- Created by: essalenko
- Created on: 06-06-15 14:02
The most influential players in promoting economic development are TNCs. The largest of these companies now match some countries in terms of their wealth, power and trading.
Traditionally, TNCs have located in developed countries or in NICs (South Korea, Taiwan, Singapore, Malaysia). However, other areas of the world such as the emerging BRIC economies and South Africa are developing their own large corporations.
The UN's transnationality index (TNI) is based on three ratios: foreign assets to total assets, foreign sales to total sales, and foreign employment to total employment. The geographical spread index (GSI) addresses the nubmer of countries in which a company operates.
TNCs can provide opportunities for economic development and poverty alleviation in a country. Whether a TNC invests in a country depends on its resources, the size of the economy, the business environment, government policies and how skilled the workforce is.
Global players and organisations
- Negative impacts
International organisations (UN, World Bank, IMF) monitor and provide investment. They can provide investment for economoc and social projects to improve standards. Seen by some as 'top-down', with little regard for local needs.
International commercial (TNCs, Nike, LG, Unilever) are capitalist enterprises that create supply chains which spread across the world. They provide employment and investment in a country/region. May exploit workers in developing countries to maximise cheap labour source and stay globally competitive. Leake of funds back to parent company.
National political governments of particular countries influence economic and social conditions in their countries (and sometimes globally). They regulate the economy to make the most of market opportunities, attract inward investment and maintain economic competetitiveness. Create the right conditions for business to flourish. Provide physical infrastrcutre to support further development. Supply public services like health and education. Decisions can be affected by politics and existing alliances.
Non-governmental organisations are humanitarian bodies and charities. They raise awareness of concerns and give aid and practical assistance to developing countries. They provide non-biased assistance to development projects or relief programmes and can be involved where global politics keeps out governments. A 'bottom-up' approach which takes account of local needs. NGOs rely on funding which may be unreliable.