As the world becomes more technologically advanced, the transportation of people, information and opportunities expand as well, amplifying the universal phenomenon of globalization and its effects in today’s world. Globalization has opened up new opportunities for businesses and economic growth. One major form of how globalization has been impacted is through the emergence of multinational corporations (MNCs). Multinational corporations, which are defined as firms that controls assets in at least two countries (Cohen), have led the way to a new form of political and economic dependence/impact amongst partnering countries. Economically speaking, MNCs provide economic boost’s within the country’s they move into. A few of their pro’s may include increased living wage salaries and better access to resources such as knowledge and technology. However, one major negative impact an MNC can cause is deforestation and destroying the environment. As corporations expand abroad, more space is required for the construction of buildings, warehouses, cattle ranching, etc. and thus, when companies are favored with policy’s such as financial deregulation, this leeway they are provided with eventually creates problems, such as our current situation with deforestation.
One of the most notable examples of MNC environmental effects is the issue surrounding the significant deforestation occurring in the Amazon rainforest. The eastern portion of the Ecuadorian Amazon for example, is “one of the richest bioregions on the planet, and a rich source of oil that has been exploited by multinational oil companies for thirty years. Oil extraction in the Amazon has led to contamination of the waters and land, deforestation, and resulted in sickness in indigenous communities, threatening some communities with cultural extinction. The jungle of Ecuador will be extinguished in its entirety within forty years at the present rate of deforestation” (Lyons). It is important to note that the Amazon rainforest is home to many animal and plant species that have not yet been discovered and could be potential cures for current diseases. Yet, at the rate MNCs are working now, the Amazon could cease to exist fairly soon. In Brazil, deforestation of the rainforest is very important too because aside from stripping native people’s such as the Yanomami away from their homes and forcing them to push further in, contractors are becoming more and more aggressive as to how far in they want to expand with the construction of new apartments, condo’s and other buildings. Colombian environmental specialists worry about the preservation of the rainforest in their region as well.
Deforestation not only affects the plants and animals living in that area but it also affects water contamination and air pollution thus people living in surrounding areas are more likely to get sick. Ultimately, although MNCs do provide economic incentives to host countries such as: higher living wages for its people, job growth, better living conditions and access to better nutrition, there are also some negative points such as deforestation, causing a significant loss of trees, plants, species and the emergence of new diseases. The ramifications of allowing MNC expansion to continue is taking its toll on natural resources. At this rate, how will global citizens ever be able to solve issues such as too much air pollution, water contamination or the simple idea of humans not having enough oxygen in the air?
Compiled by : Ashley Quintanilla
18 September 2016
Cohen, Theodore H. Global Political; Economy: Theory and Practice, sixth edition, Routledge, 2016.
Lyons, Maxi. “A case study in multinational corporate accountability: Ecuador’s indigenous peoples struggle for redress.” Denver Journal of International Law and Policy Fall 2004:701+. Academic OneFile. Web. 18 Sept. 2016.