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Ralph Nader > In the Public Interest > Developing From Within

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.