Developing countries
In this section
Commodity extraction
Debt
Breast milk substitutes
Access to medicines
Tobacco marketing
The issue
Concern over the impact of companies in developing countries can include many factors:
Commodity extraction
There is concern at the speed and manner in which natural commodities such as oil and timber are extracted from developing countries by western corporations, often at prices favourable to the wealthier nations and seemingly with little regard for the fact that they are using up finite resources. Dependence by a developing country on a narrow export base of commodities can also exacerbate its poverty when prices fall.
Debt
The origins of the Third World debt crisis can be traced to inappropriate lending by many banks during the 1970s. Money was frequently lent to unviable prestige projects or was wasted by corruption, leaving many countries with no means of repaying the original debt. Since the 1990s, campaigning NGOs working on debt issues have focused far less on private bank debt and more on intergovernmental issues relating to the IMF and World Bank bonds.
Breast milk substitutes
The inappropriate promotion of breast milk substitutes in developing countries is regarded as a major cause for concern by the World Health Organisation and UNICEF. As well as imposing a financial burden on poor people, substitutes are known to be generally less effective than breast milk in helping infants build up necessary immunities. They can also be dangerous where people do not have access to clean water to formulate the milk.
In 1981 WHO developed a strict code of marketing practice to outlaw the inappropriate marketing of breast milk substitutes.
Access to medicines
The issue of access to medicines for the developing world has become pressing in recent years. In 2001 a global public outcry forced some drug companies to drop their suit against the South African government for allowing cheaper versions of patented drugs.
The principle reason for the lack of access to medicines is poverty, which denies people access to food, clean water, sanitation and basic healthcare. Poor health is in many cases a consequence of poverty and also a major cause of poverty. This causes a vicious cycle which seriously destabilises economies. However, according to NGOs, in many cases high drug prices, often the result of strong intellectual property protection, is a major barrier. NGOs have argued that pricing, patents, public-private partnerships and research and development are the main ways to increase access to medicines in the developing world.
Tobacco marketing
In some countries the spread of tobacco, with its many negative health consequences, has begun to be checked by improved health education, public restrictions on sale and advertising and the impact of litigation. Globally though, particularly in developing countries, sales of tobacco are continuing to grow. Much of this growth in developing countries is aided by marketing methods aimed at the young, which are outlawed elsewhere.
Its relevance for charities
Many charities may be concerned about the impact of companies' activities in developing countries. Charities with an international focus in particular, may believe that such activity too often fails to bring any overall benefit to the countries concerned. Some of the issues mentioned above may be of particular concern to trade justice, human rights, development, health and anti-poverty charities.
Incorporating the issue into investments
It may be possible to avoid investing in, or engage with, companies that
- grow or extract commodities in developing countries
- market tobacco products in developing countries
- hold Third World debt
- have broken the International Code on Marketing of Breast Milk Substitutes in developing countries
- have broken the IFPMA Code of Pharmaceutical Marketing practices in developing countries
- have subsidiaries or associated companies in any poor countries with a Human Development Index score of less than 0.5
- have subsidiaries or associated companies in any of the poorest countries with a Human Development Index score of less than 0.25
- have inadequate policies on access to medicines in developing countries
