Global Economy and the Environment

Topics: International trade, Developed country, Human Development Index Pages: 3 (963 words) Published: October 8, 1999
Global Economy and the Environment

As the global economy gets integrated, national or local corporations will gradually transform in to a multinational corporation (MNC). When this type of development occurs, the host countries are usually the ones that become the immediate stake holders. This is because when a MNC sets its foot into a host country, there are economic, political, social and environmental impacts that result from their corporate actions. In many cases, it is certainly possible that it can end up in a win-win situation, if the host country and the MNCUs both work mutually. However there have been unfortunate examples, where this has not been the case.

In general, international agreements have its advantages, due to the fact that we can harmonize international standards. Therefore environmental concern is one of the key issues that the policy makers and MNCUs should set a high priority on. This is because growth and development is strongly correlated with environmental degradation. Furthermore, it is fair to say that the MNCUs are more likely to have a more harmful environmental impact from growth and development, as opposed to the local corporations. This is because MNCUs may not be as knowledgeable as local corporations in resource utilization and land management. This also refers to the notion of Rthe locals know their land better than anybody elseS. The tropical rain forest of Brazil is a good example of this. The RindigenousS or the local people have a good understanding of how to extract and utilize its resources in a very sustainable manner. However when a multinational timber company comes into Brazil, result of their actions will probably be more harmful, due to the fact that they are not complying to the RtraditionalS methods.

Another important aspect is the fact that in any international trade agreement, a MNC is most likely going to shift their production to a lesser developed country....
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