This is not to say that multinationals have nothing positive to contribute to its host country. It can be argued that although most profits that MNCs make do not get back to host countries, the chain of positive impacts that they induce are more beneficial to the economy, if we consider the long-term consequences. TNCs provide the pre-conditions for a growth-oriented economy by creating greater economic activity within those export zones, triggering a self-sustained growth cycle. Because those firms inside the trade zone will not always be foreign-owned, eventually the local businesses will catch up, and turn those export zones for the host country’s own benefit. Think of the presence of multinationals like this: a spark-plug that ignites the fire that starts the engine of a juggernaut. That juggernaut is a modern, industrialized economy that we here in the West take for granted. The best example that illustrates this is China. Chinese firms have used, since their creation in the late 70s and early 80s, special economic zones to increase their exports to the rest of the world. The Chinese have used their manufacturing sector and export power to create such a staggering trade surplus with the rest of the world(especially the US) that this issue became a top priority with President Barack Obama during his first term presidency. China has further used its newfound wealth to build up a substantial reserve of American bonds, basically becoming the largest foreign creditor to the US. So it is possible to turn the tables on the exploiter. Not only that, China has done it in the exploiter’s own playing field.
So. Are transnationals a necessary evil on the road to prosperity? Or is it the road to hell? I think it depends on how you play it. Having transnationals as an engine of growth can work, but only if they are balanced by a strong, centralized government with very clear goal of growth and how to achieve it and spread it around. The American model of laissez-faire government simply will not work in developing nations when dealing with multinationals. Without clear protection and a way to channel profits back in a way that maximizes the benefit to people, it could become the road to hell.