MNC are a mixed blessing to the developing countries Comment on this statement?

Answer 1

Multinational Corporations are indeed a mixed blessing for the development countries. This is because of the fact that although MNCs has there advantages but, along with them it also has its own disadvantages.

The following points highlight the advantages of MNCs to the developing countries.

i. Better employment opportunities- MNCs help to create better and high number of employment opportunities in the developing countries. With increased market operations, they help in boosting the employment in the nation.

ii. Employing new technologies- As MNCs enter the markets of the developing countries, it brings along the new technologies and innovations with them. This adds to the development of the domestic industries.

iii. Improvement in infrastructure- Along with the use of new technology, the overall level of infrastructure of the country also rises. This also adds to the benefits to the developing countries.

iv. Wide variety of goods available- As MNCs enter the domestic market, it brings along a flood of variety of the goods and services that are provided in foreign markets. This provides the developing nations a variety of goods to choose from.

The following points highlight the disadvantages of MNCs.

i. Exploitation of cheap labour- MNCs often lead to the exploitation of the cheap labour in lieu of low wage rates.

ii. Increasing domestic competition- By influencing the market, MNCs increase the level of competition among the domestic industries and thereby damages the domestic market.

iii. Outflow of funds to protect MNCs- The government in order to protect the MNCs for foreign investment, directs huge amount of funds to them. Also, large amount of funds in terms of profits and dividends, etc also flows out to the foreign countries.

iv. Environment degradation- As MNCs use the Natural Resources present in the developing countries, it leads to a depletion in the domestic resources. All this may result in environment degradation and displacement issues.

Thus, analysing the above pros and cons of MNCs, we can say that they are a mixed blessing for the developing nations.