Economic Development

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Imagine you are in charge of development for a developing country and were approached by a multinational corporation interested in locating in your country. Identify some of the benefits and some of...

Imagine you are in charge of development for a developing country and were approached by a multinational corporation interested in locating in your country.

Identify some of the benefits and some of the costs to the host country from allowing a multinational corporation to locate in a country with a developing economy.

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Gracie O'Hara eNotes educator | Certified Educator

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Having a multinational company locate in a developing country can be a mixed blessing. Whether it is something positive or not depends on the nature of the company. Therefore it would be important to look at multiple issues before granting or withholding permission.

  • Environmental Impact: Especially if the company is one involved in an extractive industry (logging or mining, for example), it would be important to assess the company's effect on the local environment and the mitigation efforts it would put in place. The benefit of foreign investment can be wiped out if the company pollutes water or destroys fisheries or agricultural land.
  • Jobs: One major benefit such a company can bring is jobs. It is important to ask, though, whether the company will employ local labor, what sort of wages it will pay, and what sort of working conditions...

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