This is the age of globalisation on an unprecedented scale. We are exposed to global forces both friendly and hostile. How do we or should we respond to them?
In the history of internationalisation when isolated tribes were visited by foreigners of higher civilisation some coiled in dark forests or inaccessible geographical features. They perched because of refusing to learn the technology and culture of the foreigners.
Other tribes adjusted their cultures, sought to find out the source of the foreigners superiority. In the course of the time, they caught up, avoided extinction.
Are we responding correctly to the major events taking place around us? Time and time again, we learn if discoveries of oil, gas and other elements that buttress modern industrialisation. These are taking place in Mozambique, Tanzania and Zambia. Even beyond such breath-taking discoveries are still eluding our geologists.
There are two ways of positioning ourselves. We may explore our neighbouring countries for the product that we already have or produce and make new products that the surrounding markets might welcome.
We should also position ourselves for competition with regard ti enticing foreign direct investment. Because these countries are growing faster, prima facie they will be more attractive to foreign businesses which want to relocate their manufacturing plants.
What do international firms look for when they want to relocate or expand their businesses? They examine various foreign countries to find out those which have the right factors. A foreign country must be politically stable , it must be friendly to foreign business ventures. These countries which have highly skilled but low labour are most attractive.
For a long time India has been attracting American and European business because of its skilled workers who were accepting wages and salaries a mere fraction of those in the west.
Malawi belongs to two trading blocs: The Southern African Development Community (Sadc) and the Common Market for Eastern and Southern Africa (Comesa). Firms in Europe and America that wish to manufacture goods locally for these economic blocs will look at the various member State and say let us locate in this country, try and sell to the rest of the region. The country in which the factory will be located will experience a boost in employment and income multipliers.
What are we as a country doing to compete for foreign direct investment (FDI) that wants to serve the regional market? Is our labour skilled and not over-priced?
From time to time, we read that it takes too much time for a potential investor in Malawi to conclude terms with officials, why can we not have a one-stop investment bureau. We must identify bottlenecks. As one man observed sometimes bottlenecks are found not at the bottom but the top of the bottle.
Movement of the exchange rate is one of the factors that international firms take into account. Flexible exchange rates can deter or attract investors. Investors do not want their earnings in foreign currency to swing like pendulums. A currency must be fairly steady even if it is flexible.
A currency that is low in value helps exports to expand. During the period 1950 to 1980, the Japanese currency, the yen, was under-valued as a result Japanese exports were cheaper than those of industrial countries. Japan conquered the world market where General Tojo had failed with his guns and kamikaze soldiers.
That Malawi is smaller and less endowed with natural resources need not be a prohibitive barrier to those international firms which are looking for suitable locations for their overseas factories. Singapore and Taiwan have been able to attract such world famous corporations such as Hewlett-Packard. High quality human factors can make up for shortfalls in natural resources.
We need an institution that is staffed by technocrats that are ever vigilant and cognisant of what is happening in the economics and technologies of other countries. Developmental countries behave like corporations, they watch their rivals in order not to be caught dosing.
