Presentation

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Presentation 1Challenges to Building a
Nations Wealth

• By
• Prof. Dr. Zafar U. Ahmed
• President and CEO
• Academy for Global Business Advancement Inc.,
• Texas AM University at Commerce,
• Commerce, Texas, USA

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Thought Starter

• Elites of a Nation With a Sound Vision and
  Dedicated Leadership Team Determine its Destiny

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Problems Plaguing Nations

• African Nations face problems such as
• Corruption
• Food shortage
• Low literacy and productivity
• Ethnic and Religions Conflicts
• Increasing population
• AIDS
• Civil wars

• Wealthier west
• Problem of stagnated GNP
• Joblessness
• Decreasing population growth rate
• USA
• Urban blight
• Deteriorating infrastructure
• Violence
• Outsourcing
• Drugs

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Problems Plaguing Nations

• The Four Basic Problems Plaguing
• Many Nations are
• Low Levels of Living
• Population Growth
• Lack of Jobs
• Deteriorating Infrastructure

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Low Levels of Living

• Gap between rich and poor nations has been
  progressively widening
• In too many nations, general levels of living for
  the vast majority of people are still extremely
  low
• Switzerland had over 270 times the per capita
  income of Ethiopia, one of the worlds poorest
  countries
• Countries like Taiwan, Hong Kong, South Korea,
  Indonesia, Canada, Japan and Sweden have
  relatively lesser inequalities
• Malaysia, India Tanzania, Chile, Costa Rica have
  moderate inequality

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Low Levels of Living
Per Capita Gross National Product of Different
National Source World Bank Report,
1992
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Low Levels of Living

• Third World Nations
• Fight a constant battle against Malnutrition
• About 800 million people in third world countries
  do not get enough food
• Protein consumption of US, Brazil and Ghana were
  97, 63 and 43 grams per day respectively
• Diseases

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Low Levels of Living

• Poor Health condition
• The average number of physicians per 100,000
  people was of 4.8 in the least developed
  countries compared to 310 in industrialized
  countries
• Infant mortality rate was 99 per 1,000 births on
  average in the least developed countries, versus
  74 in developing countries and 11 in
  industrialized countries

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Population Growth Problem

• Approximately 4.1 billion of the worlds 5.3
  billion people live in Third World countries
• Nations have positive, negative and stagnant
  population problems
• The worlds population in the year 2010 is
  estimated to reach 7.2 billion people
• 5.9 billion of the 7.2 billion will be living in
  Third World countries

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Population Growth Problem

• Third World countries have explosive birth rates
  and they have the burden of supporting million of
  people younger than fifteen
• In Third World countries, millions of children
  are working in farms, factories, street corners
  and in garbage dumps
• Some of the challenges faced are to provide the
  young generation with the necessary education,
  nutrition and environment

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Population Growth Problem

• On the contraire, many industrial nations
  confront problems like
• Stagnant Population growth
• Negative population growth.
• German, French, Japanese and South Korean
  governments are trying to stop the dramatic
  decline in their countries population growth
  rates by encouraging families to have more than
  two children

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Population Growth Problem

• If the decreasing population growth continues,
  nations will face problems such as being
  under-populated, underproductive and heavy with
  senior citizens
• Aging Population
• Japan has the highest number of aging population
• If aging population growth problem occurs, the
  nations have to invest heavily on senior
  citizens who will overtax the social security
  system

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Job Shortage Problem

• Technological advancements are reducing the
  number of jobs
• Jobless Growth
• The growth in GDP and unemployment in many
  countries indicates that employment has
  consistently lagged behind economic growth

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Job Shortage Problem

• Developing countries have also experienced
  jobless growth
• Women's participation in the labor force is
  increasing
• Urban migration is increasing

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Infrastructure Problem

• Adequate infrastructure and a well employed
  population enhances living standards
• In developing nations, physical infrastructure is
  poor

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Infrastructure Problem

• The Vicious circle of Poverty and Backwardness
• Low Government Revenue
• Low Infrastructure
• Low Investment Formation
• Low Wage and Employment
• Low Consumption/Motivation
• Low Productivity
• Low Profit

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Global Interdependence

• No country can make everything it needs, it must
  import products that are better or cheaper from
  elsewhere
• Global Economy
• Bilateral and multilateral negotiations
• Agreements among companies, industries, nations
  and regions
• Multiplicities of Opportunities and Threats
• Competition and Conflict

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Protectionism and GrowingEconomic Blocs

• Tariffs/Non-tariffs barrier
• Tariffs, import licensing requirements, quotas,
  quarantines, import/export prohibitions,
  arbitrary requirements
• People prefer Tariff barriers than non-tariff
  barriers
• There are more than 100 hundred regional blocs in
  existence
• Economic blocs are either to create trade or
  divert trade

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Transnationalization of MNCs

• The emergence of global industries, MNCs
• Automobiles, Electronics, Pharmaceuticals,
  Chemicals, Petroleum etc.
• MNCs have evolved from loose international
  organizations to highly programmed, globe
  spanning super-companies
• Many MNCs have larger turnover than the GNPs of
  most countries

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Rapid Technological Advances

• Industrial Era Information Era
• Technology improves productivity and decreases
  labor costs
• Technology increases Job Shortage Problem
• State of Art Technologies, however, contributed
  to Third World Development
• Technological advancement reduces cultural
  barriers and alleviates economic inequalities but
  also compensates for intellectual disparities

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Conflicting Politics and Tribalism

• Too much ethnic polarization is likely to foster
  conflict, political unrest, and possible
• political fragmentation
• Multinational State and Plural Society
• Tribal Societies
• Internal Conflict
• In 1973 some 30,000 Asians were expelled from
  Uganda

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Growth of Environmental Concerns

• Ecological Degradation
• Pollution, loss of irreplaceable resources and
  catastrophes
• Rich countries are more concerned for Ecological
  balance
• Poor countries, try desperately to raise living
  standards with little regards for pollution and
  other adverse effects of growth

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Nations Objectives

• There are four Factors in evaluating
• nations wealth
• Natural Capital
• Physical Capital
• Human Capital
• Social Capital

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A Good Economy

• Raise the level of GNP per capita
• Improve International competitiveness
• High Level of employment
• Stable Price levels
• For poor countries, strengthening their access to
  global markets, the flow of capital and
  technological transfer

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A Good Society

• Longevity
• Safety
• Good Environment
• Sound Social Health
• Freedom from crime, drugs, violence

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A Good Political Process

• Citizens must be able to influence the conduct
  and operations of government
• Apart from democratization, another political
  imperative is to expand the range of economic and
  social choices available to individuals
• A nations government, in partnership with
  business and various social groups, must achieve
  a national wealth-building strategy and consensus
  if its hopes to succeed in the highly competitive
  global marketplace

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In Conclusion
We Can view a nations wealth in terms of its
inputs, throughputs, and outputs