Globalization and Business Practices Final Term Paper

International Term Paper

Hank Snider

Dr. Ketata

Globalization and Business Practices

        The continent of Africa has many nations under stress right now. From religious tensions to poverty and disease, this continent is struggling to survive. It is also having trouble get it’s foot in the door with economic growth. With all of these troubles coming about in a time of extreme economic growth around the world, the countries in Africa cannot afford to lose the wealth they so much deserve. Ethiopia is one of these countries.

        Ethiopia is one of fifty-four countries lying on the African continent. With over a million square kilometers and just over ninety million people, this makes Ethiopia one of the top three most populated countries on the continent. This many people require a large economy to keep the country afloat. However, Ethiopia has been having some trouble with their economies of scale. It’s GDP does not even rank in the top ten on the continent. This is a major problem; with this many people to provide for, a country has to have positive growth and large profits in order to adequately provide for it’s people.

        Slowly but surely, Ethiopia is climbing out of the totalitarian regime it was once conquered by. According to Tewodros Makonnen and Halellujah Lulie, Ethiopia has recently become a democracy with a formal government, president, and prime minister. (Makonnen) President Mulatu Teshome presides over all of the economic decisions the country faces. For instance, there is question about a Nile River dispute between some of the countries bordering the river. He oversees his country’s opinions about the dispute and what they need to do or should do about problems that arise. The Prime Minister, Hailemariam Desalegn, oversees the president and makes sure he is making the right decisions. They run the government, which is today known as a Federal Parliamentary Assembly. They address legal actions with mainly civil law, but have hints of common law throughout.

        Their economy is not up to par with the main countries in Africa, but they are slowly growing. With a GNI of 470, 1140 GNI per capita PPP, they rank the 10th worst country in the world. This is one of many setbacks that make them unable to be invested in. Although they do have many natural resources, such as gold, platinum, and copper, they cannot sustain a wealthy profit from these. They do also export many things, like coffee, the gold they find from their natural resources, and animals, but they are not able to make much profit these either.

        Ethiopia is part of the integration bloc COMESA, but does not participate often enough to be recognized as a major participant.  The Ethiopian Economics Association writes, “…Ethiopia’s involvement at the operation…level has been weak. The structural characteristics of Ethiopia’s economy, low international competitiveness of Ethiopian businesses… and weak industrial structure… are some of the reasons mentioned.” (Seyoum) Ethiopia is not an attractive country for outsourcing due to it’s communication sector underdevelopment, it’s lack of manufacturing industries, and the uneducated population, which is crippled by illiteracy, that cannot function if given the opportunity to work for an outsourced company.