I usually shit on people that ask for homework help, but whatever, don't copy and paste this as yours, please.
What role do multinational corporations play in the Global South? Will they help or hinder these nations' efforts to improve their economic situation?
Multinational Corporations play a controversial role in the Global South; they are simultaneously praised and criticized. Multinational Corporations grow the economy in underdeveloped nations; and people see an opportunity for these MNC’s to combat world poverty by developing the economy in the global south. However, MNC’s are criticized for keeping the global south dependent on the global north, through various policies of economic exploitation.
A big part of the issue is that Multinational Corporations have become so large that they essentially steer the economy of the global south. Through Foreign Direct Investment they have the power to pick winners and losers in terms of economic development. They generate employment in the global south, they finance loans and, "assist the aggregation of investment capital that can fund development" (Kegley). Unfortunately, profits from this investment are not always reinvested back into the host country, resulting in a weakened and ultimately dependent state. Additionally, corporations of this scale can reduce competition and discourage free markets. MNC’s are often criticized for low wages and poor working conditions. The end result is sometimes a net widening of the gap between global north and south.
Despite the criticism, many countries in the global south are relaxing restrictions to attract foreign investors. While this way of creating wealth and economic growth is enticing as a way to end world poverty, it is important to be weary of the massive debt that the global south has accrued in this process. There is a widespread consensus that it is not sustainable. There are 28 HIPC’s, or heavily indebted poor countries, and are collectively over 780 billion dollars in debt.
