Some People think that Multinational Companies could help to boost the development of a state, while others claim that Multinational Companies capitalise labours and exploit a particular country’s resources. Discuss both sides and give your opinion!

Globalization has motivated companies to restructure their goods manufacture through outsourcing and offshoring in other country, because equipments and labours in 3rd world countries are cheaper than in the advanced economies. Some people believe that the existence of multinational enterprises will potentially lift the economy of a state by modernizing its industry. While, at the other hand, there are many people who contend that the international businesses only capitalize the country’s labours and exploit its resources. This essay will elaborate both views and note some advantages and disadvantages of each perspective. The people who argue that multinational companies could benefit a state tend to think based on the liberalism approach towards global value chains. Liberalism perspective emphasizes that cross-boundaries companies potentially could boost the development of developing states by establishing its businesses there. For instance, those companies will provide job opportunities in a nation. Obviously, these opportunities will eventually reduce the number of unemployment in less developed states. Moreover, by providing employment opportunities, it would improve the productivity of the citizens, and the state’s income per capita as well. Contrarily, the people who against the idea of offshoring, most likely follows Marxisms’ point of view. This approach is sceptical towards the transnational firms, Marxism considers offshoring as a strategy arranged by the capital holder to cut off the production costs, in order to maximize the profits for the company and the home nation and labours are only given a small amount of its profit. For example, the entrepreneurs want to minimize the production rate, they tend to utilize cheap labours and even child labours. Other than that, there are many multinational companies behaving arbitrarily to its workers, forcing them to work above the average working hours, paying them under the minimum wage, treating them inhumanely, and do not care about the worker’s health as well, . I do agree with the liberalism's views, through outsourcing and offshoring, it could create an opportunity to reduce unemployment, and uplift the people’s productivity in less developed nations. However, there are still many labours that are currently suffering in their workplace, due to the capitalization of the capital holders. They are forced to work above the average working hours with an unhealthy environment as well. Therefore, I strongly believe that the multinational enterprises should still continue their production operations in other countries, but they need to guarantee that they would never treat their workers inhumanely, they should pay their employees decently, provide an adequate workplace to ensure the employees’ health and the employees should never work more than the average of working hours. In order to ensure this provision, the authority of a state should create a legally binding agreement between the firm and the government that provides clear rules and regulations regarding the labour's rights. In conclusion, cross-boundaries firms are good for less developed states because it opens new workplace for the unemployment. Although, there are still many corporations who do not treat their employees humanely. Thus, I vigorously believe that the firm and the government should make a clear legally binding agreement between two parties to address the rights of the labour, before the company get the access to operate its business inside the territory of a nation.