Explain the role of MNCs in developing countries.

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

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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