THE DISADVANTAGE OF FREE TRADE IN AFRICA
JIGAR J TRIVEDI
UNIVERSITY OF REDLANDS
BUAD-642
INTRODUCTION
In the trending time where the world has become “the global village” the distances in travelling has become more convenient. With the masses adopting the revolution of technology now reaching in any corner of the world is just within time frame of seconds. An individual attending a meeting in his office in London through video conference and checking the goods are being stuffed in container for verification somewhere in the most internal parts of African continent for example (Marshall McLuhan,1964). But with the pace of time there has been increase in adoption of new policies and free trade with the help of technology also it comes with its cost by using the loopholes in free trade market by taking advantage of immunized business policy to make unethical business practices for more value addition in surplus profit and in the race of power of hunger. This race of hunger and thirst is unquenchable.
In the year of 1980’s when more people entered into the international business such as imports and exports more goods of exchange started evolving the phase of international trade and economies. During that era only few countries were wide open to become the part of globalization as a tool of powering their economies. The role changing players were influencing who were superpower states the Western and Eastern world started dominating the African continent by the beginning of various trade and services such as goods, consumer services, mining resources and the most vital game changer crude oil. The oil exploration industry has given more attraction to the super power Western and Eastern world who needed more fuel to run their nations for building infrastructure and defense especially. In contrast the African continent open their doors wide warmth to develop their countries and standard of living as being suffered badly by the colonies in the past and trying to revive their countries which we can simply describe as getting oxygen to breathe and survive. But this doesn’t come smoothly it had paid its cost with the rise of internal business lobbies, group biased and corruption. (Raymond .W. Baker, 1999 )
The corruption in the international business started from this instance of 1990’s when the masses realized that African continent is a gold mine of all kinds of import businesses and in exchange of providing minerals and fuels to the world. According to article by “heritage” published in October 4, 2004 these African nations suffering from poverty and under developed infrastructure and lack of safety and human rights the business was not an easy task as a result the big businesses houses started making bi-lateral ties with the government itself by offering the stake to the government and to the ministry which can be termed as “white collar bribe” which led these big power “influencers” to advise these African nations to change their international trade policies by suggestion them in such a manner with the trade, economics and banking expert that this big business minds can use these policies to make infinite surplus profit and rise in corruption and “money laundering hub”.
The money game
There were unofficially designated route of money laundering which took place by the famous treaties of non-disclosure of sources of incomes such as Swiss. Dutch, Mauritius banks and likewise which gave rise to “black money” by earning inflated profit in the African market by importing goods which is shown less cost compared to the existing market value and selling them at the higher rates with the help of free trade policy on imports by African continents which were made by these big business mafia for their own mean intention.(Michael Thomas,1994) This gave opportunity to the businesses and diplomacy to earn money under the table and officially profit gains above the table. This earning under the table gave rise to corruption and black money as a result there was necessity amongst this wrong doer to keep this money safe and sound. As a result with the higher influence in Europe diplomacy such policies were made where the bigger amounts deposited in the accounts even on anonymous names there source of income was not accountable according to the treaties. This gave more addition in motivation of money laundering crimes and official way to hide black monetary gains earned from unethical business practices from African continents and funds illegal cartel activities to suppress rivals in business and government agents who are against radical businesses unethical practices. Prevent these black money holders by sheltering themselves in tax heaven countries by offering white collar bribe for protection and saving from extradition.
The price illusion
In the course of business to make imports cheaper and promote more goods and consumer services in the market many countries across the African continents gave free trade zones or exemption on import duties or minimal duties but these kind of immunities were used by big business houses to cut down their competitor’s in the international business market. Simply it can be explain there was more growing influence of south eastern countries palm oil market to import in African continent as there is scarcity of such kind of edible oil which is prime necessity for cooking food on such key products like oil there were minimal import duties but during the arrival of actual shipment the price printed on bill of lading is fewer than the actual market value which would create monopolistic market to cut down other competitor’s and when due to loss of their rivals when they eliminate them in the market and create monopoly as a result this monopolists give price rise and influence the government of importing countries to cut the import duties this game would let the edible oil companies earn surplus profit unethically and would even create false rumor of shortage of goods by paying bribe to trade media’s and government official to keep market in their control. This is the best example of using loophole in the international business of free trade. (Tara Maclassac, 2017)
The government rule or company rule?
The business policies made by the government in the African continents observing them briefly is purely based more profit making machine for the Western and Eastern world and filling the pockets of bureaucrats and giving them unofficial part in profit. This is an example of government which is totally influenced by external powers and exploiting their own people. But they shield themselves as working for poor people of their nations and giving them opportunity. There were many instances were seen when this highly officials of African government controlled by Western and Eastern countries often seen those higher officials buying luxuries and facilities which is even 100 times higher than the GDP of their own country. Involved in prostitution and all kind of such illegal activities without being responsible that all these lifestyle and leisure costs their own countries poor people’s money and under the table money earned by corruption. Even the families of this African diplomats are provided advantage in Western and Eastern world to build homes and fancy lifestyle in exchange this companies who wants strong hold in African countries take advantage by providing government “unofficial advisory” to make changes in policy to get more business immunity. (Milena Veselinovic, 2016) This kind of policy has given more advantages to big companies to use this loopholes in business practice and eliminating competition by radically stopping the small business houses. In more precise word there is government in African continent but remotely handled by Western and Eastern of their own motives and a big game in the name of democracy and development which has affected the fair trade practices in international business.
Human right or a joke?
When these Western and Eastern influences talk about human resources and fair practice of labor but the business practice in Africa is worse condition for labor the employer who is a “Western and Eastern owner”. In oil exploration company there labors who work in the driller especially to take out crude from the internal core of earth. These labor works at a really higher temperature and very unhygienic working conditions without any safety aids. But on the contrary they are paid hardly $2 American per hour and even the employer is producing around 5000 barrel per day even each barrel costs about $50 American but still the labor gets paid such less amount and the profit earn by their boss is immense and some share of this profit is given away as a corruption to the government officials. When this countries talk on the record about labor protection and development and making working conditions better what about when this comes to their own implementation can’t I say the tittle suits the best whether human rights a joke or not? Even there are non-government organizations build in African continent but what if those owners are sponsored by these Western and Eastern world bosses only to show that they really care about human rights and necessities but dispute resolution bodies are even being formed but this bodies are puppets of this influential bosses to save interest of their companies and to abide by the law of human rights and labor protection but under the table this bodies merely delays or rather never comes to a concrete result of this problems faced by African countries. (John Paul Ongeso,2016) The policy by Western and Eastern world is simple fill the pockets of our own buy the power in government by giving them little piece and if anyone penetrate in their wrong practice of business eliminate them by unfair competition in the market.
Conclusion
Whenever any individual talks about international business and trade relations there has to be compromise on both the side in balanced way to strategic long term business partnership. But not the compromise at the cost of harming the people’s at large or not by eliminating the fair trade practices in international market or nor by buying the bureaucracy. As discussed here in this article the influential bosses of big businesses initiated the concept of free trade policy and then within this sphere of free trade policy utilized loopholes of such policy and manipulated the business in African continent and which was very well supported by the local countries because the top government officials cared about filling their own pockets and little portion to their own countries treasures and powering their economies and group their GDP. (Tom Chmielewski, 2017) On the other hand there was sharp increase in international business especially in African continent but was merely based on expanding influence over under developed countries because after all from different sources of speculation it was always about the hunger of crude by western and eastern world. The setup of various business groups in African continent has given more rise of using money and power to acquire monopoly and eliminate small business group which is an example of loopholes in international free trade business in itself. On the contrast even becoming the member of such business league requires more money and only members are allowed to do the business and internally conspiracy is always to eliminate fair competition in the market and create monopolies by biased business group and lobbies which affected African trade market to be unfair but booming. From the facts presented and arguments advanced I can conclude that the bigger companies promote the policy of free market in the international business but for their own benefit and very less to the countries but they would endorse the propaganda for working for all but they want to work for their own mean intention at the cost of buying the government at large.
Reference:
http://www.livinginternet.com/i/ii_mcluhan.htm
Raymond M Baker in “The biggest loop hole in free marker system” published in The Washington Quarterly, autumn 1999.
Milena Veselinovic (2016, January, 8) Why corruption is holding back Africa in“African view” retrieved from CNN http://www.cnn.com/2015/12/24/africa/africa-corruption-transparency-international/
Michael W Thomas, 1994 “Black Money” published in Crown Publisher
https://news.mongabay.com/2017/02/will-there-really-be-enough-sustainable-palm-oil-for-the-whole-market/
John Paul Ongeso (2016, September, 5) Positive Human Rights Obligation Transnational Corporations from
http://africanlegalcentre.org/2016/09/05/positive-human-rights-obligations-transnational-corporations/
Tom Chmielewski, (2017) “negative effects of free trade retrieved from http://smallbusiness.chron.com/negative-effects-trade-5221.html
