Month: August 2023

Travel Insurance Doesn’t Always Mean Coverage

It’s that time of year again where the sun smiles upon us, school is out and the wide, wide world of travel is just a flight away.

So you do some research on vacation options. You book a flight. You reserve a hotel room. And last but certainly not least, you call an insurance agent for an appropriate travel policy.

“Ah,” you think to yourself. “I’m covered from all angles.”

Not so fast, sir or ma’am!

While others like yourself may view the insurance they purchased as a ticket to peace of mind, it’s not always so.

Not every loss scenario that you can envision occurring will be covered.

This articles deals with issues that may arise as a result of not planning ahead or educating yourself properly about insurance issues.

Some Instances when Travel Insurance does not Cover Losses

1. If you think you are smart by buying travel insurance when you hear the radio tell you about a future storm, think again. A travel policy will not cover the cancellation of your trip following publicized storm information.

2. If you imagine that travel insurance will provide compensation for ordinary problems, stop dreaming. Your insurance will not compensate you for common inconveniences or lack of enjoyment.

3. Do not plan on getting covered for losses you cannot prove. You will need to show a sales receipt so that your loss can be substantiated.

4. Be aware that your insurance policy will likely not provide coverage for incidents that occurred while you were under the influence of alcohol or drugs.

5. Get your doctor involved before you go on your trip or you may not receive medical coverage under your travel insurance. If you cannot prove you were in good health prior to getting on the plan, you may run into coverage problems if you need medical care while on vacation.

6. Do not assume every activity you participate in is covered under your travel plan. If you get hurt while engaging in something that the insurance company considers dangerous you may not see reimbursement. Review your policy to ascertain which activities your insurance provider includes and which are viewed as perilous.

As in any form of indemnity, travel insurance has limits and deductibles, as well as exclusions. You owe it to yourself and your vacation to do the proper research ahead of the game. Speaking to an experienced independent agent will help you decide what policy is best for you and how to avoid getting denied for a related claim.

AIG, Private Equity and Venture Capital

AIG: Maurice Greenberg’s piece in today’s Wall Street Journal nearly provoked an attack of apoplexy. I’m not sure if I’ve read such a slanted, self-serving editorial in a long, long time. I’m pretty shocked that the WSJ would publish such pandering drivel. Be that as it may, we all know that the Big Mo controls gobs of AIG shares both directly and through his management of CV Starr, so let’s just say that we know where he is coming from. When he starts out with the bailout-inconsistency argument, he kind of had my ear. But when he went on to praise the Citigroup package while chastizing the AIG deal, I couldn’t help but call bull$hit.

To date, the government has shown everything but a consistent approach. It didn’t give assistance to Lehman Brothers. But it did push for a much-publicized and now abandoned plan to purchase troubled assets. The government also pushed for a punitive program for American International Group (AIG) that benefits only the company’s credit default swap counterparties. And it is now purchasing redeemable, nonvoting preferred stock in some of the nation’s largest banks.

The Citi deal makes sense in many respects. The government will inject $20 billion into the company and act as a guarantor of 90% of losses stemming from $306 billion in toxic assets. In return, the government will receive $27 billion of preferred shares paying an 8% dividend and warrants, giving the government a potential equity interest in Citi of up to about 8%. The Citi board should be congratulated for insisting on a deal that both preserves jobs and benefits taxpayers.

But the government’s strategy for Citi differs markedly from its initial response to the first companies to experience liquidity crises. One of those companies was AIG, the company I led for many years.

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The maintenance of the status quo will result in the loss of tens of thousands of jobs, lock in billions of dollars of losses for pension funds that are significant AIG shareholders, and wipe out the savings of retirees and millions of other ordinary Americans. This is not what the broader economy needs. It is a lose-lose proposition for everyone but AIG’s credit default swap counterparties, who will be made whole under the new deal.

The government should instead apply the same principles it is applying to Citigroup to create a win-win situation for AIG and its stakeholders. First and foremost, the government should provide a federal guaranty to meet AIG’s counterparty collateral requirements, which have consumed the vast majority of the government-provided funding to date.

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The purpose of any federal assistance should be to preserve jobs and allow private capital to take the place of government once private capital becomes available. The structure of the current AIG-government deal makes that impossible.

The role of government should not be to force a company out of business, but rather to help it stay in business so that it can continue to be a taxpayer and an employer. This requires revisiting the terms of the federal government’s assistance to AIG to avoid that company’s breakup and the devastating consequences that would follow.

Hank, you’ve got to be kidding me. The U.S. taxpayers saved Citigroup’s life, and for that we may get up to 8% of the company. THAT is called a “punitive program” in Hank’s parlance for the U.S. taxpayer. In my world when you save a company you own ALL the equity, not 1/12th of the equity. The fact that the taxpayer gets up to 80% of AIG – now that starts to make sense. I agree with the Big Mo’s contention that “The purpose of any federal assistance should be to preserve jobs and allow private capital to take the place of government once private capital becomes available.” But that has nothing to do with post-restructuring equity ownership. He then pulls on the heartstrings by saying “The maintenance of the status quo will result in the loss of tens of thousands of jobs, lock in billions of dollars of losses for pension funds that are significant AIG shareholders, and wipe out the savings of retirees and millions of other ordinary Americans.” Well, Hank, that is 100% on you. YOU should have thought things through before building a company and a culture that gambled it all – and lost. You tell that retiree, that pensioner how you screwed them. That’s called integrity. This thinly-veiled call for personally getting bailed out is both insulting and offensive. And I’m not buying it. I’m sure that my fellow U.S. taxpayers aren’t, either.

Private Equity: The daisy chain of secondary sales of PE L.P. interests will almost certainly accelerate. It is one of those slow-motion train wrecks that is painful to watch. The calculus is easy to understand: public equity values plummet, PE values are stickier and fall more slowly, PE as a percentage of overall assets rises to unacceptable levels, precipitating a wave of sales of PE L.P. interests. An interesting feature of this dynamic is autocorrelation, where PE values are slow to adjust notwithstanding the public market comparables that are available. If industrials are down 40%, then don’t you think a portfolio of PE holdings in the industrials sector should trade well beyond 40% down due to illiquidity? This isn’t the way many PE funds choose to see the world, however. Regardless, the secondary market is just that – a market – and the discounts being placed on marquee funds like KKR and Terra Firma reflect this reality. Pensions and endowments have to dump stuff, and are trying to do so at a fraction of their basis. But even at fire-sale prices it is hard to move the merchandise. In the next few months we’ll see just how desperate these investors are. Might we see KKR trade at 30 cents on the dollar? It’s possible. And frightening.

Venture Capital: I attended an interesting brownbag today with my pals at betaworks. A big part of the discussion was around funding in today’s hostile environment. Here are a few of the tidbits that came out of the dialogue:

  1. Be prepared to live with your current investment syndicate.
  2. If possible, have a deep pocketed investor as part of your syndicate.
  3. Raise 18-24 months of capital, no less. This can be done through a combination of capital raised plus a reduction of operating burn.
  4. Restructurings are getting ugly. Investors, whether inside or outside, are demanding both haircuts from the last round plus and a priority return of capital such that they are fully repaid before anyone else gets anything. Looks, smells and feels like a cram down. This is why having 24 months of capital in the bank upfront is so important.
  5. In these down times coalitions get formed between Management and New investors vs. Old investors. This mis-alignment of interests can lead to gridlock and push a company to the brink.

There was much more but these were the high points. Even with today’s difficulties there was still a lot of excitement about new companies and new ideas, with the confidence that money would come to those that truly deserve it. In short, there’s hope.

By: Binaryoptionstradingsignals

Corporate Politics – The Elephant in the Room

Corporate politics are everywhere. They inflict every company. In fact, you’d be hard put to find a senior manager out there who has completely avoided the fray.

Depending how far you make it up the corporate ladder, you’ll feel the heat the higher up you go. Executives and professionals talk about it all the time, especially over cocktails, but rarely in formal discussions or meetings. If it does come up in a formal setting, it is likely brought up as “We need to reinvigorate culture.”

And if you are running a new business in a large company that is developing or trying to develop a product or solution that is disruptive to the mainstream business, then you are likely drowning in corporate politics.

That certainly was my personal experience in running a business group that was creating new computers and devices for people living at the bottom of the pyramid. Any product we created would match Clayton Christensen’s definition of a disruptive innovation: i.e. compared to the PC, it would be more affordable (cheaper), easier to use (addressing computer/tech literacy issues), and have a unique value nonexistent in PC’s today.

How did it turn out for me? Not great. I walked in with open eyes, having seen politics in action before and having navigated through it successfully to get things done. I knew it would be a tough slog given what we were doing, but I was still blindsided by the intensity of driving a disruptive business.

In fact, I had come up with a way of describing corporate politics that I talked about frequently with my team, peers, and respective bosses:

There are “good” politics, and there are “bad” politics. Good politics are when someone needs to work the system (e.g. culture, personalities, organizational silos) to achieve business objectives that are GOOD for the company (e.g. bringing in new revenue, growth, profit, and satisfied customers). Bad politics are when someone works the same system to make themselves look good.

The moral of the story is obviously to practice good politics and avoid the bad. Looking back, the problem with this approach, and why I got blindsided, is that you can do the best job, exercise your best networking skills, and create fantastic things for your company, but by ignoring what I call the negative politicians, you will likely end up on the short end of the stick and you and the business you are running will suffer from it.

So my main advice is … know your enemy more than they know themselves. I really hate to use the word enemy, as my “people” philosophy tends to be more on the trusting side. But these folks see YOU as the enemy; as competition for whatever that future lucrative position or promotion may be. (And a hint: they are right in a way. As you move higher up in the company, there are fewer positions to go around. Everything becomes more competitive.)

So let me present five characteristics of the negative politicians I’ve observed over the years. They effectively:

Self promote. They go out of their way internally to promote themselves under the auspices of promoting their business or product. If they blog or publish internal articles about something related to their business group, you’ll see subliminal hints of-self promotion.

Manage up. They typically withhold negative information about their business to their bosses and selectively spin things for the positive.

Use information as power. They may use confidential (or what they position as confidential) business information about a part of the business they are involved in to enhance credibility. For example, in a meeting with other senior managers they’ll divulge some decisions or strategies that they know will captivate their audience.

Become “buddies” with the powers-that-be. They tend to actively network with the key movers and shakers within the company. If the executive suite tends to be political as well, you can bet that they have found ways to endear themselves to the company’s top dogs.

Spread disinformation about potential “competitors.” They quietly spread rumors and/or misinformation about someone that may threaten them career-wise, or against the business that person runs.

If reading these five characteristics makes your stomach clench, either in principle or because you’ve seen them in action, the next question you are likely asking is how do I stay away from these folks?

Short answer: You can’t. Long answer: Learn to work within “the company of wolves,” regardless of whether the intensity of politics is low or high. And I think you can do this without sinking to their their level.

I am in no way the expert on the best way to navigate these waters, but I have learned from past mistakes and have thought hard and long about the subject.

I have five recommendations I’d give to those that are currently in or expecting to eventually be in this situation:

Keep your ear to the ground — always. Keep an eye out and keep a mental list of those who consistently act the way I described above. By increasing your trusted network, you uncover misinformation and can make corrections.

Don’t bad mouth them to anybody. Bad mouthing people is what negative politicians do, and you will likely hear about it eventually. Information gets around remarkably easily in a company. The adage “If you don’t have something good to say, don’t say it” applies here.

Don’t alienate them, even if they screw you. The other adage I have found ALWAYS to be true is “never burn bridges,” no matter what. I have never burned a bridge. Those who have, got bitten back hard.

Keep your friends close, and your enemies closer. Don’t avoid negative politicians. Network with them. Kind words and praise go a long way. I find that those that are insecure and have self-esteem issues tend to be the most political, so find ways to help them and/or increase their sense of self-worth. But don’t make it up. Be sincere about anything you say or do.

Use some of their tactics in a principled manner. Do some self promotion in a way that ALSO promotes others. Network with the powers that be in a way that shows your value to the company. Don’t avoid them at social functions … seek them out. Read “Never Eat Alone” by Keith Ferrazzi for great tactics on how to do this.

Another reference for you: Dan King, Principal at Meaningful Careers, wrote a great article called “Winning at Organizational Politics without Losing Your Soul” that gives additional insights and reasons for not keeping your head in the sand. As he states in his article, politics is a game. “Play or not play, the game still goes on!”

Sustainable Energy for Indonesia

Buildings today account for 40% of the world’s primary energy consumption and are responsible for about one-third of global CO2 emissions (24% according to IEA, 2008; 33% according to Price et al., 2006). Despite steady increases in energy prices, especially crude oil, Indonesia has enjoyed steady economic growth of around 5 percent since rebounding from the 1999-2000 crises. All of this growth is surely accompanied by the increase in energy demand due to the increasing number of homes, factories, and commercial and industrial buildings. If we assume that demand for electricity will grow in average 7% per year for the next 30 years, then electricity consumption will significantly increase, for example in the household sector, consumption will increase from 21.52 GWh in 2000 to around 444.53 GWh in 2030.

There are four main sectors of energy users, namely household, commercial, industrial and transportation sector. Currently the largest energy user is the industrial sector with a share of 44.2%. Next largest consumption is the transportation sector with 40.6%, followed by the household sector with 11.4% and the commercial sector with 3.7%. Until now, the primary sources of energy still come from fossil fuels, with 46.9% from oil, 26.4% from coal, and 21.9% from natural gas. Hydro (water) power and other renewable energy only make up about 4.8% from the total of utilized energy resources.

Energy Efficiency versus Energy Conservation

Energy efficiency is the most cost-effective way of cutting carbon dioxide emissions and improvements to households and businesses. It can also have many other additional social, economic and health benefits, such as healthier homes, lower fuel bills and company running costs and, indirectly, jobs. The choices we make about how we use energy-turning machines off when we’re not using them or choosing to buy energy efficient appliances-impact our environment and our lives. There are many things we can do to use less energy and use it more wisely. These things involve energy conservation and energy efficiency. Many people think these terms mean the same thing, but they are different.

Energy conservation is any behavior that results in the use of less energy. Energy efficiency is the use of technology that requires less energy to perform the same function. A compact fluorescent light bulb that uses less energy than an incandescent bulb to produce the same amount of light is an example of energy efficiency. The decision to replace an incandescent light bulb with a compact fluorescent is an example of energy conservation. As consumers, our energy choices and actions can result in reductions in the amount of energy used in all four sectors of the economy; residential and commercial, industrial, and transportation.

Home Energy Usage

Households use about 41 percent of the total energy consumed in Indonesia each year. Cooling systems use more energy than any other systems in our homes. Typically, 43 percent of an average family’s energy bills are spent to keep homes at a comfortable temperature. Energy efficient improvements can make a home more comfortable and save money.

One of local improvement that we can apply is by landscaping. Although it isn’t possible to control the weather, landscaping can reduce its impact on home energy use. By placing trees, shrubs, and other landscaping to block the wind and provide shade, people can reduce the energy needed to keep their homes comfortable during dry and wet seasons. Another, is by choosing appliances for homes. Appliances account for about 20 percent of a typical household’s energy use, with refrigerators, clothes washers and dryers at the top of the list. When shopping for new appliances, you should think of two price tags. The first one is the purchase price. The second price tag is the cost of operating the appliance during its lifetime. You’ll be paying that second price tag on your utility bill every month for the next 10 to 20 years, depending on the appliance. Many energy efficient appliances cost more to buy, but save money in lower energy costs. Over the life of an appliance, an energy efficient model is always a better deal.

Energy Wise Consumers

The products we use every day consumes an enormous amount of energy to be manufactured. Therefore, manufacturers must use energy efficient technologies and conservation measures to be successful in businesses. As consumers, we can help to protect the environment and save money, energy, and natural resources by Reducing, Reusing and Recycling the products no longer use. Here are some useful measures that consumer can easy to put into practice.

Buy only what you need. Purchasing fewer goods means less to throw away. It also results in fewer goods being produced and less energy being used in the manufacturing process. Buying goods with less packaging also reduces the amount of waste generated and the amount of energy used.

Buy products that can be used repeatedly. If you buy things that can be reused rather than disposable items that are used once and thrown away, you will save natural resources. You’ll also save the energy used to make them and reduce the amount of landfill space needed to contain the waste.

Make it a priority to recycle all materials that you can. Using recycled material almost always consumes less energy than using new materials. Recycling reduces energy needs for mining, refining, and many other manufacturing processes. Recycling a pound of steel saves enough energy to light a 60-watt light bulb for 26 hours. Recycling a ton of glass saves the equivalent of nine gallons of fuel oil. Recycling aluminum cans saves 95 percent of the energy required to produce aluminum from bauxite. Recycling paper reduces energy usage by half.

Energy Sustainability

Efficiency and conservation are key components of energy sustainability. The concept that every generation should meet its energy needs without compromising the energy needs of future generations. Energy sustainability focuses on long-term energy strategies and policies that ensure adequate energy to meet today’s needs, as well as tomorrows. Sustainability also includes investing in research and development of advanced technologies for producing conventional energy sources, promoting the use of alternative energy sources, and encouraging sound environmental policies. The need for a profound transformation of the world’s energy-producing and -using infrastructure is, of course, already widely recognized in the context of mounting concern about global climate change.

In some cases, technology improvements that reduce emissions of conventional air pollutants (such as sulfur dioxide, nitrogen oxides, hydrocarbons and particulate matter) can be expected to also reduce emissions of greenhouse gases. Some conventional pollutants, such as black carbon, directly contribute to warming. In those cases, conventional emission controls can provide automatic climate co-benefits. In other cases, the relationship is more complicated: Sulfur particles, for example, actually have a cooling effect in the atmosphere. In general, most post-combustion conventional-pollutant control technologies do not reduce emissions of carbon dioxide, the chief greenhouse gas.

Renewable Energy for Indonesia

Today, renewable energy accounts for a small but growing portion of Indonesia’s electricity portfolio. Most renewable energy comes from the hydro power and geothermal industries, but growth in other sectors is likely. Surprisingly, Indonesia continues to import fossil fuels to cover production deficiencies instead of fully utilizing its already installed renewable energy capacity. Expanding the production of existing resources (that is, already operating geothermal plants or hydro power dams) could displace some fossil fuel imports, by lowering the cost of energy subsidies and creating additional demand for renewable energy technology and expertise. Indonesia Presidential Decree No. 5 mandates an increase in renewable energy production from 7 percent to 15 percent of generating capacity by 2025. To accomplish that goal, 6.7 GW of new renewable energy capacity must be installed in the next 15 years based on current growth projections (Ibid). Geothermal and biomass have been slated for the most growth, but opportunities exist in every renewable energy technology.

A policy on renewable energy and energy conservation was promulgated by The Ministry of Energy and Natural Resources on December 2003 giving references for renewable energy development and energy conservation in Indonesia to support sustainable development program. Under the Green Energy Policy, renewable energy in Indonesia has been classified into three types: (a) already developed commercially (biomass, geothermal, and hydro energy); (b) already developed but still limited (solar, wind); and (c) still at the research stage (ocean energy). The Green Energy Policy defines action steps consisting of formulation of more specific policies and programs. These include policies for: (a) investment and funding; (b) incentives; (c) energy pricing; (d) human resources; (e) information dissemination; (f) standardization and certification; (g) research and development; and (I) institutional development.

For the Indonesia archipelago, the energy solution is really dependent on its geographical position and natural resources. Through implementation of various policies and programs by the government increase the awareness of the importance role of renewable energy in a sustainable energy system for Indonesian people, and with energy efficiency will bring health, productivity, safety, comfort and savings to homeowner, as well as local and global environmental benefits.

Investing In A Developing Economy – A Possible Solution To Global Financial Crisis

INTRODUCTION

If there were security problems in Nigeria, no businessman would go to the country to explore opportunities, companies like Celtel, MTN, Etisalat, would not have ventured into security risk country to do business. Those who spread rumour about security and corruption problems in Nigeria are saying so to stop others from making money in the country. Figures don’t lie. They are the biggest testimonies for how conducive Nigeria’s environment for business and opportunities are. If you want to do business in Africa and record good returns on your investment, I welcome you to come to Nigeria. The political environment in Africa, particularly in Nigeria is tremendous.

Dr. Hamadoun Toure,

Secretary General,

International Telecommunications Union,

Cited in the Punch Newspaper, May 13, 2008)

What is happening currently with the Nigerian financial system is far from being affected in any way by the global credit crisis. At global level currently, the banks are under-capitalised, but Nigerian banks are over-capitalised. And I do not think this is a problem at all. I believe that Nigerian banks are under pressure from other economies within Africa continent that are affected by the credit challenges.

– Gordon Smith,

Head of Research, Africa and the Middle East, International Consilium,

(Reported in the Punch Newspaper, June 30th, 2008).

The foregoing statements aptly connote two understandings of the state of Nigerian economy. These understandings show that, the economy is one of the fastest growing economies in Africa and in the world. Although Nigeria has had hash economic history, it has undergone and still undergoing economic reforms, which are aimed at making Nigeria the Africa’s financial hub and one of the twenty largest economies in the world by the year 2020. Needless to say that the country has experienced political instability, corruption, and poor macroeconomic management in the past, this was responsible for unpleasant and harsh economic situation. The government relentless efforts to reposition the economy have translated into a remarkable economic growth and development. Several mechanisms have been put in place to sustain this growth and development, capable of balancing the interests of stakeholders. Perhaps, this view must have influenced Gordon Smith submission. He described Nigeria as the most dynamic market in Africa, which is under severe pressure from some countries in Africa to serve as a cushion against the effects of global turbulence. He also noted that some countries like Ghana, Malawi, Mauritius, among others were depending on her at the moment due to global risk exposure and that the country’s economy, led by the consolidated banks, was far from being affected by the global credit crisis currently rocking the world’s financial giants. He stressed further that foreign investors, who will be patient enough to weigh the Nigerian financial system on the credit risk perspective relative to global events, will find the nation’s financial sector more interesting to invest and raise capital from.

Faced with numerous challenges, Nigerian government is determined to strengthen, diversify and make the economy attractive and investment-friendly to both local and foreign investors. The government has adopted total liberalization and globalization as the economic policy, instituted privatization and commercialization programmes of public enterprises, provided total security for business and people, extended invitation to domestic and foreign investors, abolished laws inhibiting competition, embraced and fine-tuned policies to ensure quick realization of growth and development of all sectors of the economy. The effort is already paying off as Nigeria is now the focus for foreign investment thereby increased exponentially Foreign Direct Investment (FDI). Scores of economic missions and delegations from developed and developing countries have visited Nigeria, thus accelerating the growth of the economy at a very fast rate.

It becomes pertinent to direct the course of this discussion to embrace the second understanding of the above statements made by Hamadoun Toure and Gordon Smith. However, it becomes more pertinent to enumerate the inherent investment opportunities in Nigerian economy before discussing the issue of security as raised by Toure.

INVESTMENT OPPORTUNITIES AND SECURITY ISSUE IN NIGERIA

No doubt, Nigeria is an investment haven with countless and lucrative investment opportunities including oil and gas, solid mineral, agriculture, tourism, telecommunication, power and steel, transport, trade processing zone, financial sector, real estate / property, manufacturing, sport and entertainment, and fashion industry. Investors have a wide range of opportunities to choose from. It is important to note that the rate of growth of investment is fantastic and exponential in any of these sectors. Investors are at advantage of presenting their products and services to already-made market taking advantage of the population of over 140 million.

In telecommunication, statistics reveals that mobile phone users in Africa were about 280 million, overtaking United States and Canada with their 277 million users in the opening quarter of 2008. With 70 million connections in 2007, the Continent became the fastest growing region in the world, representing a growth of 38 per cent, ahead of the Middle-East (33 per cent) and the Asia-Pacific (29 per cent).It was also revealed that the fastest growing markets are located in northern and western Africa, representing altogether 63 per cent of the total connections in the region. The record showed that Nigeria, Zambia, Tanzania, The Democratic Republic of Congo, Kenya, Algeria, Tunisia, Ghana and South Africa are highly competitive markets in the Region. The record further contends that two-third of Africa’s telephony are in their early phase of development, with penetration rates below 30 per cent at the end of 2007.In percentage terms, it was noted that Africa is the fastest growing market in the world, but also the second smallest in terms of connections after Middle-East.

As Nigeria accounts for 57 per cent of the West Africa mobile phones, the country is acknowledged as the leading and the fastest growing telecom market in Africa. With mobile phone users at 44,932,181 and 734,444 for GSM and mobile CDMA respectively, her contributions to West Africa and Africa’s telecommunication growth can not be overemphasized. While the overall economic growth rate stands at 7% per annum, the mobile telephony is about 35-50%. Assuming that each of these connections was busy for a minute in a day, the country telecoms market has the capacity to generate over USD 16 million per day (USD16, 666,667) and close to USD 6 billion per year (USD 5,833,333,300). This is why telecom companies such as Visafone and Etisalat quickly joined the likes of MTN, Globacom, Celtel and other telecoms service providers in exploiting opportunities in the country.

Early this year, one of the main GSM service providers with a subscriber base of over 15 million announced a profit after taxation of USD650 million (78 billion naira) for the year 2007.Putting all these together, one can easily understand Toure’s submission describing Nigerian telecoms market as the best investment destination in Africa.

Recognizing the fact that the Nigeria telecoms industry is enormous and there is need to further exploit the sector to its fullest, the Nigeria Communication Commission (NCC) and the Ministry of State for Information and Communications have made their positions clear by extending invitation to global investors for active participation in the sector as they are willing to grant pioneer status and license for prospective applicants for various undertaking such as Fixed telephony, Mobile telephony, Fixed satellite (VSAT),Paging, Payphone, Internet and other value added services.

With the above facts, one can safely conclude that Nigerian telecom sector offers fantastic and lucrative investment opportunities to global investors. And putting into consideration 40% GSM market growth rate in the first quarter of this year (2008), there is potential for high return on investment in this sector.

Agriculture, the dominant sector of Nigeria economy, engages about 70 per cent of the population directly and provides nearly 88 percent of non-oil foreign exchange earnings. It contributes about 41 per cent of the GDP of the country. The sector recorded an overall growth rate average of 7 per cent in the last three years, a major improvement from under 3 per cent in the 90’s.

Statistically, 91 million hectares of the country’s total land area of 92.4 million hectares is adjudged to be suitable for cultivation. Approximately half of this cultivable land is effectively under permanent and arable crops, while the rest is covered by forest wood land, permanent pasture and built up areas. Among the states, which have the most abundant land, areas are Niger (7.6 million hectares) and Borno (2.8 million hectares).

Agriculture crops in Nigeria are grouped into cereals, root and tuber crops, grains legumes and other legumes, oil seeds and nuts, tree crops, and vegetable and fruits. Governments and the Ministries of Agriculture have made land acquisition easy, encouraged agricultural practices, extended (still extending) invitation to foreign investors and have put in place several incentives to stimulate growth in the sector. Despite, the agricultural potential of Nigeria is barely being tapped and this explains the inability of the country to meet the ever-increasing demand for agricultural products and her rank as 55th in the world (although first in Africa) in farm output.

As the world experiences food crisis and persistent rise in fuel price, the country’s agriculture offers unlimited opportunities for foreign investors and the world at large to provide solutions to these crises. Foreign investors will find investments in cultivation of sugar cane, sugar beet, sweet sorghum, starch (corn/maize), palm oil, soybeans, jatropha, and algae. These products are lucrative as they are potential for biofuels, a good substitute for fossil fuel. Presently, there is a very high demand for these crops from the developed economies.

Solid Mineral is another sector with great investment opportunities. Nigeria is endowed with numerous mineral resources. Recent policy reforms have brought the solid minerals sector to the fore. The emphasis is on encouraging massive foreign investors’ participation in this sector as less than 0.5 per cent is contributed to the Gross Domestic Products from Solid mineral sector. However, the Ministry of Mines and Steel and the Ministry of state’s focal attention in the last one year is to strategically place the country in a better position to explore and exploit just seven minerals in the plethora of minerals so as to increase Gross Domestic Product to 5 per cent within the next few years. The seven strategic minerals are coal, bitumen, limestone, iron-ore, barite, gold and lead / zinc.

Coal can be found in Enugu, Benue and Kogi. Within these three districts 396 million metric tones can be demonstrated using JORC classification criteria, while an additional 1,091 million tones of inferred and hypothetical coal resourced for the areas studied is 1481 million tones.

Knowing fully that development of coal will assist in the realization of energy, the Government and the Ministries are inviting foreign investors to participate actively in the exploration and exploitation of the mineral. Companies such as Denver Resources and Western Metals have already committed US$10 million and US$15 million respectively for two coal fields in the country. Another Chinese firm, Grid Xin Yuan International Investment Company that is providing more than half of China’s electricity needs is also in the country, indicating their interest in the development of a coal field in Kogi State.

The Bitumen reserve in the country is estimated at more than 27 billion barrels of oil equivalent while iron-ore is estimated at over 5 billion inferred reserves with presence in Kogi, Enugu, Niger, Zamfara and Kaduna States. Gold in just 10 locations is estimated at 50,000 ounces, barites 10 million metric tones and limestone at 2.3 trillion reserves.

Talc with an estimated reserve of over 100 million tones can be found in Niger, Osun, Kogi, Kwara, Ogun, Taraba and Kaduna States.The colour of the Nigerian talc varies from white through milky-white to grey. The talc industry represents one of the most versatile sectors of the industrial minerals in the world. The exploitation of the vast talc deposits in Nigeria would therefore satisfy not only the local demands but also that of the international market as well.

The national demand for table salt, caustic soda, chlorine, sodium bicarbonate, sodium hydrochloric acid and hydrogen peroxide exceeds one million tones. A colossal amount of money is expended annually to import these chemicals. There are salt springs at Awe (Platue State), Enugu, and Uburu ( Imo State), while rock salt is available in Benue State. A total reserve of 1.5 billion tones has been indicated. Government, to ascertain the quantum of reserves, is now carrying out further investigations.

In the same vain, large bentonite reserves of 700 million tones are available in many states of federation ready for massive development and exploitation, over 7.5 million tones of barite been identified in Taraba and Bauchi states, and an estimated reserve of 3 billion tones of good kaolinific clays has also been identified.

Gemstone mining has boomed in various parts of Plateau, Kaduna and Bauchi States for years. Some of these gemstones include Sapphire, Ruby, Aquamarine, Emerald, Tourmaline, Topaz, Gamet, Amethyst, Zircon, and Fluorspar, which are among the best in world. Good prospects exist in this area for viable investment. Understanding that this sector requires urgent investment, the Ministry has directed miners who are still in small artisan levels to form cooperatives so as to benefit from World Bank US$10 million assistance. Apart from this, three Nigerian Banks have also established solid minerals desk with fund of over US$ 8 million each for the development of the sector.

Foreign investors will find this sector worth-investing on as Nigerian governments have put in place various incentives and strategies for investment such as 3-5 years tax holiday, deferred royalty payments, possible capitalization of expenditure on exploration and surveys, extension of infrastructure and provision of 100% foreign ownership of mining concerns.

Recognizing that only a sustained macroeconomic environment and a sound and vibrant financial system can propel the economy to achieve the country’s desire to become one of 20 largest economies in the world by the year 2020, on the July 6, 2004 the Federal Government through the Central Bank of Nigeria (CBN), under the leadership of its Governor, Professor Charles Soludo launched a 13-point reform agenda to restructure, refocus and strengthen the Nigerian Financial System. To complement this agenda, another comprehensive long-term reform agenda for the Financial System (the Financial System Strategy 2020-FSS2020) was launched. The grand objectives of these agendas are substantially being achieved. The country financial system now comprises of strong, efficient and internationally competitive banks with an eye for global markets, a capital market with highest returns on investment, in dollar terms, a sound and rewarding insurance industry and other competitive financial participants.

Gordon was right in his submission to have described Nigeria as the most dynamic market in Africa. His view that “foreign investors, who will be patient enough to weigh the Nigerian Financial System on the credit risk perspective relative to the global event, will find the nation’s financial sector more interesting to invest and raise funds from” x-rays the truth about the country’s financial sector.

The country’s banking system is the safest and the soundest it has ever produced in history. It is the fastest growing banking system in Africa and one of the fastest in the world. In fact, the most outstanding contribution towards realization of the country’s dream came from this sub-sector. Economic analysts have observed that it has taken Nigeria less than 3 years to achieve what it took South Africa 20 years to achieve in the area of banking. In a short word, a world-class banking system has emerged in Nigeria.

Statistically, banking sector contributes 10 per cent to the Gross Domestic Product (GDP) and represents 60 per cent of the stock market capitalization, while there was a reduction in the number of banks from 89 to 25, the number of banks branches rose by 33 per cent from 3383 in 2004 to 4500 in 2007. The total asset base of banks rose by 104 per cent from $ 26.8 billions ( 3.21 trillion naira) in 2004 to $54.7 billion ( 6.56 trillion naira) by mid 2007; capital and reserves rose by 192 per cent from $2.72 billion (327 billion naira) to $7.98 billion ( 957 billion naira); capital adequacy ratio rose by 42.6 per cent, point from 15.18 per cent to 21.6 per cent and ratio of non-performing loans total loan improved massively by 51.3 per cent, point from 19.5 per cent to 9.5 per cent. The sector has also remained one of the most profitable in the country’s capital market. It was noted that 13 out of 21 quoted banks on the Nigerian Stock Exchange recorded returns in excess of 100 per cent since January 2007.

According to the April 2008 edition of the African Business, (the best-selling Pan-African Business Magazine published in London) 18 out of 28 West African Companies with market capitalisation of more than $1 billion are Nigerian Banks. The magazine stated that First Bank Nigeria Plc with market capitalization of $7.4 billion remains the largest company in West Africa. Two other Nigerian banks namely Intercontinental Bank Plc and United Bank for Africa (UBA) remain the second and the third largest companies in the sub-region with market capitalization of $6.2 billion and $4.6 billion respectively.

Apparently, the rising tide of banks in the country from all indications has made the sub-sector very attractive, not only to local investors, but also to foreign investors, and in particular, foreign banks. For instance, the consolidation of Regent Bank, Chartered Bank and IBTC to form IBTC Chartered Bank attracted the interest of the Standard Bank Group, the largest financial institution in Africa with a market capitalization of $ 17.8 billion, whose subsidiary Stanbic Bank, also of South Africa has just sealed a Merger deal for the latest Merger in the country, Stanbic IBTC Bank Plc. In this direction, other foreign banks have started making enquiries with CBN of a possible Merger or take-over.

To further substantiate the opportunities the banking sub-sector offers the global investors, a cursory look into Intercontinental Bank Plc will reveal the success of banking system in the country. Intercontinental Bank Plc is known to be the second largest companies in West Africa to have recorded a phenomenal growth in gross earnings, which stood at $1.45 billion ( 173.5 billion naira) in 2008. This is an increase of 99 per cent over the $728 million (87.4 billion naira) in 2007, profit after tax grew by 102 per cent to $380 million ( 45.6 billion naira) as against $188 million (22.6 billion) in 2007, while the capital base rose to $1.67 billion from $1.31 billion. The bank deposit base soared to $8.75 billion ( 1.05 trillion naira), an increase of 126 per cent from $3.9 billion (468 billion naira) in 2007, while the total assets also recorded a quantum leap to $14.2 billion (1.7 trillion naira), representing a growth of 108 per cent from $6.86 billion( 823 billion).

The bank is also in strategic partnership with BNP Paribas, the world leading energy financing bank, Afrexim Bank; Export Development Canada (EDC); Finance for Development (FMO); China Exim Bank; Export-Import of United States; International Finance Corporation in financing projects in different sectors of the economy. However, it is relevant to say that the success recorded by Intercontinental bank is a good example of the Nigerian banks’ strength and prospects, and a testimony to opportunities available to global investors in the country’ financial sector.

Apart from the above, Nigerian Capital Market offers viable opportunities as it is positioned to help companies to raise capital, and to generate high returns on investment. Its total market capitalization has grown by over 4000 per cent to $100 billion (12 trillion naira) in March, 2008, up from $2.39 billion (287 billion naira ) in August 1999.Among emerging markets, the Nigerian Capital market remains one of the most viable in terms of returns on equity. Historically, the market has delivered 28 per cent returns.

Insurance industry is not an exemption to this growth and development the country’s financial sector is witnessing. Although there are few black spots on the regulatory handling, the industry has equally recorded success in their reforms and operations. With the inflow of robust capital, insurance companies are now faced with the challenges of delivering returns to shareholders, maximizing value and exploring overseas markets. Their presence can be felt in countries like Ghana, Liberia, Sierra Leone, Sao Tome, South Africa among others.

Although Goldman Sachs’ report titled “New Market Analyst” with issue number 08/09 released on March 13, 2008 (cited in the Thisday newspaper March 19,2008) posited that Nigeria is a better economy than South Africa, International Monetary Fund (IMF) reported that Nigeria and South Africa got close to 50 per cent of the $53 billion private equity and debt flow to Sub-Saharan Africa in 2007. This underscores the growing confidence of International bodies and foreign investors in country’s financial sector and economy at large.

Furthermore, Fitch Rating Agency and the Standard and Poor rated Nigeria BB-(minus) in the area of sovereign credit, high in development of local currency debt market, and low in the areas of debt to GDP ratio and inflation. The opportunities for growth in Nigeria financial sector are still strong as the underlying fundamentals driving the growth are still present. All these and more, position the financial sector and the country at large as a leading and most dynamic market in Africa and present viable investment opportunities to global investors.

Needless to say that the opportunities presented above are typical examples and an evidence of opportunities awaiting foreign investors in other sectors of the economy.

Nigeria is the largest producer and exporter of oil in Africa (although recently placed second behind Angola in the latest OPEC report as a result of Niger Delta Crisis) with a production of 2.5 million barrels and above a day. Besides, the Nigeria is the 7th world’s gas reserve holder and the highest flaring nation in the world, with the potential to become a major player in LNG export. It has annual gas flares’ capacity to generate over 12000 MW of electricity needed to catalyze the growth of any economy. Although it currently flares an average of 1.2 TCF of gas annually, the sector has the potential to generate great returns on investment.

One of the greatest opportunities awaiting foreign investors is Real Estate / Property. For instance, Lagos Metropolis with a population of about 18 million has attained mega city status. The State has one of the highest urbanization rates in the world according to the World Bank. Consequently, there is an insatiable demand for housing delivery, which has necessitated the introduction of the New Private Estate Developers Scheme. Under the programme, the government will make large parcels of land ranging from 1 to 25 hectares available to corporate organizations capable of undertaking development and delivery of housing units. Such organization must however demonstrate that they have the financial capacity and technical expertise to deliver quality and affordable housing units.

Among other sectors of the economy that foreign investors will find viable and worth-investing on are Transport, Sport and Entertainment, Tourism, Power and Steel, Export Processing Zones, Privatization. And available records reveal that the rate of returns in these sectors is as high as in the sectors discussed above.

Apart from the opportunities mentioned above which our office is strategically positioned to maximize opportunities for the benefit of prospective investors. We also offer consultancy services in the areas of general management, manufacturing, marketing, finance and accounting, personnel, research and development, packaging, administration, international operation, specialized services and other value-adding services. And our strategic partnership with national and international companies put us in position to deliver quality service and high returns on investment.

Nevertheless, there have been fears raised by international observers, agents and bodies that Nigeria is a high-risk nation for investment and other business transactions. This development is attributed to security, multiple taxation, epileptic power supply, bad roads and poor work environment.

It may appear that doing business in Nigeria is challenging because of the activities of a few untrustworthy Nigerians who are unscrupulous. But such are simply characterization of human nature; as it can be found anywhere else in the world. It must be said emphatically that the world has been biased in their judgment and treatment of Nigeria security issue. There have never been terrorist attacks, suicide bombings or kidnapping until recently when the issue of Niger Delta came on board.

Niger Delta region-the source of nation’s oil wealth- has become an area of perennial tension, agitation, and recently, militancy. However, a confluence of factors such as environmental damage by oil exploitation, failure to develop the region, lack of job opportunities and sense of deep deprivation from the low share of derivation revenue accruing to the states in the region, has led to the present situation. Acknowledging their situation, the Federal Government has organised a Summit, to be chaired by Professor Ibrahim Gambari, the United Nations Under Secretary General, to provide everlasting solution to the crisis. Frankly speaking, Nigeria is a safe and investment-friendly place and Nigerians are accommodating and industrious.

Cyber Crime is another fearsome crime, which often put-off prospective investors from involving or investing in the business opportunities in Nigeria. This crime was actually imported into the country by expatriates. It has never been part of Nigeria culture. It is perpetrated by a few section of the population. Their operations are carried out via Internet and their targets are people who transact business via the medium. They pose as government officials and sometimes as businessmen with United Kingdom identity who deal in digital products. However the list of their tricks and operations is not exhaustive. With the help of Economic and Financial Crime Commission (EFCC), Independent Corrupt Practices and Related Commission (ICPC), and other Anti-Criminal Agencies, Cyber Crime and their perpetrators are under control and disappearing.

The grand objective of the present administration, as encapsulated in VISION 2020, is to make Nigeria a major industrial and economic power, and one of the 20 largest economies in the World by the year 2020 by providing enabling investment and business environment and maximum security for active participation of local and particularly, foreign investors. The realization of these aspirations had informed the radical and pragmatic reforms designed to increase the attractiveness of Nigeria’s investment opportunities and foster the growing confidence in the economy. In this direction, the Federal Government has provided incentives and strategies for investment such as 3-5 years tax holiday, deferred royalty, possible capitalization of expenditure and provision of infrastructures such as road and electricity, just to mention a few.

African economy is witnessing the strongest growth in 30 years; no doubt, Nigeria is one of the major contributors to this development. Most commentators have observed that the opportunities for business and investment in the country look increasingly rosy with GDP growth of 7 per cent in 2007 and 13 per cent in the next 12 years. The International Monetary Fund (IMF) forecast of 9 per cent growth rate for Nigeria in 2008 (which is second to India 10 per cent and ahead of China 8 per cent) lays credence to their observations.

Furthermore, the increase in Foreign Direct Investment, the entrance of multinational companies, the strong financial sector, the favourable and tremendous business environment, the government support, the abundant natural resources, and the population of over 140 million people, among others, put Nigeria in a comparative ( and possibly absolute) advantage over other African countries.

Just as it is difficult to ignore China as a market in the global arena, (one out of every five persons in the world is Chinese) so is it very difficult to ignore Nigeria as a market in Africa (one out of every three persons in Africa is Nigerian). With a population of over 140 million people and its economic potential, Nigeria still remains Africa most important market.

IMPACT OF GLOBAL FINANCIAL CRISIS IN A DEVELOPING ECONOMY

Unlike China and India, African economy(developing economies) is yet to be integrated into the world economy. This is as a result of slow rate of integration and globalization at which the economy is being fixed into the global economic and financial system. Consequently, developing economies will only suffer a limited financial impact from the credit crunch. However, this is not to say that developing economies are in isolation and totally free from the crisis.

To grant a point, this paper will continue to use Nigerian economy for its analysis as it represents a paradigm of a developing economy with valid and considerable variables.

According to the report from a recently concluded Bankers Committee Meeting, which ended on October 20 th, 2008 , the Nigerian banks are safe as they operate at 22 per cent capital adequacy ratio( 14 per cent above the world 8 per cent requirement) and the financial sector is far from being affected by the current global financial crisis. The report also posits that any bail-out scheme is unnecessary as the situation that warranted bail-out schemes in developed economies- poor quality assets and heavy loan losses resulting from exposure to inadequately collateralised mortgage loans- is absent in Nigeria. To underscore its point, the report noted that, as the Direct Foreign Investment in Nigerian banks is comparatively low and the banks connection with their foreign counterparts is loosely fixed, the impact of the crisis will be limited and indirect.

Conclusion

The words of Mr. Dominique Strauss-Kahn, the Managing Director of International Monetary Fund, at a meeting in Washington D.C are the corner stones of the concluding thoughts of this paper. He stressed as follow:

We meet at an extra-ordinarily difficult time- a time of uncertainty and insecurity, with a danger that those fears push us away from- not towards- a more inclusive and sustainable globalization….At its best, multilateralism is a means for solving problems among countries, with the group at the table willing to take constructive action together. When multilateralism is dysfunctional, globalization can be a Babel of Tower, with competing national interests colliding to benefit none. The new multilateralism, suiting our times, is likely to be a flexible network, not fixed system. It needs to maximize the strengths of interconnecting actors, public and private, profit-making and civil society Non-Governmental Organisations (NGOs). The multilateralism must respect state sovereignties while solving interconnected problems that transcend borders…The private sector cannot restore confidence on its own. Macroeconomic policy measures by governments cannot restore confidence on their own. Piecemeal measures on financial markets will not restore confidence on their own. What will restore confidence is government intervention which is clear, comprehensive and cooperative among countries..The world must act quickly, forcefully and cooperatively to contain the ongoing financial and economic downturn.

Thus, the position of this paper is that the confidence will only be restored if “government intervention which is clear, comprehensive and cooperative” is complemented with investment in developing economies with less or no crisis impact as “flexible multilateralism” and cooperative and sustainable globalization is solution that suits our time, not” economic isolationism”.

Multinationals: Why Don’t They "Just Do It?"

Business Ethics: Worth a thought?

The corporate world today faces rising ethical dilemmas in every day operations. Ethical issues, often confused with corporate scandals, are not necessarily as dramatic as that. Every department of every organization face moral and ethical dilemmas in their day to day functioning, and often enough corporations get away with unethical or immoral behaviour. Of course, reasons vary. Arguably, organizations cannot afford the risk of not investing their time or resources in developing a comprehensive approach to corporate ethics. This report looks at two multinational organizations, Unilever and Nike Inc. and draws a comparison on their discriminatory practices in the various countries or culture they operate in. Both the firms are identified with unethical behaviour, and although the circumstances and the firm’s ways of handling these issues are different, little seems to have changed.

Unilever Issue: Fair is Lovely!!

An Anglo-Dutch company, Unilever owns many of the world’s consumer product brands in foods, beverages, cleaning agents and personal care products. Unilever employs more than 247,000 people and had a worldwide revenue of US$51.4 billion in 2004. (Unilever 2006). In India however the firm runs under its operations under the name of Hindustan lever. The company has a range of ‘home and personal care’ products in the Indian market. One of the most successful brands of the company is ‘Fair & Lovely’. The company websites claims to be using a patented technology for this fariness cream. The website claims ‘Fair & Lovely’ to be formulated with optimum levels of UV sunscreens and Niacinamide, which acts safely and gently with the natural renewal process of the skin, making complexion fairer over a period of six weeks.

A number of ethical concerns are however related to the product. Apart from the ill effects on the skin, as claimed by some doctors, the advertising and marketing of the product has been doing more harm than good for the society. Its frequently-aired ads typically show a depressed woman with few prospects, gaining a brighter future by having a boyfriend or attaining a job after becoming markedly fairer (emphasized by several silhouettes of her face lined up dark to light). On its Web site the company calls its product, “the miracle worker,” which is “proven to deliver one to three shades of change.” (Unilever 2006). To many it may seem or sound strange for all this to happen in a country where the majority of the people have a dark complexion of skin colour with variations in brownness. Ironically enough though, people from all walks of life, be it a would-be-mother in law, or a young or an old male, everyone seems to have a fascination for lighter skin. Women from all socio-economic backgrounds go to unbelievable lengths to become just a little whiter.

Although the advertising done by Unilever for ‘Fair & Lovely’ is not illegal but it certainly remains objectionable. In an era which is dawned by corporate scandals, such as Enron and the Australian Wheat Board (AWB), Unilever has been successfully running this product in over 38 countries. Ironically most of these countries are under-developed/ developing country, who can do away with such practices. In India, a country with a huge social and cultural divide, high unemployment and illiteracy levels, Unilever successfully deceives and manipulates people through its exaggerated claims. Even if the claims were to be true, and such a product was to make skin lighter, the company looks to gain market share and increase profitability by creating a mindset where lighter skin is superior to a darker complexion. In reality people are buying products that will cause more harm than good. The demand for such “skincare” products is part of an India-wide trend of women wanting to lighten their complexions in the belief that lighter is better. This desire has a long history, a hangover from India’s colonial past fuelled by contemporary global perceptions of beauty that give prominence to western marketing and fashion styles. The advertisements shown fail miserably at all levels of advertising ethics.

One of the concepts that can be used to explain the practices of Unilever advertising is Moral myophia, the failure of Unilever to see the moral dimension at all. The advertisements done by the firm have probably been successful. How else would you explain the never ending promotional campaigns all over the media; print, display or broadcast. Success in this case relates to the increasing profitability of the firm after a particular ad campaign. The social implications of this to the society are however conveniently ignored. Quite clearly, Unilever seems to be following the belief of the only bad advert is one that does not work.

The content of the product website makes things a little more complicated. The website claims to be helping women in India, often considered to be the weaker sex. The Fair and Lovely Foundation, an initiative of Hindustan Lever Limited seeks economic empowerment of Indian women through information and resources in the areas of education, career guidance and skills training. Comprising of an advisory body of leading individuals, this foundation aims to undertake various projects and initiatives in keeping with its vision of empowering women to a brighter future. Prominent women organizations and achievers partner initiative to promote economic empowerment of women. (Grace & Cohen 2005)

Noble thought?

It sure is, but at what expense. Isn’t it strange and ironic that this company, and others in the business, continue to sell fairness as a desirable quality, be it for success in marriage or career, and equate dark complexions with failure and undesirability? Where does a company draw the line between selling a product and being socially sensitive? What is even more disturbing is the fact that there is a constant attempt to disguise these socially unacceptable practices. As noble as the idea behind the Fair and Lovely Foundation might be, it still does not solve the root problem. Addressing one problem in the society can not come at the expense of exaggerating the other one. Women in India need to be empowered, and be told that they are no less than their male counterparts, however the people of India also need to be told that the mere colour of skin does not make one superior. The society needs to get over the colonial hangover, and the least that companies like Unilever can do is not spend millions of dollars on campaigns which do more social harm than good.

Nike Dilemma: Still waiting for them to “do it”!

Another corporate giant having its fare share of controversies over the years is Nike. Nike employs approximately 26,000 people worldwide. In addition, approximately 650,000 workers are employed in Nike contracted factories around the globe. More than 75% of these work in Asia, predominantly in China, Thailand, Indonesia, Vietnam, Korea and Malaysia (Nike 2006). In 1998 Nike came under fire for the sweatshop conditions of the workers in the Nike factories in China and other third world countries. The evidence showed that the workers were regularly subject to physical punishment and sexual abuse and exposed to dangerous chemicals. (Nike Accused of Lying About Asian Factories 1998). Sub standard working facilities, bare minimum wages and risks to health of labourers mark NIKE factories in Asia. The firm was also accused of practicing child labour in Pakistan.

So the question now is, why did it happen, and more importantly, has anything been done since to correct it.

So why did it happen?

Well that is quite clear. The reason why most firms outsource their activities to lesser developed countries is to exploit cheaper labour and production costs. Nike has a brand reputation worldwide, and in-fact is a market leader in the sales of athletic shoes. The constant focus is to formulate ways and strategies to reduce production costs, and one way of that is fewer wages to the workers. The high unemployment levels in the third world countries, as well as the desperation for people to be employed, in any kind of work, allows multinationals like Nike , the perfect platform to indulge in malpractices without getting into too much trouble. A look at some of the ethical issues concerned with Nike’s human (or inhuman!) right violations would give a better understanding of the concern.

Ethical Dilemma:

Any firm which expands its operations globally needs to follow the basic code of international ethics:

o Not to intentionally direct harm in the host country. By providing below standard and unsafe working conditions, and low wages, Nike was clearly intentionally doing harm.

o Benefit the host country. Although Nike was indeed expanding the number of jobs available in China, a desirable aspect, but the extremely low wages meant it was all beneficial for the corporation and not the people in China.

o Respect the human rights of employees. Reports of unsafe and hazardous working conditions proved that Nike did not care much about the human rights in China.

o Respect the values, culture and laws of the host country- as long as they are not morally wrong or against human rights. (Grace & Cohen 2005)

It would be a fair assumption to make, if a certain behaviour is unacceptable in the home country, it would most likely be morally wrong in a foreign environment as well. Managing stakeholder interests is also extremely important for any firm. However problems arise when businesses fail to prioritize the stakeholder interests. Nike prioritizes its stakeholders in terms of their importance to the firm, and quite clearly the workers in Asia, do not seem to be anywhere near top of this priority list. As a consequence, all the efforts of the firm are directed towards the consumers, who typically are in developed countries, with more money, and who can not care less about what might be happening in a Nike factory miles away from home.

So has Nike done anything about it?

Since the controversy first broke out in 1998, Nike has claimed to taken several steps to correct the mistakes. Or so is what the organisation claims. This section of the article focuses on Nike’s efforts, the truth, the lies and the myths about it.

After the controversy broke out in the international media, Nike’s founder and CEO Mr. Philip Knight made six commitments:

o All Nike shoe factories will meet the U.S. Occupational Safety and Health Administration’s (OSHA) standards in indoor air quality.

o The minimum age for Nike factory workers will be raised to 18 for footwear factories and 16 for apparel factories

o Nike will include non-government organizations in its factory monitoring, with summaries of that monitoring released to the public.

o Nike will expand its worker education program, making free high school equivalency courses available to all workers in Nike footwear factories.

o Nike will expand its micro-enterprise loan program to benefit four thousand families in Vietnam, Indonesia, Pakistan, and Thailand.

o Funding university research and open forums on responsible business practices, including programs at four universities in the 1998-99 academic year. (Connor 2001)

However there was still no mention of the human rights of workers, higher wages, more reasonable working hours, safer and healthier work places and respect for Workers’ Right to Freedom of Association. Later consumer activist Marc Kasky filed a lawsuit in California regarding newspaper advertisements and letters Nike distributed in response to criticisms of labour conditions in its factories. Kasky claimed that the company made representations that constituted false advertising. Nike responded the false advertising laws did not cover the company’s expression of its views on a public issue, and that these were entitled to First Amendment protection. The local court agreed with Nike’s lawyers, but the California Supreme Court overturned this ruling, claiming that the corporation’s communications were commercial speech and therefore subject to false advertising laws. (Kasky V. Nike 2002)

The parties subsequently settled out of court before any finding on the accuracy of Nike’s statements, for $1.5 million. Discovery in the Kasky case had the potential to open the Nike files to public scrutiny, to document the mistreatment of workers throughout the world, and the flow of money from Nike to public interest groups. However Kasky and his lawyers settled this potential historic case for a $1.5 million donation to a group controlled by the shoe and apparel industry. There hasn’t been a word about it since.

(Weissman & Mokhiber 2002)

In 2004 Nike announced that it would be developing a balanced scorecard to integrate corporate responsibility into its business. The sports goods manufacturer said it would introduce corporate responsibility as an integral part of its contract manufacturing business. Sourcing decisions were to be based not just on price, quality and delivery but also a contractor’s pledge towards labour management and environmental, health and safety programmes.

In 2005, seven years from the time when the controversy was first made public, an independent research conducted showed that although 60% of factories monitored achieved an A or B rating in terms of compliance with agreed standards, a quarter of factories were found to present more serious problems. These ranged from a lack of basic terms of employment and excessive hours of work to unauthorised sub-contracting, confirmed physical or sexual abuse and the existence of conditions which could lead to death or serious injury. The Guardian also reported some of the conditions that existed in the Chinese factories in 2005

o Between 25% and 50% of the factories in the region restrict access to toilets and drinking water during the workday.

o In more than half of Nike’s factories, the report said, employees worked more than 60 hours a week. In up to 25%, workers refusing to do overtime were punished.

o Wages were also below the legal minimum at up to 25% of factories

(What are factory conditions in China 2005)

Once again Nike said it would set up a taskforce to improve compliance with its code of conduct on working hours. It will also work with factories to help them address the most pressing problems as well as seeking to establish a set of common standards across the industry. (Nike opens up in Standards Drive 2005)

The question of course is, would anything still be done. There is a good chance it may never be. Nike sees business ethics as “no good at all”, and believes acting ethically would not be in the best of interests of the business. Not till the time, the sales of the business go down alarmingly, would there be any hope for any drastic improvements in these conditions. Nike has always had its share of controversies, and the firm seems to be thriving on it. The firm manages to use the controversies as a publicity tool. Thus far, Nike has treated allegations as an issue of public relations rather than human rights. Every allegation is followed by the release of public statements across various magazines and newspapers stating the efforts made by the firm to make the difference, but seven years down the road, the differences are yet to be seen. Meanwhile the efforts of Nike to manipulate and win even more customers go on. The corporate website of the firm talks heavily about their shifting approach to labour compliance.

(Evolution: Shifting Approach to labor compliance 2006)

Unlike Nike, Unilever has not quite been indulging itself in illegal activities, but does that make it any less harmful, or does that make Unilever any bit more ethical than Nike?

According to this writer, the answer to both the questions is NO. In fact what makes Unilever’s practices even scarier than those of Nike is the fact that they cause as much harm, but still there seems to be little concern over it. The firm has been in operation since 1978, and even 28 years after there seems to be little or no concern. There is little media coverage over the menace, possibly because of the advertising revenues being paid, or just the ignorant nature of the present day media, which seems to be more interested in scandals rather than some social concerns in a third world country.

The double standards practised by both Nike Inc, and Unilever are quite apparent as well. The majority of Nike clothing is produced in countries it hardly has any sales, but of course the factory conditions of a worker based in an American factory is strikingly different from that of a worker in a Chinese factory. Likewise Unilever manipulates the market by introducing fairness creams in cultures where beauty equates fairness. To boost the sales, the company goes a step further by trying to position the product by changing consumer perception of fairness as being successful, both socially and emotionally.

Social impacts? Did you ask?

Of course that’s hardly on the agenda. The interesting thing is, although Unilever operates in over 40 different counties, including Australia, the ‘Fair & Lovely’ product is only available in a handful of markets. The company does not have any ‘Dark & lovely’ brands in their western markets, possibly because they perceive this market to be more educated and therefore tougher to manipulate.

The firms of course have their reasons, and one of them is us, the consumers, who purchase these products. It is the age old formula of demand and supply. We demand the product, and the firm of course goes to any lengths to fulfil the gap. In Unilever’s case, there is an obvious need in the mind of the consumers in India to have fair skin. Similarly for Nike, the worldwide demand for their apparels compels the firm to go to unbelievable extent to produce lower cost products. The story unfortunately does not end here. We the consumers, then put the firm under even more pressure to maintain their profitability, only this time we take the role of investors. Investor’s of course are only concerned with the share return, and cannot care less about how the firm maintains its profitability.

Jennifer Abbott and Mark Achbar, in their documentary ‘The Corporation’, proved that corporations in the present time fit the definition of a ‘psychopath’. The concern is that this psychopath is being raised and bred by us, the consumers, and the investors. These are average times we are living in, with every day more issues, more scandals and more controversies breaking out. However reading the stories is nearly not enough. Something somehow somewhere needs to change and change sooner rather later, before it gets too late.

End of story?

Unfortunately, I don’t think so.

Bulat Utemuratov: "Tennis in Kazakhstan Is for All"

When Bulat Utemuratov joined the Kazakhstan Tennis Federation, this organisation was in stagnation. Tennis players did not show impressive results and officials did not know how to improve the current situation. Utemuratov brought o the KTF a modern approach to setting and achieving goals which is used in business. Multi-faceted goal setting had to fundamentally change the sluggish tide of the tennis life in Kazakhstan.

Having headed the Federation in 2007, Bulat Utemuratov voiced long-term plans approved by the International Tennis Federation. The main one was to turn tennis into the mass sport. For this, it was necessary to work in three directions altogether: to develop an infrastructure, to train and support trainers, take part in competitions. They started translating plans into actions without delay.

Tennis courts all over the country

As per 2006, there were 60 courts in four regions of Kazakhstan. Courts did not meet the requirements of international standards and did not satisfy basic needs of sportsmen. Under the leadership of Utemuratov, construction of courts in all oblast centers of the country began. Currently courts amounted to almost 250. Modern tennis centers have been built in each of the 15 regions of Kazakhstan. These are facilities that meet all the requirements of the sports infrastructure; they can host competitions both at the national and world level.

The recently opened tennis centre “Ace” in Almaty has 4 indoor and 6 outdoor courts with a total area of 8100 square metres with a “hard” coating. All courts have lighting that meets the requirements and standards of international TV broadcasting. The centre can host ATP Challenger tournaments in summer. The amount of investments in the project, including construction, equipment and landscaping, exceeded 5 million dollars.

Bulat Utemuratov believes that tennis infrastructure should be easy accessible and available on demand, so the courts are being built within walking distance from densely populated places. So as training sessions fee be moderate – these are now ranging from 18-30 dollars per month for 12 sessions in the regions to 45 dollars in the capital. Number of people willing to engage in sports is growing geometrically: in 2007, just about 500 people were engaged in the lawn tennis, today – more than 6000.

Programmes for children as the basis for popularising sports

In his role of the Kazakhstan Tennis Federation head, Bulat Utemuratov pays special attention to children’s sports. The “Tennis under 10” programme is a social project aimed at educating a new generation of athletes capable to defend the honour of the country on the best world tournaments. The main idea of the programme is to start the training process as early as possible. It is for this reason that the programme began to operate in kindergartens in different regions of Kazakhstan. “Tennis under 10” unites 40 schools and 24 preschool institutions. The “Tennis under 10” programme is included in the ITF international programme Junior Tennis Initiative for children under 12 years old engaged in tennis. Bulat Utemuratov fully funded this project and competitions for the next 3 years.

The second large-scale programme for children is the School Tennis Initiative. The project was launched in 2008. It is aimed at increasing the number of tennis players across the country by introducing tennis for children aged 4-6 years in preschools and 6-10 years in schools through mini-tennis. Mini-tennis allows mastering the basics of playing on the court in a fun and entertainment way, using the game approach in training.

Team Kazakhstan Tennis Academy – foundry of champions

Team Kazakhstan project was launched by the Kazakhstan Tennis Federation in 2008. The field of its activity is education of future national team participants in the Davis Cup and the Fed Cup. Full funding is provided by the KTF. In September 2008, the first admission Team Kazakhstan students and coaching staff were sent to the Gorin Tennis Academy, USA, to improve their skills. In 2009, Dutch expert Eric van Harpen was invited as the head coach. In the same year, one of the world’s leading experts, Pole Michislav Boguslavsky, joined the project as the head coach on the juniors body-conditioning and general sports training. Since then training camps were held in the Bruguera Tennis Academy (Barcelona, Spain), Pro World Tennis Academy (Miami, USA), Gorin Tennis Academy (California, USA), Tennis Val Tennis Academy (Valencia, Spain).

Young athletes have already demonstrated good results at international and national competitions. Among them, Gozal Ainitdinova, Dostanbek Tashbulatov, Timur Khabibullin.

The students of the Team Kazakhstan Academy won more than 80 international tournaments, including various Grand Prix. In 2017, the Kazakhstan team in the category “under 12 years” became the champion of Central Asia. Kazakhstani tennis player Gozal Aynitdinova is the champion of Asia in the category “up to 14 years”. Representatives of Kazakhstan’s tennis youth regularly take prizes in Europe.

Victories, achievements, results

The Kazakhstan men’s team has repeatedly entered the quarterfinal of the prestigious Davis Cup tournament, beating such eminent teams as the Czech Republic (2011), Austria (2013), Belgium (2014), Italy (2015) and then world champion Argentine in 2017 and returned to the World Group. In February 2018, a team of Kazakhstani tennis players early defeated the Swiss team and reached the quarterfinals of this prestigious tournament. In the Fed Cup, the women’s team of Kazakhstan went into the playoffs twice.

About 40 international ITF, ITF futures, ITF Juniors, ATF and ATP Challenger tournaments take place in Kazakhstan every year. The largest tournament in Kazakhstan is the President’s Cup. This tournament is a part of the ATP Challenger series, and the women’s tournament is in the ITF series. Also, Kazakhstan repeatedly hosted World Group Davis Cup and Fed Cup international tournaments.

Are You Losing Business by Only Accepting Cash and Checks?

Many mobile business owners and professionals struggle with payment options. While on the road, moving from one job site (or client) to the next, it can be difficult to keep things organized. Most small business owners have the luxury of a storefront, cash register, and credit card processing terminal. For them, there’s no guesswork or potential “run-around” involved – either the card has funds, or it doesn’t.

Mobile business owners, such as landscapers, trades people, merchants at craft fairs, and others simply do not have these luxuries. Most are limited to accepting cash or check; the latter with no guarantee that there are funds in the account. It can be difficult for them to find a payment method that is convenient for both them and their customer, especially for big-ticket items. Unfortunately, this may often mean that the sale goes instead to the brick and mortar merchant, simply because they accept credit cards and/or provide a financing option that doesn’t involve some sort of collection arrangement.

(In other words, the credit card company acts as the “creditor” for them, in a sense, and gives the customer a self-directed financing plan on their own terms.)

Are you losing sales because you don’t or can’t accept credit cards? This is a problem shared by many mobile business owners. Imagine the sales you might have had at your last trade show or job fair, if payment of a large sum had been easier and more convenient for your customer.

Customers are carrying less and less cash around. We are quickly becoming a plastic consumer society and few people like to bother any longer with the hassle of cash or check books. They prefer the ease and convenience of their credit or debit cards. Are you losing valuable sales because you don’t accept this most convenient method of payment?

Many business owners also prefer credit cards. They offer the advantage instant approval. There is no waiting for days for a check to clear and money to be deposited in your account. Credit cards provide 24-hour payment in a 24-hour world. Payments can be processed quickly, on demand.

What if there was a way for you to accept credit cards from your mobile office or job site? This would enable you to build your business from anywhere, any time. Why should brick and mortar businesses get all the customers?

What would this do for your business? Your business could potentially grow by leaps and bounds – and you’d be making life a lot easier for both your customers, and yourself.

Here’s the good news – you do, in fact, have options. Here are two solutions you should consider:

1. Use a Wireless Credit Card Terminal.

If your typical business day consists of a large number of smaller sized transactions (for example, a pizza delivery business with an average of 40 sales under $30 a day), then you should seriously consider getting a wireless credit card processing machine.

Your monthly fees for the merchant account (and equipment, if leasing) will be average, as will the discount rate per sale, but the convenience factor in addition to the potential increase in sales from customers who don’t necessarily have cash on hand will likely more than make up for the monthly fees, and then some.

2. Accept Credit Cards by Phone

Now, if you run a business where you’re only closing on a few sales a day, but at a higher ticket ($x00 – $x,000), then you’ll want to minimize your merchant account costs because your credit card transactions will be more of an occasional occurrence – even though it will certainly impact your business in regards to convenience, efficiency and potentially even sales.

For example, if you own a landscape business where the average transaction is $600, you’ll find that quite a few clients will want to take advantage of either their card’s built-in rewards points (like “air miles”), the flexible financing – or in most cases, both of these added benefits combined.

The benefit for you is that credit doesn’t “bounce” and in most cases, you’ll have access to the funds much faster than with a check.

Now, here’s the best part – you can accept credit card payments on the spot from any touch-tone phone, including your cellular.

Also, the leading “pay by phone” services available have very low monthly fees and operate in more of a “pay as you go” fashion.

This is the perfect solution for a mobile business – or professional – where occasional credit card transactions are necessary (and profitable), but don’t quite warrant the hassle of using a traditional terminal.

Some services cost as little as a few bucks a month at about 4% per sale.

So there you have it – two very viable options for mobile business types that would otherwise have to remain stuck in the “dark ages” of cash and check payments.

Do your due-diligence to see what service might be best for you and your customers.

Fashion Wholesale Clothes – Tips to Starting Wholesale Business With Fashionable Clothes

Everyone wants to maintain up the newest trends nowadays but costs for clothes are growing especially in the designer market. Buying fashionable wholesale garments is a great way to maintain up with the trend but not spend hundreds of thousands of dollars on the particulars you really want. Whether its purses, the current jeans, dresses, scarfs or hats you can bet that you could get it wholesale much cheaper than you would purchase at retail price. If you are planning to put up your own clothing retail shop with the latest fashion clothing designs, then you must make a lot of research first before you go into it. Study everything that you have to know about this business so you’ll not end up selling clothes with inferior quality to your customer.

The internet is now the advisable site in the world to get all the greatest bargains and buying wholesale fashion clothes is no different. There are practically hundreds of web sites you can go to get these deals. Of course the good thing about buying wholesale is the more you buy the less expensive you may have the items. If you and your associates all wanted the latest fendi or Gucci bag you may all purchase it together in wholesale and save lots of cash. Even if you were just having ten percent off of the terms you may still be keeping a great deal for the higher priced designer particulars.

Other special reason is that if the middleman is overstocked for particular products you will get even more cash off the terms as they cut it to deal with more and they know that this can rouse sales. Going to the enterprises in this game can sometimes be beneficial because generally the more stock a business is trading the more decrease in terms the trade can make. So it is really a great idea to go with the super middlemen to get that extra terms decrease for wholesale trend dresses.

Basically if you’re operating business then wholesale garments is the single means for you to go. If you’re purchasing hundreds of particulars you may bet you will be saving big time on the total rate. Getting wholesale merchant is now very easy since the dawn of the web. Just search for a wholesale web site, select the wholesale trend clothes you want and then they will all be delivered to your warehouse. And speaking of choice, what you may have nowadays is fabulous.

Every pick of fashionable wholesale garments for sale on the web will also be in stock through wholesale.

Grasp the Concept of Forex Trading on the FX Dialogue Platform

The development of the internet has proven to be an incentive to the flourishing of many fields and businesses but the most important of them all is the Forex trading system. Now you can easily access different transactions and make decisions from the comfort of your home, when you like as you decide when to do your transactions and when to focus on other things in your life. And the perfect place to find what you need in the Forex trading system is the FX Dialogue environment.

The FX Dialogue platform is where the juice of this business is. All the recent news, all the changes of the market, all the increasing or decreasing of the rates, everything comes here first. As you know we are living in a world where information is power and what would you say if you were to have access to the information in the Forex trading business?

This is the place where both experts and beginners in the field of Forex trading come and exchange experience and knowledge. It’s not only information that the FX Dialogue brings to the table. There are many tools available here for the transactions of any user to be successful. On of these tools, is a simulator which has been proven to be very useful. It’s called the WayBack simulator and its efficiency has helped a lot of traders develop their strategies. The primary function of the program is the possibility of creating various scenarios where you can adapt your investment to different requirements of the market, hit “run” and then see how your transaction goes in this given circumstances. Imagine that by doing so you are testing your theories and if you make an error you can always turn back and modify the factors so that in the end you will have a successful transaction.

After perfecting your strategy so that the amount of profit that comes in, is maximized then you can head to real life transactions and there is another tool that can aid you in this step. The MexcelTrader is the perfect platform where you can score as many points as you can in a given Forex trade. To program was created with the thought to beginner Forex traders and experts alike so that everyone is given the chance to understand its functions. The main advantage of this software is that it has the possibility of automated trading. This means that you enter the desired parameters and investment rate and then sit back and enjoy the other things in our life that really matter because your money will be handled by the software. It’s just like a broker, but everything is done inside the FX Dialogue platform, everything is safe and the key point you don’t have to pay this automated broker for its services.

This is the new business in the times we are living. There are some who embrace the concept that there are more important things in life then money and you can have yours in different ways, there are some that don’t. On which side are you?

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