Earlier this year, I was fortunate to have been the sole New Zealand delegate at Harvard Model United Nations held in Boston. As the representative of Oxfam, I was placed into the High Level Meeting where we discussed Failed States. However one of the committees that appeared in my Study Guides was the ‘Coca-Cola Board of Directors’. One may wonder “How on earth does the Coca-Cola tie in with the UN?”
Firstly, here are some UN+admitted facts about Coca-Cola:
Coca-Cola and Pepsi together have earnings greater than 40% of the GDP of the world’s poorest states combined (i.e. 80 member states of the UN).
Coca-Cola’s $35.1 billion in revenue makes it the 84th largest economy in the world, just ahead of Costa Rica. (As the delegate of Costa Rica for AMUN 2013, I can say that this surprises me)
- If you stacked up Coca-Cola’s 2.8 million vending machines, they would take up 6,592,458,240 squared metres. This is the size of 4 Empire State Buildings.
During the Nazi regime, Coke was banned because it contained too much sugar so Fanta was created in 1936 so that Coca-Cola wouldn’t have to stop trade with Germany.
Coca-Cola has over 3500 beverages and it would take the average person 9 years to try each one.
Coca-Cola is an example of a Multinational Corporation (MNC) willing and able to expand their firm so that it operates in more than one country and because they are so large, they can produce more output at a lower cost. One may think this is great because they can expand into developing nations and reduce unemployment in order to train and educate people to improve efficiency and knowledge. Moreover, globalisation allows us to make a shift towards democracy. But at the same time many problems arise. Here are some UN+canny facts:
MNCs are responsible for economic exploitation. They can expand into developing nations because it is cheap to do so due to weak laws and regulations. They also risk polluting and damaging the environment.
Developing nations receive very little profit as it gets sent back to the country of origin (e.g. the CEO of Starbucks receives an annual salary of $2.15 million USD whereas coffee producers in Ehtiopia receive less than $1 USD a day which is 1-3% of the profit earned) and as a result we are seeing an ever-increasing gap between developed and developing nations.
Water is a key ingredient in its beverages and the future stability of the Coca-Cola Company depends on the management of water.
Believe it or not, 94% of the world’s population can recognise the popular red and white logo we see in supermarkets. People purchase Coca-Cola because they see it’s affordable and represents a Western lifestyle.
Cary Folower, the economist for the UN Commission for Checking Transnational Companies stated that: “Poor people in the third world can see the company’s advertisements how Coca-Cola and Fanta is equalled to happy, well-off, often white middle-class families. The poor that want the best for their children consequently buy Coke or Fanta for their children, or even worse, they start buying it for their infants. Instead of breast milk, the children get Coca-Cola!”
However, children who are raised on these soft drinks are likely to suffer from malnutrition and vitamin deficiencies because they are missing out on essential vitamins.
Multinational Companies have the potential to destroy environments and cultural traditions by their Western Influences. However at the same time multinational companies such as Coca-Cola are striving to make a change.
The Coca-Cola Board of Directors plays a major role in the public face of the company by deciding which philanthropic efforts the company will change (e.g. in 2012, Coca-Cola donated $3 million to conservation efforts by the World Wildlife fund)
Coca-Cola also has a water stewardship program aimed to protect and conserve water and has also teamed up with the UNDP. Perhaps this occurred as a response to allegations about poor water treatment and abuse in India. Like several NGOs that work with the UN such as Charity Water and World Vision, Coca-Cola is trying to help developing nations in Africa get clean water by installing water pumps, etc. As a delegate at HMUN 2013, I contributed to one of the water pumps being built by Charity Water as my committee fundraised $862.54.
In 2011, Coca-Cola paired up with UN Women to form a global partnership aimed at improving Women’s Economic Development. This partnership generated the ‘5 BY 20’ initiative which aims to empower the 5 million women entrepreneurs within the Coca-Cola chain by 2020. Together they will be providing increased access to business skills training, mentoring and financial services, focusing in growing markets such as Brazil, India, the Philippines and South Africa.
So next time you participate in a MUN, take note of how multinational companies (not limited to Coca-Cola) may impact your country’s cultural tradition, the environment and the wellbeing of its citizens. Multinational corporations have a great impact as they contribute a lot to the economies of both developing and developed nations. Though economic development and expansion is important, one must look after their environment as this will impact the stability of our member states and their industries in the future.