Corporations look for the availability of factors of production and favourable government policy while scouting to set up production in a country.
The money spent by corporations to acquire assets is termed a foreign investment by the host country.
These MNCs use various routes like setting up new companies, joint ventures with local companies, buying a local company (most common) or placing orders to the local companies to manufacture under MNC’s brand name to set up in the host country.
These corporations also bring enormous wealth and technical knowhow with them.
In this way, geographically dispersed production is getting interlinked.
Small manufacturers and industries such as domestic industries of toys, tyres, vegetable oils etc. are unable to compete with large MNC’s leading to their shut down.
Flexible employment culture, due to increasing competition for jobs leading to unsecured jobs.
Struggle for a Fair Globalization
Not everyone has benefited from globalization equally, people with education and skill have made the most out of it, while leaving many out. This highlights the need for a fair globalization process. This can be attained through the following methods:
By using government policies. For example, strong implementation of labour laws, protection to small manufacturing units etc.
Cases of unfair use of the process can be vocalised through the platform of the World Trade Organization (WTO).
People can play a major role, by being vocal about their concerns, and inducing favourable policy at both domestic and international level.
World Trade Organisation
It is an international organisation whose aim is to liberalise international trade.
Started at the initiative of the developed countries, it establishes rules regarding international trade.
Though it is supposed to get international trade liberalised, however, many developed countries have unfairly retained trade barriers. On the other hand, WTO has forced developing countries to remove all trade barriers.
For example,farmers in the USA are receiving massive sums of money from the US government to produce and export agricultural produce to other countries, due to which they can sell their produce at abnormally low prices in other countries, adversely impacting the farmers in these destination countries.
In a nutshell, the globalization process has immensely benefited various industries and people, as mentioned above, however the need of the hour is for fair globalization so that the benefits can be equitably shared among all by creating additional opportunities for all.
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