Author: chris

 

Foreign Direct Investment in the Middle East and North Africa Region 

What are the FDI immediate/ medium term/ long term prospects for FDI in a) Egypt b) Libya c) Saudi Arabia?

The short-term objective for MENA countries will be that development will be hammered by ongoing political uncertainty.  The extensive supposition will be that essentials that culminated to the uncertainties will not go away briskly and that the perils of unrest will remain unless systems of government take important steps to contain the anomaly. Whereas stable in the short term, Saudi Arabia is the largest potential concern owing to its status as the world’s largest oil producer and also the regions largest economy. When it comes to the long-term objective, MENA nations exhibit high optimism and enormous prospects that could catapult the region strongly for the coming years. While this is dependant on how the government conduct it business, the number of significant benefits packages and economic compromises pronounce indicate how positively the government will react. Again, after the abyss of the monetary crunch and global meltdown, the corporate world is becoming more able while facing a better functional environment, nonetheless, the unrest implies that any optimism should be watchful (Almezaini, 2011)

 

How important is FDI to the development and overall well-being of these countries?

 

Foreign direct investment (FDI) will play a very significant role in the MENA business as it has been a global case. FDI has the capability of providing MENA organizations with new marketing channels as well as new markets, very cheap production facilities, application of new technology, skills products, as well as if financing. For MENA countries and the foreign firm which get the investment, it is capable of providing sources of improved technologies, processes, capital, products, as well as management skills. Therefore, it is capable of providing a robust impetus both to economic growth and development. Improved systems of information technology, reduction in the cost of worldwide communication have made the administration of foreign investments very acceptable as compared to the recent past. The great change in investment and trade policies as well as the authoritarian environment worldwide in the last ten years, including trade tariff liberalization, trade policy, lessening of restrictions on the foreign investment as well as acquisition in numerous countries, and the privatization and deregulation of a number of industries, has possibly been a very important catalyst for the expanded role of FDI (Barnard, 2009).

 

Foreign Direct Investment will also play an important role in the MENA’s economy since it will bridge the gap between these economies developed nations. In addition, multinational corporations are also significant since they create employment opportunities for the MENA countries’ population thereby improving general living standards of the people. FDI will also help to encourage specialization and comparative advantage principle which in turn improves global productivity and spur economic growth and development (Dhu, 2010). Saudi Arabia and some of the Middle East countries have been able to attract FDI because of their natural resources like oil and gas. With the resources in place, these countries have been regarded to poses high level of instability which is normally associated with investment risk as compared to the developed countries. This has become a challenge to them in discouraging FDI into the region. Risk assessment therefore is very useful to investors (Bremmer & Robert, 2009). Apart from the natural resources, these countries have also put their focus in creating a world class environment that makes the running of business easier and cost effective. This has been enabled further by several underlying factors such as the availability of low price facilities and services, low cost governmental financing opportunities, the leading in export and import size in the Arab world, within the first seven countries of least inflation rated in the world.

 

 

1. What measures can these countries take to attract FDI?

 

MENA nations should exhibit the highest goodwill and promise good faith and fairness in their business dealings to attract FDI. These countries should also formulate a policy that would help their financial systems avert risks that are related with currency convertibility and transfer.  They should put in place a universally accepted currency upon which revenues and expenditures are based by indexing local currency to foreign currency to provide a return to investors in their currency would help reduce the risk. But some nations may not readily adopt this policy because it is associated with “economic colonialism”. Another way out would be to adopt political risk insurance (Abdallah, 2001).

Foreign investment risks that emerge from cases of substantial contract changes should be curtailed through smooth transitions. New legal enactments or litigations through courts and the change of existing bylaws should not hamper the foreign policy. If the opposite we to be true this would significantly affect the foreign investment contracts in place because such actions are never anticipated or planned for. Incoming governments should not interfere with foreign investment agreements established under the previous regimes. Such reasons may be based on allegations of corruption involved during the contract set up.

Foreign investors often face environmental liability risks in the international community. The recent past have seen growing concerns regarding the profound dangers to which the global environment is exposed through industrial and societal activities. As a result, these Arab nations should develop laws that to regulate investments in projects to comply with safety standards and human rights requirements. Violation of environmental requirements is likely to expose foreign investors to uncertainty risks, which should not be the case if attraction of FDI is anything to go by (Development,  2001).

MENA countries are endowed with natural resources such as oil. But the energy has been seen to exhibit greater investment risks in contemporary society. A clear oil policy should be formulated to manage tensions and uncertainties that tend to shift with oil supply trends. These countries should therefore move fast to renegotiate existing contracts whenever oil markets tighten and push oil prices higher. Owing to the high global stakes in the energy sector, compounded with the lack of a universal regulatory mechanism on foreign investment in the sector, these nations should lead the world in formulating a framework that harmonizes the security threats in the energy sector; this will win foreign investors (Wilson, 2004).

 

 

Foreign investment has been said to be limited in practical scope due to institutional obstacles and uncertainties. This is one aspect that has caused objection to global diversification in the recent past. Some markets may too small, and relatively inefficient and less liquid to attract foreign investors especially from developed nations like the US. To attract FDI, these countries should collapse their currency into a single unit; this would give them the economic muscle and bargaining power to trade with large economies. Respective countries should desist from presenting misleading market capitalization and statistics under the pretext that banks and holding companies are majority shareholders (Ocampo, 2010) . Arab nations have the prerogative to embrace modern technology and best practices that would enhance market efficiency in terms how information flows and responses obtained, this is likely to attract an array of foreign investors (Moran,et al.  2008).The nations should also work around easing institutional rigidities and bureaucracy that make foreign investment an expensive venture. To attract massive foreign investment security ownership discrimination based on nationality, differential taxation based on investor nationality, and exchange regulations should be streamlined in favor of foreign investment. In the end, modern infrastructures should be put in place to enhance accessibility to markets, and first data from the ground (Mababaya, 2003).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

 

Abdallah, W. M. 2001, Managing multinationals in the Middle East: accounting and tax issues. Washington, D.C: Greenwood Publishing Group, US. Print.

Almezaini, K. 2011, Reformation in the Middle East – the Implications of the Region’s Political Unrest for Foreign Direct Investment. Available at: http://www.ibde.org/component/content/article/87-reformation-in-the-middle-east-the-implications-of-the-regions-political-unrest-for-foreign-direct-investment.html [Accessed July 21 2011]

Barnard, B, 2009, Dubai Separates DP World from Debt Troubles. The Journal of Commerce Online Available at:  http://www.joc.com/maritime/dubai-separates-dp-world-debt-troubles [Accessed July 21 2011]

Bremmer, I & Robert, J. 2009, The Rise and Fall of Resource Nationalism. Survival, Global Politics and Strategy 51 (2): 149–158

Dhu, A. 2010, Why invest in Saudi Arabia?  Available at: http://www.arriyadh.com/Eng/AbArriyad/Left/Investment1/getdocument.aspx?f=/openshare/Eng/Ab-Arriyad/Left/Investment1/Why-invest-in-Saudi-Arabia.doc_cvt.ht [Accessed July 21 2011]

Development, O. 2001. Foreign direct investment, development and corporate responsibility. Paris: OECD Publishing.

Moran, T. H., West, G. T., & Martin, K. 2008, International Political Risk Management: Needs of the Present, Challenges of the Future. Washington, DC: World Bank

Ocampo, J. A. 2010, Rethinking Foreign Investment for Sustainable Development: Lessons from Latin America. London: Anthem Press

Wilson, R. 2004, Economic development in Saudi Arabia. London: Routledge

Mababaya P. M, 2003, The Role of Multinational Companies in the Middle East: The Case of Saudi Arabia Florida: Universal-Publishers

 

 

 

 

 

 

 

 

 

 

 

 

Discrimination, Equal Opportunity and Diversity Management

Possible explanations for enduring forms of discrimination at the workplace

The civil rights Act 1964 was aimed at ending the discrimination that African-Americans faced in the workplace (Davison 2005). Many were and are still overtly discriminated, subjected to negative and false stereotypes and a subconscious bias informed by an avalanche of factors. Many African Americans still find it hard to be hired, evaluated and promoted by virtue of their abilities and qualifications. Presently, this form of discrimination has expanded to encompass all groups of people who have distinct facial features or colours that make them easily distinguishable from others (Pollard 1999). This means that this form of discrimination is not limited to black people but encompasses those that are different from others. Racial discrimination is propagated by the misplaced feeling that the presence of foreign people in one way or the other leads to reduced opportunities for natives or leads to other negative outcomes.

In recent times, there have been concerted efforts towards the improvement of the conditions bedevilling working as a woman. Most people have stereotyped jobs that they feel are feminine which are normally less paying than similar jobs performed by men (Krieger & Hanner 2001). Many societies have placed limits for women meaning that they can only go up to certain positions and are not promoted further. This mainly is as a result of culture where the woman is seen as inferior and weaker to the man. It is common to find women being harassed sexually either consciously or subconsciously by their colleagues in the workplace despite the fact that employers are more empowered and obligated to take corrective or preventative action. Pregnant woman also face a lot of discrimination especially in hiring and promotions. This is due to the fact that employers and co-workers view them as being incapacitated in performance of their jobs as a result of their condition. Those with responsibilities of family care are also likely to be discriminated as they are viewed as having skewed foci when it comes to job performance. Those that discriminate against them believe that they are prone to thinking only about their families leaving little time for concentrating on the job. They may also be discriminated on the grounds that they may require more off days to concentrate on their families, a fact that may not always be right. Researchers note that women of colour are the most discriminated as they are discriminated on all fronts; by the fact that they are coloured and that they are women (Sturm 2001).

Perhaps the most common form of discrimination is that along age. There are numerous laws that prohibit the discrimination of older workers. Negative and false stereotypes lead to older people being disproportionately laid off whenever the necessity arises. Those that lose their jobs at that advanced age usually find it hard to gain employment at their previous level and find themselves employed at lesser positions with less pay and responsibilities (Lahey 2005). The victimization of these older workers stems from the scepticism that their best days may be behind them. They are viewed as unproductive and a liability since they may attract more medical expenses that younger workers. The idea of having slow, unproductive and expensive workers to maintain is one that drives businesses to lay off their older workforce and employ younger ones who may be more vibrant and would be started off with lower levels of pay and having little expense in terms of medical cover.

Another form of discrimination is usually along religion. People of some conspicuous religions are easy to recognise; for example the Muslims with the hijab. In present times, proliferation of extremist groups that carry out acts of terror has been linked to Islam. Many people have therefore become more sceptical of Muslims and this has led to many of them being discriminated. Religious discrimination might be due to the incapacity of the employer to meet the religious observance needs of the employees. Here, the case of Muslims also comes to mind as they are required to pray five times a day. Employers may interpret this as an avenue for loss of man hours and might decide against hiring them. Religious discrimination is mostly as a result of lack of knowledge regarding other people’s beliefs (Reskin 2000). The fact that Muslims do not allow non-Muslims in mosques is one of the reasons that they are viewed with scepticism.

People are also discriminated because of their disabilities. Many societies exhibit overt bias towards the disabled leading to many of them who are qualified losing out on jobs. Employers may cite the lack of reasonable facilities to comfortably accommodate the needs of these people. This has led to the disabled being locked out of many potential jobs and has made them to be continually alienated from the rest of society. These people require acceptance and fair treatment so that they can be involved in building the business sector as well as the nation. The major reason for discrimination of this group is that it is wrongly seen as being incapacitated to perform any job.

Importance of promoting equal opportunities and diversity management

Managers are faced with many situations stemming from discrimination in the workplace. In order for them to reap maximum benefits from their human resources, discrimination must be eradicated and every employee treated with dignity. There is therefore a major need for promotion of equality and fostering diversity. Equality encompasses individual’s rights to be different and to be free from all forms of discrimination (de Vries 2011). The concept envisages an ideal situation where the individual has the right to make choices pertinent to his/her condition and also to basic human dignity. His/her beliefs and values must be respected. Diversity on the other hand is a concept that refers to difference. Diversity can be said to be more than equality as it deals with variety and differences that are the building blocks to culture, practices and environment that are indispensable to success of societies, organizations and to individuals themselves (Dwyer et al 2003).

Diversity is a very important concept in the workplace since it is the pool from which skills, energies, ideas and resources are sourced. The talent on offer due to different cultures, religions, age groups, genders, ethnicities and races broaden organizational outreach capabilities and can be the difference in gaining a competitive advantage over others. Diversity ultimately improves the production capacities of organizations or whole communities and helps them in raising their profiles. Management of diversity entails a process of actively engaging the different components of the workforce (Edelman 2001). Equal opportunity promotion on the other hand entails fostering a culture that allows every employee or prospective employee an equal chance of reaching full potential. Equal opportunity promotion and diversity management help to improve the capacities of employees by promoting from within organizations and utilizing their different knowledge bases. The organization also benefits by having extensive information regarding the target market segments and behaviours exhibited by consumers. Employees on the other hand will view the organization as the employer of choice which is an important factor in promoting morale. Another benefit is that the organization will have a balanced workforce that captures the diversity of the society today. Employees will feel valued and respected which makes it easier for other to be easily attracted, recruited and retained in order to have a wide pool of talent.

Fostering diversity in particular has many underlying benefits. For starters, there is improved retention of already contracted employees and also an opportunity for them to progress in their careers. Working becomes an interesting affair where the environment is nurturing, vibrant and inclusive (Klarsfeld 2010). The employees become appreciative of different cultures and become better global citizens. The organisation will in the long run become more knowledgeable as it will be able to understand the needs of a wide range of people, be they customers, employees, suppliers, or other stakeholders. The needs and wants of diverse group within the organisation will be anticipated and met to the satisfaction of those groups meaning that there will be a general positive outlook for the organisation. Employees also become wiser as brainstorming and interactions will expose them to contrasting views stemming from the fact that different people analyse situations differently. The end result is that they become better team players which ultimately increase productivity and guarantees success of the business. When employees become motivated as they are continually challenged, they increase their outputs and hence improve the delivery standards of products and services.

Equal opportunity is a term that is used in human resource management that connotes balance and representation especially in matters of recruitment (Arneson 2008). Fairness in employment where all people are given an equal chance and not judged on their differences is the major tenet for equal opportunity employment. The concept is rooted in the need for treating people as individuals and not making blanket assumptions based on their affiliations. It also considers the abilities and skills possessed by individuals without stereotyping. Many people in the world today are victims of stereotypes that retard general development of the workplace, the society and the individual. There is need to breakdown stereotypes in order for the diversity in culture to be tapped for success of different endeavours. All people should be offered equal, fair and courteous opportunities so that they can be useful cogs in development. Regardless of beliefs, affiliations or predispositions, all people have the right to be appreciated and valued. The concept of equal opportunity is more exemplified in public service. This is because national environments are usually more diverse than business environments. Whereas the business environment is focused on the abilities, skills and knowledge of potential employees, the public sector must consider other factors like a balance in appointments across different ethnicities, races, political affiliations, disabilities, religion, and gender. The equal opportunity policies that have been prolific in the public sector have been transferred to the business sector as a means of ensuring that no groupings are discriminated. Organisations must have steps that promote equal opportunity employment in the workplace that follow legislation (Lawton 2000). In the UK, for example, the Equal Pay Act 1984, which detailed the remuneration obligations of employers, was replaced by the more detailed and contextually wider Equality Act 2010.

Employers should be wary not to commit acts of discriminations like offering a higher position to an external source without having advertised it to employees already within an organisation or a situation where a male employee is paid higher than a female employee for the same job. Other common situations like offering more off days to people from a particular region, denying people with disability by virtue of them lacking the necessary equipment to move around, interviewing only people from a particular gender or age group or overlooking a person for promotion for the reason that he/she will not command the requisite respect necessary for proper execution of the job mandate (Wilson 2003). Some of the reasons that lead employers to make certain decisions may be innocent and may not be aimed at victimizing different people. For example, where a disabled person is denied promotion since he/she lacks the equipment to move up the stairs or ramps or where ramps do not exist or where a female employee is overlooked for promotion to a job primarily done by men who require constant supervision and where respect must be accorded to the new boss, or where young women are required to attract customers. These situations may vary and the employer may see it fit to overlook others due to perceived shortcomings due to stereotypes attached to particular groups. When they commit such errors, they make both their organisations and themselves liable for prosecution due to discrimination. This can be avoided by fostering diversity and promoting equal opportunity employment.

As mentioned above, employers must track policies designed to promote equal opportunities and diversity management so as to comply with legislation. There are numerous legal requirements in the UK incumbent upon employers that must be met to avoid repercussions. The most pronounced ones are meant to protect the rights of the weak and vulnerable in the society. They include the Disability Discrimination Act, the Human Rights Act, the Employment Equality Regulations, the Rehabilitation of Offenders, the Employment Act, the Sex Discrimination Act, the Equal Pay Act, the Sex Discrimination Burden of Proof Regulations and the Race Relations Act (McAdams 2000). These pieces of legislation form the benchmark from which recruitment, selection, employment, remuneration and promotion of employees is done in the workplace.

Companies must formulate policies that are in line with their missions and visions. Advertisement of positions, recruiting and selecting employees, training and availing favourable conditions for working, remuneration and other tenets of employment must be aligned with organizational goals and objectives. This should also extend to the way customers are treated.  In this regard, the preferred modes of advertisement, the content in the advertisements and the conditions for employment must be targeted to a large diversity pool and must be tactical not to alienate a certain part of the population as this might be detrimental to the company’s image (Richard 2004).

Employers must ensure that their equal employment and diversity management policies entail ways of addressing arising grievances. Employees or potential employees may feel that they have been treated less favourably than they would have desired and these issues would need to be addressed to ensure that no further discrimination is done. It is prudent for employers to realize that failure to address genuine concerns amounts to further discrimination. There must be avenues that should be established so that people are empowered to make formal complaints wherever any injustice or discrimination is meted on them.

It is also prudent that diversity and equal opportunity initiatives be captured with the physical layout of the workplace. People with disabilities in particular require specialized facilities for them to properly execute their mandates. If there are flights of stairs that require ascension for the able people, there should be ramps for the disabled. These are some of the reasonable adjustments that must be made so that there is equality in the workplace. In workplaces where there are both women and men, privacy should be guaranteed meaning that there should be separate restrooms as well as separate changing rooms. Compromising the privacy of a particular group would amount to discrimination which would in turn result into disputes and lawsuits. Organisations can however gain reprieve in instances where the requests for adjustments may not be deemed reasonable; like having ramps in multiple floors due to a single disabled person.

Organisations must realize that the world has evolved into a global village where diversity is a reality. Those that have the best practices for integrating diversity and equal opportunity policies into their business models will ultimately reap the benefits (Stone 2001). Having people from diverse cultures, religions, races, ethnicities, sexual orientations, genders, marital statuses, disabilities, political ideologies and beliefs serves to increase the pool for talent, knowledge, skill and ability recruitment. There are numerous other advantages associated with embracing diversity and promoting equal employment. Ultimately, employers can disregard policies designed to promote equal opportunities and diversity management at their own peril.

 

 

References

Arneson, R., 2008. Equality of Opportunity. Stanford Encyclopaedia of Philosophy

Davison, K.N., 2005. The mixed race experiment: Treatment of racially categorized individuals under title VII. Law journal library, 12, 161-164

de Vries, P., 2011. Equal opportunity, Blackwell

Dwyer, S. et al, 2003. Gender diversity in management and firm performance: the influence of growth orientation and organizational culture. Journal of Business Research, 56(12), p.1009-1019

Edelman, L.B., 2001. Diversity Rhetoric and the Managerialization of Law. Am. J. Soc., 106, 1589

Klarsfeld, A., 2010. International Handbook on Diversity Management at Work: Country Perspectives on Diversity and Equal Treatment. Cheltenham: Edward Elgar

Krieger, H.L. & Hanner, R.W., 2001. Whose Motive Matters?: Discrimination in Multi-Actor Employment Decision Making. La. L. Rev., 61, 495-498

Lahey, J., 2005. Do Older Workers Face Discrimination? Boston: Boston College.

Lawton, A., 2000. The Meritocracy Myth and the Illusion of Equal Employment Opportunity. Minnesota Law Review, 85, 587

McAdams, R.H., 2000. An Attitudinal Theory of Expressive Law. Oregon Law Review, 79, 339

Pollard, D.A., 1999. Unconscious Bias and Self-Critical Analysis: The Case for a Qualified Evidentiary Equal Employment Opportunity Privilege. Washington Law Review, 74, 955–59

Reskin, B., 2000. The Proximate Causes of Employment Discrimination. Contemp. Soc., 29, 319

Richard, O. et al, 2004. Cultural diversity in management, firm performance, and the moderating role of entrepreneurial orientation dimensions. Academy of Management Journal, 47(2), 255–266

Stone, K.V.W., 2001. The New Psychological Contract: Implications of the Changing Workplace for Labor and Employment Law. UCLA Law Review, 48, 519

Sturm, S., 2001. Second Generation Employment Discrimination: A Structural Approach. Columbia Law Review, 101, 458

Wilson, F., 2003. Organizational Behaviour and Gender (2nd Edition). Aldershot: Ashgate.

 

 

 

Critical Thinking

 

Critical thinking can be defined as the process through which individuals use intelligence and knowledge to come up with a reasonable and justifiable conclusion regarding an issue, situation or something (Halpern, 2002). The process of critical thinking therefore involves evaluation of alternatives so as to come up with rational conclusions that can be justified according to an individual belief, values and skills. Critical thinking enables individuals to make decision of whether a certain claim is true or false.  This makes it to be an important tool that empowers and equips individuals with capabilities that are necessary to solve identified problems, plan effectively and function logically.

The rationale of choosing the above definition of critical thinking is to allow for a clear differentiation between the term critical thinking and other forms of thinking.  This definition enables individuals to understand detailed aspects of critical thinking such as the use of knowledge and intelligence as well as evaluation of alternatives. This enables it to provide a clear difference between critical thinking and other forms of thinking such as rational thinking.

Critical thinking is different and unique from just thinking about something in a number of ways.  Thinking can be considered as a mental process that allows individuals to produce thoughts about something. Critical thinking on the other hand involves the use of intelligence, knowledge and reasoning when thinking about something (Pithers & Soden, 2000).  Thinking can also be argued to be the act through which a person form a thought about something or situation without facts and evidence. This is in contrary to critical thinking where the thought formed on individual’s minds are based on facts, evidence and reasoning. Another difference between critical thinking and thinking is that thinking is common to all individuals in the society while critical thinking can only be achieved with individuals having sound reasoning, intelligence and facts about a situation, an issue or something that is thought about (Pithers & Soden, 2000).

 

References

Halpern, D. F. (2002). Thought and knowledge: An introduction to critical thinking. Routledge.

Pithers, R. T., & Soden, R. (2000). Critical thinking in education: A review. Educational

Research, 42(3), 237-249.