Covering Globalization by Anya Schiffrin

Author:Anya Schiffrin
Language: eng
Format: epub
Tags: LAN008000, Language Arts and Disciplines/Journalism, POL011000, Political Science/International Relations/General
Publisher: Columbia University Press
Published: 2004-11-09T16:00:00+00:00

QUESTIONS AND ISSUES FOR JOURNALISTS

1. Will the foreign-owned entity be export-oriented, or will it sell locally? Export-oriented firms generally have the advantage of generating hard-currency income for the host country. Also, they tend to compete less directly with local firms, which may lessen negative economic spillover.

2. Will the foreign-owned entity compete with local firms? This is a complex issue because competition often leads to increased productivity and higher national income. But, if the local firms are significant employers or otherwise economically or socially important, displacement of these firms by multinational corporations can have significant short-term negative effects. Reporters should also investigate whether the multinational will compete with local firms for skilled labor, which might have the effect of raising labor costs for local firms.

3. Will the foreign-owned entity buy from or sell to local firms? The more closely a multinational corporation works with local suppliers, the more likely that the transfer of technical and management skills will occur. This is in addition to the expected increase in revenue to local firms. If the multinational sells to local firms, especially in cases where the input was previously imported, local costs of production may decrease.

4. Is the government offering incentives? What kinds? What are the anticipated costs? Some governments have let themselves be pulled into bidding wars, especially for high-profile investments such as auto plants. If these incentives are too generous, a country and its economy can experience a net loss from the investment. Governments often will not publicize these incentives, but they deserve public examination.

5. Will the multinational corporation become the sole provider of an essential public good such as water or electricity? If this is the case, the social environment may become an issue, especially if the multinational is expected to raise prices. Journalists should investigate whether any service or pricing guarantees are offered and, if not, whether there are any other countervailing controls in place to protect the public interest.

6. Is the overall level of foreign ownership sustainable? There are no clear guidelines as to how much foreign ownership is too much. At some point, though, there may develop a risk of “decapitalization” as mentioned above—where repatriating of capital by foreign owners becomes excessive.

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