The Use Of Operations Management Today Business Essay

The Use Of Operations Management Today Business Essay Operation management is a term used or the activities which produce and deliver product and services.in many small organisation operation management performed by people who perform task and activities within the organisation. First of all we use the four Vs of operations, volume, variety, variation, and visibility. Before we tackle the activity think about how we could measure each of these dimensions for the operations that we will visit, Volume   It is important here to distinguish between the actual volumes in this case the number of customers served that the impressive burger has to cope with, and the maximum it could cope with. This is called the capacity of the operation. Capacity is easier to measure because it can be calculated by multiplying the number of seats in the takeaway by the average number of customers per hour (calculated by timing the customers) and by the number of hours the takeaway is open. In other words, imagine there is a queue of people outside the restaurants, what is the maximum number of customers that the impressive burger could serve? Contrast this capacity figure with the actual number of customers in a day that the restaurant serves. You could ask the restaurant manager for this information or make an approximation from your own observations at different times of day. Variety   There are two important aspects to measuring variety for restaurants. The first is the range of different foods that the impressive burger serves. Just count the number of different items on the menu to get an indication of this. The other factor to take into account is whether the impressive burger will customize food to your own preference. For example, does it serve burger well-done, medium and rare? Does it allow you to choose the fillings for your sandwiches? Etc. Variation   Possibly the easiest way to measure variation is the ratio of peak demand in a day or a week, to the lowest demand during that day or week. Again, you could try asking the impressive burger manager for this information or (if you have time) make observations throughout the day or even the week. So, for example, if the restaurant was busy up to its full capacity for part of the day but, at its lowest, was only ten per cent full, then the peak to trough ratio is 10:1. Visibility   This is a relatively simple issue. Simply ask, how much of the preparation of the food do you witness. It is unusual to see every aspect of food preparation, for example preparing the vegetables, slicing the bread etc. But you may see food being cooked and assembled in some burger restaurants. The other way of looking at this issue is to ask yourself whether the preparation of the food is being deliberately put centre stage in the restaurant. Some restaurants deliberately do this so as to entertain customers while they are waiting for their food. Function of Operation management The role of the operations function means something beyond its obvious responsibilities and tasks it means the underlying rationale of the function, the very reason that the function exists. The implementer of business strategy. The supporter of business strategy. The driver of business strategy Two things are important in understanding these roles. First, they are stated in order of difficulty and in order of importance. Implementing business strategy is a very basic responsibility for operations, supporting business strategy is what most operations should aspire to, but driving business strategy is only possible if the operation really does have unique capabilities. Second, they are cumulative in the sense that an operation cannot be a supporter of business strategy unless it has skills as an implementer, and cannot drive business strategy unless it has the skills to support the business strategy. Process Volume-variety and design In the four Vs of operations were described. These were volume, variety, variation and visibility. The first two of these volume and variety are particularly important when considering design issues in operations management. Not only do they usually go together (high variety usually means low volume, high volume normally means low variety) but together they also impact on the nature of products and services and processes which produce them. The volume and variety of an operations activities are particularly influential in determining the way it thinks about its performance objectives. The figure below illustrates how the definitions of quality, speed, dependability, flexibility and cost are influenced by the volume-variety position of the operation. Quality Quality in a low volume-high variety process such as an architects practice, for example, is largely concerned with the final aesthetic appearance of the building and the appropriateness of its detailed design. In an exceptionally high volume-low variety process, such as an electricity supply company, quality is exclusively concerned with error-free service electricity must be constantly available in the correct form (in terms of voltage, frequency, etc.). The meaning of quality has shifted from being concerned primarily with the performance and specification of the product or service towards conformity to a predefined standard, as we move from low volume-high variety operations through to high volume-low variety operations. Speed Speed for the architects practice means negotiating a completion date with each client, based on the clients needs and the architects estimates of how much work is involved in each project. Speed is taken to its extreme in the electricity utility where speed means literally instant delivery. No electricity company could ask its customers to wait for their delivery of electricity. Speed therefore means an individually negotiated delivery time in low volume-high variety operations, but moves towards meaning instant delivery in some high volume-low variety operations. Dependability Dependability in processes such as the architects practice means keeping to each individually negotiated delivery date. In continuous operations, dependability often means the availability of the service itself. A dependable electricity supply is one which is always there. So dependability has moved from meaning on-time delivery in low volume-high variety operations to availability in high volume-low variety operations. Flexibility Flexibility in low volume-high variety processes such as the architects practice means the ability to design many different kinds of buildings according to its clients various requirements. With the electricity companys process, the need for product flexibility has disappeared entirely (electricity is electricity, more or less) but the ability to meet almost instantaneous demand changes through volume flexibility is vital if the company is to maintain supply. Flexibility has moved from meaning product flexibility in low volume-high variety operations to volume flexibility in high volume-low variety operations. Cost Cost, in terms of the unit cost per product or service, varies with both the volume of output of the operation and the variety of products or services it produces. The variety of products or services in low-volume operations is relatively high, which means that running the operation will be expensive because of the flexible and high skill levels employed. Further, because the volume of output is relatively low, a few products or services are bearing the operations high cost base. Also, and more significantly for the operation, the cost of each product or service is different. At the other end of the scale, high-volume operations usually produce similar products or services, output is high, so that whatever the base cost of the operation, it is shared among a high number of products or services. Cost per unit of output is therefore usually low for operations such as the electricity utility but, more significantly, the cost of producing one second of electricity is the same as the next second. Cost is relatively constant. Change management Change the face nothing will change but facing to the change everything can change. The process of making things different is known as CHANGE. like impressive burger changed its menu to get more customer attention but because the lack of staff and its training business started to decline. Organisational change is an on-going process, Change can make things different Change is an ongoing activity Change creats new opportunities and challenges. Change is extensive in nature Change is impossible to avoid Help organisation to move from the present state to a desire state. Bring new opportunities for the business Reasons for change Internal factor There may be a change in leadership, structural change, adoption of new technology, there may be a decline in profit like impressive burger because of change, industrial relation problems. External factor Change in the policies by the government, technology advancement, demographic changes, change in the market, changes in the economy conditions. There are different types of changes, Planned and unplanned change Rate of change can be slow or fast Remedial and development change Wide and subsystem change for organisation Impressive burger point of view it brought some risks and uncertainties and brought new challenges for the staff and decline in the profit was big threat to the organisation. Failure reason for Impressive Burger Main reason behind problems of Impressive Burger 1. New service development: Due to development of new services all the schedule and activities of company disturbed. Numbers of operations within the impressive burger increased, but number of staff and machines remained same. 2.lack of proper arrangement: due to fast growing changes, there should be need to arrange staff,equipment,inventory,cleaning services,maintance etc. But due to lack of proper planning all schedule is disturbed and cause problems. 3. Reduction of staff: as the operation of PLC company increases, there is need to be recruiting new staff. but plc company did not focus on these things. results of less no. of staff:   Poor productivity levels   Bad feeling among staff    Customer complaints 4. Lack of training: due to increasing customers and functions of PLC there is need to be trained staff. Lack of proper training causes customers unsatisfaction. 5. Lack of machinery: main problem of the company Is that they increase their operation function But there is reduction of equipments or resources. The staff cannot do anything without useful resources like electrical equipment, fridge, microwave oven, vacuume etc. 6. Lack of motivation of staff: motivation encourages staff to do their services properly .but lack of motivation from high authority side, the staff dont know how, when and why to do this.   Dissatisfaction about the job   High level of absenteeism   The search for a replacement 7. Overburden of staff: due to less number of employees, the responsibilities of each staff member become double. For e.g. the person who cooks food, now doing dish washing as well. These type of workload became employees frustrated, irritated and they cant serve customers properly 8. Time consumption: due to lack of machinery and equipment, the whole process from food making to serving becomes time consuming the order that suppose to be completed in 4 min is now taking 9 min. 9. Hygienic problem: due to lack of proper staff and equipments, the hygienic problem increases. Because there is not proper cleaning of store inventory, kitchen, bathroom. So that the customer feel uncomfortable to sit on these places. 10. Lack of quality: quality is consistence conformance to customers expectation, the quality of product decreases day by day due to overall problems. 11. Incomplete order: due to untrained and rude staff the customers order remains uncomplete.This is also the main cause of their operation problem. Impressive burger failed its operation because of following reasons, Change management Change in impressive burger menu brought some uncertainties and new challeneges for the organisation which created a threat for the company because staff was not ready for a change because of unplanned change. People dont resist change , they resist being changed. (peter senge) If u want to make enemies, try to change something. (Woodrow Wilson) Impressive burger made change because of changing customer needs and preferences. Goal of change management is to ensure that procedure and standards are being followed efficiently and prompt handling of all changes, to minimise change related incidents and service quality to improve day to day operations in the organisation. The Need to Change The pressure of market forces organisation to change rapidly. Specified this persistent speed, influential discover they no longer can consider above choices before taking action. Organizations must be quick in considering and acting on changing needs in staffing. Leaders must ask: What kind of expertise they need? What kind of experts do we need in future? Ensure that we have exact amount of staff? Ensure that we have right amount in future too? Compare the cost of staffing with other same kind of business? These questions are difficult but essential and if we dont address these problems we have to react quick if problem happens in the organisation. Reduction in force almost always happens when we respond shoot from hip. Study explains us that downsizing is unsafe chance which means very less chance of improvement in revenue or production. Downsizing has different alternatives. There are thirteen different alternatives which explain either need for long term staffing and reduction in short term expenses. Last option number fourteen is considerably is one possible option as well.but I personally think that it is awrong choice for the organisation and its people because it is too much on the side corporate philosophy nowadays so it should be consider with other options. Several of the alternatives depend on two important points. They Share the Discomfort.  This seems to be a significant factor in the success of alternatives, according to researcher Wayne Cascio. Sharing the pain means that no one from executive to maintenance worker is immune from the strategies for saving money. Strong Human Resource Advantages.  The Human Resources Department must be proactive in developing career assessment, training and placement opportunities, and creative wage and benefit packages. Long-Term Staffing Alternatives 1.  Hiring Linked to Vision The institution identifies what skills it will need in order to meet its vision and goals. During job interviews, human resources and department managers need to ask questions specifically related to skills it will need now and in the future. This strategy helps assure that you are recruiting and hiring people who can meet future challenges. 2.  Cross Training By understanding the skill mix of staff today and linking it to the skills needed in the future, the organization allows individual employees to determine what they need to do in order to remain gainfully employed. It also gives the training department a clear mandate regarding the type of skills training they need to make available to staff. In Prahalad and Hamels excellent book  Competing for the Future, they suggest that businesses identify their core competencies and build strategies based on these fundamental building blocks. This provides a foundation for the organization and employees to build a career development process that matches what the organization needs. 3.  Succession Planning The institution needs to identify the types of management and technical skills it needs in various positions. Human Resources should work with line managers to identify likely candidates so that they can begin preparing them for positions once they become vacant. Often, succession planning is left to chance. Baseball provides a good analogy for effective succession planning. With its farm systems, players move up from A to AA to AAA as their skills increase and as openings occur. 4.  Redeployment within the Organization Redeployment can be linked to Alternative Placement, but it seems to be used most often within the organization. Successful redeployment requires: A sophisticated career management process so that managers and employees are aware of open positions. Career assessment and development activities that allow people to get ready for positions. One company linked individual career planning to corporate objectives so that people could see how their plans fit into overall direction. It allowed individuals who wished to remain within the company to make career development and placement decisions that increased their chances of succeeding. 5.  Creating Value-Added and Revenue-Enhancing Opportunities This is an Employee Buy Out within the organization. A group of employees create a new business or line of service that the company can market. (3M is a leader in this form of entrepreneurship.) Of course, the company does not enter this agreement lightly. When Ford was about to sell the name Mustang to a foreign automaker, engineers asked Ford leadership for a chance to reintroduce a Ford version of the car. Leaders said they would agree if the engineers could demonstrate that the car could be built to certain stringent quality specifications and manufacturing time that rivaled their most efficient operations. On their own time, the engineers developed plans that met these requirements. Cost-Saving Strategies 6.  A Comprehensive Model Automakers, as well as other industries in Japan, have adopted a series of steps they use as an alternative to downsizing. If the first step does not get the needed savings, they move to the next. Compensation. 50% of compensation is set, the other 50% is determined by profit or productivity measures. Hours. Cut the number of hours. Wages. Cut salaries. Placement. Make arrangements with other employers who will agree to take displaced workers. 7.  Reduced Hours A policy  is established that either places everyone in a particular job category on a flexible working arrangement or creates a flex-pool made up of volunteers from the department. The goal is to reduce the number of hours worked by each employee. Job sharing is a variation of flextime and has been used successfully in many organizations. People divide a job between them, with each person receiving proportionate benefits. 8.  Lower Wages Wages are lowered in order to save money. Wage reduction programs differ, but here are some typical elements: Everyone in the institution is part of the wage reduction program. Executive compensation is reduced by the highest percentage, followed by middle management, with non-management staff suffering the smallest percentage of loss. This is usually a temporary program instituted to get through a downturn or until other reductions such as attrition can take place. 9.  Attrition Attrition, or waiting for people to retire or leave on their own, can work in two ways: Natural attrition. Positions are not filled as people leave. This can work in an organization where turnover is sufficiently high to gain the savings quickly. Offer voluntary early retirement or other packages to people within a certain category, such as particular position or years of service. If this offer does not result in enough savings, it is extended to a broader pool. In an agreement between the Communication Workers of America and NYNEX, they created an eight-step process for reducing costs. 10.  Alternative Placement Offer early retirement incentives to pension-eligible employees in a specific area. If that doesnt get sufficient response, expand the pool and so on. None of these options includes downsizing. The organization makes arrangements with similar institutions or suppliers for placement. A variation of this occurred at ATT: after the company said it would downsize, they ran ads letting other technology companies know that there were many talented men and women available for positions. Although they have been accused of using this as a public relations gimmick, it has resulted in a significant number of requests for more information about potential candidates. 11.  Leave of Absence People are offered a leave of absence with full benefits for a specified period of time to help organization weather a downturn. Although people are promised a job upon completion of the leave, it may not be the same job or at the same pay level. This alternative must be used as a temporary measure to help an organization through a crisis. 12.  Employee Buy-Outs Some organizations have allowed employees to buy the operation that was slated for closing and set up their own business. 13.  Shared Ownership An alternative to wage cuts is concessions for equity. In other words, trading pay increases or pay cuts in return for company stock. This requires a high degree of employee participation in decision making. Employee ownership seems to falter when people are owners in name only, but are shut out of the decision making process. 14.  Downsizing Downsizing means that the organization makes a decision to terminate people against their will. Although sometimes described as getting rid of dead wood, the sweep of downsizing is much broader. (If an organization really has so much dead wood, shouldnt those who allowed this condition to persist be the ones to go?) There appears to be no good way to downsize. Studies indicate that in over half the cases, it does not meet its intended goals. And many companies find that they must rehire staff within a year. Morale and productivity often plummet. Among employees who remain after downsizing, more than half report increased stress. And the risk of violent behavior of people laid off is six times that of their employed counterparts. In a study of 531 large corporations, three-quarters reported having cut payrolls. Of the 85 percent that sought higher profits, only 46 percent saw any measurable increase. 58 percent sought higher productivity, but only 34 percent saw even a slight increase. 61 percent wanted an increase in customer service but only 31 percent achieved it. (function() { var scribd = document.createElement("script"); scribd.type = "text/javascript"; scribd.async = true; scribd.src = "https://www.scribd.com/javascripts/embed_code/inject.js"; var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(scribd, s); })() http://www.beyondresistance.com/ http://www.allbusiness.com/human-resources/workforce-management-hiring/359335-1.html

Political Risk Analysis Kenya 2012

Political Risk Analysis KENYA Table of contents Kenya covers an area of 582,646 square kilometers. The land stretches from the sea level (Indian Ocean) in the east, to 5,199 meters at the peak of the snow-capped Mount Kenya. From the coast, the altitude changes gradually through the coastal belt and plains (below 152 meters above sea level), the dry intermediate low belt to what is known as the Kenya Highlands (over 900 meters above sea level).The monotony of terrain in the low belt is broken by residual hills, masses of broken boulders and inselbergs. Settlement is confined to places where water can be found. Wildlife are masters of the greater part of the low belt. The famous Amboseli Game Reserve and Tsavo National Parks are situated here. The Great Rift Valley bisects the Kenya Highlands into east and west. Mount Kenya is on the eastern side. The Highlands are cool and agriculturally rich. Both large and small holder farming is carried out in the highlands.The Lake Victoria Basin is dominated by Kano plains which are suited for farming through irrigation. The northern part of Kenya is plain and arid. However, a variety of food crops do well through irrigation. Kenya is located approximately 8-10 hours flying time from major European cities, and about 16-20 hours flying time from North American cities. 1. 2. CLIMATIC CONDITIONS Kenya enjoys a tropical climate. It is hot and humid at the coast, temperate inland and very dry in the north and northeast parts of the country. The average annual temperature for the coastal town of Mombasa (altitude 17 meters) is 30. 0 Celsius maximum and 22. 40 Celsius minimum, the capital city, Nairobi (altitude 1,661 meters) 25. 20 Celsius maximum and 13. 60 Celsius minimum, Eldoret (altitude 3,085) 23. 60 Celsius maximum and 9. 50 Celsius minimum, Lodwar (altitude) 506 meters) and the drier north plain lands 34. 80 Celsius maximum and 23. 70 Celsius minimum. There is plenty of sunshine all the year round and summer clothes are worn throughout the year. However, it is usually cool at night and early in the morning. The long rains occur from April to June and short rains from October to December.The rain-fall is sometimes heavy and when it does come it often falls in the afternoons and evenings. The hottest period is from February to March and coldest in July to August. The annual migration of wildlife between Serengeti National Park in Tanzania and Maasai Mara National Park in Kenya takes place between June and September. The migration of almost two million wildebeest, zebras and other species is nature's greatest spectacle on earth. 1. 3. POPULATION Kenya’s population has rapidly increased over the past several decades, and consequently it is relatively young. Some 73% of Kenyans are under 30.In 50 years, Kenya’s population has grown from 7 million to 43 million. Kenya is a country of great ethnic diversity. Most Kenyans are bilingual in English and Swahili. Kenya has a very diverse populati on that includes three of Africa's major sociolinguistic groups: Bantu (67%), Nilotic (30%), and Cushitic (3%). Kenyans are deeply religious. About 80% of Kenyans are Christian, 11% Muslim, and the remainders follow traditional African religions or other faiths. Most city residents retain links with their rural, extended families and leave the city periodi-cally to help work on the family farm.About 75% of Kenya’s population lives in rural areas and relies on agriculture for most of its income. Nearly half the country’s 42 million people are poor, or unable to meet their daily nutritional requirements. The national motto of Kenya is Harambee, meaning â€Å"pull together. † In that spirit, volunteers in hundreds of communities build schools, clinics, and other facilities each year and collect funds to send students abroad. 1. 4. BACKGROUND OF KENYA’S ECONOMY (1960-2010) Kenya is the largest economy in east Africa and is a regional financial and transportat ion hub.After independence, Kenya promoted rapid economic growth through public invest-ment, encouragement of smallholder agricultural production, and incentives for private (of-ten foreign) industrial investment. Gross domestic product (GDP) grew at an annual average of 6. 6% from 1963 to 1973. Agri-cultural production grew by 4. 7% annually during the same period, stimulated by redistrib-uting estates, diffusing new crop strains, and opening new areas to cultivation. After experiencing moderately high growth rates during the 1960s and 1970s, Kenya's eco-nomic performance during the 1980s and 1990s was far below its potential.From 1991 to 1993, Kenya had its worst economic performance since independence. Growth in GDP stagnated, and agricultural production shrank at an annual rate of 3. 9%. In-flation reached a record 100% in August 1993. In the mid-1990s, the government imple-mented economic reform measures to stabilize the economy and restore sustainable growth, including lifting nearly all administrative controls on producer and retail prices, im-ports, foreign exchange, and grain marketing. Nevertheless, the economy grew by an annual average of only 1. 5% between 1997 and 2002, which was below the population growth estimated at 2. % per annum, leading to a decline in per capita incomes. The poor economic performance was largely due to inappropriate agricultural, land, and industrial policies compounded by poor international terms of trade and governance weaknesses. Increased government intrusion into the private sector and import substitution policies made the manufacturing sector uncompetitive. The policy environment, along with tight import controls and foreign exchange controls, made the do-mestic environment for investment unattractive for both foreign and domestic investors.The Kenyan Government's failure to meet commitments related to governance led to a stop-start relationship with the International Monetary Fund (IMF) and World Bank, both of which suspended support in 1997 and again in 2001. During President Kibaki's first term in office (2003-2007), the Government of Kenya began an ambitious economic reform program and resumed its cooperation with the World Bank and the IMF. There was some movement to reduce corruption in 2003, but the government did not sustain that momentum. Economic growth began to recover in this period, with real GDP growth registering 2. % in 2003, 4. 3% in 2004, 5. 8% in 2005, 6. 1% in 2006, and 7. 0% in 2007. However, the economic effects of the violence that broke out after the December 27, 2007 general election, compounded by drought and the global financial crisis, brought growth down to less than 2% in 2008. In 2009, there was modest improvement with 2. 6% growth. In May 2009, the IMF Board approved a disbursement of approximately $200 million under its Exogenous Shock Facility (ESF), which is designed to provide policy support and financial assistance to low-income countries facing exogenous bu t temporary shocks.The ESF re-sources were meant to help Kenya recover from the negative impact of higher food and in-ternational fuel and fertilizer costs, and the slowdown in external demand associated with the global financial crisis. In January 2011, the IMF approved a 3-year, $508. 7-million ar-rangement for Kenya under the Fund's Extended Credit Facility. To a considerable extent, the government's ability to stimulate economic demand through fiscal and monetary policy is linked to the pace at which the government is pursuing reforms in other key areas. The Privatization Law was enacted in 2005, but only became operational as of January 1, 2008.Parastatals Kenya Electricity Generating Company (KenGen), Telkom Kenya, and Kenya Re-Insurance have been privatized. The government sold 25% of Safaricom (10 billion shares) in 2008, reducing its share to 35%. Accelerating growth to achieve Kenya's potential and reduce the poverty that afflicts about 46% of its population will require c on-tinued deregulation of business, improved delivery of government services, addressing structural reforms, massive investment in new infrastructure (especially roads), reduction of chronic insecurity caused by crime, and improved economic governance generally.The gov-ernment's Vision 2030 plan calls for these reforms, but realization of the goals could be de-layed by coalition politics and line ministries' limited capacity. Economic expansion is fairly broad-based and is built on a stable macro-environment fos-tered by government, and the resilience, resourcefulness, and improved confidence of the private sector. Despite the post-election crisis, Nairobi continues to be the primary commu-nication and financial hub of East Africa.It enjoys the region's best transportation linkages, communications infrastructure, and trained personnel, although these advantages are less prominent than in past years. Kenya faces profound environmental challenges brought on by high population growth, de-forestation, shifting climate patterns, and the overgrazing of cattle in marginal areas in the north and west of the country. Significant portions of the population will continue to require emergency food assistance in the coming years. Kenya is pursuing regional economic integration, which could enhance long-term growth prospects.The government is pursuing a strategy to reduce unemployment by expanding its manufacturing base to export more value-added goods to the region while enabling Kenya to develop its services hub. In March 1996, the Presidents of Kenya, Tanzania, and Uganda re-established the East Afri-can Community (EAC). The EAC's objectives include harmonizing tariffs and customs regimes, free movement of people, and improving regional infrastructures. In March 2004, the three East African countries signed a Customs Union Agreement paving the way for a common market.The Customs Union and a Common External Tariff were es-tablished on January 1, 2005, but the EAC countrie s are still working out exceptions to the tariff. Rwanda and Burundi joined the community in July 2007. In May 2007, during a Com-mon Market for Eastern and Southern Africa (COMESA) summit, 13 heads of state endorsed a move to adopt a COMESA customs union and set December 8, 2008 as the target date for its adoption. On July 1, 2010, the EAC Common Market Protocol, which allows for the free movement of goods and services across the five member states, took effect.In October 2008, the heads of state of EAC, COMESA, and the Southern African Development Communi-ty (SADC) agreed to work toward a free trade area among all three economic groups with the eventual goal of establishing a customs union. If realized, the Tripartite Free Trade area would cover 26 countries. 2. POLITICAL CRITERIA 2. 1. GENERAL From the moment Kenya became independent, they went through lots of big changes. In 1962 the KANU-KADU coalition government was formed. The coalition government included both Kenyatta and N gala.The country was divided in 7 regions and each one of the regions had its own regional assembly. After forming the coalition, the principle of reserving seats in the parliament for non-Africans was abandoned and the first open elections were held in May 1963. In 1964 Kenya became a republic, and constitutional changes further centralized the government (Wikipedia – September 2012). When in 1978 Daniel Arap Moi became president in an authoritarian and corrupt manner, there were several changes in the politic of Kenya.Moi reduced the power of the Kenyatta’s men in the cabinet by identifying them to be traitors. Also although the parliament started off as coalition during the whole presidency of Moi there was only one party who had all the power. Even after being requested by United States to have multi-party system Moi declined. In the end because of the local and foreign pressure Moi was forced to accept a new party so that the multy-party could be restored. Moi won the elections in 1992 and 1997 where he used fear and electoral fraud to win (Wik-ipedia – July 2008).In 2002 Moi was not able to present himself in the presidential elections because it is stated in the Kenya’s constitution that a present cannot be in the presidential elections more than three times. Moi unsuccessfully tried to promote Uhuru Kenyatta, as his successor. Moi’s former vice-president Mwai Kibaki was elected president by a large majority. International and local observers reported that the 2002 elections to be generally more fair than those of both 1992 and 1997 when Moi was elected as president. Kibaki lost quickly much of its power because his regime was too close linked with the Moi forces.The continuity between Kibaki and Moi became one of the reasons for the self-destruction of Kibaki’s regime. In 2007 Odinga attacked the failures of the Kibaki regime. In December Odinga won majority of the seats in the Parliament, but the presidential elections votes were divided. In the end it became never clear who won the elections, still the election committee stated that Kibaki was the winner. Odinga accused Kibaki of corruption which resulted in several big confrontations between followers of Odinga and Kibaki. The European Union did not agree with the outcome either because of the detected fraud in the presidential elections.As relation mass protest were triggered, bring-ing simmering ethnic tensions. The protest and the ongoing violence between several groups continued and became worse over the months. Between December and February 1. 500 people died and 600. 000 people became homeless. The United Nations tried to settle and offered a compromise whereby Kibaki stayed president and Odinga became Prime Minister (Chartis – February 2008). In August 2010, a reference date taken on a new Kenyan constitution. The new Kenyan con-stitution restricted the power of president which would benefit to the parliament and re-gions .The reference date was accepted by the majority of parliament and passed peacefully. 2. 2. THE POLITICAL BALANCE OF POWER Various people speak of the heritance of Moi when looked at Kibaki and the amount of pow-er he has. Moi reduced the power of the cabinet – this resulted in more power for him, the president. When Kibaki became the president he had his first years as much power as Moi had in his years. But the second time Kibaki became president there were many protests against him becoming the president. Many people and also Odinga accused him winning unfairly.United Nations stepped in and made Odinga prime minister and shortly after that the Kenyan constitution changed. With the new Kenyan constitution rules Kibaki, or the pre-sent president, is not allowed to appoint more than 50% of the ministers. The rest of the ministers can be chosen by the prime minister. In this way the president is never able to al-ways have full support by his ministers. Nowadays you can speak o f a power-sharing cabinet in Kenya. The cabinet is fifty percent Kibaki appointed ministers and fifty percent Odinga appointed ministers.At the moment we can speak of balanced coalition when we look at Kenya. 2. 3. PRESENT GOVERNMENT AND HIS ATTITUDES AND PROGRAMS Although many opposed of Kibaki to become the president Kenya again in 2007 he did by some say an outstanding job. The country is compared to the Moi years much better man-aged and has by far more competent personnel (Wikipedia – October 2012). Many sectors of the economy have recovered from collapsing in 2003. So did many state corporations who had collapsed during the Moi years have been revived and are performing profitably. Also the infrastructure has been going through changes.Several ambitious infra-structural and other projects are planned or ongoing. Kibaki also introduced the Constituency Development Fund, this was introduced in 2003. The fund was designed to develop resources across regions and to control imbalances in regional development. The CDF program has invested in putting up new water, health and education facilities. There was also special attention for the remote areas of Kenya; these areas were usually overlooked during projects (CDF – official website). Another fact is since the presidency of Kibaki the dependence of Kenya on aid by western donors has been decreased.The country is still getting funded significant but is now finding more fund by internally generated resources, such as tax. During Kibaki presidency, Kenya was more democratic and freer than before. When Kibaki came to power in 2003, he gave away free learning in primary school as well as in secondary school. This resulted in increase of number of children in primary- as in secondary school. 2. 4. POLITICAL STABILITY IN KENYA Before August 2010 all the power laid in the hands of the president. Ex-president Moi for example used his position for his own benefits.After the new Kenyan constitution the powe r changed of only one person, the president, too have it shared with the cabinet. With the new Kenyan constitution it results in a more stable government. When we look at the further the cabinet of Kenya will go through huge changes starting from 4 March 2013, because the general election will then be held. So far Kibaki did not state that he will run in the president elections next year. Odinga will be participating as well as several other ministers, for example: the Deputy prime minister and the Cooperative minister (Wikipedia – October 2012). . CRITERIA RELATED TO DOMESTIC ECONOMY 3. 1. GENERAL INFORMATION Most of Eastern Africa's economy is centralized in Kenya, although this gives them a power-ful position they still suffer from corruption and the low prices of their most important ex-port products. Lately the government has lacked investing in infrastructure which leaves them in danger of losing the position of the largest economy in Eastern Africa. The government is a ccused of the lack of attempting to stop the corruption which opened the doors to a lot of scandals within Kenya's economy.This has led to a deduction of financial support options. Recently Kenya have had a lot of setbacks like: high food and fuel import prices, a severe drought and reduced tourism resulted in rise in the interest rated and an increased cash re-serve. 3. 2. GDP The GDP in 2011 was $ 72, 34 billion, in 2010 this was $ 68,9 billion and in 2009 $ 2,6 billion. GDP growth in % Because of violence used during the elections plus the global financial crisis have led to a deduction in the GDP, in 2008 the growth was only 1,7% but luckily the economy rebounded since the year 2009.Now in 2011 the growth was only 4,3% due to the inflation and currency depreciation. The GDP per capita was $1,700 in 2009 and in 2010 and increased to $1,800 in 2011. If you would compare this with the rest of the world this leaves Kenya on the 195th place in the, which is dangerously low when we lo ok at the risk of doing business with Kenya. Year PPP growth 20051398. 7034. 74 % 20061490. 4066. 56 % 20071592. 9866. 88 % 20081604. 9250. 75 % 20091616. 1430. 70 % 20101675. 9183. 70 % Even though historical facts do not look good, the forecast concerning the GDP are looking better.The GDP is likely to increase due to expansions in tourism, telecommunications, transport and construction and recovery in the agriculture, one of the most important sec-tors for Kenya's GDP. 3. 3. MOST IMPORTANT SECTORS AND PRODUCTS As mentioned before, one of the most important sectors in Kenya’s economy is the agricul-tural sector, forestry and fishing accounted for 24% of the total GDP, 18% of the wage em-ployment and 50% revenue from exports. Especially the tea production and export are likely to increase because of prosperous weath-er forecasts; the coffee industry has stagnated and is not likely to increase in the near future.The most profitable sector in Kenya is the service sector with t ourism dominating that sec-tor. About 63% of all GDP is generated by tourism. Most tourists come from Germany and the Uniting Kingdom; they are attracted to the coastal beaches and the big game reserves. The tourism sector had a downfall because of negative attention in the media and the unsafe environment. The government is currently addressing the security problems within Kenya by introducing a tourism police and by launching marketing campaigns in key tourist origin markets.The most important sectors are: consumer goods (mobile, batteries and textile), agriculture, oil, aluminum, steel, cement and tourism. 3. 4. INFLATION RATE Inflation in consumer prices in % The inflation rate in 2011 was 14%. As we can see on the chart the inflation rate fluctuates a lot which means it will have a negative effect on the analysis on the risk. The Kenyan inflation rate has been on an average of 12,6%, from 2006 until 2012. The ultimate high was 31,5% in May 2012 and 3,2% in October 2011. On the following chart we can see the inflation rate more specified in recent times.Even in the last months there has been a lot of fluctuation in the inflation rate. The main reasons for the fluctuations are droughts and uncertainty in the import and export prices. 3. 5. THE GROWTH OF THE POPULATION The current total population is 43,013,341 (July 2012). In this chart we can see that the population always has had a steady growth. 3. 6. DOMESTIC INFRASTRUCTURE Kenya has an extensive road network of 152887 kilometers but most of the roads are in bad state unfortunately. For example of the total of 63. 800 ilometers of high way only 8,868 are paved. There is currently a project designed for creating links between all major and minor roads and to rehabilitate 20. 000 kilometer of roads in the urban centers. Kenya has a state owned railway corporation which is managing the single track railway station. It runs from Mombasa through Nairobi to the Ugandan border. Certain institutes are investing in the railway corporation to make it viable. The government is working on making the railway a private owned company. Either way, the Kenyan railway station is in a bad state.Kenya has a port located in Mombasa; it has a freight throughput of about 8. 1 million tons. Kenya has an airport that recently has changed from a state owned company to a public/private company. This has been successful since Kenya now is the key gateway to Africa Communications Overall Kenya has a well-established communication system More than 90% of the population has access to GSM signals. Kenya Posts and Telecommunications Corporation provides international direct dialing and subscriber trunk dialing, mobile telephones, telex, facsimile, data communication and related services.Substantial investment for the expansion of these facilities is under way and various internet providers have made their entry into Kenya. 4. CRITERIA RELATED TO FOREIGN ECONOMY Economic Cooperation, Regional Integration & Trade T he East African Community (EAC) countries – Kenya, Tanzania, Uganda, Rwanda and Burun-di – transformed into a fully ? edged and enforceable customs union on 1 January 2010. They adopted a common external tari? (CET) with three bands: 0% (raw materials and capital goods), 10% (intermediate goods) and 25% (? nished goods). Tari? of up to 100% are appli-cable to products that are deemed to be sensitive to member states. These include maize, rice, cement, sugar and dairy products. Members will continue to collect customs receipts separately until a revenue sharing mechanism can be agreed. Furthermore, the EAC Common Market Protocol came into force on 1 July 2010, potentially allowing for the free movement of goods, services, people and capital in a zone with a com-bined population of some 135 million people. Given the large amount of legislation that needs to be amended in all countries to comply with the protocol, the transition is expected to proceed slowly.Kenya has alr eady taken signi? cant steps to domesticate and embrace the provisions of the protocol. A task force charged with reviewing national laws and aligning them with the Common Market Protocol has completed its report. Areas that need harmonization include investment, tax, labor, education, standards, competition, transport, communications and ? nancial services. The report was forwarded to the attorney general who was expected to prepare a miscellaneous amendment bill to be tabled in parliament. Non-tari? barriers (e. g. road blocks, varying quality standards, the ine? ient functioning of the port of Mombasa and other red tape) continue to impede the free trade in goods and add to the costs of doing business. The replacement of paper-based customs administration practices with an electronic inter-face system, Simba, is a strong step towards enhancing competitiveness and trade facilita-tion. With the bringing into operation of Simba customs checks are subjected to computer-ized scanning and fewer physical checks are undertaken. The programme has enabled im-porters and exporters to lodge their documentation on line.In 2012, the Simba upgrade is expected to increase automation of goods clearance across all Kenyan border crossings. 4. 1. IMPORT 2011 While Kenya had just spent 3. 3 billion US Dollars on merchandise imports in 99’, they imported goods worth to 13. 49 billion US Dollar in 2011 which is an increase of over 400%. The depressed performance during the 2008-09 was due to a number of adverse shocks including the post-election violence in early 2008, a severe drought that affected most parts of the country, high international commodity prices and spillover effects of the global financial crisis, but the econ-omy rebounded in 2010.Import Products The major import products for the year to June 2011 were oil, manufactured goods, chemi-cals, machinery and transport equipment. The increase in the value of imports was mainly due to imports of oil, machinery an d transport equipment, and manufactured goods. Oil imports accounted for 24. 2% of the total import. International oil prices increased from USD 74. 8 per barrel in June 2010 to USD 112. 15 per barrel in June 2011. Imports of machinery and transport equipment accounted for 28. 9% of total imports, and increased from USD 3 212 million to USD 3 942 million.This was due to the ongoing infra-structure development. Imports of manufactured items, mainly intermediate goods, accounted for 14. 8% of the im-port bill and increased from USD 1. 625 million to USD 2. 021 million while chemicals ac-counted for 13. 5%. Major Import Partners Kenya’s major import partners for merchandise are (2011): 1United Arab Emirates13. 0% 2China12. 1% 3India11. 6% 4South Africa5. 8% 5United Kingdom4. 6% 4. 2. EXPORT 2011 Kenya had received 2. 2 Billion US Dollar in 99’, while they could increase their receiving for ex-ports in 2011 to 5. 77 Billion US Dollar.This is an increase of about 260%. The depressed performance during the 2008-09 was due to a number of adverse shocks including the post election violence in early 2008, a severe drought that affected most parts of the country, high international commodity prices and spillover effects of the global financial crisis, but the economy rebounded in 2010. Export Products The agricultural sector continues to dominate Kenya’s economy, although only 15 percent of Kenya’s total land area has sufficient fertility and rainfall to be farmed, and only 7 or 8 per-cent can be classified as first-class land.It is the mainstay of Kenya's economy, contributing over one third of the Gross Domestic Product (GDP). AGRICULTURAL PRODUCTS:Tea, coffee, horticultural products, pyrethrum, pineapples, sisal, tobacco and cotton. TOP 1 – TEA Kenya is one of world`s top producers and exporters of high quality tea and coffee. Value of the produce was boosted by the average auction price TOP 2 – HORTICULTURE The robust flower industry in Kenya sees flower exports ac-counting up to 35% of all Europe’s flower imports. The good performance recorded in the horticultural sub-sector was due to improved external demand.OTHER EXPORTS:Beside this also iron, steel, petroleum products, cement, arti-cles of plastics, medicinal and pharmaceutical products, and leather are exported Textile is Kenya’s leading manufactured export. Soda ash (used in glassmaking) is Kenya’s most valuable min-eral export and is quarried at Lake Magadi in the Rift Valley. SERVICES: Transport, tourism and telecommunications services are the top three service exports in the country. Kenya’s services sector, which contributes about 63 percent of GDP, is dominated by tourism. TOURISM: In 2011 tourism experienced signi? cant gains with earnings rising by 32. %. The United King-dom continued to be the country’s main departure point for tourists with 203. 290 arrivals. Tourism is the second most important source of foreign exchange. To maximize on this growth trend, the Government is working together with the private sector in carrying out marketing as well as in strengthening linkages between tourism and the rest of the economy. Major Export Partners The market for Kenyan exports has been transformed over the years due to changing policy environment, regional integration and other initiatives providing market access to 12 key trading blocks.The initiatives include the East African Community, the Common Market for Eastern and Southern Africa (COMESA), Cotonou ACP/EU Partnership Agreement, and the AGOA initiative, among others. COMESA is Kenya’s key export market, absorbing about 35% of total exports. The European Union market is the second most important, absorbing about 30% of total exports. Kenya’s major export partners for merchandise are (2011): 1COMESA (e. g. Uganda, Tanzania etc. )35. 0% 2European Union30. 0% 3United States5. 6% 4Pakistan4,2% 5United Arab Emirates4,1%Ke nya's relations with Western countries are generally friendly, although current political and economic instabilities are sometimes blamed on Western pressures. ? 4. 3. THE IMBALANCE IN TRADING Kenya is largely a trade deficit country. The negative balance of trade occurs because the country's exports are vulnerable to both international prices and the weather conditions. Since independence, Kenya has enjoyed close international relations, particularly with the western countries. It is also a member of several regional trade blocs, such as the COMESA (Common Market for Eastern and Southern Africa) and the EAC (East African Community).These blocs are key components of Kenya’s trade volumes. The 2011 Kenya’s trade performance was mainly affected by rise of oil prices globally which led to increase in the import bill and the depreciation of the Kenya shilling, while exports remained stagnant. The gap between imports and exports, also called current account deficit, now sta nds at above 10% of GDP – one of the highest in the world! Today, Kenya’s main exports don’t even earn enough to pay for its oil imports, 4. 4. KENYAN CURRENCY The recent history of Kenyan currencyOn 14 September 1966, the Kenyan shilling (KES) replaced the East African shilling at par, although it was not demonetized until 1969. The Central Bank of Kenya issued notes in de-nominations of 5, 10, 20, 50 and 100 shillings. Locals in Kenya call the Kenyan shilling also â€Å"Bob†. The Kenyan Shilling: Development of the Kenyan shilling Overview of the development of the Kenyan shilling (blue) compared to the US Dollar (red) between 2002 and 2012. Exchange rate in October 2012: EUR / KES 1 Euro = ca. 110,38 Kenya shilling 100 Kenya shilling = ca. 0,91 Euro EUR / USD 1 Euro = ca. 1,29 US Dollar 100 Kenya shilling = ca. ,18 US Dollar 4. 5. KENYAN MONETARY POLICY The year 2011 was tumultuous for the monetary authorities in Kenya with high inflation rates and a h eavily depreciated currency. The month–on-month inflation rate averaged 12. 9% from January to October and peaked at 19. 7% in November 2011 against a target of 5%. The high rate of inflation was mainly driven by a rise in food and non-alcoholic beverage prices and transport charges. The food and non-alcoholic beverages index rose by 26. 2% compared with October 2010 while the transport index rose by 26. 22%. The rise in transport index reflected the sharp rise in fuel prices.According to the Central Bank of Kenya (CBK), the euro-area currency crisis also had a desta-bilizing effect on the price level. Inflation is expected to drop to single digits in the next two years thanks to improved production of food and stability of fuel prices. In 2011 the Kenyan shilling depreciated (=im Wert gefallen) by a margin of 25. 2% against the US dollar (USD), dropping from an average of KES 81. 11 per USD 1 in January 2011 to KES 101. 51 in October 2011. It depreciated against the euro (EU R) from an average of KES 108. 29 per EUR 1 in January to KES 139. 07 in October 2011.To arrest the fall of the Kenyan shilling, the monetary policy committee (MPC) progressively increased the central bank rate (CBR) from a low of 6% in January 2011 to a high of 18% by December 2011. The inflationary pressure experienced in 2011 and the depreciation of the Kenyan shilling can directly be traced back to the Central Bank of Kenya policy adopted in 2010, when it cut the central bank rate from 7% in January to 6% in December. This was meant to revive lend-ing and stimulate the economy through increased consumption. The policy was highly suc-cessful as evidenced by the 5. 6% growth attained in 2010.However increased consumption pushed up consumer prices and put pressure on the Kenyan shilling as it heightened demand for imports, which rose from USD 11,283 million in year 2009/10 to USD 13,659 million in year 2010/11. Furthermore, in year 2010/11, domestic credit increased by KES 254. 4 b illion (23. 4%) against a target of KES 205. 9 billion (18. 9%). The excess credit growth reflected a stronger domestic demand than previously estimated. 4. 6. KENYAN’S DEBT SITUATION Kenya’s external debt (or foreign debt) External debt is that part of the total debt in a country that is owed to creditors outside the country.This is not to be confused with actual government debts. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank. List of countries by external debt (End of 2011): External debt. (in USD)per capita% of GDP 1 United States14,710,000,000,00050,266103 2 United Kingdom9,836,000,000,000156,126390 3 France5,633,000,000,00074,619182 4 Germany5,624,000,000,00057,755142 5 Japan2,719,000,000,00019,14845 Italy2,684,000,000,00036,841108 7 Netherlands2,655,489,600,000226 ,503344 8 Spain2,570,000,000,00018,26084 16 Austria 883,500,000,00090,128200 92 Kenya 7,935,000,00020025 The debt service ratio The debt service ratio is the ratio of debt service payments (principal + interest) of a country to that country’s export earnings. A country's international finances are healthier when this ratio is low. The ratio is between 0 and 20% for most countries. For example, if a country has export revenue of ? 100bn and pays ? 15bn interest payments on its external debt, then its debt service ratio is 15%.A rising debt service ratio is often the sign of an imminent economic crisis. Debt service ra-tios may rise because of: †¢A fall in exports †¢Lower price of commodities which are main exports of a country. †¢Higher Borrowing †¢Higher interest rates increasing cost of debt repayments †¢Devaluation increasing cost of external repayments. 5. CONCLUSION All in all Africa has a big potential for exports and investments as there are sti ll big growth opportunities. Kenya has the greatest growth potential in the Sub-Saharan area followed by South Africa. However there are some recommendations to bear in mind (e. . Letter of credit, creditworthiness check,†¦ see list at end of paper) Following there is an overview of the key advantages and disadvantages for exporting to or investing in Kenya: +- Stable economy and good eco-nomic prospectspolitical instability ? political riskBUT: increasing political stability since peaceful referendum in 2010 ? adoption of a new con-stitution Favourable strategic geographical position and access to export mar-kets (? Eastern Africa) corruption and impunity (=Straflosigkeit) BUT: High efforts to bring the problem under control: since 2010 ?Kenyan Anti-Corruption Commission forced high-profile cabinet ministers to step aside and the International Criminal Court publicly named perpetra-tors of violence (=Gewalttater) Membership of the largest African common market, the EAC (Easter n African Community), COMESA and the Southern African Development Community (SADC) ? enables the free movement of goods and ser-vices across the member statesInadequate infrastructure for absorption of economic devel-opmentBUT: High efforts to catch up on infrastructure English languagewidespread poverty ? crime Mombasa seaport ? most impor-tant seaport + Nairobi ? olitical and economic stronghold in the Eastern African Areacompanies are often undercap-italized ? risk of late or non-payment Small time difference Small taxes and levies (=Abgaben) Low wages compared to European countries and well trained em-ployees Emerge of a middle class with increasing purchasing power Kenya plays a major role in the Eastern African economy. Mombasa is the most important seaport in Eastern Africa and Nairobi is the economic and political stronghold in this area. One big plus for exports to or investments in Kenya is that the country has a quite stable economy. Even there were some setbacks in the p ast (e. . violence during the last elections in 2008, global financial crisis) the outlook for Kenya’s economy and GDP is quite favourable for the future. Due to the expansionary of fiscal measures and by structural business reforms driven by the IMF the economy of Kenya will further improve in the past few years. Addi-tionally the recovery of agricultural production and investment in infrastructures will also contribute to the dynamism of the economy. These are quite good prerequisites for potential exporters and investors. Even if Kenya’s investment prospects are quite attractive they had been marred by political risk for a long time.Violence during the election in 2008 frightened away many potential investors. The turning point for Kenya was the peaceful referendum in 2010 where a new country’s constitution was decided (? separation of powers). The peacefulness around the referendum had a huge positive impact on the country. Following this event Standard and Poors increased the credit rating to level B+ which brings Kenya closer to a score that foreign investors regard as an all-clear signal. Nevertheless exporters and investors need to be careful about the political situation in Kenya as new elections will take place in March 2013.The electoral campaign carries significant risks of a resurgence of the violent confrontations within the ethnic groups in Kenya. Our opinion is that Kenya has a huge potential for exporters and investors. It has a solid eco-nomic basis and political stability is already improving, so we would export to or invest in Kenya. Our recommendation prior to do export or investment is the following Exporters/Investors†¦ †¢Ã¢â‚¬ ¦ need to check the local partner/customer in Kenya carefully It is very important to have a reliable, reputable partner in Kenya.Creditworthiness should be checked prior to doing business with them. †¢Ã¢â‚¬ ¦insist on payment by letter of credit Especially when doing business w ith a customer/partner the first time it is advisable not to sell under open payment terms. It could than occur that the exporter would never receive his money. A letter of credit is used to eliminate the risk such as unfa-miliarity with the foreign country, customs or political instability. †¢Ã¢â‚¬ ¦ should not admit corruption Corruption in a foreign country is also indictable in Austria. Austrian exporters may also be reliable for their Kenyan partners.Therefore it is advisable to agree on anti-corruption clauses in the contract. In case an Austrian exporter would admit corruption the export insurance will not be valid anymore. †¢Ã¢â‚¬ ¦ need to consider and watch the political situation When political unrests occur it may be advisable to stop exports until the unrests have calmed down. 6. SUMMARY MILESTONE HISTORYThe independent Republic of Kenya was founded in December 1963. JOMO KENYATTA was the first president (until 1978). Kenyatta's long presidency provided the co untry with stability. GEOGRAPHIC FEATURES †¢580. 000 km2 †¢42 million inhabitants †¢Capital City: Nairobi Language: English, SwahiliThe Republic of Kenya is a country in East Africa that lies on the equator with the Indian Ocean to its south-east. It is bordered by Tanzania to the south, Uganda to the west, South Sudan to the north-west, Ethiopia to the north and Somalia to the north-east. Kenya has a land area of 580. 000 km2 (7 times bigger than Austria) and a population of about 43 million residents. It is to stress out that 75% of the population is younger than 30 years. Its capital and largest city is Nairobi. English is the language of choice when doing business in Kenya and is also used in Kenyan schools.Swahili (also called Kiswahili) is the national language of Kenya. It is a unifying African language spoken by nearly 100 percent of the Kenyan population. CLIMATIC CONDITIONSKenya has a warm and humid climate along its coastline on the Indian Ocean, which chan ges to wildlife-rich savannah grasslands moving in-land towards the capital. Nairobi has a cool climate that gets colder ap-proaching Mount Kenya (5. 166m), which has three permanently snow-capped peaks. 1. OVERVIEW OF THE COUNTRY 2. POLITICAL CRITERIA 2002 transitional election 2007 accusation of electoral ma-nipulation resulted in violent riots in KenyaAugust 2010: peaceful referen-dum in passing a new constitution Kenya has seen significant political changes in the last decade. The his-toric 2002 transitional election, in which the National Rainbow Coalition (NARC) defeated the long-ruling Kenya African National Union, created a major political shift and inspired optimism among citizens about the future of their country as a multiparty democracy. Kenyans went to polls in large numbers for the December 2007 general elections, but the elections turned violent after accusations of electoral manipulation. More than 1. 00 Kenyans died and more than 600. 000 were displaced. Peace was r estored following the signing and enactment of the National Accord and the creation of the Grand Coalition Government (GCG), a power-sharing deal ending a political stalemate between President Mwai Kibaki of the Party of National Unity and Raila Odinga of the Orange Democratic Movement. The National Accord also set out an ambitious reform agenda including a review of the country’s constitution. In August 2010, a largely fair and peaceful referendum resulted in pass-ing a new constitution.The new constitution was a landmark NEW ELECTIONS IN 2013 risk of new post-electoral vio-lence and rumorsachievement for the GCG as it enforces broad changes to the govern-ance framework, including: a new devolved system of government; reduced presidential powers, a reformed electoral process, more defined separation of powers between the three branches of government; land reform; and an expanded bill of rights. Government institutions, civil society, political parties and citizens face an am bitious and challenging period as they enact the reforms dictated by the new constitution.Kenya’s political dynamics also are likely to be influenced by the outcome of the International Criminal Court (ICC) proceedings in which six prominent Kenyans are accused of involvement in the 2008 post-election violence. It is not yet clear whether the charges will be upheld by the ICC. Kenyan leaders are under increasing pressure to continue rebuilding their country and to avoid a repeat of the 2008 post-election crisis as the country heads into general elections in 2013. 3. KENYA’S DOMESTIC ECONOMY DOMESTIC ECONOMY The economy experienced moderate growth in 2011 but is expected to rise modestly in 2012 and 2013 respectively.The year 2011 witnessed drastic currency depreciation and rapid inflation, both of which are ex-pected to stabilize in 2012 and 2013. Youth unemployment constitutes 70% of total unemployment. In 2011 Kenya’s economy recorded â€Å"checked† gro wth, primarily driven by financial intermediation, tourism, construction and agricultural sectors. Gross domestic product (GDP) growth rate for the first nine months was estimated at 4. 2%, down from 4. 9% in the same period in 2010. Overall, growth in 2011 was curtailed by an unstable macroeconomic environment characterized by rising inflation, exchange rate depreciation and high energy costs.The country also experienced limited rainfall in the first half of 2011, which affected aggregate food production. In January 2011, the Kenyan government was forced to ask the IMF for support to counter the mounting financing pressures caused by a widening current account deficit. Certain other structural constraints, such as widespread corruption and poor infrastructure, also continued to undermine Kenya’s growth potential. 4. KENYA & FOREIGN ECONOMY IMPORT While Kenya had just spent 3. 3 billion US Dollars on merchandise im-ports in 99’, they imported goods worth to 13. 49 bill ion US Dollar in 2011 which is an increase of over 400%.The depressed performance during the 2008-09 was due to a number of adverse shocks including the post election violence in early 2008, a severe drought that affect-ed most parts of the country, high international commodity prices and spillover effects of the global financial crisis, but the economy rebounded in 2010. IMPORT PRODUCTS The major import products for the year to June 2011 were oil, manu-factured goods, chemicals, machinery and transport equipment. The increase in the value of imports was mainly due to imports of oil (International oil prices increased) IMPORT PARTNERS1. United Arab Emirates -> 13. % 2. China -> 12,1% 3. India -> 11. 6% 4. South Africa -> 5,8% 5. United Kingdom 4,6% EXPORT Kenya had received 2. 2 Billion US Dollar in 99’, while they could in-crease their receivement for exports in 2011 to 5. 77 Billion US Dollar. This is an increase of about 260%. The depressed performance during the 2008-09 w as due to a number of adverse shocks including the post-election violence in early 2008, a severe drought that affect-ed most parts of the country, high international commodity prices and spillover effects of the global financial crisis, but the economy rebounded in 2010.EXPORT PRODUCTSThe agricultural sector continues to dominate Kenya’s economy, alt-hough only 15 percent of Kenya’s total land area has sufficient fertility and rainfall to be farmed. Tourism currently is Kenya’s third largest foreign-exchange earner after tea and horticulture (flowers) EXPORT PARTNERSCOMESA (East-South Africa) -> 35. % European Union ->30% United States -> 5,6% Pakistan -> 4,2% United Arab Emirates -> 4,1% IMBALANCE IN TRADING Kenya is largely a trade deficit country.The negative balance of trade occurs because the country's exports are vulnerable to both interna-tional prices and the weather conditions. The gap between imports and exports, also called current account deficit, n ow stands at above 10% of GDP – one of the highest in the world! Today, Kenya’s main exports do not even earn enough to pay for its oil imports. ECONOMIC COOPERATION, REGIONAL INTEGRATION & TRADE COMMON EXTERNAL TAFFIFF VISION STRATEGIC OPPORTUNITYThe East African Community (EAC) countries – Kenya, Tanzania, Uganda, Rwanda and Burundi – transformed into a fully-fledged and enforceable customs union on 1 January 2010 allowing for the free movement of goods, services, people and capital in a zone with a combined population of some 135 million people. The next phase of the integration will see the bloc enter into a Monetary Union and ultimately become a Political Federation of the East African States. They adopted a common external tariff (CET) with three bands: 0% (raw materials and capital goods), 10% (intermediate goods) and 25% (finished goods).Tariffs of up to 100% are applicable to products that are deemed to be sensitive to member states. These includ e maize, rice, cement, sugar and dairy products. The Vision of EAC is a prosperous, competitive, secure, stable and politically united East Africa; and the Mission is to widen and deepen Economic, Political, Social and Culture integration in order to improve the quality of life of the people of East Africa through increased competitiveness, value added production, trade and investments. EAC has a combined population of more than 135 million people, land area of 1. 2 million square kilometres and a combined Gross Domestic Product of $74. 5 billion. This bears great strategic and geopolitical sig-nificance and prospects of a renewed and reinvigorated East African Community 5. CONCLUSION POTENTIAL OF KENYAAll in all Africa has a big potential for exports and investments as there are still big growth opportunities. Kenya has the greatest growth potential in the Sub-Saharan area after South Africa. However there are some recommendations to bear in mind (e. g. Letter of credit, creditwort hiness check,†¦) ADVANTAGESRISKSStable economy and good eco-nomic prospectspolitical instability ? political riskBUT: increasing political instability since peaceful referendum in 2010 ? adoption of a new constitution Favourable strategic geographical position and access to export mar-kets (? Eastern Africa) corruption and impunity (=Straflosigkeit) BUT: High efforts to bring the problem un-der control: since 2010 ? Kenyan Anti-Corruption Commission forced high-profile cabinet ministers to step aside and the International Criminal Court publicly named perpetrators of violence (=Gewalttater) ADVANTAGESRISKSMembership of the largest African common market, the EAC (Eastern African Community), COMESA and the Southern African Development Community (SADC) ? enables the free movement of goods and ser-vices across the member statesInadequate infrastructure for absorption of economic devel-opmentBUT: High efforts to catch up on infrastruc-ture English languagewidespread poverty ? crime Mombasa seaport ? most impor-tant seaport + Nairobi ? political and economic stronghold in the Eastern African Areacompanies are often undercap-italized ? risk of late or non-payment Small time difference Small taxes and levies (=Abgaben)Low wages compared to European countries and well trained em-ployees Emerge of a middle class with increasing purchasing power OUR RECCOMENDATIONS Exporters/Investors†¦ †¦ need to check the local partner/customer in Kenya carefully It is very important to have a reliable, reputable partner in Kenya. Cre-ditworthiness should be checked prior to doing business with them. †¦insist on payment by letter of credit Especially when doing business with a customer/partner the first time it is advisable not to sell under open payment terms. It could than occur that the exporter would never receive his money.A letter of credit is used to eliminate the risk such as unfamiliarity with the foreign country, customs or political instability. †¦ s hould not admit corruption Corruption in a foreign country is also indictable in Austria. Austrian exporters may also be reliable for their Kenyan partners. Therefore it is advisable to agree on anti-corruption clauses in the contract. In case an Austrian exporter would admit corruption the export insur-ance will not be valid anymore. †¦ need to consider and watch the political situation When political unrests occur it may be advisable to stop exports until the unrests have calmed down.

M.U.N. Position Paper: Algeria’s Stance on ISIS Essay

Algeria is home to millions of people, including those of all faiths. As one of North Africa’s leading military powers, our government swore to protect the people of Algeria. However, the recent encroachment of the ISIL group throughout much of Syria and Iraq has caused major concerns throughout the international community. ISIL is growing stronger everyday, and they have been encouraging jihad towards western countries. It is the duty of Algeria to ensure the safety of our citizens, and action must be taken to destroy this cancer. Recently, the self-proclaimed Jund Al-Khilafah in Syria group has executed a French citizen. Algeria feels strongly against jihad. It is a shame that Algerian men who have been blinded by ISIL were involved in such an incident. Algeria takes a firm stance against the actions undertaken by ISIL. Algeria has been building strong relationships with many of its European neighbors to the north. The implementation of the European Neighborhood Policy has r esulted in us developing closer ties to many European powers. We stand by our European allies in these dangerous times. However, Algeria is not yet ready to commit military resources towards directly fighting ISIS. Algeria must deal with domestic terrorism issues first before going through with any plan to fight ISIS. Even though these domestic terrorist groups have pledged allegiance to Abu Bakr Al-Baghdadi, Algeria has built up a military capable of defending its people. We have the second strongest military in North Africa, and we maintain arms deals with European powers. We have a standing army of about 150,000 soldiers, with another 150,000 in reserve. Algeria also has multiple paramilitary wings, including approximately 200,000 additional personnel. We are capable of joining the international coalition in airstrikes against Syria due to our deals with Russia. Russia, throughout the years, has sold us multiple bombers and fighter jets, allowing us to hit ground targets from above. There is no question that Algeria would be capable of defending us from the clutches of ISIL. While Algeria is capable to launching airstrikes on ISIS targets along with the international community, to join the coalition in airstrikes against the ISIL threat is still a premature move. Our primary concern is the safety of our citizens, and we do not wish to aggravate a hornet nest. Note: I apologize for it being less than two pages.

A Brief Note On Professional And Individual Ethics

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