Wednesday, November 08, 2006

Samsung Invitation: Why?

I know it is tiring to be just critiquing what the government is doing. It is not the most pleasant role to play. Honestly, if I had a chance, I would have helped the government with a strategic and a visionary outlook. Since I am not part of the system, I can't help the president before he makes his decisions.

If you know how I could be of help to the president, let me know. Seriously. At the end of the day, it is not about CCM, Chadema, CUF, TLP and any other political party. It is about poor folks who end up with dirty roads and substandard health care.

I strongly believe that Mr. JK has good intensions. But he comes short. I convinced he comes short because of his limited environmental and culture exposure. He is trying hard, but you can’t accomplish what you don’t have a context for. He is limited because he has advisors who are also not visionaries. At some point, I believe that Mr. JK and any other president will have rule that country just like a CEO would run a for-profit company. Tanzania must come up with unorthodox leadership style to change things around. That is because we have to catch up with the rest of the world, quickly.

It is clear that we don’t have a clear, consistent plan to eradicate electricity problems, because Mr. JK has just engaged Samsung to invest in electricity generation. I understand that the president has to do all he can to ensure that pertinent problems are solved. Nonetheless, that does not mean that he has to say or act on everything before the vision, the strategy and the execution plan for eliminating the problem have been ironed out.

Samsung is undoubtedly a giant company. It is an established company. It has a wonderful reputation. However, electricity generation is not their core competency. Electricity generation is not what they do best. So why do we engage electronic gadgets and ship building company to invest in electricity generation? Why don’t we expand the Tanesco capabilities? If that is not possible, why don’t’ we privatize Tanesco then? Hello, are the advisors awake at Ikulu?

The Samsung deal might sound nice and dandy. But at the core of it, Samsung is not coming to Tanzania to generate electricity for us; they are coming for more than that. Let’s get to it. Ladies and gentlemen, please read the following excerpt from IPP Media with me:

SAMSUNG has also shown interest in exploitation of Tanzania’s iron and coal, so as to produce steel which has a huge demand in Korea, as it is used in ship building and production of industrial machines. The Korean firm is also interested in having a stake in copper mining.”

That is why Samsung will be coming to Tanzania.

I can't blame Samsung. It makes sense from the Samsung’s point of view, because Samsung is engaged in electronics, communication and shipbuilding. Samsung’s interest is to find steady supply of cheap raw materials from a poor, naïve country like Tanzania. Case in point: The demand for copper, which is used in manufacturing electronics, has climbed recently, forcing a concurrent rise in prices . Does it make sense for Samsung to produce own raw materials, probably below world market prices? Absolutely. But guess who the losers are from the deal with Samsung? We are. Tanzania will end up being losers, failing to capitalize on higher market prices for copper and iron. Furthermore, as China continue to grow, so is the rising demand of iron.

Essentially, we got played. The Koreans have just thrown in a little bone in order to get a bigger piece of the pie. We are in a dire need to solve electricity problems. So a brother in need would sound like a brother indeed, right? Wrong. I work with Americans. I know how it all goes down. This is the game: identify an opportunity, create a relationship, and reap huge benefits in the future. Samsung is not electricity generating company, but they are making an extreme shift in their corporate focus to get their feet through the Tanzanian door. That should sent danger signs all over. When a company steps outside its comfort zone, we got dig deeper into it.

KEPCO NG, the company that Samsung wants to "partner" with, is an independent, global electricity generating company. Why can't Tanzania engage KEPCO directly? Why allow Samsung to play some mental games with us? What Samsung is doing is playing a middleman that we don't need. They are playing a dirty, business game.

You know what the best deal would have been? It would have been for Samsung to move some of their production facilities to Tanzania. Create a few more jobs for our young people. Moving raw materials from Tanzania only benefits the Koreans, but it seems Mr. JK and his boys were just happy to get "anything" from the Koreans. That is not the smartest way to run a country.

I wish I had access to Ikulu. I mean, why are we so naïve? The truth of the matter is, no company in the developed world will ever get into a venture without doing their homework. I am sure Samsung has studied the Tanzanian culture, the opportunities available, the angles to attack, etc. The problem is, Tanzanians never do that. I am sure that Mr. JK just shook hands with folks he has no data on, purely banking on their smiles.

Smiles? Do you know how fake these smiles are? Just ask some of us in North America.

It is true that we are desperate to get rid of the electricity problems. Nevertheless, that does not justify engaging ANY company. We have to follow the script within the drafted strategic plan to eliminate electricity woes. We have to perform due diligence on every company and to gauge whether all companies invited for investment match our needs and goals.

I think that is smart. Why can't we do that?

Update: November 10, 2006
According to IPP Media, Mr. JK has had a discusssion with KEPCO about power generation in Tanzania. I have to commend that. If you need meat, you talk with meat suppliers, not paper suppliers. This is a smart move. Mr. JK, that is the way to go.

Photo: Freddy Maro

17 comments:

Anonymous said...

You did it again ? Hey Bruh i think we think alike i concur with you on 99% of issues you reflect here ! keep it up and i bet you i ll bring traffic into this blog it is one of very few TZ blogs that make extremely sense and we need to emulate and spread this critical loud thinking so that we can engage the old school leaders in power till we get there! They are snoring ! Ohh boy Its gonna take time though !
thank you again Mungu ibariki Tanzania

Msemakweli

Jaduong Metty said...

@Msemakweli,

Thanks for visiting and sharing your comments. Snoring? That leaders in TZ do. As you pointed out, things will change with time.

luihamu said...

Metty its another topic a wonderful and painful topic,lets look this way,the next two generation to come will have no future,we are selling everything we are giving everything away just like that.Yes i know we have a power problem here at home but to my point of view i think the goverment+wananchi could find a proper way to solve the problem,now tell me the Korea are making profit out of nothing they are coming to take what is ours and for the next generation.Again i have a disturbing problem is it true that we have only one source of generating power here in Tanzania,a country of more than 34million people can't come together and figure out which way out?remember yesterday we talked about why we wananchi cant asks questions,we wananchi have to know the whole process of how the Korea company will benefit after helping to solve the power problem.Is this deal going to last until Jesus comes?Mungu ibariki Tanzania Mungu ibariki Afrika na watu wake.

Jaduong Metty said...

@Luihamu,
Tanzania has a plethora of power sources - the sun, wind, water, and natural gas. So we have no excuse there.

As I hinted, the issue lies with lack of a strategic plan. That sounds like a typical TZ, isn't it? The proof has been lack of a consistent pursuit. We have had different approaches thus far from our leaders. For instance, Lowassa invited the Thais and now the Prez is courting the Koreans, not forgetting the involvement of RDC and the like. The biggest question that I have is, are those approaches part of the strategic plan? I doubt it - all of it is our good old "zimamoto" style.

I'm convinced that we have the smartest people out there, but they have either been frustrated by the system or not willing to work with a broken system.

It surely going to be painful for the next many years. Plus, we still have the Z'bar issue to figure out, not forgetting the pressure we are facing from other EA countries. We're in deep trouble, if we don't think and act fast.

Mtaalam said...

Mtango(Balozi Japan) ndio bomu kabisa sijui hata alikua anadanganyana nini na JK hapo. Bongo inshort UMIMI ndio unatuponza, kila mtu anataka 10%,sijui kama tutafika(hata kama tukifika tutakua tumchoka sana). Blog BOMBA sana, am hooked!! keep it up bro

Chediel Charles, Luihamu ringo said...

Duuh ! inauma sana waweza lia ni mengi tu yanatuomiza hapa nyumbani.Sasa wanawaleta wengine nao wachume Je huo umeme utauzwa senti ngapi na hiyo mikataba iko safi Eeeeh twafwa
Keep it up Umiza kichwa

Jaduong Metty said...

@Mtaalam & Chediel,
Asanteni kwa kunitia moyo. I will continue to provide an insight on what I see. Hopefully, the next generation will be more enlightened than ours.

Overall, kuna matumaini Tanzania.

Anonymous said...

You are doing great all these issues.The way you tackle them professionally,you can`t do it any better.This is how those so called "press men" aresupposed to be working.Keep it up.

Patrick Kamera said...

Hi Metty,

One is left to wonder if the president has any level-headed economic advisors, really! Could it be he very well does, but doesn't heed their advice?! Hard to tell, but I do not believe he would go out on limb all on his own, if you catch my drift!

In this particular case I would hesitate to blame the president's exposure or lack thereof as the reason behind his actions(courting Samsung et al.); that would be a rather simplistic approach to what I consider a more complex problem.

I understand that the president has to shoulder the bulk of the responsibility as it comes with the office he is executing, but in all fairness, we need some smart and selfless brains in our economic and planning departments. I know we have some brilliant economists and strategic planners, I am not so sure we have self-less ones.

As long as 10% for the big kahunas is still the motivating factor in decision making, it wouldn't matter who's president, we'll continue sinking deeper and deeper into the pit we've already dug for ourselves.

What's it going to take to turn things around? Now, that's a question worth pondering.

Anonymous said...

it is embarassment to tanzanian to have a head of the state moving from one courner of the world to another bagging.we have representatives all over the world what are their doing
the president is the head of the state and leader of the government.he is the team leader we do not expect him to move around like a 'machinga'
so the problem of electicity can not be solved by the president alone,let stakehelder be invited to try the....

Anonymous said...

in my view the problem of power is not addressed properly.we do not have policy on energy that cut accross the board.it is interested to not that despite the wind technology is in the place since immemorial it is hardly been mentioned as an altenative suorce of power especially in the rural arreas where the power from the the so called nation grid is day dreams.it is high time for all of us to scratch our mind so that at the end of the day wind could make use of it

Anonymous said...

I would tend to believe that the leadership is now fire-fighting on the ussue or if you like the current power generation and distribution crisis. One of the critical factors in any successful development effort, as you rightly pointed out, is strategy and a subsequent implimentation plan.

Now to have a strategy you need all the possible resources available to you in terms of expertise...read, Brain Power. Im hard pressed to believe that the many energy experts that the country has channed out from its various universities and those educated abroad have been effectively consulted to give professional input and advise on how to get out of this perenial problem once and for all.

And this is where the problem starts...where politics becomes bigger than anything else. Where politics takes the center stage and everything else is moved to the periphery. When we let politicians make critical sector specific decisions without caring for the after effects of such decisions.

What I can read from this situation is, the problems stems from leadership decisions based on political considerations as opposed to economic consideration...and now those policitiacl considerations have been met successfully but what was ignored has come back to haunt us....needless to say this not a power/energy crisis as we all think it is, its an economic crisis and its not being handled well!

Jaduong Metty said...

@Anony 12:36
Thanks for your compliments. I greatly appreciate that. I will continue doing my best. But your feedback and corrections are welcome. I can only grow through positive criticism.

@Patrick,
Man, you came out hard. I like that.

I agree that it is a simplistic approach to view the root of the problems we have in TZ as due to lack of exposure among our leaders. We can try to complicate it and dig deeper, but you know what? That really is the issue.

The fact is, the president and most leaders in TZ have no context for progress and how to get there.

Traveling abroad does not really constitute exposure in its real sense. You have to "live" the American life, for instance, to get to catch the Americans thinking mode.

I made an assumption that Mr. JK means well. If we consider the 10% effect on every major decision, then my argument is totally thrown out of the window.

It is totally up to the Prez to identify and recruit the best advisors. If he has crappy advisors then the ball falls back right on his lap. The Prez owns the vision and he has to know how to better execute that vision out.

The fact that we have not had a consistent power policy shows the president has nothing in his mind. It also shows that he hand picked wrong advisors too. That, I cannot blame the advisors for, but the president himself.

Jaduong Metty said...

@Anony 10:08
You could have not said better. It is absolutely true that TZ has not moved towards appreciating technocrats.

The fact that we have the likes of Prof. Sarungi who traded his true profession for a political career only shows one thing - it paid for him to be a politician than a technocrat.

Case-in-point: Was it Mr. JK's responsibility to solve power problems or the Tanesco's CEO?

That is exactly where the problem is.

David Karani said...

I must thank and congratulate Metty for the service he is doing to his country. What the postings here show us is that Tanzanians really care about their country.

During the enlightment period in the West, especially between 13th to 16th centuries, many thinkers and philosophers exchanged "letters" discussing various questions of the day, for example religion and reason. Their discussions were not in vain as is exemplified by the triumph of rationality over dogma generally which have brought the world to what it is today. The current discussions both within and outside the country will, therefore, lead to better and more robust ideas about how to improve our lot in Tanzania and Africa generally.

Now, Ladies and Gentlemen, on the question of Power Crisis.

For the last 10 to 15 years, we have been on and off blackouts in our country. We have a generation of young people growing up believing that the so called "power rationing" is something normal (well, they will need to get exposure to learn that it is NOT normal, more on that on a separate posting)!

Metty has the right to worry as to why the government has invited Samsung to help alleviate the power crisis. However, it is possible that he does not have all the details. In International Business today, companies seldom work in isolation. PEPCO is large but local firm in Korea with few projects outside the country mainly in Asia. SAMSUNG on the other hand, is a large conglomerate with vast experience in international markets. Combining PEPCO’s power generation expertise with Samsung’s experience in international markets could produce the synergy that both companies needs.
There could also be financial considerations such as the need to spread risks. It is therefore not easy to judge from newspapers reports as to whether it is right to invite Samsung or not.

On the issue of Samsung wanting to invest in our extractive industries, the ball is in our court. Yes, I will explain.
It is true that the rise of India and China has increased the demand for raw materials around the globe. That provides us with new buyers and higher prices. For many decades, western companies were the only boys in town. With their mentality on opportunities and profits as clearly and rightly pointed out by Metty, they managed to reap Africa of its wealth through various means including but not limited to Production Sharing Agreements (PSA). You wonder why the richest continent in resources is the poorest!

There are many reasons why western companies managed to get contracts that did not benefit us in the past. One such reason was that they exercised monopoly over technological know-how (read, particularly, the technology of the extractive and related industries). The rise of China and India has coincided with the availability of technology not only in those two countries but also in places like Korea which developed earlier. In other words, technology can no longer be held as bargaining chip to obtain cheap concessions in poor countries (unless, of course, we Africans allow that to happen).

That is why we have the ball in our court. We need Samsung not only to work with their Korean counterparts to generate power, but also to invest in the extraction of iron and coal. And to be fair to Metty, yes, vertical as well as horizontal integration of the industry should be seriously considered. The crucial question we must ask ourselves, and indeed our leaders must ponder and get it right this time is: What kind of contracts are we going to sign?

So, in my opinion, Samsung is welcomed, but on our terms

Jaduong Metty said...

@David
Thanks for providing another wonderful insight. I must agree, I work with what I have. I can only judge and analyse issues from newspaper articles. Do I miss the mark sometimes? Absolutely!

I can only see the other side of the coin from contributions such as the one you have provided.

I don't have any problem with Samsung coming. But as you alluded to, the issue is whether Samsung will fit into our strategies and plans. Not ignoring a key question of whether our business relationship will result into a win-win situation. Historically, our mining contracts have only resulted into TZ losing. Given that fact, our worries are justified.

I like your piece though, very enlightening. Asante sana.

Anonymous said...

Karamagi unauweka usiku, unawapa Richmond muda zaidi hadi February 4th, ili iweje? ama kweli mawaziri mufilisi ndani ya serekali muilisi ni wengi na majuto ni mjukuu!
unapewa uwaziri lakini unayaonea aibu maswala yanayoangusha uchumi, unatumia kigezo gani kuwapa muda hadi February?