Introducing Foreign Multinationals into a Sub-Saharan Africa Newly Formed State

by Team Squiggly

Our role as the Chief Economic Adviser The civil war and the broken economy About our newly formed state Our State Assets:

◦ A well established school system◦ Universally educated adults◦ Oil reserve

How do we develop our economy?

Introducing Foreign Multinationals into a Sub-Saharan Africa Newly Formed State

◦ The Issues◦ Missions & Objectives◦ Benefits◦ Drawbacks◦ Limitations & Solutions◦ Any Questions?

Opportunities (Enter global market, FDI for Oil) Challenges (Promoting FDI, Increasing GDP, Limited

Capital) Year Sales1998 210961999 212172000 208682001 209352002 212672003 221562004 229452005 236012006 243882007 25146

Statistic Data by South African Petroleum Industry Association Website

Foreign Multinationals (An open attitude)

FDI is an important channel to adopt advanced technologies .

VS

Domestically controlled economy (Restricted attitude)

The system which promotes nationalism, and a strong sense of national unity.

MissionMission ObjectivesObjectives

Introducing foreign multinationals into our

economy

Foreign capitals for infrastructure and financial system rebuilding;

Employment; Internationalisation:

Corporate operation and management experience

Divergence Trade Liberalisation

Proper restrictions to protect key branches of

the economy

Laws and rules Communications with

some related international organizations

Bring cash into the country;

Stabilise the financial system and exchange rate;

Release employment pressure;

Provides: knowledge, capital, technology, expertise and global affiliates

Promotes the economic structure transformation

Money shortage and destroyed infrastructure;

destroyed economic environment;

Unemployed talented people;

Sustaining development

Multinationals create monopolies in the market and eliminate local competitors;

High travel and communication costs; Foreign firms have more power to dominate

market; Environmental problems driven from

production

Identify market entry/exit regulation; Policies Regulations to promote education,

worker training and infrastructure; Regulation on usage of “Key Assets” in the

country

SolutionSolution Prioritizing the choice of MNC; Promoting and searching new markets for

oil; Reinvestment of money in core assets

Any Questions?Any Questions?

Cohen, Stephen D. Professor. Multinational Corporations and Foreign Direct Investment: Avoiding Simplicity, Embracing Complexity, Oxford Scholarship Online, May 2007.

Gilroy, Bernard Michael. Multinational Enterprises, Foreign Direct Investment and Growth in Africa, Heidelberg, 2005, 15-16, 21-22

Jensen, Nathan M. Nation-states and the multinational corporation: a political economy of foreign,direct investment, Princeton University Press, c2006, 31

Wendy Dobson, Chia Siow Yue. Multinationals and East Asian Integration, International Development Research Centre, 1997, 109-110

http://www.sapia.co.za/stats/demand.htm