The Indonesian Tourism Industry Tourism Essays

The Indonesian Tourism Industry Tourism Essays The Indonesian Tourism Industry Tourism Essay The Indonesian Tourism Industry Tourism Essay The capital metropolis of Indonesia, Jakarta with a entire populations of 9.6 million ( BPS, 2012 ) with five countries viz. West, East, North, South and Central, has positive economic growing since period 2000 to 2011, which largely was sustained by the three chief sectors such as ( 1 ) fiscal, existent estate and concern services sector, ( 2 ) trade hotel and eating house sector and ( 3 ) fabrication sector. ( BPS, 2012 ) The increasing of economic growing gives impacts to the touristry industry in Indonesia. In January 2011, the Culture and Tourism Minister of Republic Indonesia announced the replacing of Visit Indonesia Year stigmatization with Fantastic Dutch east indies as portion of touristry run that expected to pull 7.7 million foreign tourers and bring forth $ 8.3 billion of gross. Whereas 50 % of this gross will be generated from meetings, convention and exhibitions that will take topographic point in assorted topographic point in Indonesia. ( The Jakarta Post, 31st December 2010 ) . Jakarta, where the cardinal authorities, trade, services and industry are located at, makes Jakarta a finish for concern travelers or as a authorities cardinal meeting. In add-on, with the completing installations at JIExpo Kemayoran in North Jakarta, Jakarta Convention Center in Central Jakarta, Balai Kartini in South Jakarta, Semanggi Expo in South Jakarta, Jakarta will go one of the touristry finish for MICE ( Meeting, Incentive, Convention, and Exhibition ) concern. ( Sarya, 2011, p.16 ) Table 1. : The statistic of figure of international tourer reaching through gate Airport Year 2008 2009 2010 2011 Soekarno Hatta, 1,464,717 1,390,440 1,823,636 1,933,022 Ngurah Rai, 2,081,786 2,384,819 2,546,023 2,788,706 Polonia, 130,211 148,193 162,410 192,650 Sam Ratulangi 21,795 29,715 20,220 20,074 Batam 1,061,390 951,384 1,007,446 1,161,581 Juanda, Surabaya 156,726 158,076 168,888 185,815 Adi Sumarmo 19,022 16,489 22,350 23,830 Minangkabau, 40,911 51,002 27,482 30,585 Others 1,257,939 1,193,612 1,224,489 1,311,468 Sum 6,234,497 6,323,730 7,002,944 7,647,731 Beginning: Biro Pusat Statistik, 2012 Table 1.1 shows that the international tourers who arrived through Jakarta s International Airport viz. Soekarno Hatta, have increased twelvemonth to twelvemonth which in 2011, it reached about 1.9 million. The entire international tourers who came to Indonesia in 2011 have about reached the mark of the Culture and Tourism Minister to pull 7.7 million foreign tourers. Hotel Industry For some large states like Jakarta, which has many concern activities, hotel becomes one of the most productive income-producing belongingss ( Internal information Colliers International Indonesia, 2012 ) . There are four benefits from hotel industry for a state ( Medlik A ; Ingram, 2000, p.4 ) , which are, In some countries, hotel as an attractive force of visitant who bring passing power and who tend to pass more money than they do when they are at place. This visitant disbursement power frequently gives large part to the economic system gross of a state. In Jakarta, hotel, trade and eating house sector is one of top three sectors which give a biggest part in GDP for largely old ages. From period 2009-2011, hotel, trade and eating house sector has contributed 20 % for DKI Jakarta s GDP ( Gross Domestic Product ) . ( BPS, 2009 2011 ) In countries which having foreign visitants, hotels play large functions as alien currency earners which can give large part to their state s balance of payments. For states which have little possibilities of export may take hotels as their alien currency earners. Hotels can supply many occupation chances that this function is of import for countries which have little figure of beginnings of employment, where they contribute to regional development. Hotel can move as a medium to promo the merchandises of other industries. Largely hotel are supplied with nutrient, drink and other consumables which purchased from local husbandmans, fishermen and other providers. Using local merchandises in their services makes this hotel non merely can lend straight to their economic system gross to state as a alien currency earners but besides indirectly as an mercantile establishment to advance other local industries. Hotels may go societal activity Centres for local people and frequently their eating houses and other installations can pull local usage. The positive macroeconomic growing encourages the positive growing of hotel supply in Jakarta, as a respond from hotel groups for the positive growing of room demand. Some hotel groups expand their hotel concatenation by increasing their figure of hotel, such as Tauzia ( local concatenation ) which its hotel direction will develop 23 hotels until 2012, consist of 15 units Harris Hotel and 8 units of Pop Harris. Next, there is the Accor group ( international concatenation based on France and the largest operator of hotels in Asia Pacific ) program to spread out their web across Indonesia from 40 hotels in 2011 to 100 hotels by 2015. PT Surya Semesta Internusa Tbk ( SSIA ) , who own and manages the 5-star Gran Melia Hotel Jakarta and Melia Hotel Bali, plans to spread out its gross in the cordial reception market by developing a budget hotel web in 2012. The increasing figure of hotel for a budget hotel to a five stars hotel for period 2000 2011 are shown on the Figure 1.2, ( from the period 2012 2015 are projection figure ) , Beginning: Adopted from informations internal Colliers International Indonesia, 2012 Figure1. : The hotel supply in Jakarta by figure of hotel from period 2000-2015 Beginning: Adopted from informations internal Colliers International Indonesia, 2012 Figure1. : The hotel supply in Jakarta by figure of room from period 2000-2015 Based on the Figure 1.2, the supply of hotel since 2000-2011 are dominated by 5-star hotel and 4-star hotel, whereas until 2011 there were already 37 five-star hotel and 35 four-star hotel in Jakarta. These hotel groups which play in Jakarta hotel market consist of international and local trade names. Some of international trade names in Indonesia which the author would wish to advert are Holiday Inn, Sheraton, Four Seasons, Kempinksi, InterContinental, Hilton International, Ritz-Carlton and Mandarin Oriental. While the local trade names besides sharply work to construct their ain concatenation, from Santika, Mulia and Sultan to the Sahid Group and many others. The Emerging of Budget Hotel in Jakarta The construct of Budget Hotel in Jakarta began to emerge in 2006, initiated by the Accor Group, France with the Hotel Formule1, which plans to construct four other subdivision of this hotel in Bali, Semarang, Yogyakarta and Jakarta. Then followed by Santika Group with their Amaris Hotel that until 2012 holding 22 Amaris hotel and planning to spread out the concatenation by adding another 13 Amaris Hotel. Basically the key participants in budget hotel market are hotel groups who already have established their star hotel ironss, and because they can see the possible market and demand of budget hotel, they add one line in their concatenation for budget hotel. Some of the hotel groups are shown in Table 1. : Hotel groups and their trade name on star and budget hotel. Table 1. : Hotel groups and their trade name on star and budget hotel Hotel Group Star Hotel Brand Budget Hotel Brand Aston International Aston Hotel ( 3 Star ) Fave Hotel Accor Group Grand Mercure ( 4 star ) Novotel ( 4 star ) Pullman Hotel ( 5 star ) Ibis Budget Hotel ( antecedently Formule 1 ) Grahawita Santika Santika Premiere ( 4 Star ) Santika Hotel ( 3 Star ) Amaris Hotel Tauzia Hotel Management Harris Hotel ( 4 Star ) Pop Hotel PT Intiland Development Grand Whiz ( 3 Star ) Whiz Hotel Beginning: Adopted from informations internal Colliers International, 2012 Budget hotels are known for its low menu hotel ( Barrows A ; Powers, 2009, pp.273 ) , where invitees can see remaining at good quality hotel, with a low monetary value. The invitees pay merely for what they use. This will ensue in non merely cost efficiency for the costumier but besides for the investor. Based on Colliers International Indonesia information 2012, in twelvemonth 2011 there are merely 6 budget hotels in Jakarta, which are, Formule 1, Menteng by Accor Amaris Hotel, Panglima Polim by Santika Formule 1, Cikini by Accor Amaris Mangga Dua Square by Santika Amaris Soekarno Hatta, Cengkareng by Santika Amaris Senen by Santika In the Figure 1.3 shows the entire figure of budget hotel in Jakarta since emerged in 2006 to 2012. Beginning: Adopted from informations internal Colliers International Indonesia, 2012 Figure1. : The figure of budget hotel in Jakarta from period 2006-2012 The Segment of Budget Hotel The chief section of budget hotel in Jakarta is concern traveler. The high demand of concern activities in Jakarta, which require low monetary value adjustment with limited service, has encouraged budget hotel as a chief penchant for company in taking their concern adjustment. In add-on, there is a displacement work system among corporation when they will make enlargement into a new country. In the epoch of the 1990s, to supervise or guarantee the possible for concern in country which freshly initiated, the company normally sends a direct top direction ( Hari et al. , June 2011, p.44 ) . Since 2000 s, with the bettering economic system and quality of human resources, the corporation began to depute the undertaking at in-between direction degree ( Hari et al. , June 2011, p.44 ) . In add-on, by deputing undertakings to the degree of direction, the costs will be cheaper than directing the top direction. Those alterations of form, so impact the travel concern in Indonesia, from the outgrowth of low cost bearer ( LCC ) to the mushrooming budget hotel ( limited service hotels ) which merely provide the basic demands of the invitees: the comfy suites for remainder. Basically the potency of concern traveller market in Jakarta is rather big, because of few grounds, which are: The betterment in all sectors and positive economic growing has large impact in the increasing of concern activity in Jakarta. In their concern activity, the concerns frequently do concern trip to out of town, even abroad. And as a cardinal authorities, trade, services and industry, Jakarta becomes one of the most finishs for concern travelers in Indonesia. Based on informations from Asia Pacific Business Traveller Research 2011 by Accor Group, the cost which spent for hotel adjustment for Indonesian concern traveler is $ 92/night ( 2011, p.11 ) , while the norm long stay is 2.08 twenty-four hours. ( BPS, 2011 ) As the entire concern traveler in Indonesia in 2011 is about 90 % of the entire domestic tourer in Indonesia ( Siahaan, 2012 ) , hence concern travelers will be around 6.84 million in a twelvemonth. Therefore from this sum of concern travelers, there is about $ 1.3trillion of the entire cost of the trip that flows into the hotel industry in 2011. Global fiscal crisis in 2008 had besides triggered the corporation to cut their concern travel budget. There are some schemes that they have done during 3 old ages after the crisis ( 2009-2011 ) . Based on Ascend Corporate Travel Survey 2012 , from 340 respondent of concern travelers who based 43 % Europe, 30 % North America and 17 % Asia Pacific, there is an increasing figure of company which planning to alter their pick of hotels to salvage money in 2011. Whereas this status was encouraged budget hotel as a penchant adjustment for company for concern trip The Industry of Budget Hotel in Jakarta What becomes interesting from budget hotel market in Jakarta is how the supply and demand of budget hotel is significantly increasing in the short period of clip. Many hotel groups or air hose groups expand their concern to put in budget hotel, by seeing the possible demand of this hotel. For case, AirAsia Group, an air hose company based on Malaysia, who became a innovator of supplying a budget air hose ( Low Cost Carrier, LLC ) , has besides interested to make budget hotel with trade name Tune Hotel. After first established in Malaysia in 2007, Tune Hotel has spread in 6 states, such as Malaysia, Indonesia, England, Thailand, Filipina and Australia. In 2009, they launched two Tune Hotel in Bali which is in Kuta and Seminyak and in 2013, they are be aftering to spread out 13 Tune Hotels in Indonesia which will be in Jakarta, Bekasi, Surabaya, Pekanbaru, Makassar, Sola, Palembang, Tangerang and Bali ( Kompas, 5th September 2012, p.19 ) In the Figure1. : The growing in footings of figure of suites from period 2000-2012 below shows that budget hotel s growing compared with 3, 4 and 5 star hotels in footings of figure of suites is lifting important since emerged in 2006. Beginning: Adopted from informations internal Colliers International Indonesia, 2012 Figure1. : The growing in footings of figure of suites from period 2000-2012 The important supply of budget hotel is a respond for important demand from the market. It can be seen from the tenancy rate of budget hotel which is rather good better than 3 5 star hotels. The Figure1. : The tenancy rate from 5-star hotel to budget hotel shows that merely two old ages after budget hotel has emerged to the market, its tenancy rate is extremely better than 3 5 star hotels, even 5-star hotel has the lowest tenancy rate from 2000-2011. Beginning: Adopted from informations internal Colliers International Indonesia, 2012 Figure1. : The tenancy rate from 5-star hotel to budget hotel The higher demand of budget hotel than 3, 4, 5 star hotels gives an thought that budget hotel likely has satisfied their client and could make their trueness clients who wants to make repetition purchases of their services. However, before making high client satisfaction degree and holding trueness clients, there are values that budget hotel should give to their client. How client value creative activity that budget hotel has done to their client and how this value creative activity impacts their client satisfaction and trueness that finally will increase their demand degree and how this client value creative activity impacts to the hotel profitableness that impact the supply degree will be a intent for this research. Problem Designation Due to the demand of budget hotel is higher than 3, 4, 5 star hotels, therefore there is a mark that likely budget hotel has satisfied their client that finally could make client trueness who wants to make repetition purchases of their services hotel. However, in order to fulfill their client and make client trueness, they should give values to their client. Therefore, the issue in this thesis is to analyze The Impact of Customer Value Creation on Budget Hotel towards Customer Satisfaction, Customer Loyalty and Hotel Profitability . There are four countries of research job, What value creative activity that budget hotel has done towards its clients? What is the client satisfaction degree of budget hotel as an impact of client value creative activity? What are the ruling values in act uponing client satisfaction which will take to make client trueness? How is the profitableness degree of budget hotel compared to 4 and 5 star hotel as an impact from client satisfaction and client trueness? Research Objective The chief intents of this research paper are: To place and explicate the client s value of budget hotel To place and explicate of client satisfaction of budget hotel as impacts of the client value creative activity To place and explicate the ruling value in act uponing client satisfaction degree of budget hotel, which will take to make client trueness To place and explicate the correlativity between client satisfaction and client trueness of budget hotel To analyse the profitableness degree of budget hotel compared with 4 and 5 star hotel as an impact from client satisfaction degree and client trueness Significant Research The survey is important because it provides information which will be helpful for the readers: The survey is important in understanding the client behaviour and needs better. The survey will turn to the issue of client value creative activity to better the client satisfaction to make client trueness. The survey may be utile for many interested parties, particularly: Budget hotel groups. They may utilize this research to back up sweetening of client satisfaction and relationship Students and internal parties of Swiss German University. This research can be used as a mention for lectors and other pupils to carry on farther research. The research worker. The consequence of this research can be used to enrich my cognition. Academicians. The consequence of this research can be used to make farther research in the same industry. Scope and Limitation of Thesis In order that the survey on this topic more focal point, and to acquire the benefit from the survey, therefore the survey limited to: The value creative activity by budget hotel in Jakarta towards its client The impact of client value creative activity on client satisfaction and trueness The impact of client satisfaction and trueness on profitableness degree of budget hotel compared with hotel industry.

Pol 300 class discussions Assignment Example | Topics and Well Written Essays - 250 words - 1

Pol 300 class discussions - Assignment Example The next time speculations are such that the games could be held in South Africa and most of the countries that lost will rise up to be future winners. The United States will receive much publicity based on the wide coverage of the players and, marketing of their products to be used in the games. As a result, the per capita will rise. The course has broadened my outlook on international events. The subject introduces various issues that are addressed in world concept and promotes the idea of integration at the international concept. The course raises the perspective of unity, peace, problems, and events where different states come together for a common goal. Events at the international level lead to establishment of networks that promote development and growth (Thomas, 1988). The events also help in the identification of flaws in various states that require attention and amendments as well challenges in the nations that need to be solved. At the same time, international events help in solution of problems since ideas are provided and information is shared. Innovation is also enhanced and new ways of doing things are learnt during these events (Thomas,

The changes in media and uses of media in their lifetime and the Essay

The changes in media and uses of media in their lifetime and the effects on their personal, social and work lives - Essay Example Technology has and still is evolving so fast that it has left people utterly spellbound by the comfort added to a common man’s life. Personally, advancements in technology have helped me live my life extremely conveniently than I was living prior to the invention of television, cameras, and computers/laptops, etc. AB: What was the first technology that you used? Was that a common product in that time? AK: The first technology that I remember using with most enthusiasm was a wireless radio which was particularly special in the sense that it operated on FM programming which made it better than other radios most other people owned around me which used the AM method. FM radio technology was developed as an alternative to AM because it could transmit signals on any frequency. At the time I got one FM radio for myself in 1961, this technology was newly introduced and very few people owned it so it was not quite a common product in that time. But yes, FM radio technology became rapid ly popular during the 1960s and very soon it began to be recognized as public’s choicest medium for listening to rock music or classical plays. AB: Can you describe the first impression of your first touch with that technology? AK: Because the wireless FM radio technology I just mentioned was new at the time I bought it and not many people around me had one of the kind then, so naturally I felt extremely lucky, blessed, and enthralled because it was such an exceptionally modern and convenient medium of listening to music, dramas, and educational programs. At the time I first came across this prized technology, it was the fastest medium for communicating news of the day and the first choice of people like me who were unfortunate enough to get a television. However, only a handful people of my age possessed the kind of radio I had for myself in 1961 which made me quite distinguished among my friends and the memories of how we friends used to get together to listen to the classi cal music broadcasted on the radio are just priceless. AB: How did the media change? For better or worse? AK: Not long after commercial television stations were made available in the market during late 1940s, radio technology took hold of the people throughout the 1960s and onwards. While the technology continued to attract gifted inventors from all over the world, one after another riveting change in media got introduced at more affordable prices which revolutionized people’s lives for the better. Also, there were huge payoffs like myriad technology advancements brought people closer by turning the world into a global village and bridging distances. Many tasks which otherwise consumed many hours began to be completed in a matter of minutes and one can access the entire world through the internet while sitting at one place. AB: How did you communicate with your family or relatives in overseas in the past? How about now? AK: There is no comparison between the way I and other p eople of my generation used to communicate with family and relatives living abroad in the past and in the present. In the past, the means of communication with family and friends were extremely slow, time-consuming, taxing, and literally wore people out. In contrast, communication media now are unbelievably fast, liberating, rewarding, and facile. Now people do not have to wait for months for the letters written by them to reach their dear ones thanks to

An investigation in to the effect of oil and gas to Qatar's economy Essay

An investigation in to the effect of oil and gas to Qatar's economy - Essay Example Apart from earning substantial revenues from exporting various products, every industrial giant within these nations consume 25 barrels of oil per person annually in order to maintain smooth functionality in the operations and thus contribute to the overall economic development of the nations (The World Bank 103). In terms of Qatar’s economic condition and position, recent reports project that the nation experiences a real growth rate of about 5.5 % and is ranked 44th position in terms of world ranking. The per capita income of this nation was $102,100 in terms of world ranking until the year 2013. Observably, the nations is ranked 3rd in terms of gross national savings, 19th in terms of crude oil production and 6th in terms of natural gas production (Central Intelligence Agency, â€Å"The World Factbook† ). By taking into concern the findings of this particular study, the null hypothesis to be tested in this study will be, â€Å"The oil and gas industry has no considerable impact on Qatar’s economy has been validated†. This claim has been validated from the perspective of Qatar’s officials who provided the reason behind the lack of impact on that country’s economy. Although oil comprises 58% of Qatar’s economy as well as 59% of that country’s exports as of 2012, the officials maintained that the country’s growth would slow to 5% during the 2014 financial year. The economy would not realize considerable impact because Qatar’s exports are expected to go down as the country plans to invest heavily on its infrastructure as it prepares for 2022 World Cup tournaments (Bakr and Dokoupil). The information accumulated from the research work certainly helps in determining the validity of the above-depicted null hypothesis. It can be affirmed that the research question is mainly structured with the intention of understanding that how oil and gas sector being the primary sector in the Qatari economy impose extensive impact specifically on the

Sole Proprietorship Essay Example for Free

Sole Proprietorship Essay †¢Liability is unlimited. The owner or sole proprietor is legally responsible for all debts, law suit settlements and contract fulfillments. Though insurance policies can be purchased to protect against unforeseen events, a judgment decree or balance exceeding the purchased plan amount could come directly out of the personal assets of the owner including but not limited to personal home, bank accounts, college funds or other tangible assets. †¢Income Taxes for sole proprietorship act no differently than paying standard income tax. The IRS sees no distinction between the sole proprietor and the owner’s personal finances. A standard 1040 form will be prepared yearly including a schedule C or C-EZ form for profit disclosure. Tax rate will vary year to year depending on the net profits of the business. †¢Longevity is limited to the lifetime of the owner or the completed sale of the company’s tangible and intangible assets to an individual or outside entity †¢If the owner dies without selling, the business ceases to exist. †¢Control is the most appealing factor for Sole Proprietorships as the owner needs only answer to themselves. The owner makes all decisions for the day to day operations of the company including entering into contracts, handling finances, hiring employees and even at will dissolution of the company. †¢Profit retention is a key factor that distinguishes Sole Proprietorship over all other business forms. The owner retains all profits for their own. They have no legal obligation to share the profits with any one. Please note that this does not grant the owner clemency from paying their debts or obligations if profits are low for any given length of time. †¢Location can be anywhere but is registered on a state level and must abide by local state laws. If distributing goods to other states than the registered state of the business other tax implications come in to play such as whether sales tax must be applied.

Competition law in Nigeria

Competition law in Nigeria INTRODUCTION SCOPE OF THESIS The area of Competition law in Nigeria remains an area of law that has not been fully tapped. Currently, there is no competition law operating in Nigeria and although there has been a bill, it is yet to be passed to law. The ongoing lack of a competition law regime has quite predictably led to price-fixing, excessive pricing of products , market concentration as well as domination being the order of the day, all to the detriment of the consumer. The primary objective of this thesis therefore, is to discover the value of introducing Competition law in Nigeria and indeed a sector specific Competition Law to the Nigerian Communications Industry. The theses will begin by examining the global significance of Nigeria and the position of Nigeria as a developing economy. This research further seeks to examine the state of the Nigerian telecommunications industry and the steps that have been taken by the Nigerian Government towards the opening up of the telecommunications industry in Nigeria. The thesis will also look at both the arguments for and against the introduction of a competition law in Nigeria and a specific competition law in the telecommunications industry which forms the main focus of this research. The present situation in Nigeria can be likened to a market where all the telecommunications providers provide their services at the same price, a price that always seems to be a little higher week after week, In such a case, what might have happened is that the telecommunications providers have formed cartels so that they can force up prices and make large profits. If such is the case, it is the welfare of the customers that suffers because of the lack of competition. Competition issues in various sectors of the economy are handled by other regulatory regimes such as The Special Trade and Malpractices Investigation panel, standards organisation of Nigeria, Nigerian Civil Aviation authority, Securities and Exchange commission, Central Bank of Nigeria, and of particular importance to this thesis, The Nigerian Communication Commission (NCC) which is the national regulatory authority for the telecommunications industry in Nigeria. The question that arises however is whether the regulations set out by the NCC are sufficient to promote and preserve competition. This thesis will analyse the position of the NCC as a regulator of the Nigerian telecommunications industry. RATIONALE AND RESEARCH METHODOLOGY In carrying out this research, the author will rely on a collection of theories, comparative study of the Law in different jurisdictions and Interviews with various individuals who have experience in this field. Primary and secondary sources of information will be used to collect and analyze data to come to a viable conclusion. The primary sources which the author will utilize include authoritative materials of the law such as the Constitution of the Federal Republic of Nigeria, statutes and legislations in force, official publications and judicial decisions relating to competition law, telecommunications law and Privatization in Nigeria. Books, journals, articles, dictionaries, periodicals, newspapers, The Federal Competition Bill and internet documents will constitute secondary sources of information. These are materials which pertain to law but are not themselves authoritative records of legal rules. A comparative study of competition law systems in other jurisdictions will also form a part of the study. In order to make this thesis logical, the author will sketch headings and arrange materials to accommodate research findings. Headings and cross headings will not only assist to readily identify where a particular point has been dealt with, it will also make the theses flow in a logical way and keep the readers interested. Because the area of law to being researched in this thesis is relatively young in Nigeria, it is necessary to perform foundation research and as such, secondary sources of research will be highly relied upon in this thesis. Challenges of Research Methodology: It is widely accepted that competition authorities in developed and developing countries alike encounter challenges and obstacles in their effort to promote competition and enforce their various competition laws. While the challenges faced are similar in nature their degrees vary across countries. It has been observed that Developing countries such as Nigeria do not generally place the implementation and administration of competition law on their priority lists. They are generally of the mind that it is like giving a silk tie to a hungry child. However, with the changing global landscape, trade barriers being removed and markets becoming more integrated, developing countries find themselves in the situation in which they now have no choice but to institute the relevant legislation. The implementation of institutional reform that the developed countries took several decades to accomplish is now being thrust upon developing countries which do not have the luxury of time, the requisite skill or the resources. In the same vein, in carrying out research on competition law in the Nigerian telecommunications industry, the author came across various research challenges. The main challenge has been the inability to get research materials. This is due to the fact that the area of research is still in its infant stage in Nigeria as a result there is not enough written material on it. Further, it is a very contentious and political issue as a result; companies, institutions and individuals who have access to necessary material or information are not willing to release information. The Bureaucratic nature of Nigerian Institutions also posed as a major challenge to this research. This is because there are many levels of management, much paperwork and impersonal officials working to a fixed routine who seem to find it difficult to provide necessary information or give necessary interviews which would be advantageous to this research paper. The unstable state of the Nigerian Telecommunications Limited (NITEL) which operated monopoly status in the Nigerian Telecommunications industry for a long time also proved to be a challenge in getting research information. This is because as management of NITEL changed, the operations change and this makes it difficult to get information on previous happenings in the company. Other challenges faced by the author in the research process came in the telephone interview process. This is because some people do not have telephones or do not have their telephone numbers listed. People also often dislike intrusion of a call to their homes and never have time for a telephone interview at work. Also telephone interviews need to be relatively short or people get impatient or feel imposed on. The use of the internet as a form of research also came with its own challenges some of which include accuracy and reliability of information obtained from online sources and difficulties in verifying a writers credentials. COUNTRY PROFILE AND GLOBAL SIGNIFICANCE OF NIGERIA The Federal Republic of Nigeria consists of 36 states and 774 local governments administrations. The Capital city is Abuja, located in the Federal Capital Territory and it is geographically situated in the middle of the Country. Nigeria has a population of over 148 million making it the largest market in sub-Saharan Africa with reasonably skilled and potential manpower for efficient and effective management of investment projects within the country. Nigeria is a regional power and it is listed among the Next eleven economies Nigeria is a nation blessed with an abundance of natural and mineral resources as well as renewable energy sources. Its oil reserves make Nigeria in the league of the top ten petroleum rich nations, and by far the most affluent in Africa. Nigeria is a member of the organisation of petroleum exporting nations which makes it significant to the world at large. The petroleum industry in Nigeria has brought unprecedented changes in the Nigerian economy, particularly in the past five decades when it replaced agriculture as the cornerstone of the Nigerian economy and contributes the lion share of in the nations gross domestic product, accounting for the bulk of federal government revenue and foreign exchange earnings. The Nigerian economy can be described as most promising. Nigeria has however been long hobbled by political instability, corruption, inadequate infrastructure, and poor macroeconomic management. Nigerias former military rulers failed to diversify the economy away from its overdependence on the capital-intensive oil sector, which provides 95% of foreign exchange earnings and about 80% of budgetary revenues. Following the signing of an IMF stand-by agreement in August 2000, Nigeria received a debt-restructuring deal from the Paris Club and a $1 billion credit from the IMF, both contingent on economic reforms. Nigeria has a mixed economy which accommodates all; individuals, corporate organisations and government agencies to invest in almost all economic activities. Over the last decade, the Nigerian government has introduced some economic measures such as liberalisation and privatisation of sectors that had been monopolies, with the purpose of introducing competition, wealth creation and encouraging foreign investors. In 2003, the Nigerian government instituted the National Economic Empowerment and Development Strategy (NEEDS), a domestically designed and run program modelled on the IMFs Poverty Reduction and Growth Facility for fiscal and monetary management[4]. NEEDS focused on four key strategies; poverty reduction, wealth creation, employment generation and value re-orientation. The initiative has recorded remarkable achievements, meeting most of its targets, and in some instances surpassing them. In November 2005, Nigeria won Paris Club approval for a debt-relief deal that eliminated $18 billion of debt in exchange for $12 billion in payments a total package worth $30 billion of Nigerias total $37 billion external debt. The deal requires Nigeria to be subject to stringent IMF reviews. OVERVIEW OF THE TELECOMMUNICATIONS INDUSTRY The telecommunications industry forms a major infrastructural requirement for any meaningful economic development to take place in a country. The importance of a robust telecommunications infrastructure cannot be over emphasized as it is pertinent to economic growth, and constitutes a significant portion of the worlds economy. This chapter discusses the historical and present state of the global telecommunications industry with particular focus on Nigeria. The Chapter will consider the policy approach to deregulation of the Nigerian telecommunications industry, as well as provide an overview of the evolution of the Nigerian telecommunications industry from the colonial times to full liberalisation as is the position now Over the last one hundred and thirty (130) years, the global telecommunications industry has experienced an unprecedented growth from an almost unnoticed analogue telephony to a modern digital mobile communication with billions of subscribers worldwide. This is evident in the Europe and Latin American telecommunications market worth â‚ ¬424bn in 2007, with mobile services accounting for 51%. The Evolution of the Global Telecommunications Industry The African telecommunications market being the fastest growing telecoms market in the world plays host to the next wave of global competition. In 2006 alone, mobile companies signed up about 60 million new subscribers across the continent, as many people as the entire population of the United Kingdom. Africas unique infrastructure challenges have made telecommunications (particularly mobile phones) an indispensable business and social tool. Despite impressive recent growth in telecommunications, penetration rates in Africa remain relatively low, thereby suggesting a large underlying potential market in this populous continent. It is expected that 260 million new subscribers will be added across Africa by 2014, nearly equal to the present population of the entire United States of America. THE NIGERIAN TELECOMMUNICATIONS INDUSTRY In consonance with the global trend in the telecommunications industry, Nigeria shares a similar success story over the past 130 years of navigating its telecommunications operations. The figure below shows incremental successes achieved within the Nigeria telecoms industry. The Evolution of the Nigerian Telecommunications Industry HISTORY OF TELECOMMUNICATIONS IN NIGERIA Telecommunications facilities came into being in 1886 by the colonial administration. The initial purpose was merely to carry out administrative duties as opposed to the provision of socio economic development for the country. Thus, the introduction of public telegraph services connecting Lagos by submarine cable along the west coast of Africa to Ghana, Sierra-Leone, Gambia and on to England was more important than an efficient telecommunications network. Subsequently, as at 1960 when Nigeria gained her independence, there were only 18,724 telephone lines available for a population estimated at 40 million people. This translated to a tele-density of about 0.5 telephone lines per 1,000 people. The telephone network consisted of 121 exchanges out of which 116 were of the manual (magneto) type and only 5 were automatic. Since independence, there have been a number of development plans for the expansion and modernisation of the telecommunications networks and services. Most of these plans were not fully implemented. After the Nigerian Independence in 1965 and up until 1985, the telecommunications industry was divided into: The department of Posts and Telecommunications (P T) and The Nigerian External Telecommunications (NET) Limited, P T took charge of the internal network while NET overlooked the external telecommunications services and provided the gateway to the outside world. By the end of 1985, the installed switching capacity was about 200,000 lines as against the planned target of about 460,000. All the exchanges were analogue, and telephone penetration remained poor equal to 1 telephone line to 440 inhabitants, well below the target of 1 telephone line to 100 inhabitants recommended by the International Telecommunications Union (ITU) for developing countries. The quality of service was largely unsatisfactory, the telephone was unreliable, congested, expensive and customer unfriendly. These unsatisfactory services led to the split of P T in January 1985, it was divided into Postal Division and Telecommunications Divisions. The telecommunications division was merged with NET to form Nigerian Telecommunications Limited (NITEL),a limited liability Company, while the Postal Division was reconstituted into another organisation called the Nigerian Postal Service (NIPOST). NITEL On establishment, NITEL became the national operator for telecommunications services in Nigeria. Although efforts are being made to privatise NITEL, and indeed there was a recent privatisation attempt where by 51% equity stake of NITEL was sold to core investors, this privatisation attempt was reversed and NITEL remains wholly owned by the Government of Nigeria. NITEL was set up to reverse the defects which characterised telecommunications development from independence up until 1984[11]. Its main objective was to harmonise the co ordination of the external and internal telecommunications services, rationalise investments in telecommunications development and provide easy access, efficient and affordable services. The historical key businesses of NITEL include fixed telephony services including international, internet, payphone and interconnection; Long distance carrier including fixed international calls and satellite services; cellular, including all cellular activity carried out within M-Tel. After the inception of NITEL,little progress was made in the development of the telecommunications industry and it was still characterised with poor management, lack of accountability and transparency and inefficiency. At this time, NITEL occupied a monopoly status and being owned by the Government, this resulted in its having a weak infrastructure base, high unmet demand, Lines concentrated in selected urban areas, slow growth of subscriber base and limited investment into the telecommunications sector. In order to tackle these short comings, and in line with what obtains in several developed nations, The Government of Nigeria identified that Liberalisation of the Telecommunications market was essential for rapid network growth. Private sector participation was essential for attracting financial resources, innovation and new technology. The industry was thus deregulated through the establishment of the Nigerian Communications Commission (NCC) by Decree No. 75 of 1992. The NCC has since approved almost 200 operating licenses for private providers of various telecommunications services, including internet services providers, which of course has in turn generated a high demand for telecommunications equipment, accessories, consultancy and technical partnerships. In addition, NITEL has approved various private firms to be connected to its switching systems so as to provide more lines (with greater efficiency and service) and thus act as a buffer for the grossly inadequate NITEL services. Despite all these efforts, it was quite clear that there was a dire need for the Nigerian Government to be more pro-active about improving telecommunications. As such, in 2000, the NCC awarded licenses for Global System of Mobile Communications (GSM) to NITEL by auction to two preferred bidders Econet Wireless Nigeria Limited and MTN Nigeria Limited. The licenses were bought at almost US$240million dollars, the highest amounts ever paid for such licenses in the world. The GSM technology has completely overshadowed NITELs land lines, as the demand is high for them due to efficiency, despite the astronomical tariffs its consumers are subjected to. These cumulative events eventually spurred the NCC, through the Bureau of Public Enterprises (its secretariat) to seek to privatise NITEL by requesting for Core investors to acquire controlling interest in the entity and manage its day to day activities. The privatization of NITEL has always been shrouded in controversies and politics. Many people are of the view that the Federal Government has not shown enough seriousness or sincerity in the many attempts to sell the telecommunications company. The first attempt in 2002 to privatise NITEL could not materialise due to the failure of Investment International Limited (ILL) of Britain to pay the $1.317 billion it offered for the 31 per cent shares of the company. ILL paid up the mandatory 10 per cent deposit, but was unable to make up the balance by the end of several deadline Periods, thereby derailing the process. Another attempt was made in 2003 with the engagement of a Dutch company, called Pentascope to manage NITEL and put it on sound footing preparatory to its sale. This one also collapsed. In the third attempt, Orascomm of Egypt offered $256.43 million for 51 per cent shares of NITEL. This offer was considered ridiculously low, and, so the government cancelled the deal. This has been the story of the efforts to privatize this big and potentially rich government-owned telecommunications firm. One deal that stood out was the Pentascope agreement. While Pentascope was expected to revitalize NITEL, Pentascope ended up not only ruining the company but it mounting up huge debts for the company as well. In particular, when Pentascope took over NITEL in March 2003, NITEL had about N17.7 billion in its coffers. However about a year later when its agreement with NITEL was terminated, it had left NITEL with a debt burden of N38 billion and a reduction in the number of functional land lines from 455,000 to 288,000. It therefore seems correct to state that the singular error of picking Pentascope as the management consultant to NITEL in 2003 is largely responsible for the pitiable condition the company finds itself in today. In 2006, 51 per cent equity in NITEL was sold to another company, Transnational Corporation[16], (TRANSCORP), for US $ 500 million. However, this process also failed to turn around the operator as TRANSCORP has been unable to raise the money to overcome the many problems of NITEL. The Nigerian government holds 49% of NITEL. The government however, wants Transcorp to sell 27% of Nitel to a new investor, which would then purchase a further 24% from the government to take control. This new core investor was scheduled to take over in February 2009; however this has not yet happened. In the meantime, the NCC has awarded a second national carrier license to Globacom Nigeria Limited, the only company out of three who expressed an Interest that was able to come up with the US$20 million 10% deposit of the Auction price requested by the NCC. Government was of the belief that a second National carrier would offer much needed competition to NITEL. Globacom has since commenced operations and as of today, it has the third highest subscriber network in the Country. POLICY APPROACH TO DEREGULATION AND PRIVATIZATION Liberalisation and privatisation It was only a matter of time before it became clear to Nigerian policy-makers that a shift in its policies was required. The over-regulation of the economy had become unhelpful, the economy was anaemic, and the Government had trouble keeping up with subventions to State owned enterprises, many of whom, at any rate, were inefficiently and unprofitably run. For SOEs in the telecommunication sector such as NITEL, the implications of its inefficiency for the entire economy were very far-reaching as it contributed to the retardation of the countrys overall industrial development. The merits of a deregulated economy were thus too overpowering for the Nigerian Government to ignore: much-needed foreign direct investment was to be attracted, bringing in tow the required technology, management and technical skills that would not only boost the economy but would transform the SOEs. To achieve this, however, it was obvious that radical legal reforms would have to be undertaken. Following the collapse of communism and apartheid, more countries joined the race for foreign investors. Investment climates therefore needed to be competitive. Before then, through the indigenisation policy pursued since the early 1970s, foreign investors in Nigeria had to contend with ceding a portion of their business to local investors. The real challenge, however, lay in removing regulation and monopoly so that foreign investors could have a level playing field. What followed was a rash of laws designed to facilitate foreign direct investment in Nigeria. Significant among these reforms was the repeal of the Nigerian Enterprises Promotions Decree 1989 (under which the indigenisation policy was sustained), and in its place came the Nigerian Investment Promotion Decree No.16, 1995 which made it possible for an enterprise to be 100 per cent owned by foreign investors. Also, the Exchange Control Act 1990 under which foreign investors required the approval of the Minister of Finance in order to transfer profits abroad was repealed in favour of the Foreign Exchange Decree No.15, 1995 that guaranteed free transfer of capital. The Companies Act 1968 was also repealed in favour of the Companies and Allied Matters Act, 1990, a more comprehensive and forward-looking company code. Against these reforms, Nigeria began its gradual journey towards deregulation, privatisation and a free market economy. However, as the free market was a model that had never previously been applied in Nigeria, its handlers had trouble grappling with it, and this led to the initial efforts being short-lived.This was followed by another privatisation law, the Bureau of Public Enterprises Decree, 1993. Privatization In every great monarchy in Europe, the sale of crown lands will produce a very large sum of money, which if applied to the payment of public debts, would deliver from mortgage a much greater revenue than any which those lands have ever afforded to the crownWhen the crown lands become private property, they will in the course of a few years become well improved and well cultivated ADAM SMITH, WEALTH OF NATIONS (1776). The term privatization is used to describe a range of different policy initiatives designed to alter the balance between the public and private sectors. It commonly refers to the transfer of ownership and control of enterprise from the state to the private sector.This may occur in various ways, such as, the sale of all or part of the privatized companys equity to the public, or the sale of the company as a complete entity. It may also take the form of joint ventures, where the private sector will invest in a public enterprise Privatization as a tool for economic management came about in the early 1970s when Chile became the first country to turn public businesses to private operators. Since then, over 140 countries have embraced privatization as a route to economic growth and prosperity. In the process of privatization, more investible capital has been injected into the various economies through local and foreign investors to the benefit of the country at large. In the process, funds that would have been committed to the maintenance of otherwise inefficient enterprises have been freed into more productive sectors of the economy. Privatization in Nigeria Privatization in Nigeria was formally introduced by the Privatization and Commercialization Act of 1988[25], This Act set up the Technical Committee on Privatization and Commercialization (TCPC) with a mandate to privatize 111 public enterprises and commercialize 34 others. In 1993, having privatized 88 out of the 111 enterprises listed in the decree, the TCPC concluded its assignment and submitted a final report. Based on the recommendation of the TCPC, the Federal Military Government promulgated the Bureau for Public Enterprises Act of 1993, which repealed the 1988 Act and set up the Bureau for Public Enterprises (BPE) to implement the privatization program in Nigeria. As at May 1999 the Federal Government investment in these public enterprises was in the region of US$100 billion. In spite of these massive investments, however, public enterprises have failed to perform the functions and attain the objectives for which they were set up. The gross failure of these enterprises to live up to expectations is partly responsible for the current move towards economic liberalization, competition and privatization. The philosophy behind privatization in Nigeria therefore is to restructure and rationalize the public sector not only to lessen the dominance of unproductive investments in the sector but also to initiate the process of gradual cession to the private sector of public enterprises which are believed to be better operated by the private sector. It is also expected that the privatization programme will provide the channel for reintegrating Nigeria back into the global economy as a platform to attract foreign direct investment in an open, fair and transparent manner. THE ENABLING PRIVATISATION LAWS Public Enterprises (Privatisation and Commercialisation) Act 1999 provides the enabling legislation for the implementation of the privatization and commercialization programme. This Act created the National Council on Privatization (NCP) whose functions include: making policies on privatization and commercialization; determining the modalities for privatization and advising the government accordingly; determining the timing of privatization for particular enterprises; approving the prices for shares and the appointment of privatization advisers; ensuring that commercialized public enterprises are managed in accordance with sound commercial principles and prudent financial practices; and Interfacing between the public enterprises and the supervising ministries in order to ensure effective monitoring and safeguarding of the managerial autonomy of the public enterprises. The 1999 Act also established the Bureau of Public Enterprises (BPE) as the secretariat of the National Council on Privatization. The functions of the bureau include among others to do the following: implement the councils policies on privatization and commercialization; prepare public enterprises approved by the council for privatization and commercialization; advise the council on capital restructuring needs of enterprises to be privatized; ensure financial discipline and accountability of commercialized enterprises; make recommendations to the council in the appointment of consultants, advisers, investment bankers, issuing houses, stockbrokers, solicitors, trustees, accountants, and other professionals required for the purpose of either privatization or commercialization; and Ensure the success of privatization and commercialization implementation through monitoring and evaluation. The Constitution of the Federal Republic of Nigeria 1999 Nigerian laws dealing with the issues of privatization do not exist in a vacuum. It is part of the body of laws governing the transfer and acquisition of property in Nigeria. The most fundamental legal document in Nigeria is the Constitution of the Federal Republic of Nigeria 1999. Under sections 43 and 44 of the Constitution, the right of the individual to own movable and immovable property is guaranteed by the Constitution. As a corollary to this guarantee, these properties cannot be acquired by the Government without the payment of compensation. The issue that has been discussed very frequently is whether the guarantees protect the sale of shares. This depends on whether the shares are movable property under the Constitution. It has been argued that since shares are choses in action they are not strictly so called movable property. They are special specie; consequently they are not protected under the Constitution. If this argument prevails it means that if a NEW Government which does not share the philosophy of the recent Governments ascends to power, it can reacquire the shares which it had disposed off through privatisation without any obligation to pay compensation for the share. At present the position of the Constitution should not create any serious alarm because, Under the Nigeria Investment Promotion Commission Act, Decree No. 16 1995 (the law enacted to encourage inflow of investments in Nigeria) the Government of Nigeria guarantees expressly that no compulsory acquisition of enterprises and interests shall take place in Nigeria. This clearly includes chooses in action. Foreign Exchange (Monitoring and Miscellaneous Provisions) Decree 1995 A major factor which provided a catalyst for the privatization process was the need to attract foreign investment. The commanding height of the economy theory had failed to attract investments. The oil boom had disappeared and it was necessary to augment national revenue through foreign investment. The laws governing the allocation of foreign exchange had to be adapted in such a manner as to make it very attractive to the foreign investor. Consistent with this spirit of liberalization and privatization of the economy the rules

John Kenneth Galbraith :: essays research papers

John Kenneth Galbraith The Canadian-born, Berkeley-trained John Kenneth Galbraith has been considered by many as the "Last American Institutionalist". As a result, Galbraith has remained something of a renegade in modern economics - and his work has been nothing if not provocative. In the 1950s, he presented economics with two tracts that needled the mainstream: one developing a theory of price control (which arose out of his wartime experience in the Office of Price Administration) which he argued for as an anti-inflation policy (1952); the second, American Capitalism (1952), which argued that American post-war success arose not out of "getting the prices right" in an orthodox sense, but rather of "getting the prices wrong" and allowing industrial concentration to develop. It is a formula for growth because it enables technical innovation which might otherwise not been done. However, it can only be regarded as successful provided there is a "countervailing power" ag ainst potential abuse in the form of trade unions, supplier and consumer organizations and government regulation. Many have since argued the formula for East Asian success later in the century was based precisely on this combination of oligopolistic power and "countervailing" institutions. It was his smallish 1958 book, The Affluent Society, that earned Galbraith his popular reknown and professional emnity. Although the thesis was not astoundingly new - having long been argued by Veblen, Mitchell and Knight - his attack on the myth of "consumer sovereignty" went against the cornerstone of mainstream economics and, in many ways, the culturally hegemonic "American way of life". His New Industrial State (1967) expanded on Galbraith's theory of the firm, arguing that the orthodox theories of the perfectly competitive firm fell far short in analytical power. Firms, Galbraith claimed, were oligopolistic, autonomous institutions vying for market share (and not profit maximization) which wrested power away from owners (entrepreneurs/shareholders), regulators and consumers via conventional means (e.g. vertical integration, advertising, product differentiation) and unconventional ones (e.g. bureaucratization, capture of political favor), etc. Naturally, these were themes already well-espoused in the old American Institutionalist literature, but in the 1960s, they had been apparently forgotten in economics. The issue of "political capture" by firms was expanded upon in his 1973 Economics and the Public Purpose. But new themes were added - notably, that of public education, the political process and stressing the provision of public goods. Although often not acknowledging it explicitly, many economists have since pursued themes raised by Galbraith.