Whether as an African State Should Pursue Global Integration - Essay Example

Whether as an African you should pursue global integration (advice for: African Ministry of Trade & Development This policy brief recommends the creation of The ICT, Leadership and Management Initiative (ILMI) to the Ministry of Trade and Development of Ethiopia. As one of the least developed countries in the world, this African state needs drastic changes in order to face the challenges of globalization and development. ILMI will integrate the Information and Communication Technologies with a new vision of leadership and management inspired in the Southeast Asian countries and the Asda Effect as a tool for increasing development taking advantage of all available assistance from international organizations and donors into an effective initiative for change and integration in the national and global markets. 2.- Overview. Professor Frank Flatters from the Department of Economics of Queen's University, Canada, argues in favor of national policymaking as follows: "There are many tracks for pursuing trade policies aimed at effective global participation, the most important of which are the multilateral WTO processes, regional arrangements, and special bilateral or plurilateral preferential agreements. For each of these avenues, however, the key to success is domestic policies." (Flatters, 2003). In this context, the Ministry of Trade and Development of Ethiopia has to face the fact of taking drastic measures at a national level in order to be more competitive both locally and globally. ILMI aims at a widespread use of Information and Communications Technologies as well as assuming a new kind of leadership and management all across the nation taking as examples new paradigms for change. Globalization is a very challenging endeavor, especially for a very poor country. It seems paradoxical to recommend the implementation of Information and Communication Technologies to one of the least developed countries in the world, but ICT are unavoidable in order to achieve a successful integration. With the creation of ILMI there will be real benefits in relation to international trade and national companies will be much more competitive. E-Commerce and Outsourcing will be available to a wider range of individuals. A telecommuting work force will be created through the use of ICT enhanced with new ways of leadership and management. Ethiopia's Ministry of Trade and Development has to take advantage of the globalization efforts of many international organizations and developed countries in favor of the least developed countries. 3.- Globalization and Development in Africa. The United Nations have taken the initiative of helping the least developed countries through the Millennium Development Goals. These goals are the following: Goal 1: Eradicate extreme poverty and hunger Goal 2: Achieve universal primary education Goal 3: Promote gender equality and empower women Goal 4: Reduce child mortality Goal 5: Improve maternal health Goal 6: Combat HIV/AIDS, malaria and other diseases Goal 7: Ensure environmental sustainability Goal 8: Develop a Global Partnership for Development (United Nations, 2000). The UN Millennium Project is clear about the issue of underdevelopment: "Whatever one's motivation for attacking the crisis of extreme poverty -human rights, religious values, security, fiscal prudence, ideology- the solutions are the same. All that is needed is action." (UN Millennium Project, 2005). In this context, the UN Millennium Project has suggested ten key recommendations: "1.- Developing country governments should adopt development strategies bold enough to meet the Millennium Development Goal (MDG) targets for 2015. We term them MDG-based poverty reduction strategies. 2.- The MDG-based poverty reduction strategies should anchor the scaling up of public investments, capacity building, domestic resource mobilization, and official development assistance. 3.- Developing country governments should craft and implement the MDG-based poverty reduction strategies in transparent and inclusive processes, working closely with civil society organizations, the domestic private sector, and international partners. 4.- International donors should identify at least a dozen MDG "fast-track" countries for a rapid scale-up of official development assistance (ODA) in 2005. 5.- Developed and developing countries should jointly launch, in 2005, a group of Quick Win actions to save and improve millions of lives and to promote economic growth. 6.- Developing country governments should align national strategies with such regional initiatives as the New Partnership for Africa's Development and the Caribbean Community (and Common Market), and regional groups should receive increased direct donor support for regional projects. 7.- High-Income countries should increase official development assistance (ODA). 8.- High-Income countries should open their markets to developing country exports through the Doha trade round and help Least Developed Countries raise export competitiveness through investments in critical trade-related infrastructure. 9.- International donors should mobilize support for global scientific research and development to address special needs of the poor in areas of health, agriculture, natural resource and environment management, energy, and climate. 10.- The UN Secretary-General and the UN Development Group should strengthen the coordination of UN agencies, funds, and programs to support the MDGs, at headquarters and country level. (UN Millennium Project, 2005). United Nations Secretary-General, Kofi A. Annan (2005), has stressed the need for immediate action in order to achieve the Millennium Development Goals. In this direction, the UN Global Compact was created as an international volunteer initiative that recommends "universal principles in the areas of human rights, labour, the environment, and anti-corruption" (UN Global Compact, 2005). On the other hand, The United Nations Conference on Trade and Development (UNCTAD) holds the following position about development in Africa: "The African continent remains by and large marginalized in the world economy, with over half of the population living under US$1 a day per person. If the major Millennium Development Goal of reducing poverty by half by the year 2015 is to be achieved in Africa, a major policy shift is required, both at the national and international levels, to help boost growth and development in Africa." (UNCTAD, 2002). When dealing with the least developed countries, UNCTAD suggests the following: "Sustained poverty reduction cannot be achieved through welfare transfers, although these may be used, at any moment in time, to alleviate instances of the most extreme misery. Rather, it requires the efficient development and utilization of productive capacities in a way in which the working-age population becomes more and more fully and productively employed." (UNCTAD, 2004). Through the ILMI these issues are addressed appropriately as this initiative will promote the use of Information and Communication Technologies in Ethiopia following new paradigms of leadership and management. Along this line of action, the United Nations' "New Partnership for Africa's Development (NEPAD)" faces the following challenges: "1.- Poverty eradication 2.- Placing African countries, both individually and collectively, on a path of sustainable growth and development 3.- Halting the marginalization of Africa in the globalization process and increasing the continent's full and beneficial integration into the global economy." (United Nations, 2002). On this last point, the Human Development Report 2005 states that unfair trade policies are damaging growth prospects in developing countries. (UNDP, 2005). Kevin Watkins, lead author of the Report and the Director of UNDP's Human Development Report Office gave his opinion as follows: "Comparative access to subsidies, not comparative advantage, remains the key to understanding agricultural trade," Watkins said. Looking beyond market access and agriculture, the Report calls for a stronger Doha Round emphasis on areas in which developing countries stand to gain -such as the movement of labour- and less emphasis by rich countries on intellectual property, investment, and rapid import liberalization in poor countries." (UNDP, 2005). So the least developed countries are facing a great challenge in order to find their place in the global economy. The World Bank is "the largest external funder of Africa's development" (2006) and its work in Africa is based on "the four strategic pillars highlighted in the seminal study Can Africa Claim the 21st Century: Improving governance and resolving conflicts; Investing in people; Improving competitiveness and diversifying economies; and Reducing dependency on aid and strengthening partnerships." (World Bank, 2006). The ILMI will greatly align the Ministry of Trade and Development of Ethiopia with these goals. The World Trade Organization issued its "Doha Ministerial Declaration" for helping the least developed countries achieve a greater development with fairness and equality. In its first point it points out as a priority to eliminate any kind of protectionism. In its second point it states that: "2. enhanced market access, balanced rules, and well targeted, sustainably financed technical assistance and capacity-building programmes have important roles to play." (WTO, 2001). Another mechanism like the Doha Development Round is the WTO Sub-Committee On Least-Developed Countries. On the other hand, the United States is involved in helping the least developed countries through African Global Competitiveness Initiative. This initiative "greatly expands the trade capacity building efforts underway with African nations through the U.S. Agency for International Development's (USAID) Regional Trade Hubs located in Accra, Ghana; Gaborone, Botswana; and Nairobi, Kenya. The Initiative will further the work of the Trade Hubs in enabling African economies to become better integrated into regional and global markets and to take advantage of trade opportunities afforded by the African Growth and Opportunity Act (AGOA)." (White House, 2005). The International Monetary Fund (IMF) has taken some steps in the direction of helping the least developed countries through debt relief. (IMF, 2006). Aryeetey, E., Court, J., Nissanke, M., and Weder, B. (1998). "Strengthening Africa's Participation in the Global Economy". (online). United Nations University (UNU) and the African Economic Research Consortium. Available from: http://www.unu.edu/Hq/academic/Pg_area4/globafrica.html. (Accessed 30 May, 2006). Aryeetey et al, from the United Nations University and the African Economic Research Consortium state the following: "there are lessons from Southeast Asian experiences that policy-makers in sub-Saharan Africa could adapt to their own contexts" (Aryeetey et al, 1998). The underlying issues taken into consideration by therm are the following: "1. Participating in the global economy provides immense opportunities. 2. It also entails significant risks. 3. Successful participation requires a strategic approach that is actively pursued." (Aryeetey et al, 1998). The key lessons are the following: "1. Ensure a stable macroeconomic environment. 2. Liberalize trade, but with care. 3. Realise the opportunities of regional dynamism. 4. Focus on the primary sector 5. Some protection and selective promotion policies may be helpful.... 6. But they can be dangerous if the institutional preconditions are weak 7. Reinforce the institutional preconditions for outward orientation and growth 8. Developed countries can help by". (Aryeetey et al, 1998) These are the lessons that ILMI will address locally in order to be successful globally. The ILMI has to be implemented in training agencies located throughout Ethiopia. These hubs will help everybody to use on a wider scale Information and Communication Technologies with a vision of leadership and management exemplified by Archie Norman and Allan Leighton in Asda. The Editor of Bridges.Org states the following about ICT in South Africa: "Information and communication technology (ICT) policy in South Africa incorporates telecommunications and e-commerce. While discrete policy and legislative processes, the two are intertwined within the joint national strategies of equitable development and economic growth." (Bridges.Org, 2002). This strategy can be implemented through the Ministry of Trade and Development in Ethiopia through ILMI. But it must be taken into consideration that besides economic growth there is a need for fair distribution as Tito Mboweni (2003), Governor of the South African Reserve Bank, stresses it. So ILMI will be a development strategy to be widely used throughout business in order to empower all stakeholders so they can be competitive. The leadership and management feature of ILMI will be based on the success of Archie Norman and Allan Leighton in making the supermarket Asda in the United Kingdom a successful enterprise. 4.- Response to Strongest Counter-Argument. One of the strongest counter-arguments against ILMI will be based on the following statistics about internet usage in Africa: Population: 915,210,928 (2006 estimate) Population Percentage of the World: 14.1 % Internet Usage (Latest Data): 23,649,000 Percentage of Population (Penetration): 2.6 % Usage Percentage of the World: 2.3 % Usage Growth (2000-2005): 423.9 % (Internet World Stats, 2006). As it can be seen the usage percentage of the world is just 2.3%, but at the same time it can be seen that the usage growth during the last five years is 423.9%. Information and Communication Technologies are a key factor in globalization and development, so there is no doubt that they have to be encouraged. They have to be used widely as much as possible. Another counter-argument will be held around the kind of leadership and management applied by Archie Norman and Allan Leighton at Asda. James Weber and Michael Beer studied the Asda Case for Harvard Business School in 1998. In 1991 the situation of Asda had the following characteristics. That was the situation that Archie Norman found when he was named Chief Executive Officer: "Asda's organization and culture had become more bureaucratic and hierarchical since the mid-1980s. () This led to a complete stoppage of any innovation. () There was little integration or interaction between the classes (executives and employees)" (Weber and Beer, 1998a: p. 6) Archie Norman made drastic changes. During his first day in office, he fired the Chief Financial Officer, and later on he employed Allan Leighton. Both of them made a perfect team as Kate Rankine states it: "The two men saved Asda from collapse more than 10 years ago, turning round the Leeds-based supermarket group, before selling it to Wal-Mart for 6.7billion in 1999." (Rankine, 2005). During his first day at Asda, Archie Norman met with the Management Team and he boldly told them the following: "Today is Day Zero in our recovery program. This business is in poor shape and must change sharply in order to survive. Incremental change is not enough. There are no sacred cows and nothing that can't be examined. Our number one objective is to secure value for our shareholders and secure the trading future of the business." (Weber and Beer, 1998b: p. 1). This same attitude has to be implemented through ILMI. That is the core thinking behind the success story of Archie Norman at Asda. The same principles have to be taught through ILMI to the Ethiopian people through the Ministry of Trade and Development. 5.- Conclusion. The ICT, Leadership and Management Initiative (ILMI) will greatly help Ethipia to be much more competitive, but the Ministry of Trade and Development has to face many challenges ahead. One of the challenges is related to the Doha Development Round. The least developed countries have to struggle very hard to get help from richer countries and international organizations. The globalization challenge has to be addressed through domestic policies that ensure competitiveness at national and international levels. ILMI will teach people how to use technology through new paradigms of leadership and management. ICT is unavoidable. All nations have to integrate ICT policies into their strategies. 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