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PST Assignment

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JK 《Alee》•
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2 views2 pages

PST Assignment

Uploaded by

JK 《Alee》•
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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The Role of Multinational Companies in Underdeveloped

Countries
Introduction
●​ Multinational corporations (MNCs) play a significant role in
the economies of both developed and underdeveloped
countries. While their impact can be complex and
multifaceted, their presence often brings both opportunities
and challenges. This assignment will explore the various
roles MNCs play in underdeveloped countries, focusing on
their economic contributions, social impacts, and potential
drawbacks.
Economic Contributions
●​ Job Creation: MNCs often establish operations in
underdeveloped countries, creating employment
opportunities for local populations. These jobs can range
from low-skilled labor to high-skilled managerial positions.
●​ Investment and Capital Flows: Foreign direct investment
(FDI) from MNCs can provide much-needed capital for
infrastructure development and economic growth in
underdeveloped countries.
●​ Technology Transfer: MNCs bring advanced technologies
and management practices to host countries, which can
enhance local productivity and competitiveness.
●​ Access to Global Markets: MNCs can provide access to
global markets for local businesses and products, promoting
exports and economic diversification.
Social Impacts
●​ Improved Living Standards: Increased employment and
income can lead to improved living standards for local
communities, including access to better healthcare,
education, and housing.
●​ Infrastructure Development: MNCs may invest in local
infrastructure, such as roads, transportation, and
communication networks, benefiting the broader population.
●​ Corporate Social Responsibility (CSR): Many MNCs
engage in CSR initiatives, such as supporting local
education, healthcare, and environmental protection
programs.
Potential Drawbacks
●​ Exploitation of Labor: Concerns have been raised about
MNCs exploiting low-wage labor and poor working
conditions in underdeveloped countries.
●​ Environmental Impact: Some MNCs have been criticized
for their negative environmental impact, such as pollution
and resource depletion.
●​ Competition with Local Businesses: MNCs can pose a
competitive threat to local businesses, potentially leading to
job losses and market dominance.
●​ Political Influence: The significant economic power of
MNCs can sometimes lead to undue political influence in
host countries.
Role of MNCs in Pakistan's Economy
Pakistan has witnessed a growing presence of MNCs in recent
decades, particularly in sectors like telecommunications, textiles,
and consumer goods. These companies have contributed to job
creation, technology transfer, and economic growth. However,
challenges such as labor exploitation and environmental concerns
also exist.
Examples:
●​ Telecommunications: The entry of MNCs like Mobilink and
Telenor revolutionized Pakistan's telecommunications
sector, expanding access to mobile services and boosting
economic activity.
●​ Textiles: MNCs in the textile industry have provided
employment opportunities for millions of Pakistanis,
particularly women. However, concerns about low wages
and poor working conditions persist.
Conclusion
MNCs play a complex and multifaceted role in underdeveloped
countries. While they offer significant economic benefits, such as
job creation and investment, potential drawbacks like labor
exploitation and environmental impact must be addressed.
Effective government policies and regulations are crucial to ensure
that the presence of MNCs benefits both the host country and the
companies themselves.

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