Will companies overpower countries?
As all eyes are focused on Sri Lanka with the deciding vote taking place on Thursday in Geneva, the thought that crossed my mind was the power of the Diaspora and how world politics can shape the destinies of small countries like Sri Lanka.
Whilst some can argue it is unfair, the reality is that in the business world too decisions get influenced by power play and politics. Hence, if one does not learn the life skill of working in a political economy, one can get into some rough waters.
Eight
Over the weekend I was thinking as to how one can have a fair and realistic world order that can take decisions on the merit of the data than on influence when some data that was interesting flashed past me – the value of the global economic entities of the world.
Believe it or not, eight of the top 50 economic entities of the world on Gross Domestic Product (GDP) value are multinational corporations. To be specific, Wal-Mart came in at number 24 beating countries like Norway and oil rich Venezuela.
At number 27 is Shell, ahead of countries like Saudi Arabia, Argentina and South Africa, while Exxon comes in at number 32, beating giant nations like Iran, Thailand and Denmark, which signifies how skewed the world is when it comes to actual power bases of the world.
British Petroleum at number 36 is ahead of large economies like Greece and Colombia while China National Petroleum is way ahead of Finland, Greece, Malaysia, UAE, Portugal, Hong Kong and Singapore
Toyota
From an Asian front, Toyota, valued at $ 221,760 million in GDP, happens to be larger than economic entities like Egypt, Israel, Ireland, Chile, Philippines, Pakistan, Kuwait and even New Zealand, which indicates Toyota’s balanced decision making that got it to this height. The argument is, should not the Chairman of Toyota be given a global mandate for decision making?
64% companies
If one further analyses the numbers, a key insight is that 64% of the top 175 economic entities of the world are corporate, which includes big names like Apple, Toshiba, BMW, Aviva, Tesco, HSBC, Nestle, AT&T, Samsung and Ford.
Hence it is very clear that these organisations understand the ground realities very strongly and they also demonstrate a high degree ethical behaviour, which has made them such strong entities beating countries that possess high GDPs values. Once again the argument is that the world must tap into the experience of these companies when deciding the new world orders.
A new UN
Last year at the World Conference on Global Compact, the Secretary General of the United Nations mentioned that one day the United Nations would consist of the top countries that will give leadership to the world.
Today, when I look the key decisions that are to be taken on global policy, I feel this statement holds ground so strongly. The question is, will the top economies of the world allow this to happen and even if this reality unfolds, when will it take form?
World order
Given the fallout with the economic and financial crises, it is very clear that the world needs to track on a new agenda. This will require a new ethos of working that will unfold a new world order.
But for this to unfold, we have to get the top business of the world into the system. The day this happens we will see much stronger decision making based on the ground realities of the world than on political agendas.
Next steps
Given the above thinking, maybe small economies like Sri Lanka need to change the way of working and how we engage the world. Some of the recommendations could be as follows:
1.Should Sri Lanka work closely with the top 16% of the corporates on world affairs so that they in turn can influence world decisions?
2. Should Sri Lanka insist that the top 16% of corporates setup business in Sri Lanka with manufacturing basses so that the grounding can be stronger?
3.How can brand Sri Lanka valued at $ 23 billion be built to impact economic entity indicators so that Sri Lanka can be seen as the powerhouse of South Asia from a knowledge perspective rather than just an agricultural island in the Indian Ocean?
(The author is an award winning business personality and is currently reading for a doctoral study program. He is an alumnus of Harvard University, Boston.)
