You should spend about 40 minutes on this task.
Some people believe that countries should invite foreign companies to open their branches, offices and factories in order to develop their economies. Others think countries should invest in their own companies instead.
Discuss both views and give your own opinion.
Write at least 250 words.
A new wave of globalization has taken the world by storm. It has blurred almost all the marks preventing international trade and commerce. As a result, the transnational companies set up their branch offices across the globe. However, people are split in their opinions when it comes to the point of thriving economy. Some people contend that multinational companies could contribute to the economy significantly, but the others, on the other hand, insist that countries should invest in their local companies instead. In my opinion, I believe that the governments should support local entrepreneurs in order to sustainable development.
The proponent of transnational companies hold that these corporations create positive economic value in the host nations through the application of huge capital, cutting-edge technology, and a range of competencies. According to them, the obvious effect evidenced is the improvement in the living standard of the country’s population, as consumers are directly benefited from the lower price, higher quality commodities, and broader selection. Moreover, multinational companies contribute to the increase in national income through its improved productivity and yield and its suppliers. Besides, these companies offer bulk of employment that generates income of the population, which in turn alleviates poverty.
In contrast, the antagonists of the overseas companies call for the investment in local companies. Several reasons are put forward by them. First of all, they plead government to invest in local business, since it helps generate and preserve local job opportunities, and ensures robust local economies. Secondly, local business attainment generates increased tax revenues for the localities, which can be exerted to cater crucial community needs and basic amenities. Last but not the least, since local companies are likely to rely on local service providers and vendors, such investment also has a ripple effect that helps ensure local money will remain and recirculate within the community. That is to say, investment in local companies insures local money against being moved out of the host country.
In conclusion, many countries tend to invest millions dollars in infrastructure such as, special economic zones, for the multinational corporations. Many economists support the policy that they plead that this is essential for economic development, while others refute the notion and demands that government should invest in local companies. In my opinion, foreign companies are dangerous for the host country. Let me elaborate a bit more. Transnational companies are huge organization. They will come and will compete with the small local companies, and these local companies will eventually be shut down, or be absorbed by the huge multinational companies, and therefore, local people will no longer have companies of their own.