In , the USA launched an invasion of Guatemala to prevent the Guatemalan government from taking unused land from the United Fruit Company for redistribution to peasants. TNCs are collectively the world's most powerful economic force, but no intergovernmental organisation is charged with regulating their behaviour.
This naturally favours the developed world and inhibits developing countries' development. International trade could be a powerful tool to end poverty. However, in reality, inequalities still exist in the international trading system.
How to Cite. Herkenrath, M. Journal of World-Systems Research , 9 1 , Volume 9, Issue 1, Upon acceptance of the Work, the author shall grant to the Publisher the right of first publication of the Work. The Author shall grant to the Publisher and its agents the nonexclusive perpetual right and license to publish, archive, and make accessible the Work in whole or in part in all forms of media now or hereafter known under a Creative Commons Attribution 4.
There are often tax incentives for these companies to locate in countries in the Developing World. This added to the fact that they take most of their profits out of the country, means that the actual economic benefit to the country could be minimal. Advantages: The companies help the development of the country by bringing in technology and knowledge that the host country does not possess. Multi-national companies might be worried by sharing too much information, as they could find themselves with increased competition from local companies.
Advantages: The new companies often help to improve transport links around the area. Disadvantages: The transport links that do receive financial help from the multi-nationals often only serve the direct routes and needs of that company, not the wider area as well. Technology transfer is a particularly important benefit. TNCs make a number of positive contributions. They bring pressure to great good administration; they provide infrastructure and services which are available to all; they help to identify and develop export potential; they increase the demand for and quality of local products; they provide tax revenue for governments; and they provide incentives to increase the quality of education.
Whether these contributions benefit the poorest is another question. The risks are that TNCs: replace labour, especially unskilled, with capital; corner the market for skilled workers; create local monopolies; substitute imported goods for local; exploit lax environmental and labour laws; and create over-dependency on a dangerously limited range of products.
A number of points were made in the discussion that followed. These included: Opposing views had been taken in the presentations about the desirability of a legally enforceable regulatory structure Monbiot versus a voluntary code of conduct Cairns. A number of participants felt that regulation was probably more appropriate, but there was uncertainty as to how to achieve this. It had been observed that TNCs were reluctant to be regulated, were often able to ventriloquise country-level policy, and were difficult to hold to account for example, on human rights.
The question was then not whether to regulate TNCs, but how to do so. One answer to this was to encourage popular participation and protest as a way of forcing regulation - the example of GM foods was cited. On a related point, another approach was to demonstrate that there was a strong business case for good corporate governance and citizenship, for example using partnership approaches to reduce conflict, thereby producing more favourable outcomes for both communities and business.
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