Multinational Corporations and Developing Countries A partnership of equals?

The poorest countries of the world are most in need of investment and yet are most vulnerable to exploitation by multinational corporations (MNCs) and have the least power to resist it. There tends, therefore, to be love-hate relationship between the peoples of the developing world and the giant corporations that are seen to be increasingly dominating their lives: from the spread of agri-business into the countryside through the ownership and control of plantations, to international mining corporations despoiling vast tracts of land, to industrial giants dominating manufacturing, to international banks controlling the flow of finance, to international tour operators and hotels bringing the socially disruptive effects of affluent tourists from North America, Japan, Europe and Australasia, to the products of the rich industrialized countries fashioning consumer tastes and eroding traditional culture.

Although MNCs employ only a small proportion of the total labour force in developing countries, they have a powerful effect on these countries' economies, often dominating the import and export sectors. They also often exert considerable power and influence over political leaders and their policies and over civil servants, and are frequently accused of 'meddling' in politics.

It is easy to see the harmful social, environmental and economic effects of multinationals on developing countries, and yet governments in these countries are so eager to attract overseas investment that they are frequently prepared to offer considerable perks to MNCs and to turn a blind eye to many of their excesses.

The scale of multinational investment in developing countries

\f\f\f