Development - TNCs

Transnational corporations are firms that operate in more than one country. The headquarters of these firms are usually in developed countries while the manufacturing of their goods occurs in developing countries. They Bring FDI into these developing countries.

Coca Cola

Advantages for host countries

• Creates jobs - 140,000 across the world
• Many bottling firms are local companies so all the profits stay in the host country
• They offer training and education
• Run community schemes
• Provided 4000 vietnamese women with training and equipment to start selling coke
• TNCs attract other TNCs to the host country
• Coca cola has invested $3.5bn into the russian economy, including training, construction of factories and improvements to infrastructure.
• Spread of technology

Disadvantages for host country 

• Work is low paid and usually unskilled
• Factories can close very quickly if somewhere cheaper is found
• TNCs take advantage of low environmental laws
• Profits returned to shareholders and not kept in the country
• Harsh working conditions in factories

Rio Tinto

Largest mining TNC.

77,000 employees worldwide.

Advantages

• Implementing health and safety, education and sustainability in African mining.
• Supporting Guinea's Classified Forest project
• $130m used to ensure sustainable water supply for iron ore mining in Australia, with excess water used to cultivate crops needed to feed 20,000 cattle.

Disadvantages

• Poor working conditions in Namibia leading to strikes
• Uranium miners exposed to radiation levels 7 times higher than limit
• Contamination of rivers in UK from poisonous metals