Question

Multinational Corporations: Saviors or Saboteurs?

Answer 1

Multinational Corporations are commercial organisations that operate in two or more countries, plying their trade and commerce, which generally includes manufacturing too. Companies that bring in technology into the country where they operate and create wealth of that nation certainly are saviours for that nation, as such MNCs contribute to the GDP in a very positive way. On the other hand, Companies that strip assets of organisations which they may have taken over or take raw materials from the country where they have set up base to manufacture finished goods in their mother country for export around the globe, including to the country from where the inputs were taken are definitely saboteurs.
Most nations are wiser today than ever before regarding who to invite and who to ignore while inviting foreign investment. Their requirement as well as the intent of the MNCs is very judiciously weighed before arriving at a decision.

Answer 2

Saviours

• MNCs are the way to carry out the cross border trades or attract the foreign currency to the country.

• Multinational Corporations are creating endless jobs for the unemployed people in the developing countries.

• The products and services provided by the multinational corporations are of high quality and at the most competitive rates.

• It enhances the economic globalization leading to an improved per capita GDP growth and narrowing the gap between the various sectors.

• It results in the better relations between the different countries and enhances the economic interdependence of national economies through the transfer of trades, services, capital and technology.

• It encourages mergers and acquisitions helping the companies to achieve the economies of scale.

Saboteurs

• The multinational corporations are more concerned about their own profits, no matter if it comes at expense of consumer’s interest.

• Multinational corporations are large dominant players that become a real threat for the small firms in the developing countries.

• The multinational corporation can even strengthen their economies of scale that can cause a potential harm to the local economy of any developing country.

• Multinational corporations are well known for exploiting the labours as they don’t pay them enough wages and salaries.

• The drawback is also seen in the tax segments where they are not liable to pay the taxes in the operating countries.

Conclusion

Like everything, multinational corporations have their equal shares of pros and cons. At some points, they are the best option and at some places are not at all acceptable. However, with the globalization it is necessary for the developing countries to encourage cross borders trades and that is possible only when the multinational corporations are allowed to operate in the country. It is best for the developing countries to accept them, but with some set of rules and restrictions, so that no undue advantage is taken by the companies on the cost of local people or economy.