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Benefits planning for the 21st century.

Perhaps never in this century has the pace of worldwide change been so dizzying as in the last year. As the European Economic Community lumbers inexorably toward union in 1992 and Communist dictatorships fail in the East, the buzzword of globalization is on everyone's lips. Indeed, to most multinational corporations, expansion into the global marketplace is not a choice but a necessity.

In fact, so many corporate converts are jumping onto the globalization bandwagon that multinational issues made up the lion's share of the program at a recent international conference sponsored by William M. Mercer Cos. Inc.

The conference, "Planning for the 21st Century," covered such topics as human resources in Western and Eastern Europe in 1992, communicating with employees in a global marketplace, worldwide health care trends and issues facing employers.

According to John Por, a principal in Mercer's Toronto office, "A series of very large question marks" are all that can be readily discerned regarding the near future of Eastern Europe. "It's not very edifying to talk about a stock option plan in Poland when you can't even find a telephone there to discuss it," he said. "Unemployment figures there total 100,000 every six weeks." Despite that bleak pronouncement, Mr. Por said "there is no going back to Communism."

According to David johnson, managing director of Mercer in London, many Eastern European countries are embarking on a "mix and match" program of borrowing the best economic and political components of different Western democracies. "Some are even thinking of exporting the EC social charter," he remarked.

Although, taken at face value, co-opting the best systems of each country seems like a good idea, Mr. Johnson cautioned that formidable obstacles still remain. "At the East German airport I noticed quite recently that two men were still manning the currency exchange booth even though their currency has been abolished for two months now," he said. "It reminds me of the saying, 'In capitalist economies man exploits man, but in Communist societies it's the other way around."'

In addition to the unique problems facing Eastern Europe, the West is challenged with its own difficulties, namely a two-tiered expansion of the population.

"The elderly are at one end of the spectrum and the young at the other," said Ed Lipson, a Mercer consultant based in San Francisco. "It's a big issue and is going to be a driving factor in how health care is purchased and distributed." Mr. Lipson also cited other concerns such as the large amounts of capital needed to purchase costly and sophisticated medical technology, and a worldwide medical inflation rate that seems to exceed each country's underlying general inflation rate.
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Title Annotation:includes related information on American multinational corporations's foreign operations; employee benefits in Eastern Europe
Author:Johnson, Tom
Publication:Risk Management
Date:Nov 1, 1990
Words:442
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