Feature Article of Sunday, 9 October 2011
Columnist: Sakyi, Kwesi Atta
By Kwesi Atta Sakyi
20th September 2011
B.A (Hons), NDP, MPA, Group Diploma, Cert A 4 Yr
There is the popular saying or apothegm, ‘adapt or perish’. This applies to all species and it is the thesis of Darwin that the race for the survival of species is for those which can adapt best and not those which are mighty or powerful. Sometimes, being powerful can lead to your own demise through being greedy and then in the power struggle, you get eliminated or your weight weighs you down. Hence, the exit of the mammoths and dinosaurs from this world. Their enormous appetites and monstrous sizes were not sustainable and they were the architects of their own doom and extinction.
Globalization is the process of integrating world markets and economies by breaking down trade barriers. In 1947, the General Agreement on Tariffs and Trade (GATT), was established in Geneva to promote world trade and convince members to reduce protection. The period from the end of the Second World War in 1945 to 1995 saw an era of trade wars within the Cold War era. The world became sharply polarized into the Western Bloc and the Eastern Bloc and those ideological divides affected trade immensely as capitalism came face to face with communism and socialism. In 1995, the World Trade Organisation (WTO) replaced GATT but carried along its protocols, earlier negotiated under the aegis and auspices of the UN in the Uruguay Rounds, working collaboratively with the United Nations Conference on Trade and Development (UNCTAD). The various negotiations entered into by 153 countries, set the stage for lowering tariff barriers, removing embargoes and putting in place clauses such as Most Favoured Nation (MFN), Preferential Treatment, Commodity Agreements, Negotiated Subsidies and Common Agricultural Programmes (CAP) and the African-Caribbean Pacific (ACP) Agreements signed in Lome. Currently the WTO has been negotiating for 7 years at the Doha Rounds to reduce trade barriers and there is an impasse. Globalization has been accelerated by the creation of regional trading blocs such as NAFTA, EU, ASEAN, ECOWAS, COMESA, among others. The rapid advances in telecommunications, transport and education have led to this globalization or what we now refer to as a global village or a seamless and borderless market place. The world has shrunk literarily in size because of the speed of the internet, cell phone and the cable TV Networks such as CNN, SkyNews, TBN, CBN, ABC, CBS, RTV, Al-Jazeera, BBC, among many others. The world is now a virtual world as businesses can exist online and many transactions such as voting, trading, teaching, consultations and contracts can be executed online. We have virtual businesses such as Amazon.com, e-Bay, Lastminute.com. among others. We now talk of e-tailing, e-voting, e-banking, e-government, e-commerce, and e-learning, among others. The process of globalization has exposed the world to most people who before the knowledge explosion, were feeling complacent and cosy in their cocoons. Now more Japanese, Chinese, Americans and Koreans are venturing out to explore and discover market niches or gaps in Africa, Ghana no exception. The question to ask is, ‘Are we in Ghana keeping abreast with this globalization process? How many Ghanaians have internet or cell phone access? How many Ghanaians bother to learn Chinese or Korean or about what is happening in other parts of the world? Do we have the quality infrastructure to absorb the capital being thrown at us? How many of us can say we have acquired an MBA and so we can negotiate properly with the Chinese or Koreans or Americans or Germans or Russians who will like to partner with us in Ghana? How many of us can say that we eschew corruption, homeboyism and tribalism? If these issues still linger with us, then I am afraid we are being left behind in the globalization race. We need to develop our institutions to world class standards so that we can impress our foreign partners who will like to team up with us. We need to pay attention to simple things such as sanitation in our towns and cities, quality education in our schools and colleges, the ease with which we carry out our transactions at the banks, hospitals, registrar of companies, registrar of vehicles, immigration, customs, police stations, and courts of law, among others. If we have rotten, incompetent and corrupt officials in these offices, who will like to come and buy land to invest or will like to be subjected to unnecessary bureaucracy? Ghanaians need to be polished in their demeanor and to carry some modicum of respectability around then in their daily interactions with foreigners. Of course, some of these foreigners are crooked so we need to be streetwise. Globalization may be a means to an end but not an end in itself.
FEATURES OF GLOBALISATION
Globalization evinces the trend whereby there is a movement towards universal taste and networking. For example, KFC, Coca Cola, Dell, McDonalds, HP, Wal-mart, Chelsea, Man U, Apple, Sony, Toyota, Samsung, Barclays, among others have become global brands and household ideals. We may ask, ‘is globalization a one-way traffic, benefitting only multinationals (MNCs and TNCs) from the rich and advanced countries? Some critics and observers have equated the harmonization of world tastes as Americanisation of the world. When will Ghanaian and African brands also become universal? Thanks to easy adverts posted on the websites, brands can be seen everywhere in the world. This is why we have to take ICT education and access seriously in Ghana. Globalization has increased competition and efficiency as online business people have come up with innovations of doing business the easy way. This is for the convenience of customers but it has its hazards. Customers can now buy goods and services in the convenience of their homes or offices by ordering goods from anywhere in the world. The virtual companies such as e-Bay and Amazon.com have networked with producers, credit card companies, couriers, intermediaries and transporters to disintermediate the market, thereby eliminating services of middlemen who cause inflation of prices. This has greatly reduced transactions cost and caused unemployment in some sectors and created more employment in others. The use of ICT facilities such as the internet or cell phone has made it possible for customers to order goods to their specifications (customized or tailor made), instead of buying off-the-peg or off-the shelf mass-produced goods. These customized goods are bespoke. Customer satisfaction has been raised to a new level of an art or a science. We now have terms like social marketing, customer retention, customer extension services, customer relations, customer loyalty, brand visibility, rebranding, among others. Customer satisfaction is therefore greatly enhanced. In the value chain, the use of innovative production operations to cut costs has led to the fragmentation and scatterisation of operations through offshoring and outsourcing of both core and non-core activities. Ghana should position itself as a cheap labour market to attract a share of this burgeoning market which the western world is taking to South East Asia, specifically to India, China, Indonesia and Malaysia. Ghana is strategically located a short distance away from Europe North and South America. Global manufacturing is now the in- thing so we can ask Brazil or China or Germany to outsource some of their manufacturing activities to Ghana as we do not lack talent and we have a pool of hardworking graduates. What we need to do in Ghana is to build our internal capacity for the future by educating our future. We should acquire a lot of skills and education by being multi-skilled and multi-talented. We should increase our internet speed, reduce corruption and bureaucracy and look for a new Ghana Corporate image through aggressive promotions. We are capable of deriving locational comparative cost advantage through territorial specialization and division of labour. We should follow the Indian and Chinese examples by creating centres of academic excellence in our universities so that we identify our geniuses and set them up to work on research projects, because for us to advance, we should be aggressive with research and development (R & D). We can engage in reverse engineering (done at Kakompe, Suame, Abosso Okai and Magazine). We must adapt or perish. With our abundant natural resources, we will have to go for an inward-oriented growth strategy by ensuring that we attract processing companies to Ghana to process our timber, bauxite, manganese, oil, cocoa, shea butter, coffee, gold and other produce into finished products before we export. By adding value at home, we kill two birds with one stone by creating more jobs and earning more forex. Ghanaians like me should not be in the Diaspora. We all need to stay at home working but then our system does not offer enough job openings. It is hoped that with our economy growing at around 20% p.a, we should attract the attention of world class manufacturers to relocate some of their operations to Ghana. One major area Ghana can make a breakthrough and use as turnkey project is that of tourism and the hospitality industry. Our standards in the hotels have to be world class and our hotel owners should charge reasonable prices. They should offer delicious Ghanaian and continental cuisine. We can rely on the advanced South East Asian countries to invest their surplus capital in Ghana. Here, we are looking forward to countries of cheap capital such as China, Japan, Malaysia, Singapore and Indonesia. Currently, the PIIGS countries in the EU are facing financial blues. These are Portugal, Italy, Ireland, Greece and Spain. Therefore, the whole of Europe is in financial turmoil. Maybe Switzerland and the Scandinavian countries can come to our aid. We must enter into partnerships with them to attract their FDI and expertise. We need to diversify our economic base, especially into service, tertiary and downstream businesses.
THE ILLS OF GLOBALISATION
The process of globalization has spawned its pros and cons. A lot of internet theft is being reported. There is now an upsurge of online crimes such as cyber-crime, identify theft, advance payment fraud, ‘Sakawa’and paedophilia. These internet-related crimes are on the upsurge in Ghana and I call upon the security services to work with JICA, USAID, DFID and other NGOs to closely monitor the internet and apprehend these criminals. Globalization is gradually eroding our Ghanaian culture as our young people copy blindly fads from other countries. There is massive intellectual property theft online and this is not healthy and fair to artists and rightful owners of such intangible assets. The Ghana governments should beef up the law on internet abuse, pornography, among others. While the WTO is clamouring for free markets, other countries in the first world have instituted subsidies to support their farmers and they have put insurmountable bureaucratic hurdles in the way of exports from poor countries. This situation beggars belief because it is not an even playing field. It is amoral and immoral. Pascal Lamy of WTO should take note. The advanced countries, through their MNCs and TNCs, are exploitative and abusing labour in poor countries through casualisation and paying salvation wages in the mines, plantations and other businesses. They are the ones who create the majority of negative externalities such as air, water and land pollution, noise pollution and land degradation. Globalization to them, is a ticket to raping the earth wherever they operate. Our infant industries are emasculated by them and they steal our lucrative jobs by bringing along their experts to work in our countries, denying us top-dog jobs. Our markets have become dumping sites for cheap imports which are killing our local industries. Because of protocols we have signed, we cannot place quotas or embargoes. Our borders are wide open to criminals from ECOWAS countries who invade Ghana incessantly. Perhaps, we need to check ourselves and protect our territorial integrity and sovereignty. We experience capital flight as profits made by multinationals operating in Ghana are externalized in different guises such as transfer pricing. Globalization in general is rendering Ghanaians to be copycats, losing our originality and we gobble up any new fad thrown at us from the drawing rooms overseas.
Let us reflect on innovative ways by which those of us in Ghana can find a niche in the globalised market so that we neutralize external threats and exploit external opportunities. Globalization should not be a zero-sum game but a win-win situation. The earlier we discovered our market gap, the better it would be for us. As for me, I think it lies in the quaternary or service sector. Whether we like it or not, globalization has come to stay and we need to adapt to it quickly or else we will continue to be hewers of wood and drawers of water. We should gradually woo back experts in the Diaspora to come and invest in Ghana or bring their expertise to help build the nation. We need our entrepreneurs to become technopreneurs and to set up sunrise industries such as at Ashesi University in Accra.
By Kwesi Atta Sakyi