PSIR 2A-6.5 Transnational Actors – Previous Year Questions – Solved

Model Answers to PYQs (2019-2024)

1] Some feel that multinational corporations (MNCs) are a vital new road to economic growth, whereas others feel they perpetuate underdevelopment. Discuss. [2018/15m/200w/2c]

A multinational corporation (MNC) is one that has business operations in two or more countries. These companies are often managed from and have a central office in their home country, and have their operations spread across the globe.

MNCs are hailed to bring with them the required capital, technical know-how, professionalism and employment opportunities in underdeveloped and developing countries. When they establish industries, they help in the development of infrastructure and the choices for the consumers also increase.

On the other hand, they enter underdeveloped countries only because of the cheap labour they will get along with the flexible labour laws. In 1984, India experienced the dark side of international companies with the Bhopal gas tragedy when both people and the environment were harmed.

MNCs shift the dire environmental consequences to underdeveloped countries. Countryside lands and water are polluted and overexploited. Farmers are impacted by declining water-table and highly polluted land.

The introduction of multinationals into a host country’s economy may also lead to the downfall of smaller, local businesses. Activists have claimed that multinationals breach ethical standards, accusing them of evading ethical laws and leveraging their business agenda with capital.

MNCs will be beneficial for economic growth only when the relationship between the host and the home country is on an equal footing. Otherwise, MNCs would only remain a source of neo-imperialism. [223 words]

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