Effects of complex interdependence on business ethics

There seem to be three major visible effects of the current dynamics of the global economy on the ethics of business practice

1.The Global economy increases the number of interactions between different business ethics frameworks. It does so while also fostering the creation of a "minimum global code" that allows for successful minimal interactions between business actors with very distinct characteristics. In a nutshell, it makes business more universal but also more nuanced.

2.The Global economy brings about volatility and variance in the values of business ethics across time and space. This brings the ability to change, communicate, understand and adapt to the apex of successful entrepreneurship. Complex interdependence means that, when it come to business ethics, we are set to continue witnessing a clear fluidity and variance in the matters of hierarchy of which ethical issues grab the most attention.

3. The Global economy links the micro and the macro-level of business practices. Business-ethics decisions made at the international level by Transnational corporations and regional political organizations will have a direct impact on the practice of business locally. Similarly, organized business practices at the local level can affect business policies at the macro-level (designed by states and companies) by forcing these to adapt to those practices in order to success and be competitive.

First and foremost how you understand what the global economy is and what it represents will define your understanding of its effects on business ethics. This is the case because, according to how you understand the global economy, you will attribute varying levels of agency to specific groups of actors that impact on business. As "globalization" becomes the "cliche of our times", its meaning and that of its conceptual spin-offs such as global economy, frequently tend to get lost in a blurb of meaning. Therefore, for the motives of outlining the effects that the global economy has on business ethics we have assumed it as being essentially defined by the dynamics of complex interdependence - i.e. the increasing number of multiple channels of access between societies.

Self-Absorption

Boycotting French products or KFC is as mistargetted a gesture as have been the disruptions of the torch relay.There are other ways. A little more balanced aproach from both sides could go a long way and any of such approaches need not to be any less firm.It strikes me how self-absorbed the understandings China and the so-called West have of each other, particularly in regards to forms in which to affect change on each other's actions.I simply cannot understand how not having chosen Beijing for the now termed "death olympics" would motivate China to achieve a quicker solution. Likewise, the recent wave of Chinese anti-west boycott will just serve to add more fuel to the fire of misconceptions over China of the West. There is a blatant communication problem that now worsens every day and needs to be addressed as soon as possible, by all means necessary.

Mozambique-China relations: Common Trends and Hints of Change

Original Commentary can be found at http://www.ccs.org.za/ , issue 27 of the China Monitor.

“Okhomàla okhuma nitho - Being clever is having fire in your
eyes”

The above saying comes from Mozambique. It suggests that cleverness is no more than attention to detail and nature, and that these, symbolised in the allegory of fire, hold all answers to all things. Relations between China and Mozambique now demonstrate a mutual desire of both countries to learn precisely how to be “clever” in dealing with one another. This set of relations contains many of the recurrent trends, strategic options and unique nuances that China faces in its engagement with Africa.
Trade volume between the two countries has increased substantially of late. It almost doubled in two years from US$119 million in 2004 to US$210 million in 2006 (Mofcom 2007; Market Access Map 2008). Like elsewhere in Africa, China´s use of symbolism in the form of well-orchestrated donations has been a routine trait in its diplomatic engagement with Mozambique. To this effect there has been a steady provision of gifts or partially financed gifts by China to
the government such as the Parliament buildings and the Ministry of Foreign Affairs.

With the implementation of the first phase of the South African Development Community (SADC) Agreement on the 1st of January 2008, 85% of goods produced in Southern Africa can enter Mozambique tariff free, meaning that overall inter-regional trade is expected to pick up considerably. China’s investment can play a key part in accelerating this process, boosting the pace and volume of trade, both through its role in infrastructure development and
FDI. In its interactions with African countries, China presents itself as a collaborative
partner with “no strings attached”. As such, it is supposedly challenging the traditional moulds of Western development cooperation. In addition, as China’s engagement matures, its investment preferences will gradually become more decisive in determining which sectors of Mozambique’s economy are consolidated. Traditional donors will also have to accommodate such changes.

According to Mozambique’s Ministry of Planning and Development, the economy is currently running the risk of becoming excessively natural resource-dependent. These claims are based on studies concerned with the governance implications of an eventual finding of viable oil reserves in the Northern Rovuma basin. They also allude to the patent prominence of the gas, aluminum and forestry sectors in the economy. At the end of the day, Mozambique's policy-makers are now charged with formulating pre-emptive measures to counter the so-called “resource curse”. Regarding this, two possible scenarios arise for the role that China’s investments might play. They can either exacerbate the “curse”, or alternatively, innovative investments in services, manufacturing and agriculture might help pioneer an alternative development path. In this regard, an example of a concrete issue that China and Mozambique must promptly address is the illegal logging occurring in the Northern Zambezia province by a handful of Chinese private companies.

A dynamo for Southern Africa?

An instance of the intricacies of China’s engagement of Mozambique has been the Mphanda Nkuwa dam development. The project is on the verge of becoming the largest infrastructure scheme in Mozambique that involved Chinese investment. The construction of the 1,500 MW capacity dam in the Zambeze river will start in 2009 and be complete by 2014. The total cost is
estimated to be US$2.3 billion, of which US$1.1 billion will be for the dam itself and US$1.2 billion for transmission lines. China Exim Bank pushed for the building of the dam from the start and is set to become its major financier, while the construction contract has been awarded to Brazil’s Camargo Corrêa and Mozambican partner group Insitec. Previously the European Investment Bank and the World Bank expressed interest in the financing of the project but
were left unsatisfied with risk-analysis of the 2001 feasibility study carried out
by UTIP (Technical Unit of the Implementation of Hydroelectric Projects).
The building of the dam comes at the time of a major electricity crisis for South Africa, the major power consumer in the region. Meanwhile, Mozambique observes a 42, 5% surge in electricity sales with four out of five units going to South Africa. The stage is set for Mozambique to gradually become a “dynamo” for the Southern African region, and also for China to play a part.
However, the Mphanda Nkuwa project has not been without its critics. Serious question marks have been raised regarding the displacement of people that the dam might cause. Furthermore, there has been criticism regarding the reliability of the feasibility studies that have been conducted. The International Rivers Network (IRN) and the NGO Justiça Ambiental are two of the most vocal groups demanding further studies. Some of their representatives were even lobbying Chinese stakeholders during the African Development Bank meeting in Shanghai in 2007.

Elsewhere in Africa, China has been obliged by the absence of power infrastructure to supply such developments in order to cater for the implementation of key projects such as raw material extraction. When carrying out these works, China often contracts its own domestic companies such as Sinohydro. However, Mphanda Nkuwa’s case is set to be manifestly different. First of all, although the opening of the Mozal II aluminium smelter has increased overall industrial demand for electricity, Mozambique already holds an energy surplus that is more than enough to meet its meagre internal consumption. These circumstances are likely to continue until the majority of
the population actually gains access to electricity and consumption picks up.
Secondly, the Brazilian engineering company Camargo Corrêa has, as above mentioned, been attributed the task of carrying out the construction. The economic diplomacy of Mozambique’s government and the valuable know-how of the Brazilian engineering company have pressed China to adjust its traditional modus operandi.
This time, China Exim Bank has third party involvement in a kind of deal that is usually a bilateral agreement between two governments and relies upon Chinese financing of a Chinese-constructed project. It is possible that this project could prove to be an exception proving the rule that China prefers vertical integration of its investments. It does nonetheless send out an early sign that China’s investment and loan packages are likely to become more flexible. There are two reasons as to why this development is hardly surprising: firstly, China has an unremitting tendency to be pragmatic in its foreign affairs and economic diplomacy, an inclination of which the Mphanda Nkuwa project is a good example.
Secondly, as its engagement with the international market increases, the business practices of China Exim Bank will, just like the practices of other Chinese MNCs, tend to go beyond the most immediate interests of the PRC State Council and acquire a fluid dynamic of its own. Hence, the Mphanda Nkuwa case stands as a reminder that both the grand and the minor narratives
of China’s engagement of Africa are anything but static. The project also represents a token of how China and the African countries with which it engages are both still learning how to “fuel the fire in their eyes” and their attention to detail when it comes to mutual engagement.

Sources:
-Mofcom (Ministry of Commerce of the People’s Republic of China) 2007 Official FDI statistics
-Market Access Map 2008 Trade Figures, UNCTAD/WTO International Trade Centre
http://www.macmap.org/

Charm Offensive: How China’s Soft Power is Transforming the World

Kurlantzick, J. 2007 Charm Offensive: How China’s Soft Power is Transforming the World, New Haven and London: Yale University Press

It gives for a very entertaining and balanced read though more seemingly aimed as being a wake-up call for United States' policy-makers. It is very critical of Beijing in some aspects but the author also claims that "Beijing may be warming to the idea that Chinese support for authoritarian regimes can create instability - one that in the long run does not benefit China itself". That is a view I share. Curiously, the book has been a victim of the pace of events regarding the issue, now that China's "charm" has taken a bit of a blow from the whole Tibet situation. Let's see how the near future and the whole olympics affair unfold.

South America was bristling with military tension over the week while North America continues shaking with United States election excitement. The 08 campaign does not even need to break a sweat when it comes to seizing the spotlight and with it,the minds, worries and attention of the (western) world. For all the nervousness, risks and significant developments occurring south of the Mexican border nothing seems more important than the story of how one of Obama’s aides called Hillary Clinton a “monster”. I for once am more interested in the settlement coming out of Kenya, the elections in Spain or how Lisa Marie Presley has just revealed her pregnancy.

Kosovo

Kosovo went past the UN mechanisms and cut straight to its heavyweight allies for the procurement of its independence. Spain and most importantly Russia shake their heads in disapproval. Serbia's reaction and the final outcome of today's extraordinary session of parliament remain uncertain.

Fear in post-turmoil Kenya and Kosovo

From Kenya, news arrive that land is being redrawn along ethnic lines. Meanwhile in Kosovo a swift and innovative UN designed property settlement mechanism has come to terms with a challenging situation. Very few of those 250.000 Serbs and Roma who fled in 1999 are willing to return to their previous homes which have often been reoccupied by low-income Albanian families. The old occupants prefer instead to indirectly manage them (renting or selling them) from afar after making use of the settlement mechanism. How complex and tricky it is to heal deep war wounds and how relative and uncertain can the application of post-conflict justice and fairness sometimes be. Politics, conflict and resettlement are hardly ever straightforward. Only perhaps the will towards greater stability, a will which is too often overshadowed by fear: fear of physical and material harm, fear of economic insecurity.