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'Transnational corporations (TNCs) are the most significant factor in creating unequal flows of people and money within global systems.' With reference to a TNC, assess the extent to which you agree with this statement. - AQA - A-Level Geography - Question 1 - 2018 - Paper 2
Question 1
'Transnational corporations (TNCs) are the most significant factor in creating unequal flows of people and money within global systems.' With reference to a TNC, a... show full transcript
Worked Solution & Example Answer:'Transnational corporations (TNCs) are the most significant factor in creating unequal flows of people and money within global systems.' With reference to a TNC, assess the extent to which you agree with this statement. - AQA - A-Level Geography - Question 1 - 2018 - Paper 2
Step 1
Introduction to TNCs and Unequal Flows
Answer
Transnational corporations (TNCs) are key players in the globalization process and significantly impact the flow of people and money across borders. They shape economic dynamics in various countries, often leading to unequal distributions of wealth and opportunities. This assessment focuses on how TNCs contribute to these inequalities and their overall significance in global systems.
Step 2
Understanding the Role of TNCs
Answer
TNCs operate on a global scale, impacting both host and home countries. They typically set up operations in developing nations to reduce production costs, which often leads to job creation and economic growth in those regions. However, this can also result in exploitative labor conditions, giving rise to significant inequalities. An example is Nike, which outsources its manufacturing to countries with lower labor costs, impacting local economies.
Step 3
Evaluation of Economic Impact
Answer
While TNCs create jobs, they also influence the host country's economy in various ways. For instance, the influx of TNCs can lead to a dependence on foreign companies, where local firms struggle to compete. Additionally, TNCs often repatriate profits, limiting the economic benefits to the host nation. This creates a cycle where the wealth generated does not remain within the local community, thus contributing to economic inequalities.
Step 4
Social and Environmental Impacts
Answer
Beyond economic implications, TNCs affect social structures and environmental policies. Issues such as child labor, inadequate working conditions, and environmental degradation often accompany their operations. For instance, practices by TNCs in countries like Bangladesh have raised substantial concerns regarding labor rights and environmental sustainability.
Step 5
Conclusion
Answer
In conclusion, while TNCs can drive economic growth and job creation, they are also central to creating inequalities in global systems. The extent of their impact depends on the regulatory frameworks of host countries and the ethical practices of the corporations themselves. Thus, I agree that TNCs are significant factors in creating uneven flows of people and money, but their role must be critically examined in the context of global systems.