TOPIC: FOR GRADE 10B_NEW
Encouraging multi-national companies to set up new businesses in a country would reduce that country’s level of poverty.
Encouraging multi-national companies to set up new businesses in a country would reduce that country’s level of poverty.
Time Duration for submitting the Article is
May 6 to May 12 , 2013
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Multinational company is a company that producing their goods and services in two or more country in the world. Countries in the world will try to attract multinational companies to invest their capital in their country like invest firms, mining, shares and etc. As multinational companies or known as MNC investing capital in that country means it will make the economic growth in that country increase.
ReplyDeleteWhen the economic growth in that country increase because of MNC means jobs provided in the country increase and it can reduce unemployment. As unemployment reduces it will make level of standard living increase and level of poverty decrease, because now newly employed people have their own income and can demand for their needs and wants of goods and services. The other benefit that country encourage MNC to set up businesses in order to reduce poverty is it make new technology come to the country as MNC is using high technology production.
However, as MNC’s coming to the country is also giving disadvantages as when they introduce new technology to the firms that more efficient that human, it will make unemployment increases because of the firms are thinking to increase the productivity by new technology then job cuts will happen. As job cuts happen it will make unemployment increase then when unemployment increase it will cause the level of poverty in the country increase and standard of living in that country increase. Then as unemployment rises it makes income per capita increase that make economic growth rate in a country decrease.
The other disadvantages of encourage MNC to invest in the country is it will increase the level of poverty because as more multinational companies come, national industry will forced to close because of high competition, moreover if the MNC is in the same industry with national company. Then also when MNC investing their capital in a country it will make high competition with national company and maybe it will forced some national company to close because of that then when national company closed unemployment may increase as they can’t get in to the multinational company because of maybe they unskilled and need training that aren’t given by the MNC.
This unskilled people need money to live and government may spend more to give welfare payments to support their family. Then as government keep giving welfare payments it will increase government expenditure, then until a point that government can’t afford and they will take loan from the MNC that invest in the country and as they take loan from them it will increase public debt and make the economic in the country’s hard to growth well. MNC also can make the level of poverty increase by using the environment in the area that they not supposed to do it like in rice field then when they use that land, farmer can’t produce anymore and the level of productivity of the farmer decrease and may also effect the level of poverty in the country. MNC also can make negative externalities to the country such as pollution in many ways and destruction of natural like rice field, woods and others.
So, government must see is the MNC in the country make the level of poverty decrease or increase and they must know how MNC works and is it good for the country and its environment. Then when government can choose and decide which MNC gives more benefit, all the things include the level of poverty in the country may reduce itself as standard living of people in that country increases.
Multinational company is business that have business organization in more than one country and have their headquarters in their country of origin, usually government will charge higher taxes for the multinational company , nowadays the amount of multinational company is keep increasing . Here are some examples of multinational company : Zara , Mango , Topshop , Topman , and etc. As the increasing amount of multinational company in that country there are some advantages for that country one of the is reducing the level of poverty. Because …
ReplyDeleteFirst the multinational company will open many firms because as they opening their business organization in another country they can do the production there also so the unemployment near their plant will be employed because of the opening of the firm so many job will be available for the unemployed people.
Second if the multinational company employ the unemployment people they can train them use their method so the unemployment people can be skilled , so if they are not work again at that multinational company they can use their skill in the local company or they can use their skill if they ere deciding to be self employed and they can employ other people too .
Third multinational company have to pay higher taxes to the government of that country so multinational company can boost government taxes , if there are many multinational companies at that country so it means the government taxes revenue can be high so from that taxes revenue government can use the as subsidy for the unemployment benefits or free school or free health care so the amount of the people who suffered from the poverty can be decreasing.
Fourth for some workers people who work in the primary sector will be motivated to work in the service sector or manufacturing because as the increasing of the multinational company so the consumers choice will increasing too and the demand of the consumers will increasing so if the demand is greater than the supply they will increase the price as the living cost getting higher they will move to the job that can provide them more income such as tertiary sector or they can be self employed .
Fifth as the increasing of the multinational company the local company will compete to produce good quality goods and also they will try to increase their size so they can make their product more innotiative and also they can employ more employee.
So with the increasing of the multinational company it will reducing the level of proverty because of many job are available , but as the many job available because of high demand government should have to control the level of inflation because if the inflation happening so it means the price of the supply will increasing too if the company want to reduce their cost they will cut job of the workers so government have to keep controlling the inflation because if the inflation happen the economy condition will become bad.
Multinational company is a corporation that is registered in more than one country or that is operations in more that one country ,it is large corporation which both produces and sell goods in various countries ,ex: Shilin ,Chatime ,Burger King ,etc
ReplyDeleteI think Indonesia one of the country in the world that is dominated by multinational company most of the company that available in Indonesia is multinational company .
Every country will hope their country can become one of country that have many investor who want to invest their company inside of it especially developing country will really needs multinational company to invest in their country to developed their country also can increase income for the country ,but normally multinational company may not interest to invest their company in developing country because they know that will not be success and developed their country.
Multinational company can bring many benefit and advantages for the country in which the multinational invested their company developed country will get more investor rather than developing country because in developed country the company know that they will success because the economic growth also high .I think I’m agree if multinational company can reduce poverty in country which is multinational company choose to invest inside of it because it will open new field job for unemployment and many people will be employed this mean if the total of unemployment in country less there will be many people who unemployment before and now be employed can achieve their living standards which mean poverty also reduce by multinational company .
Also multinational company will bring more incomes for the country because every multinational company that want to invest in some country they must paid for the taxes that determined by government so if the income high government can support unemployment people who may not yet find job so poverty can reduce more .Because every country has poverty and unemployment even though developed country there are poverty and unemployment but the total percentage may be much lower than developing country .
But if the multinational company increase it will bring inflation to the country because the demand exceeds the supply of the country and it will bring disadvantages for society because the price of the goods and services will become more expensive than before, but if the supplies are high the demands will not exceed the total supply which mean inflation can avoid by encouraging many multinational company in the country .
So encouraging multinational company to the country is good and can reduce poverty because if many multinational company want to invest in the country multinational company will bring new skills and technologies ,also will open new field job for unemployment people to become employed people ,but government also should push a lot of multinational company to make new field job more also avoid inflation in the country ,because if the option of goods and services many it will avoid inflation also if the type of goods and service same but different brand or name it also can avoid inflation ,ex :Burger King and Carl's jr burger
Multinational company is a corporation that is registered in more than one country and has operations in more than one country but they also have their home in one country that controlled the other company in other countries. The benefit by the presence of multinational company in a country are they will open job opportunities for the society in that country and they will give new knowledge to the society that can effect to the skill of the employee. The government will attract multinational company to open their company in their country by give them tax break and good promotion of their country.
ReplyDeleteMultinational company will provide jobs to the society in that country. If there is a multinational company in that country and they will give great job opportunities to the society, the unemployment rate in that country will fall because they can find job easily. If the company opens their firm and need more workers to produce their product, it means they will hire more people in that country. If more people gets job and income, they can satisfy their needs and wants also they can used their money to spend more in other things such as, education and health care. And they can increase their living standard because they have enough money to spend. If they can improve their living standard also they can reduce the poverty in that country.
The other benefit is multinational company can give the employee training and knowledge. If the company wants to produce high product, they will need good workers and the company will train their employee so the employee have good skill and knowledge. If the employee has better skill and knowledge, they can help small company in that country to produce better product with their skill and the production in that country will increase. If the employee has better skill and knowledge, they also can use it to open their own business. If they can open their own business, they can improve their financial and the poverty in that country will reduce because the society in that country have better skill and they can open their own shop or business.
Multinational company also should pay taxes to the government. If the societies in that country already have jobs and the government no need to give them subsidies. If the government no need to give subsidies to the unemployment and they will get revenue from the multinational company because the company should pay taxes to the government. So, the government will have more money to spend in other things such as, give subsidies in education and health care also fuel, and they can use the money to renew public services in that country and they can reduce poverty by give them subsidies in education.
However, multinational company will use more resources of that country and make pollution in that country. If the country have low wage rate, the company will pay the employee with low wage and the job are often low skilled. Much of the profit will go out of the country, and the company may pull out to relocate in a country where it can make a greater profit.
So, the multinational company will reduce poverty in a country because they can provide jobs and skill to the employee and the employee will have more money to spend in goods and services. If they already have income they can improve their standard of living also the government gets more revenue from taxes and they can reduce poverty in that country. But the government should make rules and regulation to anticipate the multinational company to used up the resources and to protect the employee from poorly paid.
Multi-national companies are firms that have business operations in more than one country, but will usually have its headquarters in its country of origin. The examples of multi-national companies are coca-cola, Royal Dutch Shell, Exxon Mobil, Toyota. Poverty is a condition of people who lacks certain amount of materials and money. There are 2 types of poverty; first, Absolute poverty is the inability to afford basic necessities to successfully live, such as food, water, education, health care and shelter. The common international absolute poverty threshold has in the past been around $1 a day. Second, Relative poverty is a condition of having fewer resources than others in the same society. Relative poverty therefore a comparative measure and similar to measuring income inequality.
ReplyDeleteEncouraging multi-national companies to set up new businesses in a country would reduce that country’s level of poverty. Multi-national companies bring direct inward investment to the economy, they provide job and incomes for local workers, they bring new knowledge and skills, they pay taxes which may increase government’s tax revenue, multi-national’s international trade may increase exports earnings.
However, there are some limitations and multi-national companies may create problems in their host countries. First, to attract/encourage multi-national companies to set up their business operation in the country, government needs to give some grants/subsidies, lowering interest rate and taxes to encourage them. Giving subsidies to multi-national companies may increase public expenditure and the money can’t be allocated to infrastructure, education or health care. Lowering interest rate may increase the supply of money and spending, which may raise inflation rate, lowering taxes will also reduce the government’s tax revenue.
Second, some multinationals may exploit workers in low-wage economies. They may pay workers at a very low wages, far less than in developed countries even they do the same job. Job security may also be far lower in less developed countries. Third, natural resources can be exploited and the environment damaged by multinationals. The availability of natural resources within the country will decrease as it is extracted by multinationals. Waste from multinationals activities/operation may pollute the water and air. It makes people harder to access safe water. Fourth, profits may be switched between countries so that multinationals avoid paying taxes. This will make government doesn’t earn tax revenue as much as they supposed to earn. This will hold up investment from government.
Fifth, some multinationals may use their power to obtain generous subsidies and tax advantages from host government. Multinationals may threat and force government to give them subsidies, otherwise they will leave the country and set up new operation in another country. While the country needs multinationals, because they provide job and incomes. If the government give them subsidies/grants, it will increase government’s spending, which the money can be allocated to other sectors.
Sixth, multinationals may force out domestic firms and local competition. It makes people lose their job, and later unemployment rate will increase which may increase the level of poverty. By using their power, multinationals may restrict competition and force smaller firms to close down. It will reduce the incentives of entrepreneurship. While entrepreneurship is essential to increase economic growth. A country would not be developed if they always rely to multinationals.
Seventh, multinationals may interfere in government. By using their power, they may try to do illegal activities to influence government, so that government may promote them and protect their own interests. Eighth, new technology brought by multinationals will make some domestic firms change from labour-intensive to capital-intensive, as new technology is more efficient and has larger economies of scale. As labour are replaced by technology, it will increase the unemployment rate, and the level of poverty may also increase.
ReplyDeleteSo, by encouraging multi-national companies to set up new businesses in a country would reduce that country’s level of poverty. However, it is not always can reduce the country’s level of poverty. Some multinationals may pay their workers at a very low wages, and it makes only a few differences. To attract multinationals, government needs to give them grants/subsidies, while the money given to multinationals can be distributed to the people or allocated to education which makes people more educated. As people more educated, they will be able to be entrepreneur which can provide job and income. It may reduce the level of poverty. For example, in Bangladesh. It is a very low wage rate economies, and there are many multinational companies set up their operation there. In fact, Bangladesh still a less-developed country. Therefore, encouraging multi-national companies to set up new businesses in a country would not always reduce that country’s level of poverty.
Charles 10BN
Multinational companies or Corporation is a corporation that has its business in at least one country other than its home country, it can be a offices, factories, etc and will have a head / central base country to coordinate global management. Nowadays, there are many example of MNC companies, such as Philips, the base country is in Netherlnd, but they have the factories around the world , like in Surabaya, Indonesia.
ReplyDeleteNowadays, many countries encouraging Multinational companies to set up new business in the country because it will bring benefits to the country, one of the benefits is it will reduce that country’s level of poverty.
First, when Multinational companies established within the country, they will need labour force and they can’t bring all their workers from their base country to each MNC companies in other country. So they will require labour workforce and it will create job opportunity especially to the unemployment. In this condition, it will reduce number of unemployment and will increase the living condition of the workers itself. When they are in a good living condition / welfare they have income for spent to satisfy their needs and wants, The income will afford their payment and avoid them from poverty.
The other reason is, MNC company will bring new knowledge and skill to the people inside the country. This new skill and knowledge can increase the productivity of workers and will encourage many enterpreneur in a country to make their business by their own because they’ve already the confident, skill and knowledege to run the business. Once again, if this thing going well, it will bring welfare to the society and reduce poverty.
From the government side, when Many Multinational companies are willing to invest their business in the country, it will increase government revenue because based on every law and regulation in a country. Every company/ business have to pay taxes, it can be equal or based on their profit or revenue. So as many company established as more the revenue comes. Also, when the unemployment decrease, government can reduce their spending on subsidies for them and can turn it to better expenditure such as better public goods and services for used by the society. If the goods and services provided by government is in a good condition , it will create good demand, if there is good demand it will create good feedback from the society and benefited for government.
However, it is not always easy to encouraging MNC companies invest their business in a country. In almost cases, government should offers subsidies to the MNC company so it will become a reason for them to invest the business inside the country. The subsidies can be varies, from government grant, or cut the taxes or even no taxes at all. Meanwhile, some government in a country cant afford the subsidy and cant cut taxes because it might bring loss/ disadvantages to them.
So, it is evidently Multinational companies bring many advantages to the country where they established their business, but government should consider and know the consequence and how to avoid the disadvantages might happened and fall on to the country. Also, government should give strict laws to the MNC companies so they cant be haphazardly like exploit the local workers with low wages.
Multinational company is any corporation that is registered and operates in more than one country, means that they have several branches and offices set up in the different countries they conduct the business in. Multinational companies have many ways to reduce poverty, especially when considering the country they operate in.
ReplyDeleteFirst, as more number of branches multinational companies are there, the more people in populace are given the opportunities to work, they employ local people in those countries to work for the corporation. The percentage of unemployed people will reduce and so on the percentage of poverty tend to decrease due to jobs are available more. This is especially important in developing countries where unemployment is high.
Second, for multinational companies they are required to pay government authorities taxes, in this way will also increasing the government revenues and will automatically effects to the government spending. This will surely reduce poverty in the country as government incomes are used to provide facilities or subsidies to the country. Example, government gives welfare for the unemployment people and therefore they can fulfill their needs.
Third, investing in local labor boosts the resident income, thus increasing the ability of citizens to purchase and consume. As the income levels rise, people are driven to buy more, even luxury items to show status. The tax base will rise with the income levels; the government will have more money to spend on domestic needs. Health care, education and other domestic programs can be funded.
Fourth, capital is the basic need of an underdeveloped society. Multinational companies transfer or introducing the latest new technology, capital and entrepreneurship to the host countries to generate economic growth and this will raise the growth rate of host nation. The introduction of technology to the developing world can lead to cleaner more efficient technologies. The standard of living tends to increase, and so increase the wealth of local people.
Fifth, multinational companies brings new knowledge and skills and give training of local labor or unemployed people with more sophisticated techniques which on available in the long run and will bring external benefits to the host country when these techniques can be used in all economics sector. This way, multinational companies thus creating a higher skilled labor force and this are an important source of human capital. People with de-skilled will be skilled and can recruited in many firms, so reduce unemployment therefore reduce poverty in country.
So, for the conclusion is, by encouraging multinational companies in a country would reduce the level of poverty, as multinational brings many benefits to the host countries; the presence of multinational increasing the living standard of the people in the country is boosted and bring new technologies, this will in turn help strengthen the economy of the nation. However, government should keep in eye supervision of the advance of the multinational companies from low wages and from the excision of the domestic companies.
-Christy Kusumo-
Multinational companies (MNC) are companies that have more than one production firm and established in other countries. Multinational companies also have their own head officer or headquarters to coordinate their companies’ progress of expanding in other countries. Multinational companies are usually attracted by high natural resources, low wages of employees, and low taxes.
ReplyDeleteMultinational companies can bring a lot of impact to economic growth, either it’s positive or negative. Such as when they are established more employees are being employed thus increasing employment rate and decrease unemployment which increases income and GDP growth. However, it is not easy to make multinational companies to be attracted to establish their production company in the country as government must use several ways that could possibly make themselves in trouble.
Encouraging more multinational economies means government will have to reduce taxes or even create free taxes for the first 1 or 2 years, such as China. This means government’s public revenue will not increase and public spending might be decreased.
As public spending decreased due to low public revenue, people are not being well-trained to work in an advance technology companies. This will make lack of skills of labor and make the entrepreneur to withdraw their production company, as labors are not efficient to produce goods. Creating more unemployment and poverty level increased.
Then if unemployment increased, government must do more welfare spending to prevent the sick rate or unfulfilled needs for unemployed people then another public spending is used. Then how are government supposed to attract the multinational companies if their public expenditure are used to pay for welfare payments?
Also, to think about it multinational companies are not really do their jobs on giving impact of reducing level of poverty. As multinational companies being established, means more natural resources are extracted from the nature which later leads to scarcity. When scarcity happened, supply will fall as there is cost push inflation causing producer to cut supply and reduce the number of employees and increase the selling prices.
If there is inflation, less multinational companies are going to be attracted as they looking for a country where its labor forces are skilled and low waged and also more resources. If those things are lacking, means government absolutely need to spend on subsidies, training, and more public expenditure on reducing cost rather than invested in public services such as health care or education.
Also, if the government trying to increase their economic growth there is a chance where labor-intensive will be change to capital-intensive as technologies being developed overtime. This means unemployment will be increase as machines are considered more efficient to produce goods and reduce the cost.
So, even though multinational companies have both impacts on positive and negative. It is better to have them under control and within the best range area of government’s act such as limiting the extraction of natural resources. Also, government can reduce their public expenditure on subsidies to attract multinational companies and spend on public services which can help decrease poverty level and increase education, skills, and health care.
Multinational company is a company that produced their goods or services in two or more different country in the world but with the same owners or shareholders. Many countries like to attract a lot of multinational companies because multinational companies can invest firms , shares , company ,etc. So the economic growth on that country will be increase due to multinational companies.
ReplyDeleteMultinational companies can give a lot of advantages to the country , the first benefit is , they can increase unemployment. Because multinational companies is usually big firms that use a lot of labour force to work , so employment will be increase. If employment increases the living standart of the people will also be increase due to more income to the people. So the poverty in a country will be decrease due to standart of living that are increases. If the living standart of the people are increases it means they can satisfy their needs and wants , so the people will be welfare.
On the other hand , multinational companies will also give a lot of disadvantages to the country. First disadvantages is to increase productivity , the firms will replace the workers with machine. Because machine is faster and more efficient than workers. Also machine can be cheaper for a long term , if you compare between buy new machine and hiring a lot of labour once we buy the machine , we don’t need another additional cost to pay. But for hiring a labour you need to pay wages for every period of time. So unemployment will be increase , if unemployment increase it means economic growth will be decrease. So at the end , it will give unbeneficial to the country.
The unemployed people will be increase due to firms that change its type of productivity from labour force to machinery force. It means the government have to spend more on welfare payment to the unemployed people and their family. Otherwise , the unemployed people will become extremely poor because of no income but they need to satisfy their needs and wants.
Second , multinational companies can forced close the national or local industries because the local industries can’t compete with the great multinational companies. Usually multinational companies have cheaper price than the other local company. So demand for multinational companies will be increase and less demand for national company. And in the high cases , multinational companies can create monopoly due to high demand from the people. So unemployment again will be increases due to a lot of local firms or company that are forced to close down.
The conclution is multinational companies can give a lot of advantages to the country such as increases of economic growth , introduce new innovation or new technology , etc. However multinational companies also can increase unemployment and increase government expenditure. So the point is multinational companies is good for the country but if its grow too much it will give unbeneficial to the country itself.