Impacts of Multinational in Nepal

Topics: Multinational corporation, Corporation, Least Developed Countries Pages: 2 (651 words) Published: October 6, 2010
Discuss the impacts of multinationals setting up factories in your country.

Nepal is recognized as a LDC,i.e. Least Developed Countries which makes it a very suitable target for multinationals to set up their business with.Nepal would face various impacts of the multinational companies.Firstly, the main reason behind multinationals wanting to carry out their businesses in a country like Nepal is to have a lower costs of production,that is to say,cheap labour,low input costs, avoid import costs.And also they would be likely to have an infuence over the politics of the country as the multinationals get a red carpet welcoming since they bring with them a enourmous amount of foreign revenue. The entrance of such multinationals posses various impacts.A country like ours has been facing a huge difference between number of exports of goods and services and their imports.So, the establishment of such large multinational firms could help in the balance of payment(B.O.P).And also these companies generate huge employment oppotunities,which on the one hand ,solves the brain drain problem and on the other hand,provide jobs to those involved in agriculture in limp periods,making the population more skillful and increasing their efficiency and quality. Similarly,the multinationals set up in Nepal produce surplus amount which can be exported to other countries.Apart from this,it increases competition between local companies and multinationals which results in more consumer choices,efficiency and creates a “SURVIVAL OF THE FITTEST” kind of situation.As a result companies are compelled to lower their prices in order to survive.Likewise,there can be a tranfer of technology i.e skill transfer.The establishment of multinationals creates localisation of industries and also enhances the infrastructural development.The multinationals create a political understanding between the companies’ country of origin and the host country.

However,the multinational companies do have their...
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