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Anton A. Evsuykov // The role of transnational companies in the reality of the new world, 97-105

DOI: http://dx.doi.org/10.46925//rdluz.34.07

The role of transnational companies in the reality of the new world

Anton A. Evsuykov *

ABSTRACT

The purpose of the study is to analyze the problem of determining the status of transnational

corporations in the system of global governance, in revealing the transition of transnational

corporations from an economic subject of international relations to understanding it as a

political actor in the system of international relations. The article covers a range of issues

related to attempts to regulate foreign TNCs by national states, It also touches upon the issue

of changing the positions of leading TNCs in the ratings compiled by authoritative

publications over the past decade, an analysis of the influence of transnational corporations

as non-state actors in world politics is carried out. Research methodology. Analysis of

published survey reports of international organizations and individual leading transnational

corporations. One of the most pressing issues in the study of the role and place of

transnational corporations in world politics is the problem of determining the status of

transnational corporations in the global governance system. As a result, we find that

transnational corporations act in the global governance system as tools and as institutions,

which requires the development of new scientific approaches that reflect the dynamics of the

introduction of these actors into the system of world politics.

KEY WORDS: tr ansnational corporations; business management; international relations;

Political science; Economics; international politics; international security; international

cooperation; Globalization.

*

Postgraduate student for the Federal State Autonomous Educational Institution of Higher

Education "Russian Peoples' Friendship University", Moscow, Russia. ORCID:

https://orcid.org/0000-0001-9599-1465 . SPIN: 3747-3590. Author ID: 873469. E-mail:

3448149@gmail.com

Recibido: 04/06/2021

Aceptado: 29/07/2021

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DOI: http://dx.doi.org/10.46925//rdluz.34.07

El papel de las empresas transnacionales en la realidad del nuevo

mundo

RESUMEN

El objetivo del estudio es analizar el estatus de las empresas transnacionales en el sistema de

gobernanza global, donde se observa la transición de las empresas transnacionales de un

sujeto económico de las relaciones internacionales a un actor político en el sistema de

relaciones internacionales. El artículo abarca una serie de cuestiones relacionadas con los

intentos de regular las empresas trasnacionales extranjeras por parte de los Estados

nacionales. Metodología de investigación. Análisis de informes de encuestas publicados de

organizaciones internacionales y empresas transnacionales líderes individuales. Uno de los

temas más urgentes en el estudio del papel y el lugar de las corporaciones transnacionales en

la política mundial es el problema de determinar el estatus de las corporaciones

transnacionales en el sistema de gobernanza global. Como resultado, encontramos que las

empresas transnacionales actúan en el sistema de gobernanza global como herramientas y

como instituciones, lo que requiere el desarrollo de nuevos enfoques científicos que reflejen

la dinámica de la introducción de estos actores en el sistema de la política mundial.

PALABRAS CLAVE: empresas transnacionales; gestión empresarial; relaciones

internacionales; Ciencia política; Economía; política internacional; seguridad internacional;

cooperación internacional; Globalización.

Introduction

The relevance of this topic is due, firstly, to the growing role of transnational

corporations (TNCs) in the development of world geopolitical and geo-civilizational

phenomena and processes in order to realize the interests of the world's leading actors, and

secondly, to the aggravation of the competitive geopolitical struggle for the influence of

TNCs on the economic development of national economies and the security of host countries.

The purpose of the study is to analyze the problem of determining the status of TNCs

in the system of global governance, in revealing the transition of TNCs from an economic

subject of international relations to understanding it as a political actor in the system of

international relations.

The objectives of the study were: a brief analysis of the activities and characteristics

of transnational non-state actors; consideration of the activities of TNCs from the point of

view of their own interests both as instruments and as institutions for influencing world

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DOI: http://dx.doi.org/10.46925//rdluz.34.07

processes; substantiation of the massive "invasion" of TNCs into world politics, under the

influence of which the role of TNCs as a subject of the world political process is changing.

One of the most pointed issues in the research of the role and place of TNCs in world politics

is the problem of determining the status of TNCs in the global governance system. Many

scientists and experts specializing in the research of the problems and perspective of global

governance argue that the world, lead by globalization, is moving towards precisely this form

of regulation of relations between all participants in world political and economic relations;

at the same time, TNCs act in the system of global governance both as instruments and as

institutions.

1

. Methodology

The research methodology is based on the use of: a systemic method that allows a

multifactorial and comprehensive study of the place, role and interests of TNCs as an

international actor realizing their interests in the geopolitical space; the method of

geopolitical analysis, which substantively studies the geopolitical "cut" of international

relations, geopolitical processes, conflicts, fundamental value foundations, "internal springs"

of events, phenomena occurring at the borders of contacting states as a result of the activities

of TNCs; and also on the use of the spatial-contextual method, which implies that the

phenomenon develops and is studied not by itself, but in the context of the sequential

development of processes separated in time and space, which allows a deeper understanding

of the phenomenon under study, the causes of the events being studied, with the possibility

of a deeper penetration into their essence and the formation of forecasts for the development

of processes.

2

. Results and Discussion

One of the most pressing issues in the study of the role and place of TNCs in world

politics is the problem of determining the status of TNCs in the global governance system.

Many scholars and experts specializing in the study of the problems and prospects of global

governance argue that the world, guided by globalization, is moving towards precisely this

form of regulation of relations between all participants in world political and economic

relations; at the same time, TNCs act in the global governance system both as instruments

and as institutions. A wide range of actors is involved in global governance, there is a greater

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number of connections and interactions, all types of political strategies known to mankind

are applied. An increasing number of newactors, the overwhelming majority of whom do not

belong to states and IGIO that do not have sovereignty and international legal personality in

its traditional sense. The activity of non-state actors, to which TNCs can be ranked, often

leads to the fact that such areas as social, economic, industrial and security spheres “leave”

the state. which have always originally belonged to him. As Ilyin noted, when there is a

general inability of traditional actors (meaning the state) of international relations to

stabilize the situation on a global scale and develop solutions with an adequate response to

modern challenges and threats, “non-state actors begin to interfere in this process, striving

to intercept the functions of global regulation and management. from nation-states and

international organizations” (Ilyin, 2011). Possessing significant resources of influence on

world politics (not only material ones), transnational non-state actors (such as TNCs and

IGIOs) generate “non-systemic phenomena” in it, which is facilitated by the increasing

transparency of borders and the erosion of the sovereignty of national states, indirectly

associated with global world political processes. Having a highly dynamic scientific,

production and market potential, TNCs operating through their branches and subsidiaries

in many countries have formed the so-called. "Think tanks" that form a monetary and

financial strategy that is beneficial for them, contributing to their dynamic accelerated

development (Shurahbil, 2017). As a result, according to Kenichi Ohmae, the state in the

modern world is retreating, freeing up the field not only for capital, but also for the political

activity of such subjects as "individuals, firms and markets" (Ohmae K, 1990). And TNCs

began to play an important role in this process. Do not forget that TNCs, pursuing their own

interests and acting within the framework of their own strategies, try to bypass local

legislation and often ignore the interests of the host country, which becomes the cause of

contradictions between TNCs and the governments of host states.

At the present stage of development, TNCs begin to function like states. In this regard,

it is interesting that, for example, the American corporation IBM has its own diplomatic

personnel to establish business relations with potential clients (Krivenko, 2016). Indeed, the

influence of TNCs on global processes is very great. The ratings of the largest TNCs, regularly

conducted by the American business magazine Forbes, have demonstrated their influence on

the current world position of countries. So, in 2016, the magazine published a rating of the

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two thousand largest and most influential companies in the world. In this rating “companies

from 62 countries of the world were represented. Including 515 companies - from the USA,

210 - from Japan, 113 - from China, 56 - from India, 62 - from Canada” (Krivenko, 2016).

According to the Forbes rating, “the most influential transnational company in the world at

that time was the American bank JP Morgan Chase. The top five also included General

Electric, Bank of America, the American oil and gas corporation Exxon Mobil and the

Chinese bank ICBC ”(Corporations that rule the world, 2011). As a result, a new criterion for

assessing state sovereignty arose - efficiency (by the way, the same criterion is the main one

in assessing the activities of TNCs). But, already in 2020, according to the rating, the TNCs

of China took the leading positions, ahead of the US corporations (Ranking of the world's

largest technology companies, 2018).

The place occupied by TNCs in the rating and the influence of TNCs on the world

market are interconnected, which also plays a significant role in the status of a state in

international relations. As a result of the activities of TNCs, the import of institutions is

carried out - those "rules of the game" (labor and antitrust laws, principles of taxation,

contracting practices, etc.) that have formed in developed countries. TNCs objectively

increase the influence of the countries exporting capital on the countries importing them.

For example, German firms in the 1990s subjugated almost all Czech business, as a result of

which, according to some experts, Germany established much more effective control over the

Czech economy than in 1938-1944, when Czechoslovakia was seized by Nazi Germany. The

economy of Mexico and many other countries of Latin America is controlled by American

capital in a similar way.

Corporations have a number of objectively important characteristics as members of

international relations. These include the presence of territories for the implementation of

activities, the existence of subdivisions and branches for the sale of products without

customs duties, as well as the involved human, natural, scientific resources of foreign states

(

Shurahbil, 2017; Mikryukov, 2021). That is, at the present stage of development, TNCs

occupy positions of active participants in the international division of labor and cooperation

and distribute world resources.

Assessment of the influence of TNCs on the economic development of national

economies and the security of host countries is currently rather ambiguous. On the one hand,

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TNCs are viewed as the main structural element of the economy of most countries, the

leading force of their economies, economic processes are associated with their motives to

defend their interests. On the other hand, their activities can provoke negative consequences

for the political regime of states. In the scientific literature, there is also a purely negative

attitude towards TNCs and the role they play in world and national politics. So, for example,

back in the 90s, RI Zimenkov noted that TNCs negatively affect the economy of the third

world countries and their activities lead to the destruction of political mechanisms operating

in society, as well as to the loss of the state's main functions in the field economic regulation

(

Zimenkov, 1990).

At present, one can notice that he is not only paying attention to the states of the

third world". sanctions policy pursued by the United States and European countries, but it

"

is in solidarity with the activities of TNCs. Transnational corporations, as noted by A.I.

Podberezkin, “will strive to exert more influence on the conduct of the government course of

their states and use state resources to achieve their goals in the international arena; at the

same time, an increase in the total number of TNCs and their resources of influence in key

countries of the world will most likely lead to a mutual balancing of their conflicting

aspirations ”; that is why "the degree of influence of TNCs on the politics of leading states

will depend on their ability to create coalitions of interests with the participation of other

TNCs." (Podberezkina and Aleksandrova, 2016). This is a balanced, conservative point of

view on the role of TNCs in world politics and the nature of their influence on the sovereign

policy of national states. This point of view can hardly be disputed - for criticism it seems to

be very cautious. At the same time, outside the framework of this position, there are

qualitative changes taking place in the entire world politics as a whole: under the influence

of the massive "invasion" of TNCs into world politics, the role of TNCs as a subject of the

world political process is changing.

A very clear example of significant problems in world politics and in the free trade

market is associated with the sanctions policy of the United States and the Chinese company

Huawei. As a global company, Huawei is opposed to protectionism and prioritizes business

compliance above its own commercial and national interests. The growing ambitions of

China, supported by the growing importance of digitalization, (Kayin Fu, 2020) which lays

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the foundations of the intellectual world, is of concern primarily to the United States, which

sees in China not only a potential competitor, but also a threat to its national security.

Politicians in the United States, regardless of their views on domestic issues, agree

that China should not be given priority. Regardless of who is in the White House, China's

containment strategy will not change significantly. Therefore, the introduction of the

sanctions regime is de facto the use of brute, unlimited force, which should break the Chinese

corporation. This means that this is not a matter of Huawei's agreements with anyone, but a

big problem in world politics. A state of emergency was introduced by presidential decree of

May 16, 2019, which allows companies to be included in the list of national threats. On the

same day, the US Department of Commerce listed both Huawei and all of its subsidiaries.

The blackmail pretext used to attack Huawei is serious, but any accusation requires at least

minimal evidence, no evidence has been presented. As a result, even the closest allies of the

United States, for example, the United Kingdom and Germany, did not abandon Huawei in

their plans to deploy 5G networks, but only tightened conditions and focused on security.

On August 2, 2017, the President of the United States signed the Countering America's

Adversaries Through Sanctions Act (H.R. 3364), approved by the US Senate and House of

Representatives. The lawis a political document aimed at strengthening the sanctions regime

against Iran, Russia and North Korea and limiting the powers of the US President to lift

sanctions that have already entered into force without the approval of the US Congress.

As far as the Russian Federation is concerned, the document contains an assessment

of Russia's foreign policy and a list of political, military and economic countermeasures aimed

at destabilizing the Russian economy and putting pressure on the functioning of the Russian

fuel and energy complex. The introduction of the sanctions restrictions regime has set new

challenges for the current and long-term development for the key Russian oil and gas

companies.

Сonclusion

Summing up, we can conclude that the global competitive confrontation is escalating

in the field of international relations, threatening peace, stability and international security,

which in a certain way leaves an imprint on the role and political significance of TNCs. TNCs

need to expand their political influence and their own political space, it is pointless to

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restrain them in this movement. Meanwhile, the field of world politics is occupied by

traditional actors - nation-states, which are wary of the invasion of their sphere by non-state

actors, in particular, such as TNCs. However, this does not stop TNCs: in their rivalry with

nation-states for spheres of influence, they give rise to such a phenomenon as "privatization

of world politics", which, by its very existence, completely changes the established ideas

about the role of traditional and non-traditional actors in the global political process. The

study of the role and place of TNCs in world politics requires the development of new

scientific approaches that reflect the high dynamics of the implementation of these actors

outside of sovereignty into the system of relations between states and interstate entities.

Acknowledgment

PhD Antcev Georgii Vladimirovich Radar-MMS.

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