Francesco Gesualdi, Centro Nuovo Modello di Sviluppo
The 2021 edition of Top 200 is about to be published: is the dossier edited by the Centro Nuovo Modello di Sviluppo which, in addition to providing information on the world’s top 200 multinationals, offers in-depth analysis of a number of particularly important issues. Three of the pieces published in the new edition highlight how transparency is the rarest of commodities in the corporate world.
The first article is about Amazon, whose secrecy is perhaps unparalleled. The empire founded by Jeff Bezos is by now the third largest group in the world in terms of turnover and the fifth largest in terms of capitalization, yet it doesn’t offer a prospectus of its group structure, it doesn’t offer a complete list of its subsidiaries and their location, it doesn’t give an overall number of its employees, nor their geographical subdivision and sectors. A secrecy that is functional to what seems to be the group’s greatest commitment: avoiding taxes. To begin with, the parent company Amazon.Com, Inc, is registered in Delaware, a U.S. tax haven, while in Europe it has an organizational structure that allows it to channel all the profits it makes on the continent to Luxembourg, another well-known tax haven. In 2020, the European parent company Amazon Europe Core declared profits for over 2 billion euros, paying only 21 million euros in taxes (just 1%), while the subsidiary Amazon EU, which coordinates all European subsidiaries from Luxembourg, declared losses for 1.2 billion euros, winning a tax credit of 56 million euros. And it has also obtained reason from the Court of the European Union, which in a ruling of May 12, 2021, established that Amazon had not enjoyed any selective advantage from Luxembourg. That’s how the world goes when the law is on the side of companies.
The other article that highlights the deep secrecy that still surrounds large swaths of the world economy is an in-depth look at the economics of the military in Egypt and Myanmar, two of the world’s worst dictatorial regimes. In both countries, the presence of the military in their own country’s economy is longstanding, but their expansion is of concern. At the beginning, in Egypt, the military’s objective was only war production, but with the excuse that soldiers also have to eat, dress and wash themselves, the army has gradually extended its presence to many other sectors: from farms to fish breeding, from food industries to pharmaceuticals, from chemical to electronic factories. And with the officers’ need for recreation in mind, the army ended up taking over the tourism industry as well, managing over 600 hotels and several resorts. One of the most grandiose projects of the military, which is very close to Al Sisi’s heart, concerns the construction of a new administrative capital, a sort of satellite city of Cairo, totally managed by the army. Other major projects include the enlargement of the Suez Canal and the construction of new cities that would have the intent to decongest the areas around the Nile, which have always been overpopulated. The number of factories operated and the number of employees is not known. According to some, the military controls between 15 and 40% of Egypt’s gross domestic product. According to Al Sisi, it does not exceed 3%. Establishing where the truth lies is nearly impossible because there is no transparency. We do not know the balance sheets of the companies managed by the military, their economic results, the recipients of any profits, the amount of public contributions made available to them. Everything is shrouded in mystery. What is certain, however, is that the long hand of the military reaches as far as the control of information, even through the secret services, which own the most important television and newspapers. As for Myanmar, the presence of the military is in all the most important ganglia of the country’s economy and in particular that of precious minerals. From a research published in August 2019 by the United Nations, we learn that Myanmar’s military owns as many as 23 companies dedicated to mining and trading jade and rubies. And it is precisely in the mining areas that the worst behaviors that have made Myanmar’s military infamous for human rights violations occur.
The latest article that speaks volumes about companies’ efforts to sell themselves as better than they are concerns research conducted in 2021 by Amo, a consulting firm serving companies to help them protect their reputations. The research, conducted on the codes of ethics and social relations of 525 multinationals scattered in 22 countries, highlighted that companies try to give a good description of themselves by self-disguising themselves under three profiles: way of being, way of working, relationship with others (stakeholders). The buzzwords used vary widely: from boldness to courage, resilience to tenacity, caring to compassion, patience to enthusiasm, beauty to efficiency, but Financial Times analyst Brooke Masters herself wrote in a July 22, 2021 article, “I suspect that the use of such challenging buzzwords lies in the fact that they are extremely difficult to measure. Their vagueness allows companies to cite them as benchmark principles without knowing what we are talking about.” If the Financial Times says so, you really have to believe it!