How do large American and European food and drug corporations affect consumers abroad, say, in South America? Robert Ledogar, a soft-spoken former Roman Catholic priest with a master’s degree from the Massachusetts Institute of Technology, set out two years ago to find out.
BACKED by a grant from Consumers Union, Ledogar journeyed, observed and researched in several South American and Caribbean countries. His report, to be issued later this month by IDOC-North America, a non-profit, educational organization in New York City, presents disturbing findings:
Multinational food companies push most vigorously products and practices which work against nutrition, health and economic self-sufficiency. For example, soft drink companies, such as Coca Cola and Pepsi-Cola, bend every effort to promote worthless drinks at the expense of nutrition and tasty local drinks, such as guarana fruit drink in Brazil.
The giant Swiss conglomerate, Nestle, among several firms, advertises infant bottle-feeding in ways designed to discourage breast feeding. Pediatricians who have studied this problem in the poor countries of the world have shown how bottled milk becomes a transmitter of disease due to contaminated water and lack of sanitation and storage facilities.
The replacement of natural infant feeding habits is rapidly becoming a third world health disaster.
Other companies are drawing large amounts of land from local food production for the masses into cash crops for export or into feed for beef and poultry, which only the upper economic classes can afford. The effect of these multinational operations is to make the rich richer and the poor poorer.
FOREIGN EXCHANGE earnings from these export crops tend to go into purchasing upper class luxuries, armaments or other capital goods that do not serve the cause of a broadly-based economic development.
Ledogar adds that the U.S. taxpayer has a direct interest in what these companies are doing, apart from humanitarian concerns for the afflicted people. The U.S. government is spending much money to assure that these multinational corporate investments are protected and subsidized.
Elaborate tax provisions, promotional efforts, insurance guarantees, low interest loans and other measures flow from Washington.
There is, moreover, a deeper question at stake. Can these developing countries, in fact, develop by relying heavily on multinational enterprises? Are Brazilians likely to obtain a locally responsive drug industry when European and U.S. drug firms control over 80 percent of drug sales in that country and take advantage of weak safety regulations to sell their products in ways prohibited in their own countries?
Earlier this year, Alfonso Lopez Michelsen, the president of Colombia, told reporters in New York that his administration was not interested in direct foreign investments.
SUCH INVESTMENTS, he indicated, create more
economic and political problems than they solve and promote an unhealthy economic reliance on outsiders. President Michelsen is advocating, with other Andean nations, an economy whose major enterprises are native, not foreign.
Self-reliance has been a marked theme of nations which have built their economies and services beyond just benefiting an elite upper class. Two different systems, Japanese and Chinese, required both a high degree of isolation from foreign investment and additional economic exchanges with other countries to construct their economies.
It could well be that the best economic development policy for consumers in poor lands is a looking inward to local resources, local technologies and local skills.
A growing school of thought, led by British economist Dr. E. L. Schumacher (author of “Small is Beautiful”) is busy documenting this economic development strategy. It is a humanistic strategy that starts with the consumer’s well-being as its measure.