tytuł, stopień naukowy, pełne imię i nazwisko (Times, 12, pogrubio

Transkrypt

Dorota Kuchta*
Joseph Uwumbeijon Sukpen**
Globalization and the Development
of Enterprises in Ghana
Introduction
In recent times, most countries, economies and enterprises have become
interdependent on in their quest to be more efficient in the provision of goods,
services and communication among themselves.
It can be recalled that in the past trade and cooperation existed among only
countries that were neighbors or did not have a great distance between them
because of the fact that most of these transactions and co-operations were executed on foot as the means of transport. The differences in languages, inability
to meet the demands of citizens were other hindrances to these forms of cooperations. The rise of industrialization however changed this trend since there
arose a need for both foreign capital and markets.
This necessity for bridging the gap between nations, economies and enterprises formed the panacea for idea of globalization. This paper discusses the
idea of Globalization, its meaning, principles and the impact that this phenomenon has had on the enterprises in Ghana.
1. Globalization
Globalization is an inevitable phenomenon in human history that has been
bringing the world closer through the exchange of goods and products, information, knowledge and culture [youthink.worldbank.org].
There are different definitions and explanations to the term ‘globalization’. The
meaning of this term is largely unknown and obscure even to those who use it.
The term is often distinguished more by what it is not rather than what it is
[Reich S. 1998]. The following are some proposed definitions of globalization.
Globalization constitutes a multiplicity of linkages and interconnections that
transcend the nation states (and by implication the societies) which make up the
modern world system. It defines a process through which events, decisions and
activities in one part of the world can come to have a significant consequence
for individuals and communities in quite distant parts of the globe [McGrew,
1990].
Globalization is defined here as a set of economic and political structures
and processes deriving from the changing character of the goods and assets that
*
Dr hab., inż, Instytut Organizacji i Zarządzania, Wydział Informatyki i Zarządzania, Politechnika Wrocławska, [email protected]
**
Mgr, Instytut Organizacji i Zarządzania, Wydział Informatyki i Zarządzania, Politechnika Wrocławska, [email protected]
268
Dorota Kuchta, Joseph Uwumbeijon Sukpen
comprise the base of the international political economy – in particular, the increasing structural differentiation of those goods and assets [Cerny, 1995].
According to Reich, “…there are at least four potential definitions of globalization that are increasingly radical in their understanding of the change represented by globalization and thus its relational implications. The following are the
definitions.
1.1. Globalization as a Historical Epoch
The end of the cold war saw the beginning of globalization and the question is if there is a causal relationship between them. Philip McMichael is of the
view that the economic counterpart of the cold war was what he terms “development project” which “was a postwar construct through which the capitalist
economy was stabilized. Like any social construct, the institutions of the market
economy are historically specific…mid-20th century capitalism was organized
within the framework of the (now universal) nation-state system...[which] combined the principles of mercantilist and liberal organization into a new international regime of ‘embedded liberalism.’ This regime subordinated trade to systems of national economic management, anchored in strategic economic sectors
like steel and farming. Together, international and national institutions regulated
monetary and wage relations to stabilize national capitalisms within a liberal
trade regime. Its extension to the so-called Third World, as the decolonization
process unfolded, generated the paradigm of developmentalism [McMichael,
1996].
The term ‘globalization’ might therefore serve as a time bound template
for describing a context in which events occur. Globalization might be considered (retrospectively) as a historical period. This period was characterized by
change involving a distribution of labor between high and low value-added processes focusing on subcontracting [Garret, Lange, 1991]; it respects markets as
institutions while condemning unionism and welfarism as antiquated; it disowns
fiscal policy as a useful instrument of policy; and, ultimately, it reasserts the
importance of individualism at work expressed in diverse forms such as ‘telecommuting’ and flextime.
1.2. Globalization as Confluence of Economic Phenomena
Globalization might be characterized functionally by an intrinsically related series of economic phenomena. These include the liberalization and deregulation of markets, privatization of assets, retreat of state functions (particularly
welfare ones), diffusion of technology, cross-national distribution of manufacturing production (foreign direct investment), and the integration of capital
markets. In its narrowest formulation, the term refers to the worldwide spread of
sales, production facilities, and manufacturing processes, all of which reconstitute the international division of labor [Reich, 1998].
What may be unique about these phenomena, however, and thus justify a distinction between globalization and its economic predecessors, is their cluster,
Globalization and the Development of Enterprises in Ghana
269
scope, and domain. Globalization characterizes an intensification and linkage of
a number of old processes rather than the development of a new one.
Wilfried Ruigrok and Rob van Tulder are specific in their characterization of
globalization, associating it with increased international capital mobility and a
growing incidence of mergers and acquisitions and of strategic alliances [Winfried, van Tulder, 1995].
R.J. Barry Jones suggests that globalization may simply be an intensification of the process of international interdependence, a function of the growth of
competition in an international free trade system intensified by the diffusion of
technology. The intensification of these processes has a qualitative change in
the pattern of constraints and opportunities facing actors [Barry Jones, 1995].
1.3. Globalization as the Hegemony of American Values
Prominent in these approaches include, the idea of diffusion and convergence; assimilation of the political and economic institutions both in the public
and private sector.
Technology makes possible the limitless accumulation of wealth, and thus
the satisfaction of an ever-expanding set of human desires. This process guarantees an increasing homogenization of all human societies, regardless of their
historical origins or cultural inheritances…Moreover, the logic of modern natural science would seem to dictate a universal evolution in the direction of capitalism… As standards of living increase, as populations become more cosmopolitan and better educated, and as society as a whole achieves a greater equality of condition, people begin to demand not simply more wealth but recognition
of their status… Communism is being superseded by liberal democracy because
of the realization that the former provides a gravely defective form of recognition [Fukuyama, 1992].
Globalization symbolizes the triumph of modernization theory over traditional way of life. This also represents the universalization of American values
based on convergence, democracy and industrialized economic development.
1.4. Globalization as Technological and Social Revolution
The same economic phenomena identified earlier are important not just
because they represent a unique cluster of activity but because they represent
a new form of activity. This view depicts a striking revolution among technoindustrial elites, driven mainly by technological advances, that ultimately renders the globe a single market [Carnoy, Castells, Cohen, 1993]. This is a comprehensive and complex vision: of globally integrated production; of specialized
but interdependent labor markets; of the rapid privatization of state assets; and
of the inextricable linkage of technology across conventional national borders.
Globalizing firms are generally labeled transnational corporations; globalizing
firms, seeking to replicate themselves on a regional basis, may be better termed
‘multinational corporations.’ Consistent with this distinction, the two behave in
very different ways. Multinational firms may decentralize production and sales
270
but their decision – making remains firmly centralized in a hierarchical structure. For the purpose of this paper, the definition of globalization as a confluence of economic phenomena will be adopted.
2. The Tensions of Globalization
According to Rothenberg, “globalization is the acceleration and intensification of interaction and integration among the people, companies and governments of different nations. This process has effects on human wellbeing, on the
environment, on culture, and on economic development and prosperity of societies across the world” [Rothenberg, 2003].
This definition captures the idea of the possible conflict of values that are involved in the process of globalization and how the various parties involved at
certain points within the process would have to give up on their values. The
following are some of the tensions that could be experienced in the process of
globalization.
2.1. Tension between Individual Choice and Societal Choice
This tension arises when there is a conflict between an individual’s preferred choice and what the society believes is the right choice for the individual.
This conflict is manifested for example in the spread of American culture into
other nations where the national interests of the said country are overshadowed
by the wave of American influence. The truth is that none of the citizens of the
said country can be said to be under any duress to prefer the American culture
but for some unknown reasons they just seem to prefer that culture. The quest of
native culture to ensure its dominance within its boundaries result in the promulgation of certain regulations which in the long run overshadow the preferred
personal choices of its citizens. The ethical question that arises in such situations is whether the state has the right to override the individual’s preferred
choices?
2.2. The Tension between Free Market and Government Intervention
This tension is very similar to the aforementioned. This is because the free
market is an aggregation of lots of individual choices whilst government intervention on the other hand is the practical ways in which societies decide on and
implement the choices they make about their values.
Free markets determine what goods and the amount of goods that are produced
as well as the trends of investments that are optimal for the satisfaction of customer demands.
The free market equally plays a crucial role in creating an efficient response to changes in the economy, when consumer demand increases or decreases for certain products, or when factors such as a decline in investment or
damage to the environment changes the supply of money or products. It is important here to state that despite all the accolades of the free market, most of the
times they fail to provide essential social services at affordable prices and gov-
271
ernments intervention in those areas becomes inevitable. Among others, these
services include water, security, defense, electricity etc. These situations often
result in interventions by governments to make sure the needs of its citizens are
met irrespective of the quest to allow the operation of a free market economy.
2.3. Tension between Local Authority and Extra – or Supra – Local Authority
This tension arises out of the conflict between for example local government institutions and their development partners. In this situations, the supralocal authority often have greater power to coerce the local authority into doing
their bid. Examples of such institutions include among others the World Bank,
the International Monetary Fund (IMF) and most of the developed countries.
The developing countries get the budget deficit funding from these institutions
and they use this as a tool of manipulation to achieve the liberalization of local
markets and the lowering of tariffs on imports among other things. These local
economies are coerced into compliance even if this policies are detrimental to
them which is further enhanced because of their dire needs to funds to supplement their budgets and development efforts.
Here again, a tension arises, this time between the democratic legitimacy
of domestic legislation and the need to create and enforce international rules by
bodies who are not directly accountable to those whose lives and interests they
affect. These examples of the tensions of globalization are just a few of the cases where citizens around the world have felt threatened by the current process of
interaction and integration.
3. The Impact of Globalization on the Development of Enterprises in
Ghana
Globalization has become the defining process of the present age. While
the opportunities and benefits of this process have been stressed by its proponents and supporters, recently there has been increasing disillusionment among
many policy makers, analysts and academics, as well as the community of nongovernmental organizations (NGOs) [Khor, 2000].
3.1. Benefits of Globalization to Ghanaian Enterprises
3.1.1. Political Stability
Looking at the political history of Ghana, the country has gone through a
number of military interventions which has most often resulted in economic
mismanagement in the country. During this period of military takeovers, there
was no accountability, they were as well characterized by the seizure of private
enterprises, victimization and many other social vices. These practices accounted for the stifled growth of enterprises within Ghana [Gocking, 2005].
Against that background, not only did the volume of new investment continue to stagnate or even decline, but the maintenance of existing assets was
272
systematically neglected. And capital flight rather than capital inflow became
the normal condition in Ghana’s balance of payments picture [IMF, 2006].
However since Ghana started a courtship with the Breton Wood institutions, it has had a very stable political leadership thereby becoming an example
for all other African countries. The conditions of loans and grants that require
beneficiary countries to practice democracy has been one of the major factors
that has ensured this stability [Dzorgbo, 2001].
3.1.2. Relatively Stable Fiscal and Monetary Policies
Government expenditures were capped at 10% of the GDP before independence by the British colonial administration. When Nkrumah assumed power, however, he removed these constraints and instituted the Big Push program
with an aggressive government expenditure program that pushed the budget
deficit to over 6% of GDP. With such a rise in aggregate demand due to government spending exacerbated by a loose monetary policy, by 1965, the consumer price inflation had exceeded 20% [Leith, 2003]. From 1960 to 1965, total
bank lending increased from 14.5 million sterling pounds on monthly average to
153 million sterling pounds [Rimmer, 1992].
This trend continued even within the early period of cooperation with the
IMF and World Bank. From the year 2001, these fiscal and monetary indexes
have greatly improved boosting the trend of business transactions.
The implications of the growth projections means that Ghana faces favorable medium-term growth prospects if it addresses its growth constraints. From
table 1 below, under a realistic baseline scenario the real GDP growth rate is
expected to average about 6.9% annually through 2015 while the population
grows at 2.6% per year, resulting in an impressive 4.2% annual improvement in
per capita income. [Ackah, EBortei – Dorku Aryeetey, Aryeetey, 2009].
Table 1. Macroeconomic indicators, 2004 – 2015
Levels (US$ billions)
Accelerated growth
scenario
C
17.44
14.44
1.80
A-B
A
7.99
6.34
0.97
Baseline
growth
scenario
B
16.59
14.23
1.78
Grow
th
(%)
Avg.
(2004
2015)
A-C
6.9
7.6
5.7
7.4
7.8
5.7
1.28
0.99
2.89
1.82
2.89
2.35
7.7
5.7
8.0
8.2
2004
Real GDP market prices
Private consumption
Government consumption
Private investment
Public investment
2015
Growth
(%)
Avg.
(20042015)
273
Export
Import
Real GDP per capita
(US$’000)
Real exchange rate (local
currency units per US$)
3.23
4.82
0.37
6.53
10.66
0.58
7.06
11.18
0.61
6.6
7.5
4.2
7.4
7.9
4.7
1.00
0.97
0.99
-0.3
-0.1
Trade to GDP(%)
Investment to GDP (%)
Private
Public
External debt to GDP
(%)
External debt service to
exports (%)
100.8
28.4
16.0
12.4
55.5
103.6
28.4
17.4
11.0
28.0
104.6
30.6
17.1
13.5
27.1
2.9
1.5
1.4
Source: [World Bank, 2007].
3.1.3. Development of the Financial Industry
Another great benefit that enterprises have received as a result of globalization is the development and consolidation of the financial industry. The Ghanaian financial industry has developed tremendously over the last decades to the
level that allows it to handle transactions with their international counterparts.
First and foremost is the fact that there was the development of the banking
code in 1983 which was reviewed in 2003 giving financial institutions the independence they need to conduct business without any interference.
The second development in this industry was the liberalization. This opened the
way for foreign-owned banks to start operations thereby giving the populace a
wide variety of banking options.
As the Central Bank puts it in its 2010 annual report “the number of Deposit Money Banks (DMBs) and Non-Bank Financial Institutions (NBFIs) remained unchanged at 26 and 46 respectively while Rural and Community Banks
(RCBs) increased from 134 to 135. The number of DMB branches increased
from 706 in 2009 to 776 in 2010while the number of RCBs went up by 38 to
479. The banking system remained liquid and solvent throughout the year”.
[BoG Annual Report, 2010].
3.1.4. Foreign Direct Investments (FDIs)
With its political stability, economic liberalism, abundant natural resources, highly motivated work force and infrastructure improvements, Ghana
is positioned to become West Africa’s premier gateway country, providing investors access to a regional market of over 250 million people. Ghana’s natural
resource driven economy is the third largest in West Africa.
Attracting foreign direct investment has been a priority of Ghana’s Government since 1983 with the establishment of an economic recovery program.
The result has been an incremental increase in FDI inflows to USD 139 million
274
in 2004, a slight increase from USD 137 million in 2003. These figures are well
above the average for non-oil producing sub-Saharan African countries.
The country’s top non-African investors originate from India, China, Lebanon,
UK, US and Germany, while the top three African investing states are Nigeria,
Cote d’Ivoire and South Africa. Ghana’s foreign investment code eliminates
screening of foreign investment, guarantees capital repatriation, and does not
discriminate against foreign investors. The only pre–condition for investment is
a minimum capital – requirement.
Table 2. Finance plan of Projects (US $’M)
Financing Cumulative
Plan
Jan
2001Dec
2006
%
Jan
Dec
2006
Local
Foreign
TotalE
quity
86.37
2.8
16.89
0.7
2,046.
71
2,133.
09
67.
4
70.
2
1782.
70
1799.
59
75.3
Local
Foreign
Total
Loa
n
Gran
dTotal
97.29
3.2
35.5
1.4
806.5
2
903.8
1
26.
6
29.
8
534.7
6
568.2
6
3,036.
90
100
2,367.
85
Foreign
Equity
Foreign
Loa
n
Total
2,046.
76
71.
1,782.
70
806.5
2
28.
3
534.7
6
22.6
47.9
7
2,853.
24
94.
0
2,317.
97.9
155.
75
7
-
%
76.0
2005
%
Sep
1994 Dec
2000
%
3.0
4
19.
49
22.
53
4.7
12
29.
9
34.
6
199.5
7
409.3
6
608.9
8
3.1
7
39.
44
42.
61
4.9
88.58
5.5
60.
5
65.
4
911.0
0
999.5
9
56.6
65.
14
100
1608.
52
100
19.
49
29.
9
409.3
6
25
23.8
39.
44
60.
5
911.0
0
56.6
77.1
58.
93
90.
5
1,320
.36
82.1
EQUITY
7.55 3.7
107.
77
115.
32
LOAN
38.6
5
22.6 47.9
7
24.0 86.6
3
100
200
2
%
201.
95
53.4
57.1
19.1
33.8
42.9
100
FDI INFLOW
75.3 107. 53.4
77
25.4
37.9
62.1
275
Local
Equity
Local
Loa
n
Total
86.37
LOCAL PARTICIPATION IN INVESTMENT
2.8 16.89
0.7
7.55 3.7
3.0 4.7
4
199.5
7
12.4
97.29
3.2
33.5
1.4
38.6
5
19.1
3.1
7
4.9
88.58
5.5
183.6
6
6.0
50.39
2.1
46.2
0
22.9
6.2
1
9.5
288.1
6
17.9
Source: [GIPC Quaterly Annual Report, January 2007].
Foreign Direct investment plays an important role in the project finance plan in
Ghana. According to [GIPC, Jan. 2007], foreign equity accounted for about
75% of overall equity finance in Ghana. The table above shows year-on-year
project finance plan and FDI inflow in Ghana.
3.2. Disadvantages of Globalization to Enterprises in Ghana
3.2.1. Privatization
One of the key principles of globalization is the recommendation of privatization of state-owned companies and enterprises. This especially was very detrimental to the Ghanaian economy. The Nkrumah administration of the First
Republic incorporated specialist banks for the development of industry and agriculture. The state assumed a central role in the national economy and banking
was not an exception. The expansion of the role of the state in the national
economy entailed a corresponding expansion of the state-owned banking sector.
With the advent globalization most of these banks were privatized making them
not relevant to the development agenda of Ghana.
3.2.2. Liberalization
Notwithstanding the fact that liberalization has propelled growth in some
parts of the economy, it has been a curse on some other parts of the economy
leading to unfair competition between the local and foreign entrepreneurs.
The foreign companies have more capital, a lot of subsidies from their home
governments and access to cheap labor which makes them much more efficient
than the local entrepreneurs. The availability of machines and technology has
been another reason why the foreign enterprises are more efficient.
3.2.3. Class Creation
Throughout the world globalization is creating the conditions for class
struggle. Nation centric pattern of accumulation are being overturned by a
transnational system of production. This process affects each country in a different manner, geared to each nation’s existing political and social structure.
276
This dialectic between descending forms of national accumulation and the ascending power is the dominant contradiction in the world [Harris, J. 2005].
Globalization is said to help with the widespread distribution of wealth, but in
reality, it only makes the wealthy people earn more and does not help with the
equal distribution of wealth. This development of classes within the Ghanaian
society has jeopardized the operations of enterprises which are state-owned
whose objective is provide goods and services for the lowest possible price.
They are unable to compete with their counterparts who are more concerned
about profits and not the welfare of the ordinary citizens.
4. Conclusion
From the write-up, it is crystal clear that globalization is one of the phenomena which has received great attention in this century and is one singular
factor that has been used to explain the increasing ease with which enterprises
and cultures separated by huge distances co-operate in different aspects of their
operations. Ghana as a country has a lot to be thankful for in as much as globalization is concerned. Most the enterprises have benefited from foreign technologies especially in the areas of banking, telecommunications, manufacturing,
construction etc.
The fact that globalization has come with a huge cost for enterprises in
Ghana does not mean the whole concept of globalization is detrimental. As has
been stated in the write-up, there is always a conflict of values between the local
unit (in this case Ghana) and the external unit (force of globalization). The onus
lies therefore with Ghana as a country to merge its local values with globalization such that enterprises within its economy do not suffer from the merger.
References
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4. Cerny P.G. (1997), Paradoxes of the Competition State: The Dynamics of
Political Globalization, Government and Opposition 32, 270-1.
5. Dzorgbo, Dan – Bright (2001), Ghana in Search of Development: The Challenge of Governance, Economic Management and Institution Building, Aldershot: Ashgate.
6. Fukuyama F. (1992), The End of History and the Last Man, New York:
Free Press, xiv-xv and xviii-xix.
7. Garret G. & Lange P. (1991), Political Responses to Interdependence:
What’s Left for the Left?, International Organization 45 (4, Autumn).
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8. GIPC (2007), Ghana Investment Promotion Council Quarterly Report,
GIPC, Accra
9. Gocking R.S. (2005), The History of Ghana, Westport: Greenwood Press.
10. Harris J. (2005), Globalization and Class Struggle in Germany, in ‘A Journal of Cybernetic Revolution, Sustainable Socialism &Radical Democracy’,
Chicago.
11. IMF (2006), Ghana: Poverty Reduction Strategy Paper, Washington, D.C
12. Khor M. (2000), Globalization and the South: Some Critical Issues. United
Nations Conference on Trade and Development, No. 147:5.
13. Leith, J. C. (2003). Ghana – Long Term Growth, Atrophy, and Stunted Recovery. Nordiska Afrikainstitutet.
14. Martin Carnoy, Manuel Castells, and Steven Cohen (1993), The New Global Economy in the Informational Age: Reflections on Our Changing World,
University Park, PA: Penn State Press. 4-5.
15. McGrew A. (1990), A Global Society in: Stuart Hall, David Held and Anthony McGrew, Modernity and Its Futures. Polity Press, Cambridge.
16. McMichael P. (1996), Globalization: Myths and Realities, Rural Sociology
61: 29.
17. Reich S. (1998), What is Globalization? Four Possible Answers, Kellogg
Institute Working Paper Nr. 261.
18. Rimmer, D (1992). Staying Poor: Ghana’s Political Economy (1950-1990).
Pergamon Press.
19. Rothenberg L.E. (2003), The Three Tensions of Globalization, Issues in
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Integrate, Our World Grows Smaller.
Globalizacja I Rozwój Przedsiębiorstw w Ghanie (Streszczenie)
Artykuł ten omawia zjawisko globalizacji i jej wpływ na przedsiębiorstwa
w Ghanie w ostatnich latach. Podobnie jak w wielu innych kulturach i krajach na świecie, globalizacja miała ogromny wpływ na rozwój lub stagnację przedsiębiorstw. Niektóre kraje były w stanie wykorzystać to zjawisko jako korzyść dla swoich przedsiębiorstw podczas gdy innym nie udało się uzyskać równowagi. Celem tego artykułu jest
wyjaśnienie pojęcia globalizacji i wybranie definicji, która jest najbardziej odpowiednia
i zwrócenie uwagi na różne konflikty, które mogą wynikać z interakcji w tego typu
zjawiska. To również ma na celu określenie wpływu globalizacji w przedsiębiorstwach
w Ghanie, a także czy Ghana jest w stanie znaleźć równowagę między lokalnymi perspektywami a falą globalizacji na świecie.
Słowa kluczowe
efekty, napięcia, typy globalizacji
278
Summary
The paper examines the phenomenon of Globalization and its trends on Ghanaian
enterprises in recent times. Like many other cultures and countries, globalization has
had tremendous influence on the growth or stagnation of enterprises all over the world.
Some countries have been able to exploit this phenomenon such that it benefits their
enterprises whilst other countries have failed to find the right balance. The purpose of
this article is among other things to explain the term globalization, and to choose the
definition that is most appropriate to this publication whist paying attention to the various conflicts that could arise from this phenomenon. It also seeks to identify that influences of Globalization on enterprises in Ghana and whether or not Ghana as a country
has been able to find a balance between its local perspectives and the wave of globalization across the globe.
Key words
impacts, tensions, types of globalization

tytuł, stopień naukowy, pełne imię i nazwisko (Times, 12, pogrubio

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