Archives for posts with tag: Multinational Corporations in Pakistan

The situation in Pakistan is not quite different from that in most third world countries where MNCs face accusations of promoting a new kind of colonialism. However, these massive corporations do bring in essential foreign investment. These global companies also boost the economy and provide employment on a large scale. Infrastructure development and transfer of technology are also increased by their actions

The MNCs in Pakistan at present are creating employment and playing their part in the economy. MNCs are operating in the country in a large variety of sectors. Multinational Companies or Multinational Corporations in Pakistan exist in the country in various forms, some have set up franchises, others operate through holding companies and some are fully incorporated in the country. Apart from infrastructure development, MNCs in Pakistan provide earnings rent etc to the government and local authorities. It was surprisingly discovered through observation that their offices are on average in the range of 60,000 sq ft in area. Just think of the sort of revenue they provide in terms of land tax etc!

What exactly do they contribute to our nation? Let’s go over the list of benefits: as already mentioned jobs, a greater variety of goods and services, foreign direct investment, create and develop the infrastructure.

The Multinational Companies in Pakistan have contributed and will contribute to the economy. Figures for 2009- USA based companies lead with $190 mn, followed by UK based firms $122 mn. Other countries have brought in investment Holland, UAE, Switzerland, Singapore, Hong Kong. China our friend and ally surprisingly has not even broken the top 5!

The MNCs are active in various fields; many European, Korean and Arab companies such as Orascom are active in construction, communications and other fields. Very few know about the many Orascom companies operating in the market. Japanese cars are the in thing when it comes to automobiles, where would our upper and middle class be without their Lexus, Mehran, Liana and Corolla imports?

Multinational corporations in Pakistan play key roles in the areas of pharmaceuticals and banking. Agriculture, telecom, IT related fields all owe their growth and progress mainly to the gora firms.

What about the future? The GDP growth rate in Pakistan is at levels that more developed nations such as the USA and Britain cannot even dream about. The nation’s young population with over 50% of Pakistanis under the age of 25 is a very lucrative market. The country’s growth is attracting major MNCs –those already in the market have wisely set their sights on rural Pakistan to give them the boost they need.

Recently it was reported (WARC) that FMCGs such as Unilever and Nestle already invested in Pakistan are hoping the country will be a source of future profits. The sheer size of the nation is often taken for granted by us who live in it. No doubt if we were lucky enough to visit the head offices of these multinationals Pakistan would be marked and circled as a golden goose. It remains to be seen if the MNCs in Pakistan kill it in their attempt to increase their profit margins.

It is often taken as a sign of prosperity and progress for a country when multinational corporations enter the market. If this is the case then Pakistan is well on the way to success.

At present the Pakistani consumer benefits from MNCs operating in the local market competing against local firms. Some of them such as Unilever Pakistan (formerly Lever Brothers Pakistan), have called Pakistan home since 1947. Other MNCs especially in telecom have come in over the last 15 years.

Despite the criticism leveled against them, even the local players acknowledge that the presence of MNCs is a benefit for the consumer. The Pakistani consumer is able to get access to the same level of technology, comfort, convenience as anyone else in the world. MNCs create much needed employment and create infrastructure- an MNC is required to have an infrastructure area of over 60,000 sq ft.

MNCs are operating in the country in a large variety of sectors most importantly: Automobile, Electronics, Banking, Telecommunication and IT, Food and beverages.  MNCs exist in the country in various forms, some have set up franchises, others operate through holding companies and some are fully incorporated in the country. Their presence leads to skill development.

Multinational companies or multinational corporations bring in essential Foreign Direct Investment (FDI) and this helps the government cover for its own short falling.  The access to more goods and services may be causing materialism as some claim but it is also improving the standard of living of ordinary citizens.

The service sector and the banking sector are particularly dependent on MNCs as the local companies fail to provide an adequate service in most cases. In the area of pharmaceuticals there are mixed views as the MNCS are charging higher prices and rumors exist of the sale of medicines locally that have been banned in other parts of the world.

The meeting point of big business and government is another area of concern as was proved by the recent scandal in neighboring India –where a major company (local) the ruling government and a media outlet were found to be in cahoots . The animosity with India and talks of opening the market to Indian firms has frightened many local companies. These players already finding it hard to cope with the foreign multinationals will find themselves at the losing end if the Indian firms enter.

On the other hand a few local firms through their flourishing exports are well on the way to becoming MNCs abroad in their own right. The opening of Pakistan to MNCs and the prospect of free trade with India need to be viewed appropriately as the half glass full and half empty situation that they really are.

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