1. Promotion of local industries
A deliberate effort is usually done to promote local industries
through a number of initiatives such as:
putting high tariffs on imported goods
provision of loans and grants to local business people by the
government, e.g. the government of Botswana has been doing this
through FinancialAssistance Programme (FAP), which was recently
replaced by Citizen Enterprise Development Agency (CEDA)
encouraging students to specialise in science and technology so as
to provide the much needed skills (scarce skills)
starting national research centres to encourage technical
inventions
2. Promotion of local industries cont.
inviting MNCs to invest in the country to produce for the market
controlling the workers so as to ensure productivity
protecting individuals ‘property rights. thus reducing fear from the
private companies that their assets may he nationalised or pirated
providing the necessary infrastructure such as telecommunications,
water, power and others at cheap prices
the government investing directly in heavy industries which are of
strategic importance like mining or which cannot attract private
investors like agriculture.
3. Export oriented industrialisation
Export Oriented Industrialisation is whereby the country develops
industries directed towards exports i.e. providing products that are in
high demand in the outside world in order to :
generate the highly required foreign exchange
create job opportunities for the locals
encourage research, innovation and development skills
encourage economies of scale, that is, countries produce more for
bigger markets and are able to reduce the selling prices and still make
good profit
make more profit and use cheap local labour and export goods, many
of which may not find a market locally.
4. Multi-national corporations/Trans-national
corporations
It is important to note that the two strategies can be
achieved by various means, such as MNC, local investments,
joint enterprises, small and large scale industries and others.
Multi-national Corporations orTrans-national Corporations
(TNC) are large companies or firms usually based in
industrialised countries which have branches or subsidiaries
in some other parts of the world.
The companies are so huge that their annual turn exceeds
Gross Domestic Product (GDP) of most countries including
developed countries.
5. Some examples of MNCs or TNCs and their products are captured in
the table that follows:
TNCIMNC Country of Origin Products
Honda
De Beers
Sony
Kodak
Nestle
Coca cola
Volkswagen
IBM
Japan
RSA
Japan
USA
Swirtzerland
USA
Germany
USA
Motor cars and motor
cycles
Diamonds
Electronic goods
Photographic
equipment
Foodstuffs
Soft drinks
Motor cars
Computers
6. Advantages of multi-national
corporations
Below are some of the many advantages of MNCs.
They bring with them capital, skill and technology.
They reduce reliance on imported goods, that is, they can be part of.
Import Substitution Industrialisation.
They provide goods and services of better quality and variety to the customers.
They export and earn foreign exchange for Least Developed Countries through Export
Oriented Industrialisation.
They widen the country's income base, hence increase Gross Domestic Product (GDP).
Some local clubs, teams and/or individuals usually benefit from the social obligations of
MNCs e.g. scholarships and sponsorships.
7. Disadvantages of multi-national
corporations
These big companies are not without disadvantages, some of
which are mentioned below.
They often pay locals low salaries and take most profits back to
their internationally based headquarters.
Least Developed Countries (LDCs) often compete for MNCs by
providing them with incentives such as tax holidays, grants and
loans.
MNCs move their products between countries so as to avoid
responsibilities and enjoy incentives from different countries.
Some MNCs are too powerful for local governments to control.
8. Disadvantages of multi-national
corporations cont.
MNCs sometimes take advantage of the ignorance of the
locals and use methods which are not appropriate for the
local environment and conditions e.g. using labour-intensive
methods.They know that most people in LDCs are desperate
for employment and will thus take up even low paying jobs
without hesitation
Industries may pollute the land, air and water sources
Industries tend to use up natural resources such as minerals
and fossil fuels which are not renewable.
9. Large and small scale industries
These are capital-intensive industries such as iron and steel
industries or car assembly plants.
These kinds of industries are found in the First World
countries where the labour force does specialised jobs and
goods are produced in large quantities.
Small scale industries are like cottage industries or craft
industries such as those for weaving, pottery or jewellery
production.
If well organised and funded they can produce exportable
goods.
