Until the 1980s, when people talk about multinational
enterprises (MNEs) -- also known as multinational companies (MNCs) or transnational
corporations (TNCs) -- they refer mostly to multinationals from the US, Canada,
Europe, and Japan. Three decades after, that has significantly changed.
The rise of MNEs from developing and transition economies,
especially those coming from China, Hong Kong, South Korea, Taiwan, Brazil,
India, and several ASEAN countries become more prominent each year although
multinationals from the industrial west remain very large and dominant.
This is consistent with global trade and capital
liberalization where economies and sectors that show huge factor endowments and
potentials for global growth attract both trade and investment flows.
Developing countries with huge populations like China, India and the Philippines,
and developing economies with highly skilled workers and innovative and
aggressive companies like Hong Kong, Singapore and South Korea, are able to
slowly put their MNEs in the global map.
The United Nations Conference on Trade and Development
(UNCTAD) produces the World Investment Report (WIR). Its WIR 2016 disclosed the
figures for 2014 of the world’s biggest nonfinancial MNEs, both in developed
and developing countries.
Below are the biggest MNEs from the ASEAN. The
Transnationality Index (TNI) is calculated as the average of the three ratios:
foreign assets (FA) to total assets, foreign sales to total sales, and foreign
employment to total employment (see table).
There are at least two things that are prominent in the
above table.
First, 17 ASEAN-based MNEs have made it to the top 100
MNEs from the developing world: 10 from Singapore, 5 from Malaysia, 1 each from
Thailand and the Philippines. The TNI of these 17 companies are generally high,
11 of them have TNI of 60% or higher.
Second, San Miguel Corp. is dynamic enough to have plenty
of branches and subsidiaries in the region and other parts of the world. It is
indeed the #1 brand from the Philippines that has high regional footprint, and
known even in some industrial economies in the west.
But there seems to be a mistake in the UNCTAD table,
saying that SMC’s TNI is 71% when it looks like having only 30% or lower.
Other big MNEs from developing Asia are the following:
1. Hutchison Whampoa Ltd. (Hong Kong, Transport and
storage) with FA of $91B.
2. Hon Hai Precision Industries (Taiwan, Electronic
components) with FA of $73B.
3. China National Offshore Oil Corp. (China, Mining,
quarrying and petroleum) with FA of $71B.
4. Samsung Electronics Co., Ltd. (South Korea,
Communications equipment) with FA of $56B.
5. Tata Motors Ltd. (India, Motor Vehicles) with FA of
$30B.
The subject of Philippine multinationals will be among
the topics to be tackled in the coming BusinessWorld ASEAN Regional Forum this
coming Nov. 24, 2016 at Conrad Hotel, SM MOA Complex. It is a regional
conference with the involvement and sponsorship of many big corporations in the
country.
Among the speakers will be CEOs and managers of big
Philippine MNEs, and MNEs from abroad that are operating in the Philippines.
This two-way exchange of ideas and experiences will be very productive for
small and medium enterprises (SMEs) in the country that aspire to have regional
footprints, and later barge into the continental and global list of successful
and big MNEs.
After all, Facebook, YouTube, Twitter other big brands
now were nonexistent until about 13 years ago. Endless innovation, consumer-friendliness
and access to more markets abroad have allowed them to leapfrog from small
start-ups to huge, multibillion-dollar global companies.
Bienvenido S. Oplas, Jr. is the president of Minimal
Government Thinkers and a fellow of SEANET. Both institutes are members of the
Economic Freedom Network (EFN) Asia.
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See also:
BWorld 71, Free trade and higher income, July 11, 2016
BWorld 72, Economic integration and disruption, July 25, 2016
BWorld 86, Philippine industrial policy, October 15, 2016
BWorld 91, Free trade means faster growth in manufacturing, November 14, 2016
BWorld 92, Climate action and Asian energy realities, November 19, 2016
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