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October 17, 2019

Corporate greed


October 17, 2019

We are living in interesting times where the capacity of the state as a manager is crumbling and corporations are emerging as a strong force to define the economy, politics, education, health and science and technology.

Their role in any society is becoming a crucial one. They not only generate tax revenues to finance essential social and economic infrastructure, develop new and innovative solutions that help tackle development challenges but also increasingly play an important role as an engine of economic growth, jobs and GDP besides providing goods and services.

These goods and services once states used to deliver but as the population grew, the resources plummeted, and it dawned upon the state that it alone cannot do it. An all-stakeholders approach was adopted that cemented the partnership between the state, businesses and civil society and it was expected that the new paradigm would contribute to a sustainable life.

But ironically, this is not happening and big corporations are emerging as a major threat to land, life, environment and jobs. There are stories related to corporate scandals and frauds. From the US to Pakistan, there are similar stories of corporate greed, swindling people of their hard-earned life money and depriving the poor of their land which happens to be only source of their livelihood. Such actions on the part of corporations are creating hopelessness and despondency; Noam Chomsky has rightly said that these corporations only work for the welfare of the capitalist system at the cost of the workers.

Immanuel Wallerstein exposes very well the exploitative nature of capitalist system in his path-breaking World System Theory and how it keeps developing countries dependent on the core (West) through the control of global financial institutions such as the IMF, World Bank and WTO. These institutions feverishly promote corporatisation and financialization and justify the exploitation and appropriation of resources, labour and land to strengthen the capitalist system.

Francis Fukuyama, the neocon intellectual (but now he disowns neocons), came out with his famous ‘End of History’ theory in 1989, presenting corporate capitalism as a solution to all the problems of developing countries, from poverty to unemployment. But today after the lapse of almost thirty years we see capitalism is facing major problems in the core countries and is held responsible for inequalities being condemned by left-oriented American politicians like Bernie Sanders, Elizabeth Warren and Alexandria Ocasio.

Recently, I visited Baltimore; I found the city divided into white and black neighbourhoods. Baltimore was once the hub of industrialization with a booming steel, shipyard, and electronic industry, producing thousands of jobs. Today Baltimore is facing increasing poverty and income inequalities as a result of the shifting of industry overseas in search of cheap labour and more profits. This is not only the story of Baltimore; Detroit, once the home of the automobile industry in North America, tells a similar story of corporate greed and how it destroyed the lives of people once living prosperous lives.

Corporate greed and violence to plunder resources is not a new phenomenon. The recently published book, ‘Anarchy’, by William Dalrymple provides vivid insights into the greed and power of the East India Company in India and how it unleashed violence through the private army it raised to accumulate wealth and power that ultimately led to the end of the Mughal Empire in India in 1857.

With time, corporations have changed their tactics. Now they no more raise armies but hire governments as proxies to satisfy their insatiable greed. Communities are strong-armed into selling land they have lived on and cultivated for generations. The illegal occupation of land and demolition of villages is driving villagers to financial ruin.

The story of corporate greed and violence does not end here. There are a host of oil and gas companies that are operating in Sindh and which are found bluntly violating CSR. The 2007 petroleum policy legally bounds oil and gas operators to invest a specified annual sum, and production bonus on social welfare projects offer training and employment to Pakistani nationals and development of coastal areas.

Due to regulatory oversight, the petroleum industry generates staggering profits at the expense of public health and environment. The exploration and production of petroleum emits hazardous poisons which are irresponsibly discharged into the soil, water sources and the air. The consistent exposure to contaminants is impairing the human immune system and causing infectious diseases and neurological complications for the people living in those areas.

Recently, we visited some towns and villages in district Badin as part of a CSR class project. One woman in a village told us: “We are facing numerous problems in the village. Primarily we do not have access to drinking water.... The company has not done anything for us. It has ruined our water resources instead. If the company realises our rights, and does something for us, we will be grateful for it, otherwise it should think of a way to help us since the blasts (seismic activity) not only damage our houses but also harms us and our children”.

We were told that drilling in seismic activity was causing severe psychological problems in adults and children and irreparable damage to houses.

Answering a question about what the oil and gas company is doing about the welfare of the local community, one young adult said: “As a small gesture to make us happy, they have started a local bus service. The dispensary is also for their own permanent personnel, the OPD only works four days a week with Rs60,000 worth of medicine and even that is substandard. They have not offered locals any employment, although people have taken stands and carried out protests....”.

Keeping in view the increasing and insatiable corporate greed, there is a need of strong and transparent regulation, otherwise this greed will destroy the people and the planet, putting human survival in irreparable jeopardy.

How long will these natural resources remain a cursed blessing? How long will the people bear the brunt of this destructive development? How long will local communities lose out on their fair share of progress? It’s not too late for change, but it may be very close. The time to act is now to control corporate greed.

The writer works as professor in the department of management sciences at SZABIST, Karachi.

Email: [email protected]