Friday, June 7, 2013

Parameters of Success and Safe-guards against - How securing the integrity of supply chains is crucial for economic success


http://www.arabiansupplychain.com/article-8842-flaws-imperfections-in-nation-building-success-formula

I attended the Africa Global Business Forum in Dubai recently where a favourite theme for discussion was how African nations can learn from others as to how to become successful business and trading hubs.  As is usual, pointing out the real issues holding Africa back was kept to a minimum. Rather, convenient excuses for sub-par performance, with pat suggestions of possible remedies, were preferred. A recent favourite I’ve been hearing is how computers with Internet and Facebook, installed in all classrooms across Africa, would be the magical solution for the continent’s problems. 

 
It brought to mind a story from about a year ago now when I ran the Masai Mara Marathon in Kenya. This is a remarkable event, requiring some impressive logistics out on the savannah. No expenses are spared, with backing from several big-name corporate sponsors. Every kilometre along the track sees an armed guard on the lookout for wild animals. 
Despite the marathon’s seemingly impressive organisation, the water supplied at the stops was insufficient for about half of the runners. Numerous people collapsed under the scorching sun and were evacuated by ambulances. Many were furious, as were the sponsors, who made public apologies to the participants. 
It was probably not that someone had failed to calculate the number of bottles required for the number of runners that had registered. An educated guess is rather that, somewhere along the supply chain of getting the water out on the track, an ‘entrepreneur’ saw the opportunity to take a detour and offload the water bottles to disburse for their own profit. 
This scenario can almost be seen as a microcosm of the challenges faced daily in Africa. Overlooking even the simplest logistical detail can jeopardise the entire operation. Any opportunity to pilfer will be taken if there are even any remotely reasonable grounds for denying being complicit in the theft.
It is not corruption so much as sheer ‘leechism’ that explains nations that fail to create overall prosperity for their people. When I lived in Jakarta, I was told it was an open secret how jobs as public servants in positions to take bribes were sold to applicant able to pay the most. These economically counter-productive ‘jobs’ were often the most well-paid jobs available. It may sound provocative, but it is a simple observation that various forms of ‘leeching’, on all levels of society, is the ‘national industry’ of most countries that remain poor, despite these having favourable conditions to promote prosperity. 
Having spent much of my youth in both Singapore and Chile during the periods of their strongest economic growth, what I saw as central to both their success stories was the in-built safety mechanisms that prevented societal inefficiencies taking root and becoming burdensome. Fundamental parameters were in place to restrict public servants abusing their positions by creating obstacles and delays to obtaining bribes. Opportunities for parasitical behaviours overall were deliberately minimised. For instance, among the first things I noticed when arriving in Santiago was how most stores, small or big, only had a single person allowed to accept payment and to handle the cash register. Even buying a piece of gum at a pharmacy required one to wait for three separate people to hand pieces of paper to each other before the goods were handed over. As for Singapore, the opportunity for even getting fined for spitting gum on the street is insignificant as it is illegal to bring in a single pack to the country.
Both countries have long been among the least corrupt countries in the world, according to Transparency International. In the context of Chile widely outperforming its Latin American neighbours and Singapore’s unique position in Asia, this is particularly impressive.
It is irrelevant to ask whether these countries have populations with more evolved morals and character. Character is not revealed in what a person can restrain himself or herself from doing in any given situation. That is largely dictated by the aggregate of life experiences and the given circumstances at hand. True character can only be revealed by how we would act if we knew with absolute certainty that we would not get caught. 
For economic prosperity, what is needed is often not about more opportunity, but less. Consider that when we live in the habitat our bodies were designed for, six hours in movement each day with an all-natural diet, the natural norm is having the physique of a professional athlete. That we fail to live up to this natural state of being is explained more by our unnatural opportunities not to, rather than any individual strength or weakness of willpower.

It is not difficult to apply the same logic to understand how the economic health and efficiency of societies functions similarly. That is, only allowing for opportunities to engage in activities that are non-sabotaging makes success inevitable.

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