Can Global Companies Save Africa?

Multinational companies were a driving force in Eastern Europe’s postcommunist transition, bringing new skills, technology, training, and better working conditions. They saved the banking systems, modernized telecommunications networks, rebuilt ailing industries, raised the quality of goods, and undermined the cozy vested interests that had robbed ordinary citizens for decades.

But is Eastern Europe an exception? Can multinational companies bring similar benefits to other needy regions, such as sub-Saharan Africa, where a legacy of colonialism, apartheid, and economic mismanagement create a fundamentally different business environment?

According to one view, Eastern Europe was uniquely positioned to benefit from multinational companies: its workforce was well educated, especially in engineering and sciences, and was thus able to avoid the classic “low-skills, low-wage” trap. What communism failed to provide – modern management, new technologies, and marketing know-how – was what multinationals could offer.

But in countries like South Africa, Namibia, and Zimbabwe, multinational companies may look very different. Western governments were typically indifferent, if not hostile, to African liberation movements. Their big corporations helped entrench racist regimes with notorious contract-labor systems that amounted to little more than slavery.