1. REFLECT – IGOS – WORLD BANK - SAPS Joint Reading Activity

2. More examples of promoting economic growth – conditional loans
SAPs – Structural adjustment programmes are designed to promote private sector economic growth.
SAPs were introduced in the early 1980s. From 1999, they have been partially replaced by Poverty Reduction Strategy Papers (PRSP). These are documents, agreed with the IMF and World Bank, which outline the country’s social and economic strategy. PRSPs put emphasis on the country’s sense of ownership and involvement in the policies adopted.

3. To get loans, countries have to accept certain conditions
The deregulation of private sector business and industry to remove limits on foreign investment and competition
The privatisation of state owned business
Currency devaluation to encourage foreign investment
Tight restrictions on government spending on education and health
Reducing taxes on businesses
Gearing the economy for the export market rather than the domestic market

4. Reflect - SAPs
SAPs have been criticised as an ideologically driven development programme.
Hong (2000) has argued that the impact of SAPs has been negative on LEDCs.
Complete the fill in the gaps activity to see what she believes that it has led to.

5. Answers – according to Hong (2000) negative impact of SAPs on LEDCs
Increased poverty – the result of low pay and regressive taxation (tax that hits the poor harder than the rich).
Poor social conditions – caused by low funding of state health and social care provision. Also caused by low pay and poor working conditions due to lack of regulation.
Corruption – liberalisation has reduced the amount of regulation, and provided an open door for corrupt practices.
Environmental damage – production for the export market rather than the domestic market has resulted in damaging practices such as monoculture (growing one crop exclusively), deforestation to make way for plantations of ‘cash crops’, and increased carbon emissions.
Social unrest – Hong cites the example of Sierra Leone where the combination of grinding poverty and the lack of services and welfare led to serious upheaval in the 1990s.

6. Transnational Organisations – Transnational Corporations
Learning Outcomes
To understand what TNCs are and provide examples.
To analyse why TNCs locate to developing countries and what conditions are like.
- To apply Sociological studies to the topic.
- To critically evaluate the role of TNCs in development.

7. TNCs – what are they? A01 https://www.youtube.com/watch?v=SsjXoKKcROQ
Whilst watching the film clip you are to summarise what a TNC is in 3 sentences
Examples of TNCs

8. Why do TNCs locate their call centres and factories in the developing world?
EPZ / FTZ-
an area where goods may be traded without any barriers imposed by customs authorities like quotas and tariffs. Free Trade Zone (FTZ) is a special designated area within a country where normal trade barriers like quotas, tariffs are removed and the bureaucratic necessities are narrowed in order to attract new business and foreign investments.
A02
Lower labour costs
The attractive EPZs (Export Processing Zone) / FTZs which offer tax breaks, training grants, low regulation, low labour costs and sometimes trade unions are banned.
Most of these FTZs are located in the developing world e.g South America.

9. TNCs in developing countries A02
Developing countries encourage TNCs to relocate for a number of reasons
Find out the reasons why by completing the fill in the gaps activity

10. Answers
Labour costs are much lower in LEDCs than in the developed world. As a result, many TNCs prefer to set up factories in LEDCs, or pay companies in LEDCs to make goods on their behalf.
Many LEDCs have actively encouraged TNCs to do this by setting up Export Processing Zones (EPZs), also known as Free Trade Zones (FTZs).
In the EPZs, companies may be offered tax breaks, training grants, low regulation and low wage costs. Trade unions are often banned.
There are now more than 800 of these zones in the developing world. Most are in Asia, South America and Central America, with over 100 in Mexico and over 100 in China.

11. Potential benefits of TNCs – A01
Increased government revenue which can be spent on health and education in that country. ECONOMIC (GNP/Growth)
Advanced technology brought by TNCs can provide a catalyst to further economic growth in the economy ECONOMIC
TNCs increase employment opportunities and therefore income. ECONOMIC (Trickle Down)
TNCs need skilled workers which improves education and training. SOCIAL

12. Problems of TNCs – A02
Lack of health and safety rules and regulations SOCIAL/ENVIRONMENTAL
Exploit workforce – low wages and long hours ECONOMIC
Child labour ECONOMIC
Driving down prices paid to producers in LEDCs followed by profiteering when these lower costs are not passed on to consumers in the developed world ECONOMIC
Negative impact on the environment e.g. factory emissions/high concentration of factories ENVRONMENT
Break up of Family Units as people migrate from the countryside to the city for work SOCIAL
Trade Unions banned ECONOMIC
Women do majority of low paid work SOCIAL
Workers are not usually directly employed by the TNCs (Job Security). ECONOMIC

13. Practice Question
June Identify and briefly explain three ways in which the activities of transnational corporations may contribute to development.
POSITIVE IMPACT OF TNCS
New Spec: Outline and explain two ways in which TNCs contribute to development. (10 marks)
Tip: A02 link to Economic, Social, or Environmental indicators of development – exactly how does your point relate to improving development.

14. Practice Question

15. LESSON 2

16. Key Sociologists – A01 Folker Fröbel, Jürgen Heinrichs & Otto Kreye
Giddens
Bakan
Sklair
Elwood
Dickens
Klein
CARD SORT – POSITIVE / NEGATIVE

17. Key Sociologists – A01
 Folker Fröbel, Jürgen Heinrichs & Otto Kreye (1980) state that, from the 1970s onwards, there have been substantial movements of industrial capital from the ‘advanced’ industrialised world to the developing world. This movement has been driven by rising labour costs and high levels of industrial conflict in the West which reduced the profitability of transnational corporations (TNCs).  With globalisation, the tendency is for the Western industrial societies to export capital and expertise while poor countries provide cheap labour for manufacturing. Many developing nations in the 1970s and 1980s set up export-processing zones (EPZs) or free-trade zones (FTZs) in which TNCs were encouraged to build factories for export to the West.
Giddens notes that we now live in a global world economy in which TNC production and marketing exert considerable economic and cultural influence over our daily lives. According to post-modernists, a global system based on consumption rather than on production has evolved and the most important element behind this move is the global mass media. Continuing advances being made in communications technology such as satellite TV, the Internet and mean that the world has become a smaller place and consequently symbols of consumption such as Coca-Cola, Levi’s, McDonalds and Disney have become globally very powerful.
Bakan calls TNCs 'institutional psychopaths' programmed to exploit and dehumanise people for profit.

18. Sklair "Such well-known companies as Ford, General Motors, Shell, Toyota, Volkswagen, Nestlé, Sony, Coca-Cola, Kodak, Xerox (and many other most of us have ever heard of) have more economic power than the majority of the countries in the world." - Sklair (1993)
Elwood-TNC’s can bring benefits - 'They are at the cutting edge of technological innovation and they can introduce new management and marketing strategies. It's also true that wages and working conditions are usually better in foreign subsidiaries of multinational companies than they are in local companies.“
Dickens – TNCs are the primary movers and shapers of the global economy with the power to easily control or coordinate production networks across the world.
Naomi Klein (2000) claims that, “…to lure TNCs into their EPZs, the governments of poor countries offer tax breaks, lax healthy & safety regulations and enforcement, a low minimum wage and the services of a military willing and able to crush about unrest. Integration with the local culture is kept to a bare minimum.”
Wayne Elwood(p62, 2001) comments: “Corporations have the upper hand, trading off one nation against another to see who can offer the most lucrative investment incentives. Tax holidays, interest-free loans, grants, training schemes, unhindered profit remittances and publicly-funded sewers, roads and utilities are among the mix of ‘incentives’ that companies now expect in return for opening up a new factory or office.”

19. Further Notes
Read pages 212 – 213, and highlight two case studies and two areas where theory is applied. This will be useful for your essay.

20. RECAP Steve Bassett – The Man! Add to your notes:

21. Homework / Timed Essay: 20 mark question
June Evaluate the role of transnational corporations in the process of global development. Concepts & arguments that they are good / bad for development. Can you link in theory? A01 Link to Social, Economic, and Environmental issues. Do they contribute negatively or positively to development? A02 Evaluative conclusion A03

22. 33 marker: Evaluate the role of TNC’s in the process of global development
-TNC’s like to set up in developing nations because there are no labour laws, low regulations, less pay and they can make more profit
+Provide industries where people in developing nations can get formal employment. Sometimes this can mean that education and healthcare are provided by the companies.
+Promote meritocratic thinking because people can get promoted and this gives people aspirations inside of the TNC’s and in education in the developing nations to work for them. For example Kenya’s tea trade.
-TNC’s only set up because they are next to sources of resources and to exploit the tax system to get better profits.
-TNC’s have too much power, if they go into a country they can create formal employment, get people out of poverty and provide education etc, however if the country raises women’s rights and regulation laws then TNC’s can leave and take with them all the benefits they brought, leaving the country worse off.
Urbanisation; TNC’s set up in cities as so there is a massive pull factor from rural areas.
Gender; women work in factories, children get exploited etc.
TNC’s promote progression but only the elites have power because they speak English which is the language of business, they leave to go to the developing nations and there is a brain drain. For example 30 million of India’s diaspora are the most educated and they have gone to help develop the developed nations.
International division of labour comes from TNC’s they have big/high end HQ’s in the west and low skilled jobs in the South.
Modernisation and neo-liberals think TNC’s are great, Nestle and Unilever are companies that need to build infrastructure to support their business so they build roads and electricity etc which the people of that nation can then use.
Dependency theorists in order to attract TNC’s can create free trade zones, this is another form of imperialism where TNC’s exploit the labour.
TNC’s are more powerful than state, they are not accountable to the nations they exploit but only to their shareholders. For example companies like Nike have moved nations when wages were highered.

23. Targets
T1 – Link in a Theory you didn’t include (Modernisation +, Dependency -, Neoliberal +, Counter-Industrial -) T2 - Include any of the concepts you have not included: trade tarrifs, exploitation, investment, infrastructure, neocolonialism, developing labour markets, trickle down, cash crops, EPZ/FTZ, Import Substitution T3 – Link in one of the Case Studies you looked at in the textbook. T4 – More discussion and links needed to social aspects of development (Life expectancy, Medical Care, Living Conditions, Changes to Family Structure, Urbanisation, Gender Inequality) T5 - More discussion and links needed to economic aspects of development (GDP, Wages, Jobs, Unemployment, International Division of Labour, Health & Safety Laws, Taxation, Trade Unions, Child Labour, Technological Innovation) T6 - More discussion and links needed to environmental aspects of development ( Rapid Industrialisation, Lack of Health & Safety Laws leading to disaster, Greenhouse Gases) T7 – Add regular links to you writing that show you are answering the question (e.g. this shows that TNCs have been useful/harmful/positive/negative in the process of development). T8 – Refer to at least 4 Sociologists in your answer (check the PowerPoint and make sure you use them in your answer). T9 – In your conclusion, give an overall judgement, including the most positive and negative contributions to development. Link in to the wider debate – do they have a role to play? What are thy like compared to other IGOs & NGOs? Do they have a place in development? What would a Post-development theorist say about the role of TNCs?

25. Homework: Research
Choose a TNC. Coke or Shell. Environmental impacts of TNCs.
Create a mini profile to show how development is being affected by TNCs in developing countries.
What to include:
An overview of what the TNC does.
Real life examples of its involvement in the country.
Positive contributions to development.
Negative contributions to development (link to under-development and global inequality).
If possible: link these to Development Indicators, such as GNP, Infant Mortality Rate, Employment Rate, Wages etc…
You may use the Case Studies listed on Edmodo as references.

26. Resources for Wall

27.  Folker Fröbel, Jürgen Heinrichs & Otto Kreye (1980) state that, from the 1970s onwards, there have been substantial movements of industrial capital from the ‘advanced’ industrialised world to the developing world. This movement has been driven by rising labour costs and high levels of industrial conflict in the West which reduced the profitability of transnational corporations (TNCs).  With globalisation, the tendency is for the Western industrial societies to export capital and expertise while poor countries provide cheap labour for manufacturing. Many developing nations in the 1970s and 1980s set up export-processing zones (EPZs) or free-trade zones (FTZs) in which TNCs were encouraged to build factories for export to the West.

28. Giddens notes that we now live in a global world economy in which TNC production and marketing exert considerable economic and cultural influence over our daily lives. According to post-modernists, a global system based on consumption rather than on production has evolved and the most important element behind this move is the global mass media. Continuing advances being made in communications technology such as satellite TV, the Internet and mean that the world has become a smaller place and consequently symbols of consumption such as Coca-Cola, Levi’s, McDonalds and Disney have become globally very powerful.

29. Bakan calls TNCs 'institutional psychopaths' programmed to exploit and dehumanise people for profit.

30. Sklair "Such well-known companies as Ford, General Motors, Shell, Toyota, Volkswagen, Nestlé, Sony, Coca-Cola, Kodak, Xerox (and many other most of us have ever heard of) have more economic power than the majority of the countries in the world." - Sklair (1993)

31. Elwood-TNC’s can bring benefits - 'They are at the cutting edge of technological innovation and they can introduce new management and marketing strategies. It's also true that wages and working conditions are usually better in foreign subsidiaries of multinational companies than they are in local companies.“

32. Dickens – TNCs are the primary movers and shapers of the global economy with the power to easily control or coordinate production networks across the world.

33. Naomi Klein (2000) claims that, “…to lure TNCs into their EPZs, the governments of poor countries offer tax breaks, lax healthy & safety regulations and enforcement, a low minimum wage and the services of a military willing and able to crush about unrest. Integration with the local culture is kept to a bare minimum.”

34. Wayne Elwood(p62, 2001) comments: “Corporations have the upper hand, trading off one nation against another to see who can offer the most lucrative investment incentives. Tax holidays, interest-free loans, grants, training schemes, unhindered profit remittances and publicly-funded sewers, roads and utilities are among the mix of ‘incentives’ that companies now expect in return for opening up a new factory or office.”