Globalisation may be the concept of the 1990s, a key by which we understand the transition of human society in to the third millennium.

My essay will be focusing on the economic side of it. I will be explaining the MNCs effect on the poor countries in respect to the rich countries ( of course intending developed countries and less developed countries), in order to do so I will first need to introduce the concept of economic development.

We will find that the impact of MNCs on LDCs can be under many aspects crucial to the development of the latter, even though it is important to bare in mind the positive contribution MNCs can bring in to LDCs. However in order to cover all the points of this wide topic, it would have been necessary to look at not only the economic side that there is to it , but as well political, social and cultural sides, which are here only briefly referred to.

The main concern of theorists of imperialism has been to explain why rich ( or capitalist ) states behave the way they do toward poor states. With the birth of dozens of new states in the years after the Second World War

Another reason that MNCs in developing countries provoke suspicion is that comparisons of inflows and outflows of capital associated with their activities shows, years after year and place after place, that MNCs take more money out of developing countries then they put in to them. In addition, critics of MNCs point out that these companies do not bring much money in to developing countries in the first place. Instead, they borrow from local sources or reinvest profits that they have earned in foreign countries. "Over the 1966-1976 period, 4 percent of all net new invested funds of U.S. transnational corporations in the less developed countries where reinvested earnings, 50 percent were funds acquired locally, and only 1 percent funds newly transfered from the United States" (emphasis added).

Albert Szymansky concludes that much of the empirical work reporting deleterious effects of foreign investment "in reality...demonstrates nothing more than how easy it is to produce just about any conceivable results with multivariate computer analysis- if one is willing to throw in enough control variables and utilise enough different sets of countries" . Although this comment may be insensitive to many complex problems that can make simple, seemingly more straightforward analyses even more misleading, it does voice what seems to be an increasingly common opinion about the impact of MNC investment in developing countries: the nature of the impact depends on how the government of a given country deals with it. (And how is dealt with is not inevitably determined by the presence of the investment.) In other words, MNC investments can have bad effects, but dealt with effectively, they also can bring substantial benefits. As Robert Gilpin concludes, MNCs are "neither as positive nor as negative in their impact on development as liberals or their critics suggests. Foreign direct investment can help or hinder, but the major determinants of economic development lie within LDCs (less-developed countries) themselves" . However, dependency theorists would disagree. Their basic argument is that foreign investment, or any other economic contact that poor countries have with the world's economic system, particularly with the rich, capitalist, industrialised countries, has almost uniformly disastrous effects on the economic and political fortunes of those countries.

"It fiddles its accounts. It avoids or evades its taxes. It rings its intra-company transfer prices. It is run by foreigners from decision centres thousands of miles away. It imports foreign labour practices. It doesn't import foreign labour practices. It overpays. It underpays. It compet

Some common words found in the essay are:
Defenders MNCs, Third World, World War, Albert Szymansky, Algeria Turkey, MNC MNC, Robert Gilpin, England United, , MNCs MNCs, developing countries, economic development, third world, poor countries, foreign investments, third world countries, host country, world countries, developed countries, economic political, mncs developing, foreign labour practices, money developing countries, mncs developing countries,
Approximate Word count = 1786
Approximate Pages = 7 (250 words per page double spaced)