Transnational Corporations and Their Iron Grip on the Global East

by | Dec 20, 2023 | Corporate power | 0 comments

Article by Dillon O’Toole Douglas

Photo by TruckRun on Unsplash


Transnational Corporations’ (TNCs) greed for increased profit margins and lower production costs has played a significant role in the abuse of labour rights and inequality amongst workers in the global East. Whilst a Westernised view may immediately critique the conditions many workers in the global East are subjected to, it is more important to delve into the complex interplay that governmental decision, corporation influence, and most importantly the quality of life these jobs offer that reveal why TNCs such as Nike, Adidas and Apple have a such an iron grip on production in the global east.


One of the main reasons why many TNCs are based in Asia is due to the unique economic conditions situated within the region. Countries such as India alone are home to 272 Special Economic Zones (SEZs); which are designated areas within a country that are subject to unique economic regulations that differ from other countries. These SEZs are used as a powerful bargaining chip by governments to attract corporations to outsource manufacturing processes to these areas to benefit both the country’s economy and the corporations’ profit margins. SEZs have become particularly important for economic growth within South-East Asia, with three-quarters of the 5,400 SEZs worldwide being located in South-East Asia. However, these Special Economic Zones, and the lack of regulation enforced by the government and corporations within them, have caused significant worries surrounding labour rights, compensation, and working conditions that have subsequently resulted in significant economic, social and environmental vulnerabilities for these developing nations.


Whilst the lack of regulation within certain industries can certainly be attributed to a governmental body that has purposefully chosen to subject their citizens to poorer working conditions in order to increase capital, in many cases it’s the corporation and its ability to undermine governmental power, particularly in developing countries that benefit greatly from corporation investment, becoming reliant on them, and where governmental bodies are more likely to lobby with corporations, that allow for this inequality in worker conditions continue. For example, despite the Chinese government’s implementation of the 2008 Labour Contract Law which specifies that “workers are entitled to a detailed written employment contract when they are hired and severance pay based on length of employment if they are laid off”; many companies exploited every loophole possible to avoid compliance with the law, which meant workers were fired and then rehired on an agency basis, or were compelled to sign blank contract forms, or contracts with intentionally inaccurate information, all to save profit margins. This intentional deception of workers and continued lack of regulation concerning a fixed wage has only exacerbated the income disparity between the West in which labour requires written contracts for employees, and the global East in which workers continue to be taken advantage of.


Corporations often maintain their grip on the Asian workforce because they can offer better wages than standard primary sector jobs like agriculture. For many impoverished individuals, factory work represents an improved alternative, despite poor pay and working conditions. David Griswold exemplifies this in his 2018 article China’s Great Migration stating how the largest net migration in history resulted from agricultural reforms in 1970 that prompted 300 million citizens to move from rural areas in China to cities to work in the factories that had begun to produce labour-intensive goods. This mass migration of Chinese citizens is a testament to how the prospect of additional income, however minimal, can be life-changing for impoverished workers.


However, it’s also important to consider the blatant human rights abuse these companies perpetuate throughout the manufacturing process. Global brands such as Coca-Cola and Nesquik have both been under scrutiny due to their human rights violations, as these companies use their economic power and influence to exploit countries’ natural resources. For example, Coca-Cola’s over-abstraction and privatisation of water in Plachimada is a clear example of the prioritisation of business operations over the needs of local agriculture and the environment. However, despite this clear human rights violation Coca-Cola as a corporation faced little repercussion.


The enduring dominance of corporations in the global East is a multifaceted issue that is deeply rooted in these countries’ desire to industrialise and grow as global economic hubs despite the poor working conditions many citizens might be faced with. To address these issues, it is essential for not only governments but society and international organisations as a whole to collaborate in establishing strict regulations that safeguard labour rights for all. 



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