Tension That Can Often Exist Term Paper

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Usually the country where the MNC's ownership is located is part of the industrialized world and the countries where the production assets are located are part of the developing world. In this particular instance, the various MNC's had their headquarters in Brazil, France, Spain, and the UK.

One of the reasons why MNC's may invest abroad is so that they can utilize the natural resources located within a particular country. Often a third-world country may be rich in resources but has no means to extract those resources for use. MNC's come in to provide those means and make a profit for themselves while doing so. In this case the country of Bolivia is Latin America's second-largest source of gas deposits but it has no indigenous corporations to extract them. The MNC's came and invested $3.5 billion worth of performing this function.

The tension that often comes to exist between the MNC's and their host countries is due to various reasons.

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One of the foremost reasons is that oftentimes, the country's citizens believe that the MNC is cheating them of the wealth derived from the country's resources. This would lead to public pressure on the host country's government to support the citizens in protesting against MNC activities.

This is the case in Bolivia right now, where its indigenous and labor groups are working to get back some of the wealth they believe the MNC's are stealing from them. President Mesa's government has become embroiled in tug-of-war between placating either the MNC's, whose investments the country has increasingly come to rely upon, or the local popular groups that threaten to stage mass protests against the government. So far, as his most recent action indicates, President Mesa has decided to side with his country's citizens on the matter.

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