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Developing countries attract transnational companies (TNCs) by offering incentives like cheap labor and tax reductions, which boosts profits for TNCs and enhances trade links. Direct foreign investment from TNCs leads to job creation and improved infrastructure, allowing governments to invest in education and healthcare. The Fairtrade Foundation works to ensure that farmers in poorer countries receive fair prices for their products, preventing exploitation by wealthier nations.

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2 views

Document5

Developing countries attract transnational companies (TNCs) by offering incentives like cheap labor and tax reductions, which boosts profits for TNCs and enhances trade links. Direct foreign investment from TNCs leads to job creation and improved infrastructure, allowing governments to invest in education and healthcare. The Fairtrade Foundation works to ensure that farmers in poorer countries receive fair prices for their products, preventing exploitation by wealthier nations.

Uploaded by

chazzidema9
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Direct foreign investment - developing countries offer incentives such as

cheap labour and tax reductions to TNCs (Transnational Companies) that open factories in
their country. This benefits the TNC because they have less costs to pay so can increase their
profits. It also benefits the developing country because investment from countries increase
trade links with other countries.

Industry -factories (such as those opened by TNCs) create jobs and provide
opportunities to invest in housing and infrastructure through direct foreign investment.
Employees pay tax to the government which can be used to improve education and
healthcare; therefore, creating a more skilled workforce and improving the productivity of
the workforce and life expectancy.

TOURISM-countries with tropical climates and beaches, beautiful landscapes and diverse
wildlife have become popular holiday destinations for tourists from North America and
Europe. This creates jobs in tourist industries such as hotels, tour companies, spas and retail
centres. Just like with industry, employees pay tax which can be used to improve housing,
education and healthcare provisions.

FAIRTRADE: the Fairtrade Foundation aims to ensure that wealthier countries


buying primary products such as coffee, cocoa, cotton, wheat and fruit do not
exploit poor countries by paying them an unfair price. Fairtrade ensure that
farmers are paid a guaranteed price for their crops.

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