To achieve this, our strategy are to focus on our main competencies and core business. Diversification can be seen as the expansion model carrying the highest risk, one we are currently not pursuing. (Quickmba) 2.4 Market Development: With South Africa seen as the gateway to Africa, with good established processes and infrastructure, African countries have the potential to become lucrative markets for South Africa. Unfortunately payment of imports are troublesome and risky if not handled as upfront payments. Corruption is perceived to be on the rise in Africa, together with expensive and inefficient import handling at ports, contributes to Africa being an unstable and risky market to rely on.
The 1979 energy crisis plunged many countries into economic crisis (deVries, 1996). The World Bank responded with structural adjustment loans which distributed aid to struggling countries while enforcing policy changes in order to reduce inflation and fiscal imbalance. Some of these policies included encouraging production, investment and labour-intensive manufacturing, changing real exchange rates and altering the distribution of government resources. Structural adjustment policies were most effective in countries with an institutional framework that allowed these policies to be implemented easily. For some countries, particularly in Sub-Saharan Africa, economic growth regressed and inflation worsened.
Africa is typically thought of as being a continent full of violence and revolution. This concept may have originated from the poor treatment of Africans by the rest of the world through colonization, forced labor in Africa, and the enslaving of Africans in other regions of the world. The danger and violence that stemmed from many countries gaining independence and experiencing political upheaval has been thwarted by peacekeeping efforts from outside agencies, like the United Nations. Africa has had a violent past, but only because of the exploitation by the Europeans, and eventually Americans. Ultimately, their ethnocentrism led to violence and the stereotype of danger in Africa.
The purpose of doing this was to reduce the unit cost. Malthus proposed a theory in his first work called ‘'An Essay on the Principles of the Population.'' There was a very pessimistic picture about population growth in that case and he said that ‘'It is a shame to believe that population will grow endlessly without encountering any obstacles''. According to this theory, the population increases in the form of geometric series of 1,2,4,6,8,16,32… as foods increases 1,2,3,4,5,6… in the form of arithmetic series. Malthus said that the rate of population growth was much higher than the increase in food capacity needed for human nutrition, which inevitably creates a crisis.
Less jobs will be available as aggregate demand will decrease. This can also lead to a reduction in investments. Government can increase its spending as a means to increase aggregate demand. The more goods and services purchased, the more likely it is that businesses will make sales and will be forced to increase their production levels. Increase in production leads to increased jobs, more money for people to spend on goods and services.
The reason was not only deterioration in the trade policy environment. By the 1980s the GATT was no longer effective and efficient as it had been in 1940s. Apart from that, the international trade system had become much more complicated and significant in comparison to before. The GATT rules couldn’t cover many areas of expanded services trade. Such expansion of services trade was linked to increases in world goods trade.
This put the reliability of Malthus’ theory into question and brought about more counter arguments. Karl Marx believed that rather than population growth being a serious problem, it was the capitalist system that was the main culprit and the consequences were overpopulation and poverty. He and his academic partner Engels argued with Malthus’ idea that resources could not grow as rapidly as population since they had no reason to believe that science and technology could not increase the availability of food and other goods as least as quickly as the population grew(Weeks,2008:84).The argument that science and technology could solve the food shortage problem can be noted to be a Northern approach to the problem because it assumed that certain conditions such as economic prosperity, efficient market, technological advancement, enabling state and inclusive informed society are in place (Oelofse C, 2006).This puts in question the applicability and validity of this view as most
Globalization has, on another hand, has strengthened the economic marginalization of African economies because their dependence on a few primary goods for which demand and prices are dictated by outside countries.This devalues the power and growth of African economies. They have no control over their own products and services. This has amplified poverty and economic inequality. This has been been achieved through foisting economic specialization based on the needs and interests of external forces and transforming the economies of African countries into series of enslaved economies linked to the
This badly affected the economic conditions of Nigeria and division of labor was also slowed down. Fourthly, corruption in South Africa and especially Nigeria was the root cause that did not let Africa to be a developed nation. This badly impacted the sustainable development of the African economy. Corruption has been considered as a disease in Nigeria which has brought untold economic dilapidation, poverty and low infrastructure facilities in Nigeria . The research mainly focused on the root causes of underdevelopment
EFFECTS OF EXTERNAL DEBT ON ECONOMIC GROWTH IN DEVELOPING COUNTRIES, CASE STUDY KENYA. ABSTRACT Low –income countries categorized as HIPCs have continuously experienced difficulties in servicing and managing their external debt. Kenya, together with some Sub-Saharan Africa countries are among the HIPCs. Kenya’s development and initiatives to ensure debt sustainability have had a drawback as a result of the rising debt burden and the high level of external indebtedness. The hope of these loans was to put the country on a faster development path through rapid investment and faster growth.