Acknowledgements 4
Dedication 5
Acronyms 6
List of appendices 7
Preface 8
Introduction 9
Situational analysis/Overview 10
Importance of study 16
Part II
Chapter 8 89
Chapter 9 102
Bibliography 124
Appendix B 140
Appendix C 174
Billy C Sichone
2. AU - African Union
Appendix C
Other case studies
The paper upon which your eyes now peer results from the
resilient and relentless labours of an ant like cohesive team that
diligently laboured to produce it. In many senses, it is a synthesis
of the plethora of books already dealing with the subject of
International Business (IB). International business is impossible to
ignore any more as every one is affected, from the peasant farmer
in Shangombo district (Rural Western Zambia) who hardly has any
tangible wealth to the bwanaℵ whose neck can hardly be
differentiated from the head due to the countless fat folds on the
neck! Some people spend half their lives on the surfing, buying
and selling on the Internet while others tread the deadly path of
crossing rivers while balancing in a canoe all night! All these are in
some way involved in International business because the product
of their labours affect some sector of the world economy in one
way or other, no matter how insignificant. Thus, this research
paper seeks to bring together the various facets connected in
carrying out IB so as to finally fetch a good price leading to
economic development.
In coming up with this volume, the author has traversed far and
wide in search of valuable data. In doing this, various methods
were employed but the chief of them was reference to the countless
parchments out lying out there. This work is divided into two parts
with various chapters and then crowned with a number of case
studies largely generated by the author to further consolidate the
work. It is the hearty prayer of this writer that the work will prove
ℵ
“Bwana”- refers to a Wealthy comfortable person
Ν
Refer to The Post news paper of Tuesday 10th December, 2002 pp 2. Article entitled “Globalization is
here and there is nothing we can do to stop it-Mfula” check also the Editorial comment for the same day.
Λ
Refer to Zambia-A review of commerce, industry & tourism millennium edition “foreword” pp3 2000
! %
The study at hand is one that demands clear thinking and a high analytical
prowess on the part of the researcher. As such, it is equally very critical to
mark well the parameters of the study as well as the limitations that might
affect the results.
With respect to scope and in view of the vastness of the subject, we shall
first give general definitions and then zero in on the international business
scenario as it affects the Nations. In other words, this is a comparative study
of what obtained yesterday and what is will be the case in the not too distant
future. The ideal would have been to concentrate on a locality and do a
detailed scan but the nature of the subject at hand forbids that to some
extent. That not withstanding, we have did a general over view, drew
principles that we applied. Put differently, we limited ourselves to the
changing nature of business and role of an international individual. This
approach thus highlighted the important features and considerations to be
taken before hand.
&
As earlier intimated, the bulk of the data portrayed in this work is basically
on the readings gathered over time either through the internet, TV, hard
copies or even through various discussion forums informally and other wise.
Thus, as the research went on, documentation took place as the
bibliography/references will ably attest. Where possible, actual verification
took place to ascertain the assertions.
' ! %
From the above painted scenario (Situational analysis) it is therefore
extremely critical to embark on the study of international business. But why
bother our selves in the study of International business; after all, the vast
majority of people spend their lives hardly going beyond the borders of their
countries. In attempting to answer that question, it is necessary to state that
such gross ignorance catches many a soul unaware making them wonder at
what has hit them when business calamity strikes. The problem at hand is
that International business affects all of us regardless of where we live in
one-way or the other. The other secondary reason is that ignorance hinders
diligence, enterprise and proactivity. In point form, the critical importance of
this study is given below:
Going by the above points, it is very clear that the study of the subject at
hand goes without saying, it is cardinal. With a good appreciation of the
above highlighted facts, it would avert many a business shipwreck that
attends many an initially grand and successful enterprise. The objective then
of this study is to expose people to factors that affect international business
if they are to venture out there successfully, for many a ship runs aground
among the rocks for want of light about the high seas of international
business.
×
Check Dr Kaunda’s assertions in the Post newspaper dated 28th July 2002 pp 1 “HIV is becoming a threat
to Security-KK” issue # 2111SU34.Read the Editorial comment as well.
ϒ
Definition supplied by the author
Φ
Roger Bennett PhD, International Business 2nd edition 2000 pp1
ε
Philip Cateora International marketing 9th edition pp 6-This is the definition for “International Marketing”
) ! ' %
1. Merchandise exports and imports
2. Service exports and imports
3. Tourism and Transportation
4. Use of assets;
1
Note that “Global” is different from “International” business
J.D & Radebaugh .L.H 1998 International business: environments and Operations 8th edition
ι
Czinkota R C Ronkainen as quaoted in Global business pp5
& * ! ' %
The international business industry has many players but for now, we
synthesize two major classes)
+,-
This is where the entity exists primarily to make profit and will do
anything to remain competitive as long as possible profitably regardless
of what happens to the competitors. This is where the vast majority of
businesses fall especially the large Multinational Corporation∞ that
operate in the international business environment. Usually, the direct
investment strategy has been used hither to by the MNC rather than
exporting from the country of origin.
∞
Daniel Papp states that Globally, there are at least 7,500 privately owned corporations operating at least
27,000 subsidiaries in other countries pp 80 2nd edition “contemporary international relations”
International business, with its sharp profit motive how ever brings
problems for the poorer nation as their market is limited or manipulated
1. They are more focused on the profit and loss account as well as the
balance sheet. Unlike the non-profit making organizations, these
organizations are only interested in a person as long as they add value
to the organization and able to perform, the absence of which spells
doom for the same. Should there be any indication of losses, then the
witch hunting begins and not a few heads roll. The organization
hardly bothers about staff welfare, community benefit or the
conditions in which people work. What counts is raking in millions of
cash.
2. The financial portfolios/offices are usually very important
comparatively. In this we mean that because the profit making
organizations are keener to reap as much cash as possible, the people
that take care of the self same cash take a prominent place in decision
making at the expense of other equally critical staff. Where the
Accountant is the final decision maker, just know that the
organization places high value on cash. Although this is the case,
many non-profit making organizations are beginning to veer towards
this extreme, as the budget is a key component of the proposal
success.
3. The workers employed are only those that are critical and add value to
the organization. Closely connected to # 1 above, the people
µ
Refer to Dr Kenneth Kaunda’s aasertion in the Post news paper dated 29th September 2002 pp1 & 4
From the above mentioned points, we can safely assert that the only way to
succeed is to have the right acumen, information, financial muscle and team
to achieve maximum success in a given time frame and locality
,. (! %
This is where the entity functions on the income and expenditure basis.
The non-profit making organization receives, spends and reports on the
cash received from a donor. Most of the NGOs, Societies, clubs and
research institutes fall in to this category. The NGO industry begun as a
small insignificant player in world business and was largely ignored but
as the decades have gone by, the position has radically altered. The once
little stream is now a flood of activity. In his book “contemporary
International relations”Β, Daniel Papp traces the development of the NGO
world into a formidable force in world business. Papp devotes an entire
chapter and shows that the world cannot avoid this new trend. Among the
reasons that have made NGOs flourish is the confidence, principles and
the relative lack of bureaucracy and red tape that characterizes the
world’s governments although non profit making themselves. The
Β
Refer to Chapter 5 of the book where he highlights the International Governmental organizations (IGO)
and other significant players. He further states that at the publishing time of edition, that the NGO influence
has risen drastically since the second world war.
$% $
%
International trade does not pop up suddenly from nowhere but has stages
that it goes through as it evolves. As intimated later, these are not hard
and fast rules but for the purposes of our study, the stages are used.
Arthur Lewis, lists a number of stages that we out line below:
1. Exports- “A country cannot begin development from a subsistence
level by producing for the home market only. An increase in per capita
income increases demand for nearly everything, but no country can
produce nearly everything…self-sustaining progress can continue only if
the increase in imports is matched by an increase in exports…thus, if an
increase in out put increases imports, there is a deficit of home spending.
This releases goods that are automatically exported…”κ
2. Import substitution-The second stage of economic development is
import substitution, producing for the home market. According to Lewis,
a country cannot start its development by producing for the home market,
but given export production, can generate further progress by substituting
home production for imports….import substitution is not confined to
manufactured goods and industrial equipment but includes the
stimulation of raw materials production also.
3. Structural inflation- “Apart from technical factors, which determine
which manufactures to make at home and which to import, the market for
manufactures as a whole (domestic and imported) is limited by the
ϒ
For example, Zambia has managed to arrest the uncontrollable inflationary trends to around 18% in 2002,
though it should have reduced to 13% but due to the drought and other natural disasters, this has retarded
progress.
κ
A Lewis, Development Planning 1979 pp38,39
Some of the bottle necks will be dealt with by implanting a farm policy,
export promotion and balanced growth in all sectors.ϑ
ϒ
' ( %
If international development is ever going to take place effectively, a
number of issues must be addressed so that the right remedy is prescribed.
For instance, it is very clear that there is a wide trade imbalance between
nations and this definitely affects the levels of trade development. It would
interest you to know that Africa’s trade size is just about 1% of the total
world trade. To diagnose the root problem, we must first trace the stages of
development and then ascertain the magnitude of the variance and the map
out a way forward. Cateora, in his monumental work has this to say:
The nations go through “5 economic stages and each stage is a function of
the cost of labour, technological capability of buyers, scale of operation,
interest rates and the level of production sophistication.
Growth is the movement from one stage to another and countries in the first
three stages are considered economically under developed…
Stages:
1. Traditional society- this is composed of the least development where
the literacy levels are very low.
2. The preconditions for take off- this is the process of transition to take
off stage…advances of modern science are beginning to be applied in
ϑ
Lewis pp 44-54
ϒ
Some people like Dr KD Kaunda of Zambia strongly feel the policies employed by world bodies like the
IMF are retrogressive rather than constructive. For instance, in the Post News paper of 17th Nov 2002 pp1
& 4, Kaunda asserts that IMF policies have reduced African countries to their weakest levels. In response,
Dr Mark Ellyne representing the IMF rejects that view in the Post News paper of 20th November 2002 on
page 8
Though well thought out and neatly laid out, the above stages are criticized
as being impossible to categorically follow in the real world because
countries have a mixture of issues at one and the same time. For instance,
Zambia is a country that hardly has all the stage two features but has begun
transacting on the international trade level. This is due to the liberalized
economy and the advent of globalisation. As such, it is difficult to “box” a
country into the neat break down.
The next indicator to use in determining the trade imbalance levels is the
Gross domestic product and Gross National product (GDP & GNP)
although mentioned later on in the paper.
+, "- / .-ƒ
Defined as two measures of a country’s economic activity. GDP is a
measure of the market value of all goods and services produced within
the boundaries of a nation, regardless of asset ownership. Unlike GNP,
GDP excludes receipts from that nation’s business operations in foreign
ι
Cateora P International Marketing 9th edition pp226. Stages first proposed by Walt W Rostow, the five
stages of eceonomic growth 2nd edition (London: Cambridge University press 1971) p10
ƒ
It may interest you that Zambia’s GDP rate has fluctuated over the years for instance the following
statistics were recorded for the period 1987 to 1991 respectively:
(%) 2.7,6.3,0.1,-0.5 & -1.8. Source: Profit magazine, April 1993 # 1/11 pp48
0%
Apart from the economic indicators as listed above, the availability of
liquid cash in the hands of genuine investors will help enhance
development. These selfsame investors will ordinarily build capacity and
the industrial fabric of the economy leading to more generation of cash.
As we know, excess cash in the economy will lead to inflation, yea, and
hyperinflation unless meticulously handled. Another pit fall to be avoided
is to allow limitless restrictions to remittance of the hard earned forex to
other countries. Although this assertion may sound plausible, it is not
√
Source: African Connexion international 1994 pp15
3. $
ϒ
$
In the modern world, one ignores Technology at their own peril as tool
helps to accelerate economic development. Technology should be viewed
in its widest and general sense, from Electronics to heavy-duty industrial
machinery. For instance, in this information age, wider area networks
(WAN) and databases are essential to timely responsive strategic action.
4. & %
Going by the GDP/GNP as well as the stages high lighted earlier on,
those nations at similar stages of development will experience better and
more fair trade as they will be able to bargain. But if two countries at
widely different levels of development trade, there is likely to be some
trade imbalance and usually in favour of the economic giant.
5. $ 1
When the world trade nerve centre was destroyed on September 11 2001, the
world held its breathe because the New York stock exchange is by far the
most lucrative and advanced in the World and to halt business for a while is
extremely costly. The basic function of the stock exchange is to float, and
trade in shares of different entities listed on the stock exchange. As such,
only those companies with high profiles will generally list their company
shares relative to the development stage of the exchange market. In Zambia
for example, the stock exchange market (Lusaka stock exchange LUSE) is
hardly a decade old, having begun in 1994•. Although stock exchange is
gambling in principle, it never the less help to improve the economy in that
ϒ
This aspect has turbid the developed economies into even higher orbs leaving the less developed nations
wallowing in poverty. It is a good thing for the developed world but can be a nightmare for the poor
nations. Dr Kaunda has asserted thus,”Globalisation has left Africa on the margins”-The post News paper,
Sunday 29th September, 2002 pp 1 & 4 Issue # 2174SU43
•
Refer to Zamba-a review of commerce, industry & tourism millennium edition pp14 2000
Another critical aspect that must never be over looked in looking at the
factors is the intertwining effects of the economic climate at which the IB
activity finds itself. It should be noted that all economies, no matter how
potent, goes through the following cycle:
Thus, depending at what stage one embarks on the IB activity, this will
affect the portability and viability of the business.
Thus we have shown that the trade imbalances and the conditions of the
economy are critical for a thriving international business environment to
evolve or else every attempt will be thwarted by the very factors thus
mentioned above.
Μ
Although some signs can be identified. Refer to Andre Roux’s book “Everyone’s guide to the south
African Economy” pp27
ι
Ethics are “enquiry into the nature and grounds of morality where the term morality is taken to mean
moral judgements, standards and rules of conduct” Business ethics. Ferrel, Fraedrich, Ferrel pp 5
≡
refer to case study attached in appendix C
3
Economic growth is the rate of growth measured by the Gross domestic product. For example, if the
economy produced 1,000 units of item X in 2002 and then produced 1,001 units of the same in 2003, then
the economy would have grown by 0.1%. See “Everyone’s guide to the South African Economy” by Andre
Roux pp33
There could be other problems but the above mentioned suffice for now. Let
us quickly then hurry along as we look at the cardinal elements that must be
noted before venturing into new business territory.
! & !
Now, international trade is a necessity if any 21st Century company or
individual is to succeed. There are certain key factors to be grasped before
venturing into a new market and these are the controllable factors (4 Ps,
Product, Price, Promotion, and Place) and the uncontrollable factors such
as the Political, Legal, and the cultural environment. There are 3 ways of
Marketing:
1. Ethocentric where goods are produced for one domestic market but the
goods go “International” as a “by the way” due to surplus.
Study and travel unravels the meaning of global business how that the world
has been reduced to a small place where transactions done in a remote part
of the world may have an effect on the business at another part of the world.
The trend today is that World Trade is going “Global” and as such, the
Marketer should think globally. The World economy has gone through
Π
Source: Executive Excellence “ Multinational networks” Vol 17 # 4, April 2000 pp5
1. Protectionism: through
(a) Unrealistic standards: where countries set unreasonably strict
quality standards.
(b) Tariffs: To protect the domestic infant industry from external
competition, tariffs are imposed.
(c) Quotas: When Governments impose restrictions as to the quantity of
goods to be imported for a given period.
(d) Voluntary export restraints (VER): where a country just decides
out of its own free volition, to restrain exports in order to deal with a
problem.
(e) Boycott: where goods are not bought for a specific reason or to press
a certain demand to be met.
(f) Monetary barriers-Either by restricting access to foreign exchange
or refusing foreign transactions like drafts.
These protectionist stands have hindered much trade.
When a country is in international trade, certain key indicators will tell
whether the economy is growing or not. The following are the key
indicators:
ℑ
The Language of Trade: A glossary of International trade terms, p30.
ℵ
The language of trade: A glossary of International trade terms Page 30 by office of International
Information programs, U.S. Department of State
A modern business leader must take into account the political environment
in which one intends to work because this variable is very critical in
determining which way to go. By and large, the Political environment ranks
among the highest variables before one gets bogged down with other ‘knitty
gritties’ such as the culture and legal aspects. The following factors will
influence international investment:
1. Stability of Government policies and how they will affect trade liberty.
2. Number of Political parties and their Policies.
3. Nationalism, what the government policy is on international ownership
of businesses. At some point, there was a drive by many governments to
forcibly turn all multinational companies into the hands of the nationals.
This may not necessarily mean taking over title of the said companies but all
the positions are taken over by the natives. There are a number of ways the
government can react to international investors. The following are some of
them:
1. Confiscation- This is where the government simply takes over without
compensating the international investors.
2. Exporiation- Where there is a take over by the state but compensating
the Investor for the loss incurred.
In the past, Governments were hostile to foreign investors but in the last
decade or so, the situation has changed. The following Strategies will lessen
political risk:
1. When entering a country, it may well mean that Joint
ventures with the natives are entered into or
2. Expanding the investment base by joining with banks
who are owed a lot of cash by the Government so that the
Government will be disarmed from wrecking havoc as
they will be interested parties, for how can you bite the
finger that feeds you?
3. Marketing & Distribution- Ensuring that the company
holds the controlling power over the distribution world
wide so that should the Government cannot be “funny”,
or else risk losing Market for their products too.
What other thing ought we to mind? Let as wait and see as we peer into the
next hurdle.
The legal system position renders it difficult for a company that has its
tentacles in various countries at one and the same time. The various legal
systems that do exist are:
1. Code law/civil from the ancient Roman empire.
2. English law (Common law)- This was derived from the decisions that
were passed in local courts set by the English King.
3. Islamic law-Based and derived on from the Koran.
4. Socialist law- Developed by Carl Marx who believed that all men
should be equal and as such championed the socialist movement.
All these are some of the hurdles that the multi country corporations have
to face.
Thus, companies must agree before hand which law is going to be used in
settling any potential dispute. The following ways could be used to settle
international disputes:
Among the many options available for data collection methods is that of
questionnaires. A good questionnaire has a number of attributes such as
being brief, with ‘Yes’ or ‘No’ answers. Accurate and relevant information
is key or else large sums of cash will be wasted in the wrong direction.
Today, it is not only enough to have a huge capital base but there must be
correspondingly relevant, timely and accurate information to hand. With the
research done and out of the way, we next think about the opportunities that
avail themselves.
Trade is slowly shifting from the highly industrialised nations to the lesser-
developed countries. Consider the emergence of China and India. What is a
Ω
Definition is from “International Marketing” by Cateora, page191
Whatever the case in the above situations, in the quest to identify new
markets, the following are the means of identifying market segments:
3. Polychographic measures.
Let it be constantly be borne in mind that markets differ widely but some of
the hurdles and challenges a marketer might anticipate when eyeing a
socialist-communist country as a market for example, are:
1. The quotas- How big are the quotas and the restrictions there of?
4. Corruption- The level of corruption and what is being done about it.
Can we handle such levels of corruption?
It must be noted that the less developed countries are fast becoming
important potential markets (BEM)η. These include Poland, China and
India, among many others. The least developed countries (LDC) are
found in central Africa while the newly industrialized countries include
Mexico, Chile, Brazil, and South Korea, though still among the LDC.
The other important grouping is the ‘4 tigers’ of Southeast Asia. They
are economic giants led by Japan and are composed of Taiwan, Hong
Kong, Singapore and South Korea.
η
Big emerging markets
ϒ
CNN= Cable News Network
This Chapter basically deals with the regional trade groupings littered all
over the globe. These groups come about as countries in a region try to
coordinate activities in terms of trade so as to reap the best mutual benefits
from within the region. Usually these groupings come up with standards and
terms of reference to which all the member countries must subscribe such as
reducing tariffs on goods from within the grouping but raising them on
foreign goods from outside the catchment area. A number of International
agreements have been entered into which address different aspects of
international trade. The GATT↵ (WTO) is a case in point. Most of the
groupings are localised whilst being regulated by international principle laws
such as the fair trade law. This law seeks ensure that fair trade practices are
observed in international trade. Some of these groupings are:
(g) The USA/Canada Free trade area.
(h) COMECON- Council for mutual Economic Assistance, by the USSR
council for mutual economic assistance of socialist countries.
(i) NAFTA- North American Free trade area
(j) Mercosur- Southern Cone common market found in Latin America
(k) AFTA-ASEAN Free trade area-found in the Asia Pacific Rim
(l) CEA-Chinese economic area
(m) EU- European Union
(n) CEFTA- Central European Free trade area.
(o) ASEAN-Asia Pacific rim including Japan, Taiwan, south Korea.
Recently, China has linked up the grouping making this the largest
economic grouping housing a 1.7 billion people market- BBC news 5th
November 2002.
(p) SADC-Southern African coordination conferenceϒ
(q) COMESA-common market for East and Southern Africa
(r) NEPAD- New partnership for African Development
(s) PTA-Preferential trade area (now defunct)
(t) ECOWAS-Economic community of West African States
↵
GATT= General agreement on trade and tariffs: WTO= World Trade organization
ϒ
Refer to the Africa Connexion magazine Volume 9 2nd qtr 1994-very insightful for the African groupings.
A third postulation about the future trade is that it will be region less, as
people advance to use e-commerce and the advent of virtual corporations.
What are the strategic implications on marketing, yea, the International
Marketer? Despite all the potential advancement and the increased ease of
communication and interdependence, we think that the problem of language
will still linger. Also, the one global market concept if realised, will lessen
the barriers as well as blocking those out side the regional block. The latter
implication is rather negative some what but it is one of the ramifications
never the less.
Having seen the frantic effort people have made and we now consider some
marketing strategies to help us in our quest to penetrate and capture those
markets.
Since the customer demands high quality standard goods, total quality
management (TQM) is essential. In addition to the quality standards, there
is need to establish local relationships that focus on the marketing process
(Relationship marketing), strategic business alliances, partnership and joint
ventures. Where Joint Ventures are preferred, it is prudent to know the four
factors associated to this mode. These are:
1. It helps the firms produce goods and services that more than meet
customer expectation and continuous satisfaction.
2. It is a corporate strategy that focuses total company efforts on
manufacturing superior products with continuous technological
improvement and zero defects that satisfy customer needs.
The customer’s changing needs are identified through market research. This
emphasizes the real rather than the imagined customer expectations.
Further more, formulated quality control systems for all functions are
Quality is a must and can only be ignored at one’s own peril. Chapter 12
takes us to the export trade mechanics and logistics.
Today, the regulations and restrictions of exporting and importing are very,
much around, even in the world leaders of trade like the USA. The major
goal of these regulations is to watch what is exported and imported. This is
especially true of the strategic goods to certain countries and also from there.
The major reason for this is basically to protect the domestic industry from
unfair external competition as well as to conserve foreign exchange. In many
countries, the economy is both extremely weak and fragile where poor
quality and expensive goods are produced. These mediocre goods stand no
chance of competing with the cheaper and higher quality foreign products.
In a country therefore, there are certain ways to get things done. This is by
logistics. Logistics are a total systems approach to management of the
distribution process that includes all activities involved in physically moving
raw materials.
For example, in terms of transferring goods by either sea or land, the foreign
freight forwarder is licensed by the federal maritime commission. The said
freight forwarder arranges for the shipment of goods while acting as the
agent for an exporter. In this case, an exporter, instead of transporting the
goods him/her self in the international environment would use the services
of a foreign freight forwarder because of the following reasons:
That not with standing, the International Marketer will encounter a lot of
restrictions and hurdles as he/she seeks to plough through the maze of the
international market. Among the major import restrictions will be the
following:
Despite all the hustle and bustle, the day is coming when most of these
hindrances will be past and forgotten. For now, we content our selves and
hope for the best.
When all the marketing and net working is done, we move over to the
distribution channels that will be vehicles for our goods.
There are many channels of distribution that are employed from place to
place to ensure the safe and speedy passage of goods across the world. For
instance, in Japan, the channels are multi layered while in America, the
structures are simple. On the side of the company, this is a good avenue for
getting prompt feed back. These agents come in various shades and
1. The use of direct mail distribution has several advantages over the
indirect because:
(a) It is cheaper
(b) Cuts bureaucracy
(c) Challenges old paths.
(d) Cuts down on work force
(e) Successful way of entering a market.
Having asserted the above, we hasten to say that middlemen are needed in
certain markets because:
(a). There is minimum investment on the part of the company some
times.
(b)Commission drive is so costly some times that people rush for the
extra buck at the expense of doing a good job.
(c)Cannot operate short term but on a long-term basis.
The local market characteristics, which affect the advertising and sales
promotion of products, are:
(a) Culture-The orientation and the set norms in a particular region.
(b)Tastes- what people like and approve of.
(c)Perception/decoding- How well exposed and developed their minds
are to accept foreign and new views/products.
(d)With the advent of the Satellite TV, the Marketer is able to reach
many countries since the world is viewed as one market. Thus, the
goods are standardised, using the same Logo. As a result, it is hoped that
slowly, the media is creating a uniform perception of standard products.
It is believed that the global consumer generation has already budded.
For example, when the youths in Japan watch TV about what the Youths
in the States wear, and next time you see them wearing the same!
2 %
The work of the international Manager who leads people has to contend with
various attitudes, beliefs, cultures, and values of the local condition. For
instance, in the United States, the company business takes precedence over
family and relations where loyalty is given to the entity. In Latin America,
the opposite is true. Further more, in the USA, the entity concept of the
organisation is espoused strongly while in other places, the entity cannot be
separated from the people. Another difference is the way people view their
jobs in a particular organisation. In the West, working for a particular
organisation is not viewed as life long while in places like Japan, people
devote themselves to one for life along side other relatives and friends. The
work relationships are more personal and founded from culture and family
while in the States, the grounds of hiring some one is not family attachment
or prior knowledge but largely on merit. We may even add the attitude
towards working hours as a difference! A Japanese worker will toil tirelessly
until the work is complete everyday without minding the knocking off time
while an American will content him/herself with the 8 hour schedule, pack
bags and go home, whether the work has been accomplished or not! All the
% $ %
4
1. The “out of sight out of mind” syndrome seems to grip the sending
company head office. There is a sense in which the person on an
international assignment is “forgotten” about as soon as they leave the
head office doors. For instance, the expatriates do not get information on
time, are treated, as not part of the “home team” and neither are they
consulted on major decisions, even on ones that affect the very stations
they lead. In short, there is an absence of that sensible feeling of
belonging but rather replaced by the feeling of alienation.
2. Lack of career development. It seems that those that remain at base
get preference treatment in terms of training, have better access to
resources, are in constant touch with the “known quantities” at head
office and thus develop rapport, network as well as friendships to the end
that they are naturally recommended to higher tasks while the expatriates
in the fringes of civilisation are relegated to the promotional terraces.
When the said expatriate returns home from abroad, this discrepancy is
so vivid as one compares with peers. Obviously, one feels “robbed”,
cheated and demotivated.
3. Another hair-raising issue is the re-entry “inconveniences” that
accompany settling back home. When the expatriate family has been
away from home for a number of years, many variables will have
changed and as such, there is need to prepare for another “culture shock”.
Some of the inconveniences faced will be the change of status, earning
power, new job descriptions or unpredictable and ambiguous challenges
daily, the change of station for the family in terms of friends, pace of life,
school, food, dress codes, liberties and even attention given. Sometimes
As though the aforementioned points were not enough, the Manager must
learn the culture, values and attitudes of the locals if to be effective. The
cultural aspects cannot be dispensed with that easily because for many an
entity, success rests on the cultural, dialect and cue knowledge. It is
Keep in touch with expatriates so that they do not feel “left out”. As was
intimated in (3) and (4) above, the expatriate families feel cut off from the
base, much like how an astronaut would feel without either the lifeline or the
Space Manoeuvring backpack. They feel unsafe, unimportant, irrelevant and
without assurance as to whether what they are achieving is plausible.
Naturally, we all need some commendation or a pat on the back. Further
more, people feel encouraged when they are urged on or consulted on some
seemingly trivial matters. The fact that they know something about what is
going on will settle many a hiccup.
Having asserted the above from the perspective of the expatriate, we now
proceed to state that it is costly to maintain an international sales force as
well. The following reasons come to the fore:
1. Cost of living allowances are high: To send some one on an
international assignment is costly business because you pluck them out
their “natural habitat” and plant them in a foreign environment. As such,
that loss of home creature comforts must be atoned for by ensuring that
the new setting is as close to and as comfortable as the home country. For
example, the children of the said expatriates may have to attend the
international school as well as provide incentive allowances for being
away from home. In the distant past, the author of this review perceived
an international assignment as a great privilege above all else. The
present mindset is that not all is rosy when one considers all the
parameters and the opportunity cost attendant to the international job. In
as much as it is more lucrative, there is the emotional cost and family ties
that must be dealt with rather ruthlessly for a while. But that not with
standing, the well adjusted International Marketer will brave the
“weather” and stand firm against all odds, all things being constant and
equal. The International manager must be ready for change at all times.
Π
Author of saying unknown to this article writer.
When we consider foreign direct investment, our focus shifts slightly to the
international plane where we talk about multi national investments from
individuals or concerns that would like to reap from or change the face of a
particular place, people or landscape by pumping in resources (usually
finance) from abroad. This is direct foreign investment in the simplest terms.
In other words, we can say that direct foreign investment refers to the direct
infusion of resources from one country to another by an entity or concern
usually with a profit motive. Roger Bennet does not specifically define it in
capsule form but does a good job highlighting that DFI has been around for
over 150 years but interest grew when the large US multinationals begun to
cross the Atlantic into western Europe after 1946. Charles Hill on the other
hand defines it in passing in his book “International Business” when he
states “FDI occurs when a firm invests directly in facilities to produce and/or
market a product in a foreign country”. Hills’ brisk definition broadens the
investment scope beyond just the financial aspects that most of us are
accustomed to but includes investing in (1) a foreign country (2) in facilities
(3) direct investment and (4) production/service with a profit motive. Thus,
when the crippled Zambian economy finally ground to a halt as far back as
1985, the only recommended option was change the laws that paved way for
DFI as well as privatisation. As we all know, this did not actually take place
until the turn of the next decade when the Dr Chiluba led team bravely and
What are the benefits of DFI to the country, individual and investor? This is
a broad and deep question but we shall answer it in general terms as relates
to the three entities mentioned above. The first benefit of FDI is that it
brings about development in a given locality. The much-needed massive
investment from abroad brings with it the necessary capacities that
accelerate development. Check any place where genuine investment has
taken root, what do you see? The place has changed record short time!
Imagine if that investment had not come, things would pretty much be the
same despite our boasting of having huge latent potential of untapped
resources. Apart from the financial muscle, DFI brings with it new
technologies, skills, competencies and in the process, these trickle down to
the natives, if they are wise to appropriate these and improve on them. That
is partly how the Japanese changed their fortunes from rags to riches in less
than fifty years.
We have spent much time around this hill, let us consider the fifth benefit of
DFI and it is this: DFI contributes to Gross Domestic Product, GDP for
short. Among many things, GDP refers to the sum of all the transactions
relating to the income and expenditures of a country in a given time period
say one year. If the country received more income than it spent, then that
country is said to be developing or experiencing a growing economy. Any
positive GDP is desirable and indicates that the productive capacities are
being effectively and efficiently utilized to generate wealth. The goal is to
achieve as high GDP as possible, say 10-12% as China has been
experiencing lately. Other more mature and developed economies such as
In the sixth place, DFI means more development, resources, higher standard
of living and an opportunity for Zambians to invest freely in their own
country and abroad. As foreign investors carry out their businesses, making
their work easier, some of them are cognizant of the social responsibility that
goes along with their resource exploitation. In other words, investors, in
addition to their marketing ploy, wish to thank the community in one way or
the other by paying back in kind or cash. That explains why some companies
like Celtel (now Zain) would go out of their way to promote the famous
“Star Search” because they are essentially saying, “Thank you Zambia for
what you have done by making us rich, we pay back some how by
promoting this contest”. Or take for example, KCM paying the national
soccer team coach. These are but examples. In the cases mentioned above,
the corporate image is built as well as lengthening the “acceptability of the
product/service/company”.
As at Oct/Nov 2006
Tenthly, the perceived job creation expands the tax base for the government
that in turn translates into better social amenities and services.
Eleventh, in a perfect world, DFI and privatisation allows more of the locals
to be serious stakeholders in many resources provided they have the money
as opposed to a command (e.g. socialist or communist etc) setting. In
addition, a free investment climate fosters entrepreneurial ship among the
natives, having opened their eyes to exploit the available resources and
markets at home and abroad. Twelfth and lastly for our purposes, DFI brings
about efficiency, raises competition thereby improving product and service
delivery quality. Thus, people have a wider choice, higher consumer power
and in time, make it cheaper to do business in that country.
That said, the glowing picture painted above seems to show a near
impeccable ideal world which presupposes that every factor will be in place,
static and maximize good for all concerned. For a moment, it looks like a
“win-win” scenario but sadly, DFI does have the down side as well,
especially if the playing field is not level. If one side is desperately poor
while the other is filthy rich, exploitation of man by man results. The
different development paces and levels between the nations also play a
major role as those from developed nations will have refined systems that
cheaply “grab” the raw materials from the less developed, process them and
return them to those countries at double or triple the value. Value added
goods are good but the inequalities rub off the benefits and it becomes a
unidirectional affair. It is like a “rat versus elephant” tag of war or a “speed
boat versus canoe” race. At times, the stakeholder /trading nations are
worlds apart. What are the real tangible negatives of DFI as experienced in
countries like Zambia? Many come to mind but a few will suffice and we
rest our case there after.
Secondly, the hard earned and developed companies are surrendered into
foreign hands that seem to “reap where they did not sow”. Many times, it
appears a rip off. Take the painful example of the ZANACO privatisation, a
profitable indigenous multinational company sold off by the stroke of the
pen! This transaction makes one feel hot under the collar. Consider the
ZCCM arrangement (although initially nationalized in 1981 from private
hands). The massive government investment, though not profitable at the
time, was sold off at ridiculous prices!
Thirdly, DFI withdraws services from places where the Government once
serviced. If a place or investment area is not profitable to the investor, they
swiftly close off their investment and relocate to a place where they think
they will benefit. For instance, many Banks closed their branches from the
rural areas and only concentrated in the profitable urban centres. The UBZ
serviced all the routes, no matter how bad but the modern investor shuns
these and cannot be compelled to go there. Though it is an opportunity, it is
not attractive enough.
But in the sixth place, DFI defies local rules and regulations once the
investors are entrenched and in control of all the key productive assets. The
powerful multinationals call the shots in many countries and get away with
many atrocities ranging from breach of labour laws, pollution, unfair
competition, clandestine dealings and out right disregard for the powers that
be. We see that in Zambia repeatedly, such as the BGRIMM explosion and
KCM pollution sagas of 2005 and 2006 respectively.
Ninthly, DFI, leaves poor people poorer as the rich-poor gap widens. The
state is more interested in over taxing the already squeezed citizens while the
foreigners go scot-free for many years, yea, they go laughing all the way to
the bank. In a capitalist arrangement, the rich and famous are powerful often
having the law on their side. I am yet to see a poor person easily get solid
and expeditious justice in our land compared to the rich. “Money talks”, as
they say. Look at the KCM pollution saga of 2006, had it been a local
company which had polluted the Kafue river, all the government organs and
powers could have clamped down on them.
Twelfth, if the laws are bad, expect continued exploitation of man by man as
in the case of the privatisation laws of Zambia. They give the investor too
much bargaining and leverage power compared to the citizens. Unless and
until it is changed, DFI will continually appear a terrible monster.
Fifteenth and probably lastly for now, DFI promotes wanton exploitation of
natural resources. The Foreigners have a clear head start and advantage
compared to their counterparts. The archaic laws promote exotic investment
as it easily facilitates their paper work and builds their cartel network. Look
at the Lake Kariba arrangement, who exploits the Kapenta business the
most? Further than that, DFI promotes pollution too. The multinationals
sometimes flee their countries to invest at places where weaker pollution
laws exist. While the desperate poor countries rejoice that a Saviour has
come to town, in actual fact the enterprise could just be transferring the
We have thus crystallized only twelve of the many evils connected to DFI,
we leave it to others to delve into other details but for now we run to a
conclusion.
It is now clear from the above point that DFI does have pros and cons which
every entity should carefully consider before any firm commitments can be
entered into. One would ask, do the benefits outweigh the demerits of DFI?
Not necessarily. Depending on the context and extant investment policies,
DFI can be a blessing or a curse. It is however advisable to avoid all
extremes which may lead to acrimony or capital flight. There is need to
move out of our time honoured enclaves and see what the global economy
offers. The five imperatives of economic development: Market led,
Knowledge based, Entrepreneurial, Regionally integrated and globally
connected need to be vigorously pursued. Needless Xenophobia ought to be
exorcised. This author holds strong personal opinions about this matter but
he leaves it for you to make informed decisions. Further, he appeals to you
to read various literatures on this subject so that you comment intelligently
the next time the subject comes up in your discussions with colleagues.
Xenophobia= strong dislike of foreigners, intolerance, racism etc. This was clearly manifested in South
Africa in 2008.
In this global world, human resource can come from any place and perform
very well. Others plummet who have been star performers as home probably
due to contextual matters. Pay particular keen interest in the categories
below:
Even after producing the best quality goods, the manager must ensure that
the goods are successfully sold. Selling involves getting customers to buy
the products. As will be noted, customers are willing and ready to buy goods
that are fairly priced and equal to the satisfaction they derive. As such, if
there are too many middlemen in the process of distribution, chances are that
the prices will shoot up and thus reduce the sales. Therefore, in the present
chapter, an attempt is made to establish prices for an entire market, as
opposed to different prices that are pegged in different market segments.
Recall that products are produced with a particular market in view as well so
much that the price, in a way is determined by the goal. But recall also that
the Global Marketer has to have a uniform brand and uniform price if going
to market goods on a global scale. Should the prices vary, this could harm
the sales and the goodwill of the company. Thus before prices are fixed,
certain questions must be answered such as:
1. Is the price right and fair?
2. Does the price take into consideration factors such as inflation?
3. Is the price competitive and profitable enough?
4. Does the price match the bundle of utilities and satisfactions in
the product?
5. Will all people regardless of culture and location accept the
price?
Companies must also take into account other avenues such as transfer
pricing, intensity of competition, the commercial as well as political risks
and also the hedging options that are available. Hedging has to do with
shifting the risk to a third party. These gadgets should inoculate the
international marketer from the price escalations that occur as a result. This
price escalation can be further minimized in three ways:
Lower the cost of goods- Build quality in the production process to avoid re
working as well as adopt the best practice methods.
Lower the tariffs- The Government should reduce or remove tariffs.
Lower the distribution costs-Reduce on the number of middlemen such as
agents and merchants.
There are many other factors to be considered but suffice it to say that the
above are the most critical and ought never to be ignored. Finally, we are
about to enter the final lap of our book review of this excellent book. Thus
far, it has been an exhilarating journey, how we long to go further!
≈
The Language of Trade: A glossary of international trade terms, Page 48.
ƒ
International Marketing, Philip Cateora, page 575.
As intimated, the EXIM Bank is American but has tentacles in other parts of
the World as well, working on the same principles. But what are the ways in
which finance can be gotten? What arrangements avail themselves? For an
international transaction to take place, a number of sureties are needed and a
number of ways have been devised such as the following five basic payment
arrangements:
1. Letters of credit-This is a letter opened in favour of the seller by the
buyer. The said letter shifts the buyer’s credit risk to the bank so that in
the event of failing to pay, the bank takes up the responsibility.
2. Bills of exchange-This is a time draft where one promises to pay at a
future date whilst taking possession of the goods now. In other words, the
bank issues that bill but will only make actual payment when the agreed
date arrives. In that case, the seller pays a small charge if he/she cashes
the bill before the agreed date. In this case, the seller assumes all risk
until the actual dollars are received.
3. Cash in advance- in this scenario, the seller demands that cash be paid in
advance before shipment of goods can commence.
4. Open accounts-Sales take place but only with long standing trading
partners whose credibility is worth resting on. In this case, the seller is in
a position trusting that the other parties will automatically honour their
parts.
5. Forfaiting- this is a one time arrangement with the bank by the seller to
buy a specific accounts receivable. Usually an institution will act as the
forfeiting party, assuming all political risks as well. In other words,
“Forfaiting is a long term financing technique which is available for the
seller to make a one time arrangement with a Bank or other financial
' % (! %%
From what has been highlighted so far, we have no telling where the IB lot
may fall tomorrow but we can safely assert that IB will become more
complex and yet user friendly as long as the present trends continue. The
present indications seem to suggest that IT will continue to impact the
traditional trends for a long time to come. It is possible that e-commerce will
be the main avenue for IB as it is faster and far much cheaper in the long
run. Today, an order can be placed from one end of the terrestrial ball and at
the click of the finger on the key board, an order is made triggering an online
just in time process at the other end of the globe. This means that companies
will be more agile, leaner and smaller, offices paperless, brand names
proliferated, outsourcing commonplace and product quality higher.
Decision-making will be faster due to the availability of strategic
information.
Much, much more remains veiled to the human eye at this stage but suffice it
to say that IB will be catapulted into more dynamic arenas. Let the reader
keep a keen meticulous eagle’s eye to what lies in store.
*+ , $-.
Thus far we have sought to describe what ‘International Business’ is but our
question has hardly been tackled, has globalization really left Africa on the
margins? Is Africa thrown to the fringes of civilization and relegated to the
pauper’s den forever?
Τ
Refer to Taylor’s book “Development from within” pp 219
The other school of thought, advanced by people like Dr Mark Ellyne holds
that Africans cannot claim to be disadvantaged because:
1. Africans themselves are the problem. Generally, they
themselves are to blame because they do not work hard
but love ease. They would like to live like kings minus
working like slaves for themselves and theirs. The
developed world film star mentality has captivated many
like a virus. Further more, the Africans are indifferent
and not proud of where they hail from. Given an
opportunity, they would prefer talking about the United
States, Japan or Europe rather than promote their own
roots. Talking about Africa in a developed world context
is like throwing a wet blanket on the discussants. As one
e-mail attachment has quaintly put it “Only in Africa”.
The lay out in that document depicts the stark difference
between Africa and the Western World.
Research reveals that the IMF and World Bank are excellent and well meaning bodies but in practice,
their policies are awful. Refer to the UN hand book and the booklet on the IMF, its structure and purpose.
Reading through the literature makes one feel that some criticism on the institutions is really not fair and
unwarranted.
÷
Refer to attachment on this in appendix C downloaded from the internet in November 2007
λ
A development MA Japanese colleague, Masaki Miyoshi, holds this view. When analytically thought
through, Masaki is right.
Χ
Brett as quoted by Taylor and Mackenzie in “Development from within” pp 218 1992 edition.
ϒ
Refer to the Preface addressed to the reader in the booklet “A NEW INTERNATIONAL ECONOMIC
ORDER” by Valentin Shcetinin et al pp5
÷
Check write up in appendix C for a full write up on Ghali’s ordeal with the Americans.
0 ”(pp65).
)
*
$
)
*
! )
+ ) )
/
12!!3.4356ι .
ℵ
Infact, D.R.F Taylor has asserted that here ever these bodies have gone, there is either nil growth or
negative growth. Where growth has been recorded as a result of their intervention, the parameters are
questioned. Refer to “Development from within” by Taylor & Mackenzie 1992 edition pp 217-20.
Many other options remain open to mother Africa but the desperate
need of the times remains strategic visionary leadership. Are you
that long sought after leader? In the ensuing Chapter, we consider
the future of Africa in this highly dynamic global context.
From a strategic perspective then, Africa still holds promise and will be a
powerful voice in the not too distant future, perhaps one or two of the
African states will be numbered among the G9!
In concluding this part and having taken deep thought over this matter, we
would like to submit that we can safely agree with and assert that the first
school of thought is indeed right for Africa has actually been marginalized
hitherto. It has not been viewed as an equal partner but as a “by the way”.
That not with standing, Africa has to some extent contributed to the dismal
view and must needs wake up to the current and future realities. The World
is too fast to wait for lingerers. As some one has quaintly quipped “The
World loves winners and has no time for losers”. African must aspire to be a
winner so as to be heard.
Our literature review and study has been long and protracted but fruitful
having ploughed through this avalanche of books, what have we yielded?
What conclusions have we safely arrived at? From what has been researched
so far, we can safely assert the following findings:
1. That international business is getting more complex
every day.
2. That global business is dynamic and complex relative to
yesterday.
3. That the advent of IT has enabled quicker decision
making to take place and thus increased the pace of
business transactions.
4. The international business person must be aware of the
differences in perception of different issues from place to
place e.g. time, taste, dress, moral ethics etc.
5. That one transaction in one part of the world has a
rippling effect on another many thousands of kilometres
away.
6. That although capitalism seems to have triumphed, it also
has major pitfalls that need to be watched and managed
meticulously.
7. That even the most developed countries like the USA
also fall into the trap of unfair trading habits that are
meant to protect the home market.
8. That other once insignificant trading entities have now
taken over some areas of business in World trade due to
their high quality and customer focused products e.g.
Japanese cars have robbed the USA of a lot of market.
9. The giant economy countries like the USA need other
players to survive, hence the forming of economic
blocks. We have arrived at a stage of interdependence
rather than independence.
10. Half the time, the expatriate is at a loss when they return
home to the country of origin, as many things will have
changed, especially in places like the USA.
ϕ
Refer to “The B2B All about IT & Telecommunications hand book 2002” annual book let stipulating all
vital information ranging from the history and development of IT including e-commerce.
ϒ
Executive Excellence Vol 16 # 3 March 1999 pp 8
3 %%
Having gone thoroughly and meticulously perused through this book, it now
remains for us to offer some recommendations for future use:
1. The Business leader of tomorrow must be far more multi
talented than that of yester years. The said leader must know
more languages, cues, culture, objective SRC, etc
2. The leader of tomorrow needs to be taken care of before,
during and after an international assignment.
3. The international Business leader should be ready to settle
and operate from any part of the world, as the world is now
a global village.
4. Tomorrow’s companies must be agile and ready to mutate
at any time and consistently so.
5. The quality of goods must be high, at the right price and
place.
6. The present bureaucratic, rigid and inflexible
multinational corporation must be ready to mutate constantly
in the light of the varying changing scenes in the
environment.
7. The business leaders of today must be ready for the
imminent shift towards the virtual company and the rise of
e-commerce.
8. Companies and individuals must ensure they have access
to the right, relevant and useful information timorously for
strategic decision-making.
Ω
Source: The Sunday Post newspaper, 17th November,2002 pp7 # 2223SU50
ϕ
Although Valetin et al dismiss the concept of “interdependence” as another Western ploy to paralyze the
poorer countries further so that they could reap more at a lesser cost.
Θ
Fad: This is “a practice or interest followed for a time with aggregated zeal” Webster’s new collegiate
dictionary (Springfield, mass.: Merriam, 1976) p410.
γ
Sources: Workshop addressed by the Bank Governor on TV as well as the post Newspaper of 18th of
November 2002.
η
A case in point is the opening of Africa’s biggest game park in Mozambique recently linking three
National parks in three different countries, Mozambique, Zimbabwe and South Africa. Refer to the Post
newspaper of 10th December, 2002 pp14.
λ
Dr Kaunda, in his tenure advocated a change from Copper to Agriculture and as such pumped in K
400,000 million when the rate was K1.2 to US$ 1. This was perceived as the only way to achieve economic
independence. From “A new international economic order” pp 68
Ρ
Source: The International Monetary Fund, purpose, structure and activities book let pp 8 for April 1980.
Refer also to Ankie Hoogvelt’s book, “The Third World in Global Development” pp 84
♣
Source: Ankie Hoogvelt, “The third World in Global Development” pp 84. Ankie asserts that of the 141
member countries, 114 are third world Countries that constitute the 36%. This position makes the USA
single handedly able to block or veto any major proposal for change or reform in the IMF.
2! %
t last this legendary work finally closes its pages having most ably dealt
with the vast subject of International business! I would therefore strongly
urge any one intending to work in an international environment to avail them
selves to these selfsame resources and “soak” in the classical monumental
works until they have “sucked out all the juices”. It has been mesmerizing
globe trotting across this terrestrial ball within the confines of web pages and
otherwise. This scan is non negotiable for the potential international
business player.
↵
One Japanese Development professional, Masaki Miyoshi strongly believes that among the many things
Africa needs is to discover its own strengths, and turn them into strengths. He thinks that has partly
contributed to Japan’s success story, although he also thinks that Japan’s long history of industrialization,
though latent and unnoticed for many years has helped to propel Japan to higher orbs but working within
the Japanese unique context of the complex communal and extended family system, unlike in the Western
World where each individual is like a “stand alone computer” that periodically connects to the website and
shuts off the rest of the time.
7+ ' 9 7 : ;
" < $$9
7 7 $$%
7 " <" ?@ :
$$$
7 " $A .; / $$9 : ;
7 )! 8> + 3 A $ 7!># 7
B $$5
7 @ = 7,
/ $$5 $ C
( D + A E, / $$E
( " ( ! !/ E
> < F G < B /
E
( ( : 8D )( )#
# & =' ( # (
" , / C # D ; H
; H F < # -
>
( 4( < ; H $$9
( ! 5 ><4(
?@ : $$
( 7 8G < , G
/ E
( 2D '? , 6& F 2+ ! ,
> 6 ' 2, ' 6! =
(!7 D ( F !
D 4 $$$
( + 3A E, / $$3 (
> = : ;4:;>!4D D F2 $$ 6
> J / $$ =
$$%
8 B! ! ) # 7
! ( ( ( 7
< # # @ . >
#7 # 7 B 47 $$9
#7 # 7 $-5
#7 F # B $$5
@ (!!
: 7+ -A 3 $$% :
/ 7
( !/
, " 8! (
# & K' > ( (
" <, / C 7# D ; H F
3 / $$ 4$
! / < ; H
)! K; H <
!( !? $-. # ( L
!/
, 7 # ,& ! / $$3
, / : ! $$.
, / )( / :
; $$9
, # 7 8> L & ) ; / # (7
B D 8 ;H ( /
$$5
,@ ! / 7, . $$5 G
/ > /
, / B7 ) ) 8
> # / =! : 47L
>@ @ K $$$=E
F ; / )7
B 8 $$-
F J ? 8 )
2 6 J / K :; >F4:;> ?
F > (! # % 2 $-56#
& K'
F > !
/ $-.
F / F F ;
$$-
F 7 K> !/ E
F D <8 '( B ? ,
! =' ! ; , = .
7 $-$
& D # $$5
& # D > 8 (: 7
5 > ><(
& / )> ! /
# # D / > A E
& " / J / ) ; !
7 J /
' (: ? E 2 $- 6
! /
' # ' M # 7 *)
7 ( N
& / # $$$
' D # # 7 + E# 8
> ><(
' " / 7 F #
# & =' 9 $$-
' (/ ; + K (/
' 7 # # D / )
# $-E
B > / E
: ; B D 8 ; H
< $%% $3
: ; :; / $$9
</ ? & )# )7
$-
L A $5 B $$5
B? # 7 . # 8> / $-$
B # # G
4! / ; H ( # E
4
B " / 8# ?1 K, @& / B
( !/ $$5
G ( : ='
G G ; " > =
$$- /
G " / 87 G )? / 5
2 $$-6 # & K' ( # (
" , / C # D ; H ;
H F < #
G ? =' 8# ; H
, # !/ < $-$
< G 8B ! < K 8
5 > $$- , ' (
!/ # <
< D 7 , )
$3$ & 7 8: < (
< G 2 $3E6+ L
<
# / F7 ' N , # (< ?
D ! = = K7
G " B , / $$9
# L ; / '?!> , /
E
McIntyre Chris, Zambia: The Bradt travel guide, 2nd edition, Bradt
publications, UK, 1999
# "( 7 & )7
?
: $$.
# 8 )J / K
8 2E 6, !/
J / 2 6
# L ( =G
/ F $$-
# 7 # ), G < ;
H #
; & # $-9 D , );
&
? B 8 B! I# ( =
' $$5
? 8B B ) # K7 8
E > 2 $-$6! ' " ;N
359-
Orbis books/world vision, Mary knoll, New York 10545, 7th printing March
2004
? # , #7 .
@ (!!34$9
? ! G 7 /
<7 2 $$96< 8; H )"
? " 8( /
<
! , " $--
# !/ ; H <
< ' ! H
! # 8D ( ) 2 $$.6
' <% 5. ( #7 E %
! B >@ D / $-5
! ( F 7 #
E
! # L A 4 7 $$. 7 !
" ( )7 / =
D + D +
-
" / 8# #
K 1 5 $$- ( ( "
<, / C 7# D ; H F <
( ( < / < # # @
# ; ,
! " " F /
/ L $$$
+, : # 8, !
/ # $-%
( D L
/ $-% # 7
# >=/ , G /
< ; H , ! # 8B / E
!B8 7 !, # $$5 B 8
F 8!
, ) ! /
# > 7/ $-3
7 > )F / 4# $$9
< K 2> 6D 8
$$-
L =+ A B = $$9
D B! 4? #
# & =' $$% 2"D ;6 (
( ( 7 < # # @
9 >
# 7 7 $$9 /
< / / D @
$-9
," F 8F # L ,
" 7 " $$E
J / / $$$
#7 # 7 ? /
$--
> L # E
' (/ ) ; + (/
$-5
#
#F / D , E 55.
: 77 $-
! ; ) E E4 .
J / F L + .A E 7 $$-
< D # =,
$$-
7 87 ) # K
3 > $$. "D ; ( " (
# 7
B < # K )
8' : 8! <
; H # / # 2 $$ 6
: 7 )< )
L
+ = + D + E E= 5
+ 8F + D P! !/
# $-%
D G # " '
F
! ' $$% ! > / =
D # D # > P:
7 B $$E
D , P: 7 ? /
$$
D + '8+ < # ?
I " , "D ; $$5 / (
# 7
D " 7, / !
E E
D + ' "
F =D + , /
D + K, D + K7
" $$$
D + $$3
D + J / K D + J / K7
E
DDD D+ ? KD / D +
J / , # 94 .4 $$$
J7;&? A E 7 $33 : J /
J 4:;F!7 ! 7 KB E E
That besides, as the throne changed hands, and as more and more people got
exposed, the foretaste of the Bulozi beauty begun to show to the outside
world. The first was the Fish then followed by rice, cashew nuts, meat and
many other rare goodies. Infact, the sand is excellent for glass making and
other related activities.
As such, people started to trickle to Mongu in the late nineties but today, this
tiny trickle is now a flood. People literally pour in from all corners of the
≈
Although still a minor crop in 1994 (only 7% of the total cultivated area), rice production has known an
upswing since 1994 when World Vision and other developmental organizations have undertaken to
promote it. Opportunities for western province pp42
⊗
According to research conducted in 1995 by Mulwanda and team, 333 tones are caught every year from
the lower Zambezi. Roughly 75 % is consumed locally while the rest is exported to Lusaka and beyond-
Opportunities for western Province Maimbo,Huijsman,Mulwand and Lof pp50
×
Incidentally, Angola is potentially the richest country in the SADC region but for the civil war that raged
for over 24 years. Refer to Africa connexion International Magazine pp 23 Volume 9 second qtr 1994. This
type of carnage has distorted the economy not only of Angola itself but other regional countries as well.
The demise of terrorist leader Jonas Savimbi gives hope that the Kalabo road will be useful, apart from the
long abandoned Benguela railway.
θ
Refer to The Zambian Farmer Magazine Vol 3# 2 of April 1998 pp16, 17 as reprinted from the African
review of business and Technology.
ι
The UBZ & Zambia Airways closed in 1994. See the Southern African Economist Magazine of Feb/Mar
1995 pp23.
Very few have not heard about the successful Marks & Spencer chain store of the UK. It
is by far the number one clothing retailer having experiencing phenomenal growth for
many years until 1998 when it bagged an unprecedented profit of £ 1.2bn. But now, like
many other businesses, the growth and profits have eluded the chain retailer lately. The
company appears to be buffeted by disappointing results from every front to the extent
that it has had to shut down a number of strategically placed stores in mainland Europe as
well as sell its US business outlet. These developments signal a drastic reversal in the
hither to prosperous company. What is happening? Are things well with Marks &
Spencer?
In the article, “Marks & Spencer profits continue to slide” which appeared in the
Wednesday May 23rd 2001 Post Issue, we see the company experiencing turbulent times.
It is still viable and is making strides to address the adverse situation.
Marks & Spencer has had problems for some time now, and as such, it has embarked on a
restructuring program, so far having cost a whooping £ 335.4 million. The goal is to
make the said company, agile, profitable and more customers focused again, thus
returning to profitability. In order to carry out this mammoth task, Mr, Vendvelde, the M
& S Chairman, has put a number of strategies in place. These strategies will ensure that
sources of finance are identified and utilized accordingly.
Largely, the cash will come from sales, disposal of assets, closing of non–profitable
centres; job cuts as well as relocating from the expensive & luxurious Banker street
headquarters office to the cheaper Paddington Basin new head office. The pending job
cuts for instance; will reduce the work force from the present 3,500 to 1600 in 2003.
Having sourced the funds, the company intends to address the problem areas such as the
adult clothing division where the problem specifically lies in the women’s wear section.
Once the exact problem root cause is diagnosed, appropriate steps will be taken to
reactivate that area and any other. Furthermore, the retail chain store plans to invest more
in the food and services areas. Other possibilities exist but in all there areas, greater
quality and appeal in a better store environment will be the hall mark.
All these strategies look fantastic but as Vandevelde quips, “The results will not be seen
over night, but our customers will see a gradual and progressive improvement as changes
take place”.
The risks associated with the raising of funds from within is that the various stake holders
such as share holders may not be entirely pleased because the company will appear to be
shrinking instead of expanding. Furthermore, the company may not declare big enough
dividends and thus lose stockholder confidence other disadvantages could be the job
losses as well as a potential major shift from the traditional strength of retailing into the
service industry.
Personally, I agree with the M & S strategy as long as a proper SWOT and environmental
analysis has been done. Also, I will vouch for the M & S mores if appropriate
contingency measures are put in place in the event of the worst coming to pass. Issues
such as a superb cash flow must be guaranteed after the restructure. Further, I strongly
feel that these reforms must be implemented diligently, prudently, slowly and cautiously.
There must be a continual reading of the environment to make sure that M & S ekes out
the best route.
After all is said and done, I have no doubt that we shall continue to enjoy the high quality
goods from Marks & Spencer many years hence.
Bibliography:
9. The Post newspaper, Wednesday March 23, 2001. Issue No 1738, page 8.
When Greg Hutchings took over the reigns of the Tomkins Company as
Chief executive, he immediately went full throttle to turn around the
company. From a mere £ 17 million puny engineering firm to a global giant
turning over £ 5 billion a year, Hutchins had reaped off the impossible
pending to be listed among the management legends.
The once simple engineering firm begun to change as from 1983 when
Hutchins commenced implementing his mammoth development drive which
among many things, included acquisition, expansion and diversification of
the company business. As such, the Tomkins bought many companies such
as the Smith & Wesson, the Baker Rank Hovis Mc Dougall, Lawn mower
makers, Murray and Hayter, and grocery products manufacturer Red wing. It
was a bold and risky investment venture but Hutchins undauntedly went
ahead. For a while, all went well but slowly, change and decay begun to set
in resulting from myriad problems rocking the company. But what went
wrong? Why did the company begin to decay after glittering so brightly? A
number of problems are highlighted in the article “Smith and Wesson to
change hands” that appeared in The Post issue number 1732 of Tuesday 15th
May 2001. The said article begins with the sentence that Smith & Wesson
was to return into US hands having been owned for 14 years by the UK
company, Tomkins. The article highlights the fact that as the Tomkins begun
to expand in to a conglomerate, it became too large bureaucratic rigid
unresponsive, complex and too diverse. As a result it was neither as focused
nor strategically responsive to the rapid business environmental changes. In
addition to the complexity and bureaucracy, a chain of lawsuits trailed
around the company. Sadly, the maverick chief executive also contributed
by abusing office that led to his resignation in October 2000. All these
problems then, caused all the subsidiaries not to thrive as expected.
The only way forward then was to reduce the probability of totally running
bankrupt by a change in strategy. The only option available at the time was
to be begin shedding off the non-essential & non – core businesses. Hence,
the selling spree that ensued. These changes, although necessary, were costly
in that many issues had to be addressed such as reorganisation &
restructuring costs.
To date, all the earlier mentioned companies have been sold off with Smith
& Wesson as the latest. The said latter company was purchased at $ 112m in
The Tomkins financial crisis was so critical that the very existence of the
company was threatened and needed drastic solutions to rectify problem. As
earlier intimated, this came through restructuring and selling off all the non –
core companies, thus saving Tomkins. To day, it is slowly returning to its
directed goal of engineering. But why did Tomkins land in this mess in the
first place?
In my thinking, perhaps the company initially had too much excess cash and
decided to invest at any & every opportunity. It seems that no proper risk
analysis was taken in terms of the company sensitivity, return on equity, net
present value, capital structure and the cash flows that would ensue. Ideally,
before embarking on any project, there is need to carry out a detailed cash
flow analysis to predict how viable a business could be in the short or long
run e.g. 5 years hence. Thus, we can see that human factors of personal
preference or the unguided quest to achieve and conquer were at play. In the
end, the company is at the brink of collapse. We clearly see that the fact that
we have excess cash flow is no guarantee that the same favourable
providence will continue, hence the need to be meticulously watchful.
With the sales gone and investment risk minimised, Tomkins can now shift
its focus to its core – competences that will ultimately carry the day for it.
Bibliography
1. The Post Newspaper, Tuesday May 15th 2001. Issue No 1732 page
14
The communists whilst still in power at the time, had ruled with an Iron fist,
treating people like mere “things”. They did not allow other political parties
nor any opposing views to theirs. As such, any dissent was drastically and
firmly dealt with. Usually, it was violently crushed so that others would be
deterred. But in those turbulent times of January 1990, a new political breeze
was blowing with people freely hoisting West German flags, clearly stating
their preference of German unification. By the same token, the stubborn
communist Government remained obstinately and tightly in control but of
course with lost ground, times had changed drastically in the revolution.
The people employed were largely on family lines and thus resistant to
change. Due to poor circumstances and polices, the economy was state
controlled and as such the market forces could not freely reduce the prices
As such, in January 1990, after the revolution had swept across Eastern
Germany, it brought about lasting changes. A number of challenges and
implications therefore confronted Louis R Hughes, the Opel chief, as he
attempted to market survey with a possibility to investment. Among the
implications of the revolution was he had to tread most circumspectly, read
the political scenario, build relationship and attempt to strike deals for
investment. Obviously, the developments in East Germany attracted scores
of other investors to the country, much like a moth to a flame.
In the motor industry, renowned companies such as the Ford, Peugeot and
Volkswagen were all clamouring to strike some deal for either partnerships
or buyouts. This meant that Hugh had to act swiftly to out wit the others.
Although the economy had been state controlled with a record of over
employment with poor dilapidated infrastructure, the future potential of
reaping benefits were immense. Louis envisioned using the “native” nature
of Opel as a competitive advantage in the quest for market presentation. In
future, it would mean replacing the obsolete machinery, raising the quality
re–engineering as well as establishing a manufacturing presence of
international standards. All these thoughts must have raced through Hugh’s
mind as he took steps to meet the Kombinat leaders in East Germany.
Obviously, one might have the financial resources but lack information and
the acumen to network the business is perilous. Therefore, Opel had to
overcome some hurdles and grasp opportunities that came their way. Some
of the problems faced were largely political. The East regime still wanted to
hold back but the people on the ground wanted a change.
The top brass was highly corrupt, uncompromising and refused to change
with the times. Thus, to get things done, one had to carry a bribe then things
could be swiftly and diligently attended to. But as at January 1990, things
were slowly beginning to change though bureaucracy and ceremony still
held sway. Another problem Hughes faced was language. He overcame this
The East Germans were not only cheaper but honest and well educated too.
Thus, we can see that the labour market was large. Another opportunity was
the potential 17 Million market for the high quality “East German” cars
which would be churned out by Opel (Opel was considered a German
Company though wholly owned by General Motors of the USA).
The options that Hughes had then were three fold. Firstly, he had the option
to concentrate on the western market and not bother about the east; after all,
Opel could hardly satisfy the demands in West Germany. The second option
was to come to the east through the west. This was advantageous because
East Germans preferred and believed that West German cars were better.
The third option was to simply go to other third countries where labour was
even cheaper than east especially so that if Germany was to reunite, the
expenses would dramatically rise to match international standards, thus
eroding the current advantages. All these three options lingered in his mind
as he tabled his case to other board members.
Further more, the strategy must address the networking framework, which
should involve befriending the key decision makers as well as being
community conscious. This may well mean producing cars that do minimum
harm to the environment as well as our contributing to social needs and
causes. In addition, our marketing must be consistently aggressive and
relevant. Hughes’ two-step multifaceted proposal seems superb because it
will ensure that 10,000 Opels are assembled and serviced as well. The
second aspect or stage of bodybuilding is equally good provided this is done
at the optimum time and with the right infrastructure.
If Hughes presents his case well in the Norstand and at GME or OPG, I am
optimistic that they will fully rally behind him, though some might initially
have some reservations. The issues of Political instability, labour market,
infrastructure would beg answering to clear some minds. Hughes should
convince them of the potential growth market value, the willingness of their
Being global entails implementing and maintaining the best standards that
are ISO certified (international standards of quality). It means total quality
management, teamwork and modern management practices come into play.
This takes time but armed with a visionary leadership and determination, it
is an achievable feat for Opel. In my opinion, the chances of success for this
complete overhaul are high provided the right parameters are put in place
such as continuous training, reduced costs, de staffing and opening up
management for innovation and creativity. Admittedly, this is a lot of work
but necessary if Opel is to remain competitive in the 21st century.
It may seem an insurmountable task but I am confident that the Hughes led
team will steer Opel to success, let us seat tight and watch them perform!
Bibliography
1. Bower, Bartlett, Uyter Hoeven, and Walton. Business Policy: Managing Strategic
process, 8th Edition, [ISBN: 0-256-1159-5] Richard D Irwin
2. Phillip Coteora: International Marketing, 9th edition, McGraw Hill, Boston,
Massachusetts Burr Ridge, Illinois Dubugue, Iowa Madison, Wiscosin New York,
New York San Francisco, California St Louis, Missouri.
This holding presence went on until the aforementioned changed RHL went
through different Managements and eventually proposed despite many
hurdles from the natives and Government who viewed it as a foreign and
exploitative company. In an attempt to overcome these challenges, the RHL
Management had tried to please the local conditions by participating in
social activities and attempting to invest in the community pleasing projects.
In that way, the company avoided some tax. As time went on however,
problem after problem began to buffet the organisation as people tried to
clamour for positions of influence and build personal empires.
It was at this critical time that Das was hired. He found a divided house. The
company was cash strapped, morale was low, labour was hostile, labour
management relations were adversarial, and turnover in management ranks
was very high. Because of governmental price controls, Management for
years had stressed volume, selling at any price and producing at any cost.
Furthermore, there was jockeying for power, functional empires,
international conflicts, legalistic management style and low mutual trust.
Phew! What a time to take over! But this was his inheritance and thus
Having changed the attitude, his next task was to pacify the local conditions
while maintaining good relations with the holding company. Parts of the
local stakeholders were the shareholders, customers and the Government. To
do this, he embarked on product quality improvements; open participative
innovation management style, customer focus as well as aggressive
marketing campaigns. It was whilst trying to please all stakeholders that he
entangled the campaigns into producing ayurvelic, a product that though
socially helpful, was not in line with the RVI corporate products. To produce
this would have meant diverting from the original strong marketing bias to
manufacturing. This would potentially put him at variance with the RVI, and
yet it was critical for RHL to receive preference treatment from the Indian
Government. No doubt, this initiative was viewed as Palatable and
constructive to the local community. The second thing, which was
potentially controversial, was his proposal to sanction the production of
dextro be supplied to the RVI, which is the largest consumer in the world.
Both these ideas were superb but would put him at daggers drawn with the
RVI. This was a risky step but evitable in the circumstances and would only
be justified if Das convinced them (RVI) that both these would keep the
international standards as well as the RVI regulations. These were bold steps
marking out Das from other illustrious managers like Koerber or Bartlett.
The advantages of the two major products (Ayurvelis and Dextro) were that
these would firstly not only rake in a lot of profits but also boost the
company image in that both the Government and community would be
satisfied. If I were Das, I would seek to present all my facts to headquarters,
statistical and otherwise. Having shown them, I would highlight the
advantages such as profits and corporate image. I would point out the
problems such as tax that could be significantly reduced. I would also show
them the team I lead as well as their determination to succeed. All these
persuasive arguments should carry the day, I hope. If others argued on
policy and organisational international standards, I would show them that
our situation is a unique case and thus merited to be treated as an exception
to rule. I would show them that this is part of marketing and the winning of
local goodwill for future days.
Having surveyed Das’ situation, I can safely assert that Das’ career options
are many. He could choose to remain in RHL, or rejoin RVI and indeed go
in to writing. Furthermore, he could also take up a political career as he has a
heart for mother India as well as his strong benevolent pulse – In my view, I
see a great leader in Das, slowly but surely budding and will soon blossom at
noonday. His vision, strategic eye and focus merit out emulation.
In a nutshell, Chuck lacey must be objective, strategic and wise. When the
decision is made, he must be ready to go full throttle in implementing the
decisions, all the time keeping an eye on the market. A divided house is a
sure recipe for disaster but also, we must acknowledge that change is
resisted at all costs, especially if it impinges on time honoured hallmark
values. That not with standing, we are confident that the Ben & Jerry will
surmount all these hurdles with agility and hurtle towards a brighter
tomorrow!
Bibliography
The fourth and last best practice is to make managers accountable. Far too
many pay lip service to the importance of diversity than they practice. Once
given a platform to present a paper, they give heart rending, tear evoking and
moving speeches but as soon as they turn round to leave, they discard
Γ
Retaining Diversity, Excellence magazine-May 1999 issue page 7
Bibliography
ϒ
Diversity management, Excellence magazine-May 1999 issue page 8
Reading Larry Diamond’s “Debt or Democracy” article evoked a lot of sad emotions
and thoughts. Many scenarios flushed through my mind as I read the article, point after
point. I could not help but agree with him on most of the points save a few. In principle, I
heartily support the views advanced in the said article.
By and large the article was well written, researched, argued, largely consistent with deep
insight summoned to potently present the issues at hand. For instance, his introductory
paragraph could not have been written any better than he has. It presents an accurate
summary of what obtains on the ground here in third world Africa where the politician
has taken over the scenario and recklessly ruins every thing at the cost of the powerless
poor and disadvantaged. Indeed, wantonness is the modern clown Politicians’ trade mark.
The crippling external and unsustainable debt levels, absence of social amenities and
services, near homogeneous abject poverty, shortened life expectancy and the ravaging
effects of the HIV/AIDS pandemic among other things are well analyzed. This and many
other aspects of the article are simply superb and I wish he had written more than he has.
First and foremost, it is important to note that not all the pauper countries are as corrupt
as portrayed in the said article. Some are as clean as any other nation can ever be, perhaps
even better than some of the purportedly developed countries of the world. While it is
true to say that most are corrupt, not all are. I wish there fore to raise my finger in protest
over that assertion.
Secondly, Mr. Diamond makes another assertion that there is “global prosperity” I
thought that statement was not entirely accurate unless he was using it as a figure of
speech or referring to the affluent society primarily. That not with standing, It is probable
that he meant that the first world by and large is technologically advanced and able to
generate much more than ever to the extent that it is inconceivable to stumble across
extremely poor nations in this global village. If that is he meant, then I have no quarrel,
but if he meant that the whole world is in prosperity, I beg to differ. That may imply that
every country on this terrestrial ball is in a measure as advanced with all their resources
and potentials fully harnessed. I tend to think that the statement is far too wide and
relative. Care must be taken so that our Self Reference Criterion (SRC)¬ does not
influence our perception. Objectivity must reign at all times. From my stand point, I tend
to think the affluent societies have historically significantly contributed to the vices (e.g.
corruption, dependence syndrome, indifference, power jostling etc) we see today. For one
¬
SRC has to do with our world view and how we interpret things. Usually this is influenced by many
things such as up bringing, training and exposure.
Thirdly, the article at hand places the root cause of the problem as a purely political one. I
understood him to mean that the unjust systems and weak mechanisms thus far instituted
in the said countries do not address or have the capacity to guarantee proper
administration of justice, fair play and focus in a country. I agree with that but what I
would like to add is that the root cause really lies with the respective natives of the
countries at hand. My diagnosis is that the third world citizens by and large suffer from a
naïve ATTITUDE problem that makes them laissez faire, complacent, indifferent to the
point of docility and generally laid back while their wealth and tax money is misapplied.
The tax payer is often too busy toiling trying to make ends meet while the appointed
authority is busy siphoning the wealth or lavishly spending it on egocentric politically
motivated worthless issues. The corrupt leaders really ensure they nearly over draw on
the patience account of the led to the extent that they get away with it without leaving any
finger prints behind them after they have left office. The immediate solution to this defect
is sensitization (i.e. activating/ charging/ awareness rather than “pumping sense into their
damn heads!” which the word “sensitization” seems to suggest at first sight) on a massive
level scaling up what some NGOs are already doing. In Zambia, the Women for Change
is one such potent NGO that has contributed greatly to this noble agenda.
Fourthly and closely connected to the point above, most of these poor countries still
harbour archaic constitutions that are oppressive and herald the President as a “know it
all” super person. What these so called leaders do when they get into power is to defend
the defective constitution as much as possible so that they prolong their hold on power.
For instance, in Zambia, the government has tenaciously held on to the ancient defective
constitution so that they can easily surmount the next elections slated for 2006. Basically,
the said Zambian constitution is based on the obsolete autocratic system where the Chief
assumed all powers regardless. What he or she said was unquestionable law. Similarly,
the President is addressed as “Your Excellency” meaning that that they are infallible and
neither can they be queried on anything, what a fallacy! By that token, they can commit
some heinous crimes and still escape unscathed due to the immunity embedded in the
law. The President has powers to decree anything, sometimes ultra vires, after all, the
separation of powers between the judiciary, legislature and executive are merely on
paper. As such, the President can prevail over court decisions leaving no room for contra
opinions to be given an objective hearing. Thus, it boils down to attitude because if
people had the right attitude and were aware of the cracks of the matter, they would have
long dealt with the constitution issue ages ago.
Note that not all leaders are corrupt. I used this blanket statement for convenience and specifically for the
actually corrupt.
Sixthly, poor countries are infested with short term thinkers that only look at issues
subjectively and conveniently. They masquerade as excellent planners but deliberately
fail to implement, choosing only what will suite them. If any thing threatens their hold on
power, they quickly adjust as via an emergent strategy that never appears when it has to
do with good national issues. Having been around for some time now, I have observed
that the short term mind set is effectively at work where people deliberately refuse to see
what may befall the nation in the near future but choose to bag an extra coin! This is an
extremely costly way to run a country. The nations need more than mere planners but
implementers equal to the task. These strategies must be shared with the donors who
should track every move along the way, depending on the government in question, for
notoriety varies.
In the seventh place, the countries at hand should ensure that proper mechanisms are put
in place that will ensure that the now endemic corruption is systematically, consistently
and effectively eradicated or reduced in a given country. In the case of Zambia for
instance, the corruption fight appears to be a mere smoke screen because no tangible
mechanisms exist to independently sustain the corruption fight, neither are there extant
law enforcement agencies free from external political interference. There is mere
rhetorical talk rather than action. Sadly, this talk is equated to commitment to the fight by
the donor community who naively buy into the meticulously crafted political ploy. In
Eighthly, I wish to agree in part about the recommendation for the donor agencies to
demand democracy for aid or debt relief but I wish to add further that the top down
arrangement should be revisited. What tends to happen is that the said countries may
observe the conditionalities but the quality of work output on the ground remains
questionable, in many instances far below standard due to the hustle and bustle about
targets and deadlines. A case in point is the USAID run programs. Most of these are high
profile, well meant but fall short in that they tend to emphasize numbers rather than
quality. This means that the top down approach is bossy and does not encourage owning
of the goal by the stakeholders who break their backs to meet the requirements. I would
therefore recommend that the relevant donor agencies critically look into the matter and
ensure that quality is in built within the system where both the implementing partners and
other stakeholders internalize the essence of quality programming. As at now, it remains
a far fetched wish.
In the ninth place, I have serious reservations advocating for the United States being the
watch dog over other countries’ human rights record. I say this because I see glaring
inconsistencies in the USA. Examples abound which show a questionable record and
motives by the USA. One example is the Iraq fiasco where the USA, in the pretext of
promoting democracy is after the regions’ oil reserves. USA must first remove the log in
its eyes before it spots the speck in the other’s eye. Granted, the nation (USA) has the
financial muscle and is probably the foremost super power of the day, but it is none the
less subject to the same parameters that measure the human rights record. The American
pride is simply amazingly blinding! I recommend that we use a more neutral country as
an ideal example not the United States.
Tenthly, Mr. Diamond seems to assume that once the pauper governments are pressurized
to bow to donor demands, the respective citizens will rise in uproar as a result. This is an
unverifiable assumption as it does not apply universally. Granted, there will certainly be
some internal upheavals but not always to the extent suggested. Further, the people that
are hurt the most are the common people on the ground. The governments the donors
target to destabilize will for a long time ignore the top down decrees and simply pass on
the buck to the hapless ordinary people who ultimately bear the brunt. In the process,
myriads perish while the survivors are reduced to less than the scum of the earth.
In the last place under observations, I tend to have problems with the definition of the
term “National security” as proposed by Mr. Diamond. Methinks it is a cover up for evil
by the bully nations. The USA has in the past abused this term to justify its crimes against
⊃
In Zambia, we have observed an increase in the court gymnastics where the amount spent on court witch
hunting costs more than what was actually stolen, its just a circus out here!
What then is the way forward? I simply wish to strongly advise that a new workable and
sustainable mechanism be devised to refine the present systems. Further, I wish to advise
that the egocentric interests of the USA be checked by other equally potent nations. In the
post cold war era, the USA is having a field day harassing all and sundry in the name of
fostering freedom and “national security”. The present trend must be reversed if we are to
see a changed world. Further, the United Nations also needs to be liberated from the firm
American clutches that have hijacked it. We are aware that many hands are involved in
this global body but we assert that the entity has no teeth to bite the USA because of the
dollar that the latter dangles. Another aspect worth exploring is to scale up on the gender
equity in the less developed nations as that will act as a check and balance measure
within the system. By and large, the female folk are deprived of decision making
prowess, no wonder the AIDS pandemic runs rampage.
Finally, the poor countries desperately need the donor aid cancellation. If that were done
today, that would be the greatest news. Whether it is done piecemeal or in one whole is
immaterial for now, though the piecemeal arrangement is favoured by this author⇔. Debt
for Democracy is heralded but modalities questioned.
⇔
Thinking outside the box a little, imagine for a moment the whole debt was instantly written off in one
batch rather than piecemeal, there would be chaos in the pauper countries! Most likely, the politicians will
loosen the tight fiscal controls, divert funds and open a Pandora box for theft as there will probably be more
disposable funds. Plunder would ensue once again unless safety gadgets are proactively put in place to
guarantee potent internal controls. Another possibility is that they will use the debt relief as a political
mileage tool to lengthen their hold on the mantle.
It is reported that some of the leading scientists at NASA are from UNZA.
From the foregoing, it is therefore folly to believe that only the World’s elite universities
will produce the all stars team. Take a look at the Real Madrid team. This team, by all
standards is the dream team but look at their dismal performance season after season. I
am convinced it is not a question of capacity as much as pride. After all, they all have
made it!
In this global world then, people must learn to think outside the box of course whilst
meticulously maintaining the standards. Like once successful but obsolete strategies,
standards may also stifle initiative, creativity and development of thought. With all due
respect to those upon whose shoulders we now stand, there is an urgent need to
constantly re-examine the changes in the environment. This should be a universal
principle to operate with.
Care however must be taken not to hurl out time tasted principles but the methods and
approaches are the ones that are variable. The same goes for many once popular churches
in Europe that are by and large deserted today. What about the Cinemas, Post offices and
Discos? With the human eye, all these failed to mutate with the times and have thus
remained white elephants. That does not mean in and of themselves these are useless, far
from it! But rather, they needed to read the times, anticipate environmental changes and
proactively position themselves at places where the target populations are.
! "
1. Merchandise exports and imports
2. Service exports and imports
3. Tourism and Transportation
4. Asset use
5. Investments, including direct and portfolio investments,
licensing, concessions and turn key investments, cooperative
agreements;
6. Multi National Enterprise/Corporation (MNC)
Like many countries in the region, Zambia embarked on privatization with, among other
objectives, a desire to broaden ownership and develop the capital market. The Securities Act was
enacted on 19 December 1993. It established the Securities and Exchange Commission (SEC) to
regulate all participants in the stock market with the prime purpose of protecting investors. The
Lusaka Stock Exchange began operations in January 1994 and was formally opened for business
on 21 February 1994 after only twelve months of concerted effort on the part of the government,
the private financial sector and World Bank project team. As an integral part of the privatization
program, the Privatization Trust Fund was established in June 1994 to temporarily warehouse
shares which are later to be sold through public flotations.
After what many observers perceived as a slow start, Zambia's program has really taken off over
the twelve months from June 1995 to June 1996. As the following table shows, not only has the
number of concluded deals risen sharply, but ZPA's scope of work has also expanded.
Zambia's program is managed by the Zambia Privatization Agency (ZPA). A noteworthy feature -
and one of the key factors in the program's success - is the involvement of the private sector in
the management and oversight of the divestiture process. This takes two forms. First, ZPA is
private sector-led. It has a board of 12 directors but only 3 are appointed by the government. Nine
of the directors are selected by representative private sector groups such as the Zambia
Confederation of Chambers of Commerce and Industry, the Zambia Congress of Trade Unions,
the Zambia Federation of Employers, the Law Association of Zambia, the Zambia Institute of
Certified Accountants and the Bankers Association of Zambia. ZPA's chief executive, recruited
and appointed by the ZPA Board, is also from the private sector. Second, much of the
preparatory work is contracted out to professional firms and all negotiations with bidders are
conducted by small teams of professionally qualified individuals selected for each transaction. In
this way, not only is the private sector heavily involved, the government is twice removed from
deals.
Through ZPA's professional approach (the Bank project team's field work in Zambia last year
revealed not a single complaint about lack of transparency) and the results it has achieved, the
government has had the confidence to broaden the Agency's scope of work to include all
parastatals. Hence, ZPA is now responsible for handling the privatization of the major utilities and
Zambia's largest public enterprise, Zambia Consolidated Copper Mines Limited. In no other
country in the Africa region has a government had the confidence to place complete responsibility
for privatization in the hands of one entity.
Finally, donors, including the Bank, have played an important role too in the success of Zambia's
program. Their level of support has been greater than in any other country in the region and that
support has been very well coordinated. Donor cooperation and coordination in support of
privatization also provides a good example for other countries in the region.
Having analysed the scenario, it now remains for us to draw a few lessons
and conclusions.
Firstly, we note that Ghali was probably naïve about many things when he
stepped onto the 38th floor of the UN Secretariat. He assumed too much
thinking all were friends when viper tongued politicians were lurking in the
corridors to strike him!
As the momentous event recedes into the irretrievable past, we can only
salute Boutros Ghali for the resilience he displayed in attempting to steer the
titanic UN back to sanity. As he himself aptly concludes, “I believe that such
a transformation is still possible and will succeed-if the United States allows
it to do so.” we trust that the petty politics will be surmounted and the
metamorphosis realised.
Bibliography
Billy Sichone trained as an Accountant and worked as a Program Accountant at one of World
Vision Zambia’s large scale Area Development Programs for seven years. He studied the Zambia
Diploma in Accountancy (ZDA), is a Fellow of the Institute of Financial Accountants of the UK,
holds an MBA (Preston University, USA) and is a doctorate candidate.
He is married to Jane and now works as Program Manager at a large scale World Vision Zambia
project.
Among his interests are studies, reading, studying, research, writing, meeting people, astronomy
and adventure.