential of working capacities of the existing enterprises, as well as the intellectual resources and high qualification of the working force that our country possesses”, – as the President of the Republic of Uzbekistan I.A. Karimov has remarked.(8)

In this context, the research of UNCTAD’s activity, its inquiry (enlightenment), particularly of the issues of TNCs’ activity and questions of employment, workplaces, labor migration is of great value for Uzbekistan on the way of its further successful integration into the world community.

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1 UNCTAD. World Investment Reports 1991–2006. United Nations, New York and Geneva, 1991–2006.
2 Beyond Conventional Wisdom in Development Policy. An Intellectual History of UNCTAD 1964–-2004. UN, New-York and Geneva, 2004. UNCTAD/EDM/2004/4. P.XXIII
3 See: Beyond Conventional Wisdom in Development Policy. An Intellectual History of UNCTAD 1964–2004. UN, New-York and Geneva, 2004. UNCTAD/EDM/2004/4. P. XXII
4 UNCTAD. World Investment Report 2006. FDI from Developing and Transition Economies – Implications for Development. United Nations, New York and Geneva, 2006.
5 Movsesyan A., Ognivtsev S. Transnacionalniy kapital I nacionalnie gosudarstva. //Mirovaya ekonomika I mejdunarodnie otnoshenia. Nr. 6, 1999. s.55. (Moskva)
6 Daniels John D., Radebaugh Lee H. Mejdunarodniy bisnes: vneshnyaa sreda I delovie operasii. Moskva, “Delo Ltd”, 1994. s 726–727.
7 UNCTAD. World Investment Report 1994. Transnational Corporations, Employment and the Workplace. New-York and Geneva, 1994. UNCTAD/DTCI/10 . P.165–173.
8 Doklad Presidenta Respubliki Uzbekistan I.A. Karimova “Garantiya nashey blagopoluchnoy jizni – postroeniye demokraticheskogo pravovogo gosudarstva, liberalnoy ekonomiki I osnov grajdanskogo obshestva” na zasedanii Kabineta ministrov RUz, posvyashennom itogam socialno-ekonomicheskogo razvitiya strani v 2006 g. I vajneyshim prioritetam uglubleniya ekonomicheskih reform v 2007 g. ot 12.02.2007 g.