Labour Market Issues in Saudi Arabia

In today’s business environment, globalisation has created many challenges in the hospitality industry particularly how to manage the increasing culturally diverse workforce.Advertising We will write a custom essay sample on Labour Market Issues in Saudi Arabia specifically for you for only $16.05 $11/page Learn More Diversity has become a significant factor in the human resource management of the tourism industry as tourist organisations across the globe have become more diverse as a result of differences in race, culture, ethnicity, national origin as well as dispositions and personal characteristics in the workforce (Baum, Devine Hearns 2009, 1). Managing diversity in a workplace requires that the workforce comprise of diverse population which includes both the visible as well as the non-visible differences so as to harness such differences to create a productive working environment where each individual feels valued and free to engage their t alents in contributing towards the organisational goal (UNESCO 1999, 23). The cultural diversity in Saudi Arabia has had a huge impact on the country’s labor market. The essay is therefore an attempt to assess labour market issues in Saudi Arabia. In particular, the essay examines how cultural diversity in Saudi Arabia has impacted on its workforce. The benefits attained by the labour market and organisations in Saudi Arabia due to cultural diversity are addressed, in addition to an examination of the challenges facing the success of cultural diversity in the workplace. Finally, the essay suggests various solutions that could help improve cultural diversity in the workplace in Saudi Arabia. Saudi Arabian culture is built around strict Islamic religion as well as ancient social customs which often clash with modern technical realities (Needle 2004, 76). The country has increasingly relied on the foreign workforce particularly in the private sector such that about 60% of its wo rkforce is foreign (Al-Dosary, Shahid Rahman 2005, 1).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Most of their foreign workforce is from Pakistan, India, Philippines, Kuwait, Sri Lanka and the East European countries like the UK, Germany and France (Guirdham 2005, p.5). Diversity in the workforce within the hospitality industry in Saudi Arabia enables the hospitality organizations effectively provide for customers from a wide social as well as economic spectrum. The country’s tourism industry has majorly depended on pilgrimage season (Gatrell Kreiner 2006, 765). Diversity within the hospitality organizations in Saudi Arabia has significantly changed the behavior of the native Saudis. Generally, Arabs undertake their tasks in less hurry and are not very active during the day in the month of Ramadan; this has sometimes affected their service delivery. Inclusion of employees fro m other countries especially the Christian countries enable them achieve continuous functioning and speed in service delivery in the hospitality industry. Foreign workers in the industry have made it possible and easier for tourism organizations to provide for religious tourism especially for the large number of Muslims who travel for the Hajj. They provide the workforce needed during the month of Ramadan as well as for the leisure tourists (Gatrell Kreiner 2006, 769). Diversity in the workforce within the hospitality industry in Saudi Arabia enhances quality service to customers as it gives them the capacity to understand the cultural diversity among customers (UNESCO 1999, 37). Managers are therefore better placed to identify the uniqueness of customers from different countries or regions in terms of styles, practices, expectations as well as processes. With this knowledge, they can adapt complex ways of dealing with the various visitors that tour Saudi Arabia including the domes tic tourists.Advertising We will write a custom essay sample on Labour Market Issues in Saudi Arabia specifically for you for only $16.05 $11/page Learn More They are also able to avoid stereotyping of cultures. According to Henderson Sadi (n.d, 95) the international tourists have been increasing at the rate of 4.3% and the trend is predicted to increase. This has been attributed by many factors and among them being workforce diversity in the tourism industry (Mustafa 2010, 46). Cultural diversity enhances marketing research for the tourist organizations in the Kingdom of Saudi Arabia. Managers also use the cultural framework to manage the workforce. It is used to enhance cross-cultural training in the workforce to develop skills and provide experience which can enable them better meet the expectations of the culturally diverse customers. The training has been used in most hospitality organizations in Saudi Arabia to develop culturally-sensitive workfo rce that is able to effectively deliver services to the culturally diverse customers that they meet everyday. Diversity in the workforce has enabled the hospitality industry to adopt flexible labour strategies particularly in the tourism industry. The foreign workers provide the necessary public relations needed to neutralise the fears expressed by the international communities especially towards the Arab countries concerning security matters (Saudi Commission for Tourism Antiquities 2010, 5). According to Henderson and Sadi (n.d, 98) selling to non-Muslims internationally has become quite challenging mainly because of cultural sensitivity (Henderson Sadi n.d. 98) In terms of social composition, the main ethnic group in Saudi Arabia is the Arabs, who constitute 90 percent of the population. The remaining 10percent is made up of the Afro-Asians (Al-Dosary, Shahid Rahman 2005, p. 2). The county is 100 percent Islam.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More All the citizens of Saudi Arabia speak Arabic, as well as about half of all the immigrants in the country. The Koranic, modern standard and high literary classical Arabic finds use in religious rituals, prayers, lectures, poetry, broadcasts, speeches, and written communication (Al-Dosary, Shahid Rahman 2005, p. 2). With regard to architecture, in 1950, approximately 40 percent of Saudi’s population led a nomadic life. As such, tents were the main residence, in otherwise highly dispersed patterns. The population led a nomadic form of life, moving from one place to another in search of pasture and water for their animals. The other 40 percent of the Saudis led an agricultural life, in the rural areas. Only 20 percent of the population lived in the old cite of Medina, Mecca, Taif, Jeddah, and Riyadh. However, by 1992, two thirds of the Saudi population lived in the urban areas. This was as a result of major changes that were taking place in the Saudi Arabia, buoyed by rapid exp ansion of the oil industry (Guirdham 2005, 56). Older cities expanded very rapidly, and new ones sprung up very fast. The new cities in Saudi Arabia are a sharp contrast of the old cities. The local citizens and guest workers in Saudi Arabia are characterized by a key social division. Temporary immigrants form the largest part of the working class. This is the same group that occupies few positions in the Saudi’s upper class, with the rest occupying the middle-class positions (Guirdham 2005, 57). The different social classes in Saudi Arabia experiences diversity in terms of wealth accumulation. Individuals across diverse social divides share common beliefs, practices, and attitudes. This common sharing is further strengthened by the strong religious and kinship ties in society. The nature of employment relationship in Saudi Arabia is unique. As the number of foreign workers increase in the Kingdom of Saudi Arabia, the private sector including the tourism industry have been ab le to diversify their operations and nature of jobs as organizations hire workforce from different regions and societies who come from different backgrounds and with different attitudes (Pizam 1978, 10). The tourist organizations as well as other organizations respect the diverse cultures and have put in place policies and strategies which ensure that employees from different backgrounds work hand in hand no matter their cultural beliefs. In an attempts to effectively handle cultural diversity in employment, the government mostly employs local managers to run public organizations including parks and to manage the locals and the firms in an efficient manner. In private organizations, foreign workers are employed on the accounting approach so that they can deal with performance management, systems as well as control of individual’s activities to enhance efficiency of the organizations (Guirdham 2005, 57). The mission statement of most tourist organizations in Saudi Arabia artic ulates their commitment to diversity in the workforce as well as the customers they serve. Individuals are designed roles which enable them utilise their cultural expertise to achieve the organisational goals. The co-workers are aware of the cultural diversity that exist in the workplace and are therefore respectful of that (Gee 1997, 32). Cultural diversity has enhanced social cultural exchange as well as understanding among employees and different committees during their meetings (Gee 1997, 32). This has helped in preserving the cultural identity of the Saudis. There are a number of challenges that face the issue of cultural diversity in Saudi Arabia. Human resource management practices in Saudi Arabia are heavily influenced by religion as well as tribal and family relationships. This limits the ability of foreign workers to provide their all to the organizations particularly in decision making. The Saudi cultures also limit women’s participation in workplaces or even in ac quiring employment opportunities. Tribal and family’s influence in the workplace create authoritarianism to foreign workers as well as to other tribes which are not members of the tribe or clan. The tribal culture of Islam also limits their tolerance to new ideas or initiatives in the workplace. Exploitation of oil in Saudi Arabia has led to increasing influx of foreign workers in the country seeking to get employment opportunities. According to Al-Dosary, Shahid Rahman (2005, 1) about 60% of Saudi Arabia’s workforce is foreign, but at the same time, Saudi Arabia experiences unemployment rate of about 30%. This has made the government rethink its strategy on employing foreign workforce. The government announced in 2003 that it will have had a significant cut on foreign workers by 2013. This has started limiting the number of foreign employees in organizations and thus reducing the level of cultural diversity in the workforce. The influx of foreign workers has also aff ected the salaries and wages paid to workers in Saudi Arabia. Foreign workers provide cheap labour as compared to the salaries demanded by the Saudis themselves. Foreign workers who have come from countries of lower economies easily accept these salaries; however, managers from Saudi Arabia and Oman demand higher salaries. Besides, the government has increased the cost of work visas as a strategy for limiting the number of foreign workers. This has raised the cost of maintaining foreign workers thereby impacting on the advantages which come with cultural diversity in the workplace. In addition to that, the increasing high cost of living also affects foreign workers stay in the country thereby reducing the level of cultural diversity in the workplaces (Pizam 1978, 12). (Pizam 1978, 12). On the basis of the foregoing arguments of the essay, a number of recommendations have been arrived at. First, there is need to educate the Saudis on the importance of national integration and respect for different cultures in order to achieve cultural diversity which is able to drive business organisations to greater levels. The awareness should be aimed at helping them overcome tribal and clan/family considerations in workplaces. Saudis have to learn to separate some aspects of their religion in the workforce so that they can effectively deal with gender diversity in the workforce and also be more receptive to creative ideas that employees contribute in the running of organisations. It is also important that the government develops mechanisms for dealing with the disparity that exists in the workforce in terms of the ratio of foreign workers to local workers. The locals have to be given more employment opportunities to help combat the increasing poverty levels in the nation. In conclusion, cultural diversity has significantly improved the tourism industry in Saudi Arabia. It has provided the necessary expertise needed to drive the industry into the global economy. The private sector has achieved efficiency that the government has also borrowed in public organizations. However, tribal and family relationships pose negative challenges that the country needs to overcome in order to realize greater cultural diversity in the workforce. Reference List Al-Dosary, A. S., Shahid, M., Rahman, S. M., 2005, An integrated approach to combat unemployment in the Saudi labor market. Journal of Societal Social Policy, 4(2): 1-18. New York: Casa Verde Publishing Baum, T., Devine, F. Hearns, N., 2009. Resource guide: Cultural awareness for hospitality and tourism. Hospitality, Leisure, Sport and Tourism Network. Cincinnati, OH: South Western College Publishing. P. 1 Gatrell, J. Kreiner, N. 2006. Negotiated space: Tourists, pilgrims, and the Bahà ¡Ã¢â‚¬â„¢Ãƒ ­ Terraced Gardens in Haifa, Geoforum, 37(5), 765-778. Los Angeles: Kalimat Press. Gee, C. Y., 1997, International tourism: A global prospective; World Tourism Organization. New York: Guilford Publishers. P. 32. Gu irdham, M., 2005, Communicating across cultures at work, 2nd ed. Basingstoke: Palgrave Macmillan. P. 57. Henderson, J. c., Sadi, M. A., n.d, Tourism in Saudi Arabia and its future development. Dharam: King Fahd University of Petroleum and Minerals. pp. 95-98. Mustafa, M. H., 2010, Tourism and globalization in the Arab world. International Journal of Business and Social Science, 1(1): 37-48. Dubai: Department of Sustainable Tourism. Needle, D. (2004) Business in context. London: Thomson. P. 76. Pizam, A. 1978. Tourist impacts: The social costs to the destination community as perceived by its Residents. Journal of Travel Research, 16(4), 8-12. Chicago: Harcourt Brace Jovanovich College Publishers Saudi Commission for Tourism Antiquities, 2010, Tourism investment in Saudi Arabia. Riyadh: SCTA. P. 5. UNESCO., 1999, Tourism and culture: Rethinking the mix. The UNESCO Courier, (July-August issue): 21-56. Florida: Harcourt Brace College Publishers This essay on Labour Market Issues in Saudi Arabia was written and submitted by user Shania S. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

The holocaust essays

The holocaust essays The holocaust was a terrible time period where millions of Jewish people were man slaughtered. Economic and political conditions in Germany between 1918 and 1933 played a major role in the creation of a climate that made Nazism appeal to the German population. There was widespread unemployment. The German people turned towards nationalism. The Nazi party captured the nationalistic favor of the country. The spiritualism and doctrines of Nazism struck the heart of Germanys traditions and cultural life. The Nazi party set the Jews up as enemies and blamed them for all of Germany's troubles. The Jews became the scapegoat of the movement. They were held responsible for anything and everything that worked counter to the Nazi ideal. Support for the Nazi party increased between 1928 and 1933, when the party first started showing signs of popularity. Over the next few years the party's support expanded. As the party's following increased, Germany started becoming a totalitarian state. Until November 1938 the repression had been mainly political, but the Nazi party took the hatred of Jews to new depths. The persecution of the Jews continued as many Jews were forced to flee to other countries. By the outbreak of the war in 1939, only 285,000 out of the 690,000 Jews in Austria and Germany were left. The rest had immigrated to other countries. The Jews that remained, the majority, old or married to non-Jews, soon became part of the mass extermination that followed. On the 10th of January 1942, a meeting took place known as the Wannsee conference. At this meeting it was decided by Hitler, the leader the party, that the result of the war will be the complete annihilation of the Jews.This genocide changed the world for ever. Even though the world has this event to learn from, these types of things are still occurring today. Many people are being killed because of their race or religion. My grandfathers and his brothers were altered because of...

Integrated Marketing communications ( The Report should be about an Assignment

Integrated Marketing communications ( The Report should be about an insurance company) - Assignment Example Kuwait Insurance Company is the major competitor of BKIC. Having gained enough experience of functioning under changing market conditions, the company is positioned in a well manner to face the pressure with courage and confidence (Bkic, 2015). The major forms of cross-functional relationships which exist within the company are the relationship between the marketing, finance, human resources and technical team members. The association of all these functional areas play significant role towards the success of BKIC. The expertise from all these areas works towards the common objective of the company (Annual Report, 2014). There are various methods of internal communication such as memos, notice board, mail, face-to-face conversation and suggestion and complaint boxes (Smith and Mounter, 2008). Memos are used to communicate information among the departments of the firm. Various departments of BKIC such as the finance, marketing, human resources and operations discuss among them how to engage the employees by providing efficient training on the respective field (Bkic, 2015). Notice board is used to communicate important information to the employees. If any worker gets promotion, then their name is posted on the notice board. It makes them feel special and motivates them to put more efforts towards the betterment of the company. Mail is also considered as a significant form of internal communication method. Employees can make query on certain matters where they face problems and can get the clarification from the managers. BKIC has an apparent policy related to their communication with employees (Annual Report, 2014). Face-to-face conversation is regarded as one of the most important way of internal communication to enhance the engagement of employees. It helps to eradicate any type of misunderstanding which generally takes place at the place of work and therefore results in keeping employees for a long period. The

How the respective elements of Hospitality, Cultures and People are Essay

How the respective elements of Hospitality, Cultures and People are enacted in the organisation - Essay Example The hotel offers luxurious accommodation to its clients. The organizational structure comprises of two divisions including the Hongkong mainland hotels and those in the Asia Pacific and Dubai. This paper will explore the enactment of various elements of the organization, which include hospitality, culture & people. It also highlights issues that the organisation faces in relation to these elements. The paper also provides recommendations as regards improvement on delivery and management of these elements by the organization. Hospitality organizations are usually focused on maintaining a competitive advantage in the industry through maintaining strong relations with their clients. It is important to understand while engaging in the hospitality industry that consumers will always make a rational choice, mainly to go for the alternative that will give them maximum satisfaction (Paula et al. 2008). In other words, they are free to seek services from the provider whom they feel is most pleasing. Competition in the hospitality industry has increased due to Liberalization of trade whereby investors are free to establish business beyond political boundaries. Large multinational companies are competing with local companies and hence each company in the hospitality industry has to develop strategies to enable it to maintain competitiveness. Effectiveness depends on the organization’s ability to market its products and maintain reputation in the market. To the customers in the hospitality industry, competit ion among service providers is to their advantage. This is because competitors improve their services in a bid to attract more consumers (Hatch and Cunliffe, 2006). Hofsted defines culture as a tool that the mind applies to guide a person’s day to day activities and interactions with others. He believes that culture is a collective aspect of a population that has occupied a particular social environment where individuals learn

Woman Changing Tradition Research Paper Example | Topics and Well Written Essays - 1000 words

Woman Changing Tradition - Research Paper Example They have made up their minds to come out of their houses and work like men. They want their rights and want to do all that men are supposed to do because their own gender roles make them feel inferior. They want to be at the workplace, in the politics, and in the armed forces. This has been inculcated in their minds by way of strong feminism which comes with the agenda of women liberation. This paper discusses the hot debate whether women should be allowed to change gender roles or not by shedding light on the way feminist theories are changing the trend. Let’s start with explaining the difference between sex and gender which will show to the reader how gender roles come into existence. Sex refers to physical anatomy and biological differences between male and female; while, gender means the characteristics by which the society defines who is male and who is female (Roughgarden 22). Every culture has different concepts of gender roles that are assigned to males and females, a nd these are the gender roles that define the masculinity and femininity of an individual regardless of his physical anatomy or, in other words, sex. â€Å"Men and women are social categories† and socially â€Å"we have the freedom to decide who counts as a man and who counts as a woman† (Roughgarden 23). ... e main aim of contemporary popular culture is to refigure the body, hence issues regarding the body such as its shape, age and other requirements are the hot subject matter for magazines, books, journals, TV shows and even popular science. He states that these issues regarding the body raise questions about body frailty which creates concerns about gender differences, women being treated differently from men and the inferiority they experience as a result. For this reason, the issues regarding body and the gender differences encompassing the popular culture are the main concern of current feminist theories. Liberal women talk about women being treated differently than men, that is, gender discrimination that is favored basically by male domination. They talk about women’s understanding about sexuality, their experience at the workplace and how they manage their families alongside work. They are also concerned with women working with disciplines like history, social sciences, p hilosophy, arts and anthropology. The other important thing this feminism has to say is that women can tend to change the whole scenario by using their practical and empirical knowledge. This would help construct â€Å"a future non-sexist society† (Humm 5) which is the focus of attention of feminism. There are some feminists who characterize women as slaves in their houses doing work for their families without getting paid and thus their houses become a sort of prison for them. This is often referred to as domesticity. They say that this domesticity has to be ruled out from women’s lives if they want themselves to be treated at an equal status with men and considered as modern. The issues of domesticity and gender discrimination define how today’s woman reacts to her inferior position in

Foreign Direct Investment In Nigeria

Foreign Direct Investment In Nigeria The Nigeria economy has attained the middle income status according to the World Bank, with its ample stock of natural resources and institutional development and growth in the country. The Stock Exchange market in Nigeria is the second largest in Africa. The GDP Purchasing Power Parity was ranked 31st in the World as at the end of 2011. The balance of payment showed a trade surplus with the United States which is her largest foreign investor and a recipient of the largest export market for U.S. goods. During the  oil boom  of the 1970s, Nigeria accumulated a weighty foreign debt to finance key infrastructural investments. In October 2005, Nigerian authorities had a negotiation with its Paris Club  creditors and concluded on an agreement in which Nigeria debt was discounted by approximately 60%. Nigeria thereby used part of its oil profits to pay the residual 40%, releasing up at least $1.15  billion annually for poverty reduction programmes being carried out. History was rec orded in Nigeria after the debts were paid and was now known as the first African country to pay up all owed debt to the Paris club amounting to an estimated value of $30  billion. It is important to know that Petroleum  plays a large role in the Nigerian economy, accounting for 40% of Gross Domestic Product (GDP) and 80% of Government earnings. The telecommunication market in Nigeria is one of the World fastest growing fastest growing markets with major emerging market operators (like MTN, Etisalat, Zain and Globacom) who based their largest and most profitable centers in the country.  The government has recently begun expanding this infrastructure to  space based communications with a space satellite which is monitored at the Nigerian National Space Research and Development Agency Headquarters in Abuja. The financial service sector has developed as a result of the combination of international and local banks, brokerage houses, insurance companies and brokers, asset management companies, private equity funds and investment banks. Rampant inflation has occurred on the Naira and the Central Bank of Nigeria (CBN) has been trying to control the rate to remai n below 10%, in 2011, CBN increased interest rate, rising from 6.25% to 12%. On 31 January 2012, CBN decided to maintain the key interest rate at 12%, in order to reduce the impact of inflation due to reduction in fuel subsidies. Though the, the inflation rate in Nigeria was recorded at 12.80 percent in July of 2012. The unemployment situation in Nigeria is currently high just like how it has affected the global world due to the economic crisis as it was last reported at 23.9 percent in 2011. 2.2 Foreign Direct Investment in Nigeria A definition contained in the Balance of Payment Manual (Washington, D.C. International Monetary Fund, 1997 and 1993) defined Foreign direct investment as investment completed through a long lasting management interest of an organization, enterprise or professional body operating in a country other than that of the investor in question. And must have at least 10% ownership of the organization considered as FDI (Patterson et al 2004). Usually FDI are made by large multinational (MNEs) through acquisition or merger or the development of a new facility. The broad spectrum of all the MNEs is that they play a dominant role in Research and Development by bringing new technologies into such country and also they have great influence on the economy they invest in (Balaam and Veseth, 2008). The debate of FDI has increased as a result of the large flow of FDI into both developed and developing country and its importance on the growth in such economies and global economy at large. The component s of FDI should not be mistaken; this includes equity capital, reinvested earnings and intra-company loans. Equity capital is the foreign direct investors net purchase of the shares and loans of an enterprise in the country of investment other than its own. Re invested earnings is part of an affiliates earning accruing to the foreign investor that is reinvested in that enterprise. And intra-company loans are short or long term loans from parent firms to affiliate enterprise or vice-versa. 2.2.1Determinants of Foreign Direct Investment The economic determinants of inward FDI can be grouped for conveniences sake into three categories each reflecting the motivation for investing in foreign countries in specific Nigeria. This includes resource seeking, market seeking and efficiency seeking. Resource seeking is a principal determinant because the availability of natural resources in the host country determines if such country is well endowed and if investment is possible. In previous years the agriculture sector in Nigeria was booming and served as a great form of investment venture in the economy as the earnings accruing from it boosted the economic growth of the country. However in recent years, the oil and gas industry has overshadowed the agriculture sector and therefore neglected as resources and funds have been used to improve the oil and gas sector. Petroleum oil since then has served as a huge avenue for foreign investors because of the abundance in the country the inflow to that sector has been high and theref ore contributing about 40% to Gross domestic product, 90% of exports and 80% of government revenue. The relevance of economic determinant for attracting market seeking FDI is the market size in absolute terms. Large market can accommodate domestic and foreign thereby helping to boost firms production to operate on scale and scope economies and Nigeria has a wide market base. Efficiency seeking determinants can be other forms that reflect the motivation to invest such as that availability of low-cost unskilled labor in Nigeria. 2.2.2 Challenges of the Operating Environment for FDI Some of the major limitations to attracting investment in Nigeria include unfriendly investment environment, inconsistency in government policies, others are social vices such as insecurity corruption, financial and economic crimes as well as conflicting policies. The challenge therefore is to reverse these: (i) The Capital market The Nigerian capital market was also not secured in the tumults of the global economic crisis, in April 2008; the market experienced a downturn in the history of capital market operations in the country. This unprecedented sinking of the stocks forced both foreign and local investors who had opted for the advantage of the optimal return on investments on the stock exchange began to scoot elsewhere in extreme anxiety. (ii) Energy As a result of the global economic crisis the demand for oil decreased, resulting in oil prices dipping from $140 per barrel in the third quarter of the year to $44, and being the principal source of the countrys revenue earner. The foreign reserves dwindled from $65billion to $45billion within six months from the third to last the quarter of the year. Apart from the above, Nigerias high propensity for imports was also part of the reasons for the fast diminished foreign reserves. In 2006, 2.5millions barrels per day were produced and grew to about 3millions barrels per day. Unfortunately the Niger River Delta violence during this period cut off 600,000 barrels per day. Furthermore, the lack of qualified technical staff was a constraint, kidnapping in the Delta also made recruiting expatriate staff difficult, especially for the oil services companies (iii) Power: Numerous ways of improving infrastructural development have been embarked upon by government but still to no avail. Development of infrastructure particularly electric energy has been and still remains a major concern of investors even despite the Power Reform Program, no productive result has been achieved (Bello 2011). The inadequate infrastructure has imposed high transaction cost for business and thereby militating against growth of the private sector 2.3 Foreign Direct Investment Flows This section discusses and explains the pattern of Foreign Direct Investment flow in the World and in Nigeria. 2.3.1Trends and Pattern of FDI in the World The world economy has gone global due to the liberalization of trade, the breaking of business barriers, technological advancements, capital markets and the growth of international goods and services or ideas over the past decades. Ayanwale (2007), many developing countries see FDI as an important element in their strategy for economic development and this has led to the speedy growth of FDI around the world. In developing countries, Mergers and acquisitions including private- to-private transactions as well as acquisitions through privatization became an important vehicle for FDI (Kyaw, 2003). Therefore, developing countries have made impact on the global economy as a result of large domestic market, cheap and skilled labor, low labor costs and high returns on investment especially in the economics of industrialized states. This has led to many countries improving their business climate to attract more FDI. In fact, one of the pillars for launching the new partnership for Africas de velopment (NEPAD) was to accelerate FDI inflows to the region (Funke and Nsouli, 2003). The trend of FDI depicts in the diagram below of the inflow of FDI in the past twenty years as there has been an upward movement from 1990 and a decrease in1999 then rose again in 2003 and continued to rise until the decrease again from 2007 and has remained very low due to the world economic crises that has been ongoing. Figure 2.1: World Foreign Direct Investment Inflow Source: World Development Indicators 2008 Fifty-seven new measures affecting FDI were introduced by forty African countries of which forty-nine among these measures encouraged inward FDI (UNCTAD, 2007). The increase in FDI inflows largely reflected strong performance and relatively high economic growth (UNCTAD, 2008). 30% of total FDI inflows were accounted for as reinvested earnings as a result of increased profits of foreign affiliates, notably in developing countries. In Africa, FDI inflows increased from $18 billion in 2004 to $36 billion in 2006. This was due to improved prospects for corporate profits, increased interest in natural resources and a more favorable business climate. As regards this, many studies have been conducted to ascertain these; however, the results do not give accurate evidence of the impact of FDI on the economy of developing countries. For example, Lumbila (2005), Sylwester (2005) and Ndikumana and Verick (2008) show that there is a positive effect of FDI on economic growth, while others such as (Fry, 1993, Dutt, 1997; Hermes and Lensink, 2003) gave contrary conclusions. Further, other studies suggest that the effect of FDI on economic growth may depend on whether the country has minimal level of absorptive capacity that is a prevailing environment that can attract FDI such as educated workforce, institutional infrastructure and liberalized markets (Borenztein et al., 1998; Carkovic and Levine, 2002; Le Vu and Suruga, 2005). 2.3.2Trends and Pattern of FDI in Nigeria Nigeria a country well-endowed with natural resources and a very large market sizes qualifies to be a major recipient of FDI in West Africa and indeed one of the top leading West African Countries that has consistently received FDI in years past as we see in the figure below: Figure 2.2: Nigeria Foreign Direct Investment stock Source: UNCTAD 2012 However the level of FDI attracted by FDI has shown no specific significant value in the growth of the economy and is been seen as mediocre (Asiedu 2003) compared with the resources of the country. Furthermore, the empirical relationship between FDI and economic growth has remained unclear despite numerous studies that have examined the subject of interest. However, recent evidence supports that the relationship between FDI and growth may be country and period specific. Asiedu (2001) submits that the determinants of FDI in one region may not be the same for other regions. Although it has been generally acknowledged that FDI is an important aspect of the recent wave of globalization across countries. FDI inflow to diverse regions of the world has been increasing dramatically. The total world FDI as at 1990 stood at US$204443370862.543 and grew dramatically to US$815219446619.453 (World Bank 2012). Only few countries have been successful in attracting significant FDI flows. But West Af rica as a whole has not benefitted particularly from the FDI boom. In West Africa, FDI amounted to 14012.54758974US dollars in 1990 and has been increasing gradually and currently stands at 110394 US dollars (UNCTAD 2012). Although UNCTADs World Investment Report 2004 reported that Africas outlook for FDI is promising, the expected surge is yet to be manifest. Nigeria is one of the few countries that have consistently benefited from the FDI inflow to West Africa and has turned out to be one of the most attractive countries in West Africa in terms of FDI inflows with a value of $69242million in 2011 amongst others such as Ghana with $12320miilion, Liberia with $546smillions, Cote d Ivoire with $6408millions and Niger with $3123millions. Nigeria share of FDI inflow to West Africa in 2011 covers about 63%. As percentage of GDP, foreign direct investment has increased substantially since 1990 till 2001 but began to drop since 2002 and currently stand at 29.16%. Although the value of FDI inflow into Nigeria has been on the increase. This is attributable to the economic reforms and the resulting of macroeconomic stability, which have instilled great credibility in the Nigerian economy. However the FDI contribution as a percentage to Gross domestic Product has fallen but the Nigerian economy has experienced strong growth in recent years. Real GDP growth averaged 7.8 percent from 2004 to 2007, and growth of 6.4 percent in 2007. Sectorally, there was a surge of FDI flows in the primary sector, mainly oil and gas. In 2008 Nigeria was at the top of the ten Africa FDI recipient nations with over US$20billion. The ethnic conflicts and youth restlessness in the Niger delta affected the level of the crude Oil production. The election tension and these socio-political conflicts aggravated the problems of insecurity and hence the improbability in the domestic business environment which in turn impacted negatively on the inflow of FDI. Towards this the Federal Government has improved the security in that region and the youths in that region are being empowered to participate in productive ventures. In addition, the services sector particularly, transport, storage and communications continued to attract FDI since 2006. Oil accounts for nearly 40 per cent of GDP, but from 2001 to 2006-except in 2003-real growth in other sectors outpaced growth in the oil sector. For example the telecommunication sector experienced strong growth after its privatization. In spite of the surplus of studies on FDI and economic growth in Nigeria, the existing empirical evidence on the causal relationship between foreign direct investment and economic growth and the associated benefits is very inconclusive. In spite of a seemingly positive association between FDI and economic growth, the empirical literature has not reached a consensus on the direction of this impact, however, suggesting that foreign direct investment can be either beneficial or harmful to economic growth. The principal driving force for this work is that for developing economies, and for Nigeria in particular, the issue of economic growth is an important one. 2.4Sources and sectorial distribution of Foreign Direct Investment in Nigeria Nigeria sources of FDI over the years have been increasing. There are more countries investing in Nigeria than in previous years. Some countries include USA, UK, China, and Netherlands amongst others.   Nigerias most important sources of FDI have traditionally been the home countries of the oil majors. The USA, present in Nigerias oil sector through Chevron Texaco and Exxon Mobil, had investment stock of USD3.4 billion in Nigeria in 2008, the latest figures available. The UK, one of the host countries of Shell, is another key FDI partner UK FDI into Nigeria accounts for about 20% of Nigerias total foreign investment. As China is striving to expand its trade relationships with Africa, it is becoming one of Nigerias most important sources of FDI; Nigeria is Chinas second largest trading partner in Africa, next to South Africa. From US$3 billion in 2003, Chinas direct investment in Nigeria is reported to be now worthwhile. Different sectors have received different amount of FDI in Nigeria. The total volume of FDI captured through the Central Bank of Nigeria is US$7,750billion. This represented about 11% increase over 2007 figure of US$6,935billion. The non-oil sector attracted US$7,109billion which represents about 91% of the inflow with the services sector being the major beneficiary with about 82% of the total inflow into the economy. The banking and finance sector accounted for about 9%. The country remains the highest destination of investment within the Economic Community of West Africa (ECOWAS) region by attracting about 50% of the total volume into the region. It is evident to note that when compared to other countries in Africa in terms of total stock of FDI attracted over the last ten years. Nigeria is ranked second to South Africa as we see in the figure below: Figure 2.3: Selected African Countries FDI inflow in comparison with Nigeria Source: UNCTAD 2008 2.5Foreign Direct Investment policies Framework 2.5.1Investment Framework and Bodies The Nigerian Investment Promotion Commission Act laid out the framework for Nigerias investment policy in 1995. Under the Act, foreign ownership of 100% is allowed in other industries apart from Oil and Gas industry where investment is constrained to existing joint ventures or new production-sharing agreements. The essence is to promote and facilitate investment in Nigeria. In 2006, a One Stop Investment Centre (OSIC) was set up to bring together agencies with mandate as regards investment and streamline the process of investing in the country. Furthermore, the Commission is required to encourage, promote and co-ordinate investment in the Nigeria Economy. The law allows the Commission to grant approvals on fiscal concessions on industry interrelated incentives such as: Export oriented industry, Local raw material utilization, and Pioneer industries, Implant training, Research and development, Investment on infrastructural facilities, Investment in economically disadvantaged areas; pr ovided that the fiscal incentives for which approvals are given shall be for tax concessions (NIPC 2006-2008 Report). Other Stakeholders that were represented within the One Stop Investment Centre (OSIC) are: Corporate Affairs Commission (CAC): who will be responsible for name search and company incorporation registration. Nigerian Immigration Services (NIS): will be in charge of Expatriate Quota Positions, Regularization of Permanent Work Permits, and other immigration facilities. Nigeria Customs Service (NCS): has the role of issuance of import and export guidelines procedure for citing excise factories goods clearance facilitation and generation information on fiscal policy issues. Federal Inland Revenue Services (FIRS): is responsible for tax registration, payments of stamp duties, issuance of tax clearance certificate and issuance of tax forms National Agency for Food and Drug administration and Control (NAFDAC): has the function of registration of regulated products, issuance of export certificate, authorization to import of unregistered products Standard Organization of Nigeria (SON): is responsible for facilitating all aspect of standardization activities, approvals or permit for use of standards and provide guidelines for investors. Amongst others. 2.5.2 Other Policy incentives Investment incentives are commonly intended to provide tariff, fiscal and other concessions to enterprises that meet certain criteria such as choice of sector, size, location and employment creation etc. This applies both to foreign and domestic investors. Thus, for the main aim of attracting identified strategic investments, the NIPC by its mandate is expected to execute full authority in the administration of the numerous incentives to encourage investment activities. However, this has not been the case as some Federal Ministries and agencies are also performing this function and leading to misplaced obligation. This requires coordination and streamlining for effectiveness and efficiency. The recent Presidential Committee on Problems of Investors is doing its best in overcoming most of the constraints and attempt are being made to review the incentive regime and make them responsive to the yearnings of investors. Other investment promotional activities include: Sensitization programme aimed at educating the Public on its activities and to seek public support for its programmes. Hosting business and investment forums like successfully organized the 1st Nigeria-Brazil Business and investment Forum which held in Sao Paulo, African Petroleum, Energy and Mining Forum in Beijing, Nigerian Argentine Business Investment Forums and other conferences being organized to promote investment like International Business Leaders Conference (NIPC 2006-2008 Report). 2.6 Linking Foreign Direct Investment and Economic Growth The link between Foreign Direct Investment and Economic Growth has been a subject of debate for many decades and has been subject to empirical scrutiny. There have been new found facts about this link due to the emergence of the globalized world in recent times. This is due to the acknowledgement of Multinational Corporation, capital accumulation and large investment in trade in developing countries. Foreign direct investment is bundle of capital stock and technology, and can augment the existing stock of knowledge in the host economy through skill acquisition and diffusion, labor training and the introduction of new managerial practices and organizational arrangements (De Mello 1997). Three literatures have added to the subject of FDI-led growth. First, previous studies based on the assumption that there is only one causality from FDI to GDP growth and have been criticized in more recent studies (for example Kholdy 1995). In other words not only can FDI cause negative or positive ef fect on growth but growth can affect the flow of FDI. Secondly, the new-growth model has resulted in some reappraisal of determinant of growth in modeling the role played by FDI in growth process. Thirdly, the new development in econometrics theory such as time series concept of integration and causality testing has further expanded the ongoing contest of the relationship between FDI and economic growth. Foreign direct investment can impact growth directly and indirectly. The impact of FDI can be seen to directly impact growth through capital accumulation, and the incorporation of new inputs and foreign technologies in the production function of the host country. Neoclassical and endogenous growth models have used empirical test to check the theoretical benefits of FDI. In the neoclassical growth models FDI promotes economic growth by increasing the volume of investment but FDI affects growth only in the short run because of diminishing returns to capital in the long run. Longà ¢Ã¢â€š ¬Ã‚ run growth in the neoclassical models arises from exogenous growth of the labor force and exogenous technological progress. In the endogenous growth models FDI raises growth through technological diffusion from the developed countries to the developing. This permanent knowledge transfer from FDI accounts for the diminishing returns that result in long run growth. The endogenous growth literature has identified country conditions that must be present for FDI to have a positive impact on growth such as the complementarity between domestic and foreign investment, adequate leve ls of human capital, open trade regimes, and wellà ¢Ã¢â€š ¬Ã‚ developed financial markets. Some of the most important endogenous growth empirical research has been discussed in the literature review section. It is now necessary to look at the impact of FDI on growth in the economy and the analysis on whether FDI has an effect on economic growth; this will be discussed in the next chapter.

Great Barrier Reef Essay -- Wonders of the World, Australia

The Great Barrier Reef is known as one of the Seven Wonders of the World. It is believed to be one of the most incredible places on this earth. This reef is the largest living organism on this planet and the only living thing on earth visible from space (2011). The warm waters of the southwest Pacific Ocean are the perfect environments to create the world's largest system of coral reefs. The Great Barrier Reef is in such pristine condition that it was listed by the World Heritage Trust as a protected site and is therefore, managed by the Great Barrier Reef Marine Park Authority to ensure that its beauty is maintained for many travelers and sightseers (Edgar 2010). Due to the complexity of this natural phenomenon, human practices have led to ecological problems for the reef, but preservation efforts can provide future generations the ability to learn from and experience one of the largest oceanic coral ecosystems in the world. The Great Barrier Reef is located just off the coast of Australia. This marine park stretches over 1800 miles and is almost parallel to the Queensland coast (2011). The reef spans a distance of 65 km wide and reaches 15 to 150 km off shore (2011). At just 500,000 years old, the Great Barrier Reef is a relatively young structure. Yet even younger is the current reef's structure at less than 8,000 years old (Edgar 2010). The formation of the Great Barrier Reef is very complex. Coral reefs began to form in the region at about 58 to 48 million years ago when the Coral Sea Basin formed (Briney 2010). However, once the Australian continent moved to its present location, sea levels began to change, and coral reefs started to grow fairly quickly, changing climate and sea levels. This consequently caused them to... ...populations, some countries have invested into fish farming or aquaculture, but some controversy has followed from this practice. Studies have shown that fish farms are not helpful in sustaining the native fish, and have actually harmed them instead. There are two main types of aquaculture: onshore and offshore. These farms, often times due to overcrowded tanks, result in outbreaks of deadly diseases. An example is pop eye, an eye infection that causes swelling of the eye. On offshore farms, domesticated fish often escape through faulty and inferior netting, infecting native fish populations. Alternatively, offshore farms pose a different problem. Management of these facilities has been known to filter pure excess waste products of the fish into the ocean. The contaminated water, also full of nutrients, creates algae blooms and starves sea floor of sunlight.