Anwar A Abrar, CEO of Standard Chartered Bank Bangladesh, was recently assigned as the CEO of the bank’s Malaysian operations. The move is as much a recognition of Abrar’s talent as it is of the growth and maturity of Bangladesh’s economy.
There still lies a vast chasm in per capita earnings between Bangladesh and Malaysia, but we’re growing fast, and multi-national corporations, like Abrar’s employers, are playing an important role in our quest to bridge that gap.
MNCs are the most significant form of non-state actors in the world today, with some of them having more significant political and economic influence globally than most state actors. Political rhetoric has often turned vitriolic against MNCs, denouncing them for de-capitalising foreign nations in which they operate and siphoning money to their home bases.
In developing nations like ours, they are sometimes blamed for creating income inequality, exploiting poor workers and communities, and stifling domestic innovation.
Political rhetoric aside, however, nations that have embraced MNCs, like South Korea under Park Chung-hee and Singapore under Lee Kwan Yew, have fared incomparably better than nations that have eschewed them.
There are, and always have been, valid arguments for protecting nascent local industries against the ravages of international competition, and MNCs are the juggernauts of that world, but protectionism carried too far has devastating effects.
The globalisation we celebrate
As evidenced by the South Korean model, when local firms are provided some level of protection, and allowed to compete -- albeit with “training wheels” in the beginning -- and also collaborate with MNCs, only then do they start acquiring the knowledge and the expertise to thrive in global competition.
The story does seem to be rather the same across the board, from Samsung in South Korea to Huawei in China.
MNCs have evolved over four odd centuries into what they are today and in many ways, they have evolved to bring the greatest material goods to the greatest numbers. Eminent French historian Fernand Braudel regarded the Dutch East India Company as the first big jump in the development of the multi-national corporation.
While that ties them rather inexorably with colonialism, it doesn’t mean the former created the latter. It was the efficacy of their structures in trade versus the old guilds that led to a geometric rise in the volume of trade.
When local firms are provided some level of protection, and allowed to compete and collaborate with MNCs, only then do they start acquiring the knowledge and the expertise to thrive in global competition
MNCs are also solely responsible for the globalisation we celebrate today. From the Dutch East India Company to Unilever today, they have evolved, and the best-fit has also been the best propagator of value.
As economies grow, the influence of local firms grows in equal measure, and in nations with rather infirm institutional structures like ours, these firms tend to grow into large family conglomerates, or business groups.
According to experts like Gary Hamel and CK Prahalad of Harvard University, it is these local business groups that tend to employ more exploitative and non-innovative practices when they are shielded from international competition.
So, it is the absence of MNCs in markets that lead more to the kind of negative market effects for which MNCs are often blamed.
Bastions for innovation
Contrary to denunciatory rhetoric, MNCs have become the drivers of innovation, creators of value, and incubators of talent and leadership in developing nations.
MNCs like Unilever, where I have found a home for the last few years, add a tremendous amount of value not just through supplying consumer goods that meet global quality standards, but also through a plethora of other conduits.
And it is all these additional values that are needed for the fulfillment of Bangladesh’s Sustainable Development Goals (SDGs).
MNCs like Unilever create and nurture talent. There was a time when talent in Bangladesh was attracted by the public sector, alas that is no longer the case. The best minds in the country rush to these MNCs because they are best able to provide this nation’s latent talent the conditions necessary to thrive.
These places become bastions of innovation, where new ideas are spawned that aid the masses: From things as simple as mini shampoo value packs, to life-saving water filters.
Leadership, too, is fashioned there. Captains of industry are created, who go on to prove themselves in the global arena. Luminaries such are Kamran Bakr (Unilever), Golam Mainuddin (British American Tobacco), Sonia Bashir (Microsoft Bangladesh) and the likes exemplify the grand achievements of the leadership spawned.
As we near our 50th birthday as a nation, the problems we face are too complex for the public sector or any single talented individual leader or innovator to overcome.
Every issue, from trade to climate change, has taken on a new urgency, thanks to technology, globalisation, and our endless thirst for natural resources.
The only way to deal with the problems that we are facing now, and are likely to face in the future, are to parcel them out in small pieces and let the most innovative forces, that are driven by the right incentives, to come up with solutions.
MNCs shall not be the solution to all or even most of our national problems, but they do and will keep doing two big things.
First, they will keep developing the talent that we require to make the next big economic leap.
Second, through competition they will keep providing the environment in which local firms too shall thrive and learn to innovate.
The combination of these two are what is required if we as a nation are to fulfill our destiny and go beyond just meeting our Sustainable Development Goals.
Fardina Habib is an expert in branding and was trained in Baruch College, New York.