Author Archives: Andrzej Zwaniecki

About Andrzej Zwaniecki

Andrzej Zwaniecki has covered business, economic and related issues for America.gov and other U.S. public diplomacy projects. Earlier, he was a radio broadcaster, reporter and feature-story writer.

Is Corruption Good for Business?

Posted on by

Believe it or not, corruption can help entrepreneurs in some situations. Some research points out that bribes can grease the cogs of bureaucracy in highly regulated economies and make it possible for entrepreneurs to achieve their goal of starting a business. But make no mistake: in general, corruption is a deterrent to potential entrepreneurs, and countries should strive for less regulation rather than more corruption.
In sub-Saharan Africa, South Asia and other regions with widespread corruption and difficult business climates, the entrepreneurial spirit is often stifled, and when it is not, entrepreneurial energy is channeled into informal sectors outside formal legal and financial systems. Unregistered firms may thrive: in some countries the informal sector makes up around 40 percent or more of economies. But such businesses don’t contribute much to the public welfare as they don’t pay taxes and sometimes pose a danger to the public. Informal businesses themselves rarely if ever are capable of reaching their growth potential because of impediments of an informal economy: “higher capital and transportation costs, more storage problems, greater difficulty hiring quality staff and less ability to enforce contracts”.

Countries that want to tap entrepreneurial energy start with relaxing their regulatory regimes. This reduces the potential for corruption. For example, according to the World Bank’s Doing Business 2011 report, Kazakhstan, Tajikistan and Hungary have made significant progress in deregulating their economies, thereby improving conditions for starting a business. This promotes much stronger economic growth than the opposite strategy – increasing regulation and counting on entrepreneurs to make the system work by greasing the wheel.

Pay the Judge, Get Justice?

Posted on by

In many countries, biased, corrupt judges not only fail to uphold the rule of law, but actually help create the culture of impunity. At the International Anti-corruption Conference in Bangkok a panel of judges, justices and prosecutors were trying to establish essential elements of an independent judiciary system.

Nobody disagreed with Charles Caruso of the American Bar Association who postulated that a trusted criminal justice system cannot exist without an independent judicial authority acting in concert with an independent prosecutorial body, each free from corruption. Key propositions included:

• Embedding judicial independence in the constitution;,
• Appointing or electing respected, distinguished individuals to be judges;
• Providing judges with guarantees against punishment for decisions politicians or other centers of power may not like.

The U.S. judicial and prosecutorial systems were presented as structures in which multiple checks ensure judges’ and prosecutors’ integrity.

Judicial independence is a dynamic concept. Justice Barry O’Keefe from Australia cited Indonesia as a country where a once independent judiciary lost its independence and ethical bearings during the Suharto regime. Where the rule of law prevails, a respected, independent judiciary can be the single institution enjoying the public trust in times of a political crisis, said Justice Vichai Vivitasevi from Thailand in reference to his country. However, judges cannot take on the role of political arbiters, he said, without risking their independence.

Taking the Glamour out of Corruption

Posted on by

Hollywood glamorizes mafias. That’s too bad, said experts at the International Anti-corruption Conference in Bangkok, because real-life organized crime poses a tremendous challenge to democracy, economic and financial stability, and development.

Through corruption and violence, crime rings with an international reach undermine the rule of law and penetrate legal economies. Modern Mafiosi buy politicians and votes in national and local elections, hire lawyers and accountants to gain “legal” access to markets, and ensure the support of local populations through charities funded from crime proceeds.

All legal tools must be used against crime bosses, said James Trusty of the U.S. Justice Department.  But that’s not enough. Transnational organized crime must be “attacked” from all angles. Through legislation, countries can target shell companies, and through assets forfeiture governments can make sure that “the Sopranos” don’t enjoy the fruits of crime and corruption. Professional organizations of lawyers, accountants and others can root out their unscrupulous members through due diligence and certification.

Will these efforts be able to end corruption once and for all? Not likely, experts said, but disrupting criminal activities and breaking the cycle of corruption make enough of a difference in addressing the threat that they believe corruption-fighting policies should still be aggressively enacted.

Corruption Fight Gets Complicated

Posted on by

For years, corruption was seen as a relatively simple matter –public officials taking bribes in exchange for access, benefits or privileges. No more. Look at the agenda of the 14th International Anti-corruption Conference in Bangkok and you’ll see how things got complicated.

Corruption now touches on countless areas of public life, business and international affairs. Fighting it and promoting good governance have become essential to dealing with the many challenges faced by individuals, businesses, governments and the international community such as distributing development aid, addressing climate change, tackling transnational organized crime, managing natural resources, helping countries recover from civil wars and managing global supply chains. More parties than ever are now affected by corruption, including private sector contractors, health care practitioners, real estate agents, investors, international donors, corporate marketers and judges.

Fighting corruption is essential to dealing with international challenges such as organized crime and global supply chains.

As corruption-related issues become more complex, the fight against them requires greater expertise. Some of more than 50 sessions and workshops at this week’s conference involve experts in all possible aspects of corruption and good governance. And the anti-corruption activists have some probing questions for them – What is the best organizational regime for anti-corruption agencies? How can we protect victims of human trafficking? How can we pressure governments in mineral-rich countries to publish data about revenue from production of natural resources?

The experts have no easy answers, but at least are able to point activists to the most successful practices others have used in combating similar problems. Looking at the experiences of the United States and other countries, they are able to offer ideas on dealing with issues ranging from corporate bribery to human trafficking to transparency in business deals of multinational corporations.

Fighting Corruption Hurts Organized Crime

Posted on by

For a long time, corruption has been condemned for many different reasons. But it has never been condemned for the threat it poses to security. Until now.

The International Anti-corruption Conference, which began November 10 in Bangkok, Thailand, heard calls for decisive and urgent action against corruption to combat the exponential growth of transnational organized crime. Corruption facilitates these crime networks and creates opportunities for terrorists and nuclear weapon proliferators, according to Gareth Evans of the International Crisis Group. The gravest threat may come from post-conflict countries and failed states where mafias often have either found safe havens or created alternative power structures, Bill Hughes of the U.K. Serious Organized Crime Agency said.

But bad news about transnational crime can actually be good news. Because it has grown beyond any single country’s capability to deal with it effectively, nations have no choice but to cooperate. Somali pirates are a good, but not the only, example of this proposition. To effectively respond to the threat, countries must go beyond making grandiose declarations and instead focus on relevant transnational issues, and cooperate and coordinate their actions.

A police officer checks a luxury car during a raid against an international gang in Costa del Sol, Spain on May 25, 2010. Spanish police worked with their counterparts in Britain and Ireland to track the suspects.

World powers must ensure that an effective international financial monitoring system is in place when they provide aid to post-conflict countries. Remedies in other nations should include private-public partnerships to secure global supply chains as well as law enforcement cooperation and customs capacity building. Cameroon was cited as an example of a developing country that has made progress on customs reform.

The United States took action to mobilize the international community against transnational crime when it launched Trans-Pacific Symposium on Dismantling Transnational Illicit Networks in 2009. The second symposium, organized jointly with New Zealand, is taking place later this month in Christchurch, New Zealand. Partnership with European countries is in the works.

If Silicon Valley is High-Tech Heaven, Are Some Biz Clusters in Hell?

Posted on by

Silicon Valley generally is viewed as the epitome of pure private sector entrepreneurship, worth propagating in other places.

Yet, in the early years, the U.S. government helped to lay a foundation for this cluster of innovative startups and the venture capital funds supporting them, according to the recent book [add italics] Boulevard of Broken Dreams by Josh Lerner.

Many governments promote high-tech business because countries and localities that fail to make relevant investment often lag in innovation, business formation and economic growth.

Research parks or science parks combined with business incubators have multiplied around the world with the aim of commercializing advanced-technology ideas coming from universities and research institutes.

However, quite a few of these efforts fail because they are either misguided from their very conception or don’t take cues from the market.

As the character of science, entrepreneurship, technology and business changes, so must government programs designed to support high-tech entrepreneurship. Nobody knows yet where the evolution will take the now prevailing model of research parks/incubators. But those countries, regions, cities, universities, venture funds and potential entrepreneurs that embrace the change and try to make the best of it will benefit.

America.gov will publish in March a feature Web page related to these issues.

And to preview the topic, we have invited officials, experts, venture capitalists and entrepreneurs from around the world to blog on what makes relevant government-supported schemes work and what will be the shape of high-tech entrepreneurship that emerges in the future from the interplay of governments, venture funds, universities, researchers and entrepreneurs. Please join the discussion.

Is Customer Service Passe?

Posted on by

As I watched 14 hard-working businesspeople win seed money to start or expand their businesses in Africa, I was excited for them. I was also afraid for them. Excited, because they had made it through a judging process that started with some 750 competitors. Afraid, because now that they have capital, they really have to do it! They have to hire, plan years out, deal with red tape, and find customers.

One book I just read might help them on thinking about the customers’ place in their overall plans.

When more and more large and profitable companies get away with dreadful customer service, it might seem silly to argue that attention to customers offers a competitive edge for small businesses.

But Barry Moltz and Mary Grinstead argue just that in their book “BAM! Bust A Myth: Delivering Customer Service in a Self-Service World.” They provide compelling evidence that good customer service adds value, helps the smallest firms differentiate themselves from the crowd, boosts chances of survival for new startups, and gives them a solid footing from which to earn later profits.

Challenges abound. The authors point to the obvious one – when companies start and have a limited customer base, it is easy to satisfy customers; the hard work comes when the company’s customer base grows. Changing business environments also present a challenge to customer-service. For example, the spread of self-service and the ascent of social media means call for rethinking what a customer really considers good service. Probably the toughest challenge, the authors say, arises from the culture of disregard for customer satisfaction at many companies and from myths that linger and affect other companies.

Moltz and Grinstead bust many cliches, such as “the customer is always right” or “good customer service means the same thing to everyone,” and provide good advice, based on the experience of successful firms. They tell you how to derive real value from empowering customers. But their book rejects the accepted “wisdom” that customer service is all about listening to buyers. It is two-way dialogue, they say.

Goat Ranch in Ghana Aims to Start an Industry

Posted on by
[guest name="Henry Adobor" biography="Henry Adobor teaches corporate strategy, ethics and leadership at the School of Business, Quinnipiac University, Hamden, Connecticut. His background is in retail and human resource management. His business interests in Ghana include a small IT center in Accra and a large-scale aquaculture project. He lives in Cheshire, Connecticut."]

The African Diaspora Marketplace contest recently awarded $50,000 to $100,000 to 14 immigrants to the United States from African countries to help them start or expand businesses in Africa. Some of them share how they plan to use the money on the New Enterprise blog.

Henry Adobor

Henry Adobor

You may not believe it, but goat farming is my passion. It connects me to my childhood during which my mother kept a few goats (as do most people throughout Sub-Saharan Africa.)

What I am trying to do with Aceritas Ghana Ltd. – the company I have started – is turning the passion into a commercial enterprise. The company will own and manage Green Acres Goat Ranch. Beginning with 100 goats, this commercial goat farm will use improved breed stock imported from South Africa and modern husbandry methods to produce the animals for meat and breeding. This will be a huge improvement over traditional small-scale livestock farming, which is inefficient and unsustainable in the long run.

But my goal is far from pushing small farmers out of competition. With a small laboratory and education center, the ranch also will work as a platform for sharing knowledge with local farmers to help them upgrade breeding and farming methods and grow. Aceritas is forming an alliance with a local university to promote research on goats, particularly on the new breed. My hope is that this project becomes the nucleus of an emerging industry. I plan to entice others to form a Commercial Goat Breeders Association to lay industry’s foundation.

The Accra Plains where goats soon will roam.

The Accra Plains where goats will roam soon.

My partner in Ghana -Stephen Adrah who owns several companies and farms – will manage Aceritas operations.

Because the market for goat meat is huge in Ghana, the initial focus is on selling the animals to large buyers, brokers and individuals directly from the ranch. Breed stock will be sold to farmers. Thinking ahead, Aceritas also will prepare for farming milk goats and selling goat milk in the future.

The ADM grant has come handy. It will help to defray the cost of importing the breed stock (that is substantial because the animals will be air-freighted, no first class please!) and building housing for goats.

Generous Spirit Drives African Diaspora to Invest in Home Countries

Posted on by

Guest-blogger and economics writer for America.gov Andrzej Zwaniecki talks about U.S entrepreneurs targeting business in Africa.

If you need proof that countries in Africa can experience economic renewal don’t look further than these blogs by finalists of the African Diaspora Marketplace business plan competition and their recent Web chat (http://www.savorchat.com/chat/african-marketplace). These entrepreneurs are competing for seed money to start businesses in their home countries. The joint ventures between U.S. entrepreneurs of African origin and their partners in Africa range from a virtual marketplace for small farmers to business development services for small businesses to clean, on-site power generation for larger companies. Winners will be announced January 13.

The entrepreneurs target markets in Africa because they know them best and because that’s where great opportunities are. They face serious challenges in sub-Saharan countries such as poor transportation and electrical infrastructure. Yet they are willing to take a higher-than-average risk driven by a desire to contribute to the development of their home countries. Many are accomplished individuals – some run their own firms, others have successful professional careers. They could have rested on their laurels. But an entrepreneurial individual can hardly resist a temptation to seize an opportunity when he or she sees it.

As small businesspeople without big money, they sometimes must persuade officials and potential customers in target markets they can leverage their skills and experience to a great effect.

Many African nations have come to appreciate the asset their diasporas represent and are soliciting their opinions on a range of issues from business regulation to investment policies. Although the diasporas by themselves won’t do economic miracles in Africa they definitely can help prepare the ground for accelerated development by spreading the culture of private initiative and innovation.

Harnessing the Power of Ideas in Muslim Countries

Posted on by

Today, guest-blogger and economics writer for America.gov Andrzej Zwaniecki talks about Muslim entrepreneurship.

Looking at economies across much of the Muslim World, some people might question whether Islam is compatible with entrepreneurship and innovation. 

Yet a major 2007 study says that adherence to Islam can’t explain Arab countries’ low scores on business-formation measures.

Many Muslim communities around the world boast a large number of individuals with considerable business acumen.  One Muslim nation – Dubai – has excelled in promoting entrepreneurship, and some others like Indonesia are doing quite well too.

But there are still countries and communities that could benefit from an entrepreneurial boost. President Obama hopes that by strengthening existing Muslim entrepreneurial efforts, and inspiring new ones, an upcoming conference on entrepreneurship has the potential to change Muslim economies.  As a world hub of entrepreneurial activity, the U.S.A. has a wealth of experience, after all.

The White House-sponsored event – the Presidential Summit on Entrepreneurship – will take place in Washington in the spring of 2010.  The rule allowing delegates to self-nominate strikes me as innovative and a good way to produce a summit with new ideas and entrepreneurial energy. On the downside, the nomination deadline is close – November 30! So don’t procrastinate if you have an interest in promoting small Muslim businesses.