AAMIR & EJAZ

8/6/2019 AAMIR & EJAZ

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(BC09008)

---: PRESENTED BY :---


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The Benefits Of Multinationals

........................ Topic .........................


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MNCs bring with them new ideas and new techniques that can help

to improve the quality of production and help boost the quality of

human capital in the host country.

Many will not only look to employ local labor but also provide them

with training and new skills to help them improve productivity and

efficiency.

Highly qualified people of Pakistan get recruited in these companies.

Unemployment rate decreased in Pakistan due to the recruitment of

Pakistani people from all over the world.

Skills, Production Techniques And ImprovementsIn The Quality Of Human Capital

The Benefits Of Multinationals


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For the host country (Pakistan), there is a likelihood that theMNC will have to be subject to the tax regime in that country.

As a result, many MNCs pay large sums in taxes to thegovernment of Pakistan.

But in the case of Pakistan, the problem might be that there isa large amount of corruption and bad governance .

As a result MNCs might not contribute the tax revenue theycould and even if they do it might not find its way through tothe government itself.

Tax Revenues


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Improvements In Infrastructure

In addition to the investment in a country like pakistan, in

production or distribution facilities, a company might also

invest in additional infrastructure facilities like road, rail, port.

new buildings and communications facilities.

This can provide benefits for the whole country. Pakistan got a

lot of benefits in this respect.

The communication corporations like telenor, mobilink, warid

improved the communication facilities


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Employment Effects:

Another beneficial effect of the MNCS is that they bring employment

opportunities to the host country that would otherwise not be created.

Direct effect arise when a foreign MNC employs a number of citizens.

Many multi national corporations set their industries in pakistan and

recruit the local people, terms of their education and skills.


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Balance of Payment:

A countrys balance of payment keeps the track of both its

payments and receipts from the other countries.

The balance of payment effect is an important consideration

for the host country.

When a MNC establish a foreign subsidiary the capital

account of the host country benefits from the initial capital

flow.


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Competition and economic growth

Efficient functioning of markets depends on adequate level of

competition between the producers.

When a new enterprise is established, the number of players in the

market and consumers choice increases.

In turn this can increase the level of competition in a national

market, thereby driving down the market prices and increasing theeconomic growth.


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Increased competition in Pakistan tends to stimulate capital investmentsby firms in plant and equipment, research and development as the

struggle to gain a competitive edge over the rivals.

We can take example of competition betweenMITCHELL'SFruit Farms

Ltd and unilever food products.A healthy competition between them

providing a quality assurance in these products.


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Learning of skills

Benefits arise when a local enterprise learns valuable skills from

the MNCS by its exposure in the market.

A firm can learn about specific superior management techniques,superior products and process techniques.

Our local people of Pakistan getting knowledge from these

MNCS about the latest techniques and trends.


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Foreign policy

The establishment of MNCs helps in creating the relationship with

different countries in the world.

Thus helps in enhancing the foreign relations.

Due to these economic transactions of goods there is a less fear of War

between the States.

Flexibility can be seen in the foreign policy of Pakistan and India due to

exchange of goods and expanded businesses.


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(BC09007)


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De-Merit GSome companies are producing goods that are not

beneficial for our society and not match with our

mind sets. Examples Includes alcoholic drinks,

tobacco products and baby milk etc.

Repatriati n f pr fit

Profits go back to the headquarters of the

MNCs rather than staying in Pakistan - the

benefits, therefore, might not be as great.

MNCs use the local resources of Pakistan

and in return dont give benefits of that level.


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CONT

National sovereignty

The government of Pakistan is worried that the

establishments of MNCs is accompanied by some loss

of economic independence. The concern is that the key

decisions that can effect the countrys economy are

made by the foreign parent that has no real commitmentto the host country and over which Pakistan have no

real control.

The source of domination

The MNCs enjoys the benefit of domination. They

are politically controlling the economy of the

country. They are dominating Pakistani domestic

decisions.


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Infant Industries:

The newly established industries suffer a lot due to

the arrival of the multinational companies. They

dont get the enough time to developed and fullyestablish. Before the flourish the conditions

becomes so worst due to MNCs that they wiped

out. Like LAYS the international food brand is so

popular in PAKISTAN that no other local chips

company is developing due to its hype.


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Knowledge and Skills Transfer

The multinational companies usually hire the

skilled, trained and professional employees

already working in the domestic companies ofPakistan. So the knowledge and skills transfers

from these domestic companies to the

multinational companies subsidiaries. Our local

talent is serving these MNCS


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Dumping

The multi national companies tried to

fail the local products by making theirproduct low price. The best example of

this is Chinese low quality products in

Pakistani market .


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Pakistan these days is facing an immense crisis

in political, social and economic drawback,

recently Pakistan is passing through a series of

chronic and painful problems include political,

socioeconomic, energy crises,security, uncertainty in Baluchistan, day to day

suicide bombing, foreign Drones attacks and

worst situation of law and order in FATA and

NWFP. These all are brain blasting and heart

pinching for all true Pakistanis.


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Pakistan has been facing many crisis and

problems since the time of its

independence, but today the number of

problems has multiplied to an extreme.From the basic necessities like food,

clothes and shelter to the security of lives.


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In this era of globalization, states have to

interact with each other for social, political,

economics purposes.....

Pakistan have to adopt the things which is

necessary in globalization.

MNCs are not bad itself but the way to use or

utilize it is different.

Some laws should be made and properlyimplemented for these MNCs. So that Pakistan

as a less developing country should not deprive

from its rights.


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