Multinational Corporations and Development: Friends or Foes?

It is an honour to be this year’s Eminent Scholar in International Management. I join a distinguished group of previous recipients, led by the late C. K. Prahlad, who was also a good friend and indeed an important supportive voice in India’s march to reforms since 1991. I had been advocating these reforms ceaselessly since the mid-1960s. These reforms’ implementations – pretty substantial, but still ways to go – have led to India’s reversal of fortune from the status of a diminished Lilliputian to that of an awakened Gulliver. Last year’s Eminent Scholar, Stephen Kobrin, discussed the multinational firm in today’s world economy. The role of multinationals in development has never been free from controversy. But, the arguments of both the critics and the proponents have gone through significant changes as structural changes in the world economy have occurred. For example, changes in society and governance, such as a growing civil society and spread of democracy worldwide, have ensued, and these events have changed the arguments. Equally, it is now clear that if multinationals are to play a welcoming and beneficial role in the developmental process, they need to reconceptualize the way they operate in the host countries. If they do so, they will become true friends of the developmental process, and the opponents who charge that they are foes instead will lose political salience.