Multinational companies are becoming increasingly common in
developing countries. What are the advantages and disadvantages of
this?
In recent years, the operation of big corporations is ubiquitous in
developing nations. The essay will first suggest that economic growth is
the
prime benefit, while the excessive use of emergent nations’ natural
resources is the main drawback.
One evident benefit of the operation of transitional companies in less
developed countries is the prosperity of the local economy. That is to say,
multination companies provide an inflow of
capital into developing
countries. This investment not only creates job opportunities for the
people in developing nations, but it
also helps to build better
infrastructure, such as bridges, roads, and transportation facilities, for
them. For example, the role of Foreign Direct Investment in the year 2010
was undeniable because it uplifted the
Indian economy so fast and
increased GDP and created so many jobs for locals.
The prime disadvantage is that these companies use the natural resources
of developing nations recklessly, which affects the environment. In other
words, Smaller, less developed governments
often trade an increase in
revenue for access to natural resources. This extraction of raw materials,
such as oil, diamond, rubber and fuel, can cause environmental
externalities- polluted rivers and loss of natural landscape.
For instance,
many Chinese private enterprises have been heavily criticised for using the
resources of countries like Vietnam, Thailand and the Philippine and for
polluting the environment.
In conclusion, huge global companies benefit less
developed nation
economically is the prime advantage of this, and the extraction of raw
materials for the sake of profit is the main disadvantage.
