Fear Not but Policy Monotony

Almost all of us are global traders in the twenty-first century. It is estimated that around 90pc of the information collected by either local or global companies today is about activities in the external world. The impulse to learn new information about countries, competitors, customers, technology, and culture has no end.

Change, the underlying foundation for businesses, defines the stage of survival and influences biases emanating from old assumptions. We do not have an option but to adapt to change for the globalised room has left no room for anything but that. Most of the changes that are taking place in Ethiopia are directly or indirectly a result of global forces.

Ethiopia’s economy has by most estimates grown by over seven percent in the past year. The beneficiaries of this growth though are not only Ethiopians but also foreign investors that are trying to capitalize on a soon to be lower-middle income nation.

Though having decelerated in the past couple of years, Ethiopia’s economy has been growing at a double-digit rate, and the government expects great strides in its vision towards industrialisation. Such predictions though have the potential to change, for the better or worse, in the face of changing cultural, political, economic and technological advancements.

To keep up the pace of change for the better, we have to mitigate expected risks to the economy, acting proactively. This is to safeguard against future upsets brought on as a result of global movements and to ensure that Ethiopia reaps the fruits of globalisation as it is possible to grow faster than is the case now.

To survive as an organisation, it is necessary that leaders learn and impart operational knowledge as fast or faster than the environmental changes that threaten viability. This works for the nation as well. The new strategy for leaders has to be about constantly adapting to change in an ever altering landscape.

To achieve this, the focus must be to look beyond competition and market share to more fundamental questions of survival and sustainability in a turbulent and continuously changing environment, driven by globalisation.

Like business leaders, understanding the role and responsibility of the leader of the nation in the context of globalisation is critical. It is akin to driving at high speed through a tunnel that is breaking apart. The smallest of destructions could prove fatal, and success could only come through foresight.

I support Prime Minister Abiy Ahmed’s (PhD) full-throated support for change, especially when it comes to the financial sector which he described as unhealthy. But it would be all for nothing if the impetus to act now is eroded. In a fast-changing world, sooner is better than later.

It is possible to optimise if only the structure and policy integration in the financial sector is improved. Unless the government has strong faith in the fruits of liberalisation and flexible regulatory frameworks, the multiplier costs to the economy will be high.

Attitudes and ideals are relatively hard to change. The financial sector has long been a victim of the government’s strategy to transform the economy into one that is led by the industry sector. This is despite a service sector that takes the highest share of the economic pie, at close to 40pc.

It adds great value to the economy and could bring in the hard currency to lubricate the manufacturing base. If the government allowed this to take place naturally, it could lead to a healthier economy.

Changing individual behaviour is proving as challenging. As more people are included in the group, relationships multiply and become more complicated. This is what makes organisational change the toughest of its kind. The larger the organisation, the more difficult it is to bring about a monumental change, as could be evident in many governments around the world.

This is why change needs to be drastic, albeit well thought out. Procrastination and delay in response creates room for resistance, and eventually, the business or nation ceases to be a market leader, and the chaotic organisation may subsequently fail to exist as a viable entity.

The key question for leadership in nation building in globalisation is how to reduce too many moving parts within institutions for the critical response time to remain fast. Economic transactions are influenced by the rate of response leaders make, and the sort of the change that follows.

We do not have a better chance than now to think out of the box. We cannot chase more currency and secure the whole economy by the same level of thinking that created the scarcity.

It is normal to want to resist change, and with the willingness to compromise, bargaining and negotiating are not the wrong attitudes to have. It is equally important to understand that these feelings are within the leader as well as all team members and must be dealt with if the nation or the organisation is to grow as a cohesive group.

To survive in this globalised society, we need to see change for what it is – the natural order of things. The assumption that globalisation has hurt us may be valid but only because we have tried resisting it.

It has allowed the firms in our financial sectors to remain uncompetitive, even by African standards. The question of how the financial sector can better facilitate the ever-growing economy at this high rate of growth can no longer be addressed through procrastination or sticking to previous policies and tactics.

We need to fasten industrialisation and address the forex crunch by promoting fundamental changes in the monitory policy, regulations, capacity, competency, and knowledge of the financial sector. The choice should not be left to the government, as the Prime Minister said, although a great deal of the burden lies there, but to the many players of the nation that bear the cost of resisting the change.

By Asseged G. Medhin
Asseged G. Medhin is the deputy CEO of operations at the National Insurance Company of Ethiopia (NICE). He could be reached at kolass799728@yahoo.com.

Published on Apr 28,2018 [ Vol 18 ,No 939]



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