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Essay on Transnational Corporations and Effects in Developing and Developed Countries

By Edited Oct 16, 2016 0 0

In Developing…

            Nations with the richest and most abundant supply of natural resources are being exploited by greedy and careless institutions that are draining and exhausting these nations’ lands. Transnational corporations (TNCs) have become an important aspect in growth of economies and countries since the 1950’s; in result TNCs have become an economically dependable factor for countries and individuals. Transnational corporations is a phrase that is defined by a group of people who are recognized by law as an individual—a single legal person—that perform certain tasks in more then one nation and are not confined to a single nation. Corporations started to grow more because of the Civil War and Industrial Revolution and were initially charted by a state to perform a certain function in society. A corporation worked for the people instead of having the people work for the corporation as it is seen today. The Fourteenth Amendment said, “…nor shall any state deprive any person of life, liberty or property without due process of law” (14th Amendment Section 1).The Fourteenth Amendment was aiming to protect black people form injustice and granting them equal rights. As corporation’s greed and malicious principles started to build during this time of equality they too wanted to be part of these rights. In result corporation’s money-based and immoral lawyers manipulated these laws to give the corporations an advantage. The Supreme Court then granted corporations’ equal rights as a human being because it was recognized as an individual legal person to life, liberty, and property. This gave unimaginable power to corporations in the United States government and other nations that would later take its toll on innocent and unaware people—externality. Governments that depend on these corporations have developed selfish laws and regulations that protect their own investment and capital while also attracting TNCs to stimulate their economy without regard of its workers and the environment. Now TNCs have gained a sufficient amount of power to break from government control and sometimes claim absolute authority over natural resources in nations by privatization. TNCs have become masters of slave plantations that exploit their workers in disregard. These workers work in harsh conditions, absurd low wages, and have insufficient representation—if any. Transnational corporations should not have an absolute authority of power over natural resources in developing countries that bypass laws that harm the environment and the people, empower themselves with unprecedented dominance by privatization, and unfairly uses its workers as puppets, but should create a mutual relationship with these countries’ workers and natural resources.

Most of these nations that are being drastically impacted are mainly developing countries that have both the necessary supply of natural resources to support TNCs and are in need of the TNCs income. These two complementary factures present in a developing country result in the attraction of TNCs that exploit both the people and the land. TNCs main source of power that produce production are natural resources. These natural resources take a variety of forms such as oil, trees, and basic gases that are abundant in many developing countries. TNCs institute in developing countries because of their lenient environmental laws. These institutions take advantage of what is offered and their greed transforms into an unfair and harmful system towards its host land. Harm is not only impacting the people but also the environment. These lenient environmental laws are attractions to TNCs establishments in a developing country which causes pollution, health problems, deforestation, and exhaustion of land. Something that took hundreds of years to make and grow naturally is being destroyed in seconds for the greed of others and is not being replaced. Rivers that supply drinking water to villages and other commodities are being polluted by TNCs making them unhealthy to drink from, and causing an increase in death-rates and diseases. The Citarum River in Bekasi, Indonesia according to the Asian Development Bank, “…provides 80 percent of household water for Jakarta's 14 million people, irrigates farms that supply 5 percent of Indonesia's rice and is a source of water for more than 2,000 factories, which are responsible for a fifth of the country's industrial output…[but the most polluted river in the world].” Fishermen have replaced their practice of fishing in the Citarum River to trash picking in the polluted river refereed by some locals as, “a movable dump”. Dieses rates have increased over the past twenty years as the river becomes more polluted and infections are more common (Gelling).   

            Bolivia is an interesting country that has witness the raft of transnational corporations. When Bolivia needed a loan to refinance the water service in Cochabamba, Bolivia’s third largest city, the World Bank required the privatization of all the water in Cochabamba. The privatization of natural resources means that initially these recourses were under government ownership but were then made private by TNCs. This kind of process can indeed bring prosperity to an economy, but can also devastate an economy. For Bolivians this meant that people in Cochabamba had to pay for every drop of water they used from sky to ground. Rain water and ground water were owned by a corporation in San Francisco and the people had to pay about ¼ of their income for water. (Movie)  This led to a series of conflicts that resulted in one death and hundreds injured for the unfair prices put on water and the overall privatization of the water by a TNC. Catastrophic events are witness by such actions being sought through by corporations to innocent people. Now imagine when time gets closer to 2025 when two thirds of the world population is prospected to have no access to drinking water (Rosegrant).What kind of catastrophes might be in stored for humanity at that time?      

            Employees in the United States enjoy their protection under the law from having a minimum wage, physical protection where the employer can not harm the employee in any way if wanting to avoid a court trial, and work in suitable conditions. These laws are taken for granted in the United States and are seen as luxuries in other states. Especially in developing countries where people are faced with inequality and the government has its own interest over the people’s interest. Minimal, if any laws are emplaced by developing countries government to protect workers by rather are emplaced to protect TNCs. Workers are put in overcrowded labor markets who come from the outskirts to cities for work that pays poverty wages. Some might say this wages stimulate economies and put food on the table for these impoverished families. But in reality these wages are not sufficient to support a family or put food on the table; maybe a half loaf of bread for 8 people but not enough to fill all these stomachs over the night. Low wages are essential for TNCs that are only looking to make money; “In Haiti… workers are paid 11 cents an hour by corporate giants such as Disney, Wal-Mart, and J.C. Penney…In 1990, shoes made by Indonesian children working twelve-hour days for 13 cents an hour, cost only $2.60 but still sold for $100 or more in the United States”(Parenti).These are products seen in our society that are in demand form United States consumers. Demand for these products means acceptance to inequality and child labor.  

            Innocent children, mothers, fathers, and infants are being impacted by these TNCs and can not repel or receive the proper protection. These people have no representation or saying because they have no other option but to accept TNCs that bring staggering low incomes but still an income that allows a family to survive for a month or so. As more TNCs are expanding and their acceptances are increasing their power will increasing along side. This power leads to an absolute authority or an overwhelming institution in a certain state. TNCs should have a limit to such power by unity of the workers and government and giving individuals a voice. By getting the right representation to individuals who are afraid to speak out or are being negatively impacted by TNCs will be one step closer. Being informed of what is taking place around the world and knowing how to decipher from right to wrong is another. If government dose not have our own interest then who will? This is a famous quote from John Locke, “…the People, who have a Right to resume their original Liberty [when government fails to protect society], and, by the Establishment of a new Legislative provide for their own Safety and Security, which is the end for which they are in Society.”


Works Cited

Abdul-Gafaru, Abdulai. “Are Multinational Corporations Compatible with Sustainable     Development in Developing Countries?” Ciber Gatech. 19-20 Oct. 2006. Web. 7 Dec.         2009.

Addabor, Elizabeth. “Extraterritorial Application of Environmental Law to Transnational Corporation and their Affiliates.”Law Ucalgary. University of Calgary. 3 June 2005.        Web. 7 Dec. 2009.

Fisera, Raphaël. “A People vs. Corporations?” Arso. Dec. 2004. Web. 7 Dec. 2009.

Gelling, Peter. "Trying to Stop Pollution From Killing a Lifeline.(Foreign Desk)(protection of       Citarum River)."  The New York Times. Dec 14, 2008. Web. 2 Jan.    2010.

Khan, Sabaha.“Transnational Corporations Liability for Environmental Harms.” Articles Base.      27 Sep. 2009.             Web. 7 Dec. 2009.  

Parenti, Michael. “Multinational Corporations Cause Global Poverty.” Opposing Viewpoints:        Poverty. Ed. Viqi Wagner. Detroit: Greenhaven Press, 2007. Web. 7 Dec. 2009. 

Rojas, Róbinson. “Transnational corporations and developing countries.” R Rojas Data Bank.    1998. Web. 7 Dec. 2009.  

Rosegrant, Mark W., Ximing Cai, and Sarah A. Cline. “World Water and Food 2025.” IfPri.        International Food Policy Research Institute (IFPRI),2002. Web. 7 Dec. 2009.





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