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Each day the global economy becomes more
and more like an African
weaving - dozens of
different, colorful, and previously isolated threads woven together,
gradually becoming more tightly intertwined. Africa, newly rising from years of economic and political
turmoil, is eager to make its own vibrant contribution to this
emerging tapestry.
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Globalization is increasingly tying the fortunes of national economies
to one another,"observes South African manufacturing executive Ewald
J.H. Wessels (MBA '71), one of the key organizers of the School's 1999
Global Alumni Conference on "Managing Development: The African
Renaissance." [www.hbscsa.co.za/99conf] The conference, to be held in Cape Town in March, will be
a two-day intensive seminar on the economics, politics, and investment
opportunities of southern Africa. It will also provide a chance to meet
and network with African business and government leaders as well as with
fellow alumni from around the world.
While sub-Saharan Africa - consisting of the 48 countries south of the
Sahara desert -is underdeveloped and faces staggering challenges,
experts agree that the region, with its vast natural resources and 600
million inhabitants, has no shortage of potential. In recent years,
trends toward economic growth, decreased financial regulation, and broad
political change have led to more democratic societies, creating
conditions for what some have called an African renaissance.
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"The driving force behind the region's growth is South Africa," says HBS
professor Richard H.K. Vietor, the faculty chairman of the conference
and the author of a 1997 comprehensive case study that looks at the
country's recent development policies. Vietor notes that South Africa
produces 20 percent of Africa's GNP, an astounding figure considering
its population of 41 million represents less than 6 percent of the
continent. "South Africa is a regional superpower," echoes HBS associate
professor Robert J. Robinson of his native country. "For those who can
access it, the country has a First World infrastructure - financial
institutions, health care, and transportation, for instance - and it is
rich in natural resources."
South Africa is indeed the linchpin of the region, but it also faces
unique challenges that many of its neighboring countries do not. During
four decades of minority rule under apartheid, the government shaped a
protected economy that virtually ignored the well-being of the country's
black majority and left the country ill-prepared to compete in today's
vigorous global marketplace. Since the dismantling of apartheid in 1991,
South African leaders have worked to create a democratic society and
revamp the economy, improve education, and create jobs. As the country's
first democratically elected president, Nelson Mandela has inspired the
nation and emerged as an international hero who has led the country
through a peaceful political transition. [Mandela awarded honorary degree from Harvard.]
Mandela and his colleagues have emphasized deficit reduction,
privatization, and fiscal conservatism, and the results of their
policies are now beginning to bear fruit. Since 1993, for example, GDP
has grown steadily, inflation has decreased, exports to the rest of the
continent are up, and foreign investment has increased. Although
progress is sometimes disappointing and many challenges are still ahead,
South Africa is nonetheless seen by investors from all over the globe as
one of the world's top emerging markets. As some international
corporations - Dow Chemical, for instance - are putting down important
roots in South Africa, others such as Hilton Hotels, Coca-Cola, and
McDonald's are boosting their presence throughout the sub-Saharan area.
As noted, South Africa's infrastructure is also a source of strength for
the region. "ESKOM, the state-owned power company, is one of the best
electric companies in the world," says Vietor, adding that South Africa
is the continent's primary provider of electricity. In a recent Cape
Times article describing ESKOM's importance in the region, the company's
chairman Reuel J. Khoza (47th PMD) noted that electricity in South
Africa is the cheapest in the world and that ESKOM is able to provide
support to neighboring countries.
Where infrastructure is lacking, entrepreneurial opportunities abound.
In recent years, for example, the Cambridge, Massachusetts-based firm
Adesemi (formerly African Communications Group) has secured $37 million
in financing to support wireless communication programs in
underdeveloped regions, including sub-Saharan Africa. "We are currently
setting up voicemail through wireless public pay phones at over one
thousand locations throughout Tanzania and plan to expand the concept to
other parts of the developing world," says company CEO Monique Maddy
(MBA '93). [Maddy was profiled in the February 1997 Bulletin.] Maddy, who will be a panelist at the Cape Town conference,
plans to bring voicemail to 25 developing countries within the next five
years.
Other countries in Africa are making significant strides as well: the
small, dynamic, stable economies of Mauritius, Tunisia, and Botswana
were recently lauded in the Africa Competitiveness Report compiled by
the World Economic Forum and the Harvard Institute for International
Development. The leading countries in Africa now have a combined growth
rate of over 6 percent, and the continent as a whole is growing just a
point below that, compared with an average rate of 4 percent for the
world's industrialized countries. The challenges are numerous, but as
Nelson Mandela puts it: "There is no obstacle big enough to stop us from
bringing about a new African renaissance."
The Role of Alumni Leadership
The African continent is home to some five hundred HBS alumni; more than
three hundred reside in South Africa, occupying senior positions in
virtually every industry in the country and particularly in banking,
mining, and retailing. G.S. ("Andy") Andrews (VIS '79), director of the
Graduate Institute of Management and Technology in Johannesburg and
longtime president of the HBS Club of South Africa, recalls how during
the apartheid era, HBS alumni helped the country's business community to
understand the necessity and propriety of reform.
"In the 1970s," says Andrews, "a number of firms, many headed by HBS
alumni, set an example for other companies by eliminating racial
discrimination and, in certain cases, by deliberately ignoring
discriminatory laws." Andrews notes that several HBS alumni - including
Peter L. Campbell (77th AMP), Michael R. Hofmeyr (43rd PMD), and Peter
G. Wrighton (64th AMP) - were key members of the Consultative Business
Movement, formed by the business community in the 1980s to facilitate
the transition process. "Those individuals were instrumental in
mediation and trust-building efforts among opposing business and
political interests," says Andrews. "Without their efforts, the
country's peaceful transition to democracy would not have occurred."
For its part, the HBS Club of South Africa, by virtue of its members and
its stature, has been an organization whose actions exercise influence
throughout the business community. The club often used its Business
Statesman Award, a high-profile honor, to recognize individuals playing
leading roles in the change process. And, notes Andrews, for nearly
twenty years, a club scholarship program has enabled black South
Africans to attend Executive Education courses at HBS.
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