U.S. Chamber of Commerce Issues a Report on the Reluctance of Multinational Corporations to Invest in Africa

The U.S. Chamber of Commerce and the Baird Communications Management Consulting (Baird CMC) firm have issued a news release about a study that investigated the reasons why multinational corporations are hesitant about investing in Africa.

The United Nations Conference on Trade and Development issued a report in 1999 which reached similar conclusions.

The U.S. Chamber of Commerce’s news release identified 5 preventing multinational corporations from wanting to contribute foreign direct investment (FDI) in Africa:

  • Rule of law — A strong consensus exists among the respondents that the rule of law does not prevail to the degree required to make Africa an attractive investment destination. This applies to corporate, societal, and criminal law.
  • Attraction — Africa does not offer a sufficiently large middle class of consumers or show consistent economic growth that could promise a future market. Most African countries are small and have poor markets, and there are barriers to regional markets — such as taxes and the freedom of movement of people and goods. However, Africa does offer enormous natural resources and that is an attraction.
  • Risks versus rewards– Given the currently perceived risks in Africa, the rewards have to be very high to make it worthwhile to invest. Presently, U.S. corporations say that there are very few visible promises of future returns high enough to justify significant interest in investing
  • Supportive business framework–Transportation and communications infrastructure, trained or trainable human resources, and equitable trade and employment practices are insufficient to support corporate investment
  • A welcoming environment– African countries are not doing a sufficient job of providing education and health services to the potential workforce, which makes the potential hire-able local insufficient to support investment.

Points to consider

The question is who should benefit from this investment. The reports, from the U.S. Chamber of Commerce and the United Nations, suggest that the improvements suggested will be largely for the benefit of the multinational corporations.

Also, the desirable actions that the multinational corporations cite may conflict with the expectations of the population. This recently occurred in the United States. Recently, a rule of law argument was heard within the continental United States—the sanctity of contract. This argument was raised in the public’s opposition to the American International Group, Inc. (AIG) use of bailout funds to pay bonuses to traders unraveling AIG’s complex investment positions in derivatives. The public sought the return of the bonus money.

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The Futility of “Colorblindness” (Continued): Criticism of Statement of Judge Sonia Sotomayor Studiously Ignores Racial Reality in the United States

It is interesting to listen to the criticisms of comments made by Judge Sonia Sotomayor for the Judge Carlos G. Olmos Memorial Lecture at a University of California, Berkeley, symposium (titled, “Raising the Bar: Latino and Latina Presence in the Judiciary and the Struggle for Representation”). At the root of the condemnation is a belief that everybody (regardless of race or other difference) is equal under law and therefore everybody has the same status in the society. I reassert that people are indeed equally human, but social power is not equally distributed.

United States (population: 281,421,906 (2000 Census)

Race Percentage of population Number
White 75.1% 211,460,626
Black 12.3 34,658,190
Native American 0.9 2,475,956
Asian 3.6 10,242,998

Critics of Judge Sotomayor’s sentence in the 2001 speech are that if a White person said the same thing, it would not be celebrated but reviled.

I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life.

However, considering the racial reality in the United States, the statement of the critics rings hollow when one recognizes the tremendous power the White race possesses in the United States.

The sentence in Judge Sotomayor’s  lecture was written in the part of the speech responding to an argument of Judge Miriam Cederbaum in which Judge Cederbaum stated that judges should rise above their identity while rendering judgment on cases. In another statement, attributed to former Supreme Court Justice Sandra Day O’Connor, Judge Sotomayor noted that it was mentioned that a wise old man and an  wise old woman would reach the same conclusion in deciding cases. Judge Sotomayor disagreed stating that there is not a universal definition of wise and that “a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a [wise (?)] white male who hasn’t lived that life.” Moreover, Judge Sotomayor recognized that people with different backgrounds can understand others outside of their group; however, this understanding requires a person to devote time and effort to the task (which the person may not want to do) (another writer has recognized this argument in Judge Sotomayor’s speech).

Let us not forget that wise men like Oliver Wendell Holmes and Justice Cardozo voted on cases which upheld both sex and race discrimination in our society. Until 1972, no Supreme Court case ever upheld the claim of a woman in a gender discrimination case. I, like Professor Carter, believe that we should not be so myopic as to believe that others of different experiences or backgrounds are incapable of understanding the values and needs of people from a different group. Many are so capable. As Judge Cedarbaum pointed out to me, nine white men on the Supreme Court in the past have done so on many occasions and on many issues including Brown.

However, to understand takes time and effort, something that not all people are willing to give. For others, their experiences limit their ability to understand the experiences of others. Other simply do not care. Hence, one must accept the proposition that a difference there will be by the presence of women and people of color on the bench. Personal experiences affect the facts that judges choose to see. My hope is that I will take the good from my experiences and extrapolate them further into areas with which I am unfamiliar. I simply do not know exactly what that difference will be in my judging. But I accept there will be some based on my gender and my Latina heritage.”

In evaluating Judge Sotomayor’s speech, the demographic reality of the United States must be recognized:  Whites are at the apex of the social pyramid and are the primary population in the US. Nothing Judge Sotomayor said disturbs this reality.

Lawyer demographics

Race 1990 2000
White 92.6% 88.8%
Black 3.3 4.2
Hispanic 2.5 3.4
Asian Pacific American 1.4 2.2
Native American 0.2 0.2
Native Hawaiian or Pacific Islander .04
Two or more races 1.2

Post Script

Here is a link for the full text of Judge Sonia Sotomayor’s  speech at U. C. Berkeley.

Credit Card Reform: Credit Card Bill in Congress is Good But Does Not Address True Problem–Usury

While the Congress wants to help credit card holders achieve some fairness in their relationships with credit card companies, their efforts (H.R. 627, S.414)  will not fully help the consumer. The credit card consumer is at the mercy of the credit card companies.  The popular thing to say is that the consumer has the right to decline to accept a credit card and look at the competition.  Yet, in truth, the average consumer cannot negotiate the terms of contracts today.  Most contracts are contracts of adhesion (take it or leave it terms).

Credit card companies are given a degree of latitude in setting interest rates without regard to a state’s usury law (12 usc sec.85, Marquette v. First Omaha Service Corp.).  That is a profound power, which requires an equally profound responsibility to avoid abuse.  With interest rates that could approach 30% or more, with the federal funds rate at 0 to 0.25%, the credit card companies have collectively decided to act licentiously.  As a result, then, the power to set interest rates must be regulated again in the face of the credit card companies’ terrible failure to exercise self-control.

However, this scope of the power will not be a part of the so-called reform of the credit card industry because so many politicians (House, Senate) get campaign money from these same firms.  Thus, the credit card reform bill presently being rushed through Congress will address some abuses but not really get to the root of the abuses, namely the setting of interest rates.

The Senate rejected an amendment (S. Amdt. 1062-Sanders) to the Credit Cardholders Bill of Rights Act, H.R. 627.  The amendment was proposed to set a national interest rate limit of 15%.