Monday, May 27, 2013

Explain the role of MNCs in developing countries.

I assume that you are referring to multi-national
corporations and I have tagged this question
accordingly...


The role of MNCs in developing countries is
rather controversial.  Some say that they benefit these countries while others say they
are detrimental.


The most common argument in favor of MNCs
is that they bring needed economic development to the countries.  MNCs come into
countries where there are few good jobs and they provide jobs at relatively good wages. 
This can help create more demand within the country and may lead to the creation of a
stronger local economy (since the MNC's workers can buy more goods and
services).


However, some say that MNCs only exploit
low-price labor and do not do any good to the country.  This school of thought says that
the MNCs pay the minimum possible wages and do not contribute at all to building a
stable economic base for the country.  There is also concern that the MNCs are too
important to the country's economy and can therefore exert a lot of control over the
country's government.

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