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The Overall Impact of Multinational Companies to Developing Countries

From the time its territory was claimed for Spain in 1492 through 1850, little development of any kind occurred in the Dominican Republic. During this entire period, the country was either exploited for the economic benefit of a few hundred individuals, or it was used as a pawn in the great power politics of European nations.

Subsequent to 1850, the Dominican Republic remained a politically independent state through 1889, with the exception of another Spanish occupation from 1861 through 1863. By 1890, the Dominican Republic was significantly in debt to foreign financial interestsprimarily North American. American economic intervention in the Dominican Republic had begun, "when individual commercial interests acquired land to participate in the sugar industry, the mainstay of the economy" (Wheaton, 1984b, p. 420).

The combination of financial problems (resulting from nondevelopment, a growing population, and fiscal mismanagement), and domestic political turbulence created a "state near anarchy" by 1899 (Fagg, 1965, p. 152). In 1900, "foreign interests, particularly the U. S., moved in to . . . control the economy" (Wheaton, 1984b, p. 420). As a part of this external control, President Theodore Roosevelt devised the socalled "Roosevelt Corollary" to the "Monroe Doctrine," "by which the United States sought to prevent" the development of conditions "in the Caribbean that might provoke intervention" by European powers (Fagg, p. 152). Among the more significant of the actions imposed under the policy prior to 1916 were (1) an American takeover of the customshouses in the Dominican Republic in 1905, in an arrangement whereby the United States retained 55.0 percent of the collections for the servicing of the Dominican Republic's international debts (Fagg, p. 153), (2) the imposition of the United States dollar as the national currency of the Dominican Republic in 1905, and 3) the establishment of the United St...

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The Overall Impact of Multinational Companies to Developing Countries. (2000, January 01). In LotsofEssays.com. Retrieved 19:37, October 31, 2014, from http://www.collegetermpapers.com/viewpaper/1303362614.html
 
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