Walmart Expansion is Good for Low Income Countries

A successful corporation tends to have detractors with genuine and less justifiable complains about its business practices and other internal policies. Among the several corporations that have a committed set of detractors is Walmart, which is most often attacked for driving prices low through its bulk purchases and for its enduring reluctance to allow its employees to join trade unions. In spite of this, I maintain that Walmart has a superior business model and its success is based on the many things that it does extremely well. Andrew Clark of the Guardian provides a narrative here of a corporation managing its business extremely well and responding to inevitable setbacks intelligently. Most interestingly, Walmart is seen as trying to expand outside the US stealthily to avoid undue attention and resistance.

I have always considered that for all the successes of Google as a universal search and advert corporation, the one corporation whose benefits are acutely required in developing countries is Walmart. My argument is based on the demonstrated ability of Walmart to ensure that its customers are able to get the most competitive prices for their money. So given the levels of poverty in substantial portions of Africa, Asia and South America, Walmart would be on the list of corporations target by governments seeking investments. And yet it is clear that many governments seeking investment would be looking for corporations that would seek extensive tax waivers and merely invest in extractive industries.

The introduction of mass retailing in developing countries would be useful for Walmart because the Chinese goods that it so successfully sells are also becoming available in African urban areas. One should not fail to notice that Chinese merchandise exporters have to rely significantly on the warehousing and logistics that Walmart has built in order to maintain their competitiveness in many markets. In this way, Walmart is enabling Chinese corporate success while also making profits for its owners and providing goods that households use. Admittedly, some of the suppliers in China have treated workers poorly and even filed false returns on payments made to their employees, it does not take away the fact that the keen attention to prices is essential for low income households. It is also clear that the violations are not the result of Walmart's policy but occur because of poor enforcement of regulations in China and other countries.