Doing business in the developing world: recommendations and advice.

Doing business in the developing world: recommendations and advice.

Doing business in developing countries requires resilience and flexibility. Compared to OECD standards, bureaucracy in the developing world is almost ten fold as long and irresponsible than in developed countries.
Furthermore, developing countries show little interest for putting in practice their own compliance rules and internal procedures, hence delivering poor service and no accountability.
 
In such terms, de jure norms clash with de facto ones. In India, obtaining a construction permit requires more than 20 authorizations and half a year on average; at the same, time, it is not uncommon to get a driving license in a day in Delhi just by hiring a facilitator.
 
The lack of accountability makes processes slow and inefficient. Whereas promotions are either based on rentier logic, tribalism/sectarianism or on bribery, the result is empirically measurable: services do lack in efficiency and impact. In the Middle East and in Africa, most of services run on an unofficial economy, making things hardly understandable to a western corporation and its compliance rules. In few words, that is a clash of business culture.
 

Corporate Social Responsibility

In spite of the evidence, foreign direct investments must enact corporate social responsibility practice. According to The Guardian, developing countries are home to 80% of world population; by 2050, another 3 billion people will live in the developing world. Indeed, corporate social responsibility do much in order to preserve companies reputation and social inclusion, but hardly have an impact in eradicating detrimental habits: in the Niger Delta, oil companies built schools, but the lack of an open and competitive system to recruit personnel in civil service has left many students aside. That does not mean that CSR is a misconduct; on the contrary, it is the minimum a corporation can do to match its compliance rules to local reality. 
 

Growing sectors: 

Having said that, there are few bright ideas for doing business in the developing world, and some some are worth mentioning. The energy sector should not be seen as a commodity intensive market in developing countries (with special regards to fossil commodities producing states); indeed, alternative energy and savaging initiatives are on high demand at the moment, and the trend is likely to endure.
Given the rise of a consuming middle class in developing countries, trading of goods has developed steadily in the last 15 years; while still exporting agricultural items, developing economies do import tech intensive items like computers, smartphones and tablets, not to mention consumers goods like clothes, shoes and niche food items.
 

Professional services are on high demand: from recruitment to education or travel consultancy, developing countries need professional support to develop their societies and economic models.  

 
 
 

For more information:

info@svadvisory.com

Follow us on our social networks