Policy implications of the MNEmerge project discussed

The MNEmerge team presented the policy implications that have arisen from the project’s research results in a policy briefing organized at the Directorate-General for Research and Innovation (DG RTD), European Commission in Brussels, Belgium on the 27th of October, 2016. The policy briefing consisted of presentations and discussions on the research framework and methodology of the MNEmerge project, as well as on policy recommendations resulting from studies on capability building and poverty reduction in different sectors.

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Professor Pervez Ghauri from the University of Birmingham, UK, presented the revised research framework of the project, highlighting the role of host government in initiating linkages and spillovers between MNEs and local development. In most cases, the local government provides incentives to attract foreign direct investment in the country, of which the MNE usually benefits. However, as Professor Ghauri emphasized, for MNEs to play a role in development and capability enhancement of local firms, the incentives given should be spent on the local society. In addition, Professor Ghauri recommended that the monopolistic practices of MNEs should be discouraged, and polluting and adverse environmental practices should be regulated.

As regards the various case studies of the project, Professor Juha Väätänen from the Lappeenranta University of Technology, Finland, presented the policy implications that have arisen from the study on the electrification of rural areas in Brazil. According to Professor Väätänen, by supporting local entrepreneurs and by setting both regulations and incentives for MNEs to invest in local capabilities building, the capabilities of local firms can be strengthened and the level of education of the local workforce can be improved. Balancing between incentives and regulations, as well as introducing social tariffs, can attract MNEs to operate in rural areas, while simultaneously transferring increased costs to local consumers can be avoided. Among other topics discussed in the policy briefing were, for instance, sanitation and healthcare in India, healthcare in Brazil and industry in Ghana.

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All in all, the policy briefing included lively and fruitful discussions among the project team and the representatives of the DG RTD, resulting in useful suggestions on how to proceed with policy recommendations, and inspiring further research.

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