A decade of tumultuous economic developments ended with a year full of surprises, the majority of them welcome. Inflation stayed very low in most industrial and emerging market countries, while economic growth remained high in United States, picked up in Europe and began to recover later in the year in Latin America. The turnaround in the fortunes of countries was nothing short of remarkable and China and India continued to expand at high rates. Even in Japan there ware signs that worst might be over. Many now see better prospects than at any time since the early 1980s. Part of this is a pure extrapolation, but advances I technology and continuing deregulations are further reasons for expecting rapid growth in the global economy. A prolonged book in a more market-driven world economy can, thus, by no means be ruled out. Yet, even if thus this long-term vision is accepted, policymakers can still expect a few bumps along the way. What can policymakers do to ensure that the global economy reaps the benefits of a more efficient production and financial structure overtime? Whatever the answer, it must be recognized that efficiency is not every thing. Fairness and perception of fairness must also be taken into consideration. The economic growth should be accompanied by social and human resource development. The obvious question is: Should these increased rights be complemented by firms’ assuming greater social responsibility? The notion of social responsibility of TNCs encompasses a broad range of issues of which environmental, human and labour rights have attracted most attention in recent years. In a liberalizing and globalising world economy, this question is likely to be asked with increasing frequency and insistence. Governments now focus more on imposing the broader setting in which TNCs operate-macroeconomic management, infrastructure provision, human capital, competition policy, and the like. In short, they seek to entice TNCs to do what they seek to entice TNCs to do what they would like to see done, as opposed unilaterally to seeking to impose their objectives on them. The line between “imposing†and “enticing†is a fine one and impossible to draw in a general manner. More often than not, it a matter of the right policy mix of carrot and stick reflecting, of course the specific attributes and objectives of countries and companies Unless-policy measures can adequately trade-off all the competing objectives, a sharp and unwelcome turn away from market-based approach to less desirable solutions can not be ruled out.
There are no reviews yet.