The Hidden Agenda of Multinationals on Developing countries
There are many multinationals corporations operating their business activities in the Asian countries. In the present world, there is the dominance of Asian economy as there are the world's largest economic countries like china, India and Japan. The fastest growing economy of Association of South East Asian Nations (ASEAN) including china and India have attracted to many multinationals to move their operational and business activities in Asia.
The hidden agendas are:
1) Search for potential customers:
Any businesses need customers for survivals. As we know Asian countries like China, India, Bangladesh have huge populations density. The more people, the more demand and supply so as the sales and revenue.
2) Cheap resources and materials:
Asian countries are rich in natural resources and raw materials like iron copper coal and natural herbs and medicines which are essentials for the businesses. It will cost them a lot while importing instead multinational moves in those countries and run the business. There is the chance of reduction of natural resources in the host countries.
3) Wider range of skills:
As we know Japan China and India are the world´s tech hub destinations. The skills, techniques and manpower needed for the business are easily available comparatively in cheaper expenses than developed countries like UK and the USA. For example many clothing companies are operating their business in Bangladesh and Pakistan because of cheap manpower . Even sometime, they exploit the human labour force in the host countries.
4) Tax avoidance:
Many multinationals move to such a country where corporate tax is low to minimize their tax bill. Even some businesses avoid tax by manipulating internal prices where they show less profit or loss by optimising the operational cost.
5) Create monopoly in the country:
Some multinationals are more powerful than the host country's overall economy because of the resource and capabilities they have. They can easily trap political leaders and twist country's regulations in their favour. Sometime they even interfere in political affairs of the nations.
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