Latin America, common roots but full of diversity!!

Latin America, closer to our hearts

(Map available at Yahoo Images)

Latin America means home for us, but it is a definition that still many of us don’t understand, since sometimes we think about it just as south America, but it means a connection with the roots of our languages so it goes up to Mexico and even includes the province of Quebec in Panamá.

But as a closer place for us there was a presentation, of Juliana Chacón, Mónica Ordoñes and Jaime Andrés Cardona, that focused on three main aspects, politics, economy and culture, which we are going to explain here.

So starting with politics, they highlighted in the presentation that there is not coordination between Latin American countries towards a common political style, what makes it hard for the region to take common decisions looking for a common goal and does not allow coordination in the activities they undertake together.

That also, has made possible to identify smaller groups taking similar directions, and at the moment those are center-left, radical left and center-right.

The center-left is related to social democracy and seeks to have a mixed economy and a regulation within the market in order to guarantee an egalitarian system. Right now, the most important country with this tendency is Brazil with Lula Da Silva, Chile with Michelle Bachelet and Paraguay with Lugo, among others.

The radical left is based on a total equalitarian base and takes as guide the theorist from Marx, Lenin, Stalin and Trotsky. It is against capitalism and it uses a populist rhetoric.

According to the presentation, it looks for an immediate well-being but doesn’t think in the long term, gets in debts that are hard to pay and wants to give total employment without thinking about productivity.

And here it goes against the “imperialism” of the States in Latin America.

The most recognized left government is the one in Venezuela with Chavez, and then we consider its friends Cuba with Castro, Bolivia with Morales, Ecuador with Correa and Nicaragua with Ortega.

And finally, the center-right is the one in favor of the free market, promoting Foreign Direct Investment, reducing taxes and like that reducing the public costs.

The main countries with this tendency are Colombia with Uribe, Perú with García and México with Calderón.

Nonetheless, this perspectives and view doesn’t seem to be considered stable for the following years since the next year there are elections in many countries of the region and the outcomes are still unsure for some of them.

The economy has as main region integrations ALCA, ALADI, CAN, MCCA, MERCOSUR and AEC.

The ALCA is an initiative to have a Free trade Area for the whole Americas, but right now it is finding a huge opposition from countries as Brazil, Argentina and Venezuela who propones the ALBA as an ALCA (Alternativa Bolivariana par alas Americas) opposite.

ALADI is an important institution in the region, it doesn’t subscribe commercial agrrements but it seeks to coordinate the intentions to achieve an economic integration and promotes the subscription of FTA’s and others.

The CAN, MERCOSUR, CACM and AEC are regional economic integrations that are aiming somehow an economic union. Despite of this the efforts are hard because of some differences among the members. From those the closest one is CACM, which is a common market already.

And finally, concerning cultural diversity it was highlighted that there are many racial groups thanks to the mixed of cultures and people, the indigenous habitants and then the European migrants and the African they brought, and unlike in other European colonization this time there was a mixed of races creating like that the mestizos (European and indigenous) and mulattos (African and the others).

That has made Latin America a culture full of diversity and a colorful continent.
With languages Spanish is the most influential, but there are other languages as Portuguese and French.

Latin America is definitely a beautiful continent full of places and cultures to explore.

Special Note:
This Blog was made and design by María Camila Restrepo Zuluaga, Julia María Rodas Jaramillo and María Natalia Suárez Vallejo.

References:
Cardona, J.A. & Chacón, J. & Ordoñez, M. & Vargas, N. 2009. Presentation "Latin America: A gaze around the region" part of the subject Organizations and Cultures at the University EAFIT

Course Evaluation

Organizations and Cultures

The course Organizations and Cultures is a very interesting course and which is important for our studies due to the closer look it gives to the importance of cultures in organizations, the meaning of diversity and tries to makes us closer to the global context.

I enjoyed a lot the topics and how the subject wants to makes us more critic on what we read and know and how it is important to question things and look for those answers.

The part of the expositions/presentations is good in the way that people can be creative, become expert on a topic and develop skills to share that with the class. However, there is also a huge flaw in the methodology and it is how mediocre the student community in EAFIT tends to be. There have been amazing expositions that show the interest of the people on the topics, the commitment and investigation to do something smart, but there are also some of them that should feel ashamed to do such a presentation in a university environment. Some of them even make mistakes in the titles that are inacceptable, and more if we are support to be experts, other talk about things that have nothing to do with the topic and the real issues to be addressed are left behind and other just make it heavy and sometimes unbearable.

But finally, when it comes for us to be critic about it we stay quiet, because we don’t wanna be pointed as the ones trying to affect our classmates and become an outcast.

Hopefully, with time we are more willing to give our best, do a great job and expect that from the others and if we don’t get it ask for it.

The part of the research proposal has been also very cool for me. We need to become a culture of investigation and propose things according to the things we find out. We tend to leave investigation for the engineering and are not conscious that our studies also need to improve and have new things.

Besides we can have better ideas of things that we want to know and can help us be more aware of the situations and needs of our society.

Additionally, it is an advantage to have a good guidance through the process, being able to reach the professor at any time and receive help.

Finally, in the entire course I find important how we become more aware of the importance of the form and the content, and how we are getting ready to meet international standards.

North America setting examples for the world

A Closer Look at North America

(North America Political Map, taken from Yahoo Images)

America is such a broad continent that it has been divided in different subcontinents: South America, Central America and North America.

However, there are different definitions on what really North America is. Some people talk about it as just the United States and Canada, other add to those two Mexico and other islands in the Atlantic and others take central America as well.

So in the presentation made by Natalia Barco, Laura García, Annika Ekström and Marie Nilsson, they define North America according to the National Encyklopedin, which says: “North America, the north part of the double continent America; 24.4 million sq km, 529 million inhabitants. Greenland, Canada, USA, Mexico, Central America and the Caribbean belong to North America… In some occasions Central America and the Caribbean are separated as special regions and sometimes North America is used synonymously to the cultural concept Anglo America in contrast to Latin America.”

It is also important to highlight, that Greenland belongs to Denmark and like that it is consider as a part of Europe, and Hawaii geographically part of Oceania as a State of the USA is considered part of North America.

But as in the presentation, despite of how broad North America has been defined, there will be a focus on three countries, Canada, Mexico and the USA.
These three countries are linked geographically, share some similar historic roots and economically are very important due to its FTA, the NAFTA (North America Free Trade Agreement). This FTA was signed in 1992 and has been a reference in trade all around the world, inspiring many others FTAs.

The NAFTA according to the presentation has 2 main objectives, being one the gradual reduction of tariffs and other trade barriers for goods as well as for services and the other one is to create a free-trade bloc.

With the constitution of America, we have to consider the influence of Europe, and how the Spanish were important especially for Mexico, and British and French for the USA and Canada, among other European immigrants as the Dutch and the Irish.

But the American continent was not only occupied by European immigrants, before them there were many important indigenous communties, Some of the managed to survived, while others were killed by the many diseases European broughts such as the flues, or by the Europeans.

And Europeans didn’t come alone either, they brought the slaves making America a place where different cultures met and have been living together, shaping the continent.

However, dispite the similitudes each country faced different historical facts, geographical differences and many other things that made them unique.


United States

General Info:
· Its capital is Washington D.D
· It has an Area of 9826630 km2
· And they have a population of around 307 millions.
· Considering their GDP it is of USD 14,11 trillions and the GDP per capita is USD 46820. The USA is the number one economy in the world.

(Foto taken from Getty Images, "Bald eagle in front of American flag" by Vicky Hart)

In the presentation, they addressed some mains issues as:

Immigration, where they higlighted the importance of immigrants for the population groth in the States and the creativity and innovaion they have brought. Nevertheless, there has always been a difficult concerning the iligal immigrants entering the country, in some places as Miami and California there are also issues between “Americans” and Latin people (cubans, mexicans…) and after September 11 the rejection many immigrants face, specially the ones coming from the Middle East or who are muslims.

The other topic, was the Government, being important the institution of the three branches “legislative”, “judicial” and “gobernment” and how the idea of the democratic government was develop there in order to response to the abuses, specially with taxes, that Great Britain was imposing to its colonies in North America. There were a lot of important people who fought for the independence of the 13 colonies in North America and who build a governamental institution and structure that is very important in today’s world. The people form the States are proud of that and in many of their symblos as their flag you can see features realted to the 13 colonies and how they became what they are.
(Foto taken from Getty Images. "Mount Rushmore National Memorial" by Ed Freeman)


At the moment the US president is Barack Obama, something important is the fact that he is the first Africanamerican president.

With the culture, it is important to talk about the role of religion with a religious diversity, but clearly more towards Christianity, not all of them are catholics and there are christian religions as the mormons that were born there, but the common line is that they follow Christian beliefs.

The food has a huge european influence. But in the States they are facing problems as obesity due to the lack of a healthy food style and the junk food available everywhere. So it represents a major challenge for the States since it is better to have a population who knows about and has access to healthy food, undertake fitness programs and like that are able to have a healthy life.

And finally, the business culture, where they are individualistic, look forward to take advantage of all the posibilities out there and treasure time since “time is money”.

Canada

General Info:
· It’s capital is Ottawa
· It has an area of 9984670 km2, what makes them the second largest country
· It has a population of around 33 millions
· Its GDP is of USD 1307 trillions and the GDP per capita is of USD 39300

(Image taken from Getty Images. "Hand holding maple leaf with canadian symbols on it" by Kain Zernitsky)

In the presentation, they talk about facts as the weather, since due to its position they hace really cold winters, and in the north areas they actually have the Antartic.

The languages are also very important since Canada has two official languages English and French and there is also space for many other languages, which their immigrants and families keep as Mandarin. In the way they are supporting multiculturalism, there is also space in many schools according to the communities to teach classes in other languages, for example in the Province of Saskatchewan many slavic languages are the most common at school.

With the government they are a parlamientary government and constitutional monarchy. While they States was figthing for their independence, Canada took a different road, so they still are related to the British Crown having the Queen Elizabeth II as thier head of State with a governor acting on her behalf, but they have an independence in their decisions.

Culturally, Canada is very diverse. With the multiculturalism policy you can see space for different religions, foods, customs… everythin according to the background of people. But the most well known are the features coming from the British culture and the French one, who were the most and the ones who define and build the country. Anyway, those particular cultures also live with general ones, which are the culture of each province and the national culture. Each province has symbols and features that makes it different from the others and special for the country, and as Canada there are general things as the beaver and the mapple leaf, important for their history and they are also in the road trying to define what really means be a canadian.

(Foto taken from Getty Images. "Beaver carrying a stick through pond in Elk Island National Park, Alberta" by Peter Essick)

In the business culture, they appreciate punctuality, they are reserved and more conservative.

Mexico

General info:
· Its capital is Mexico D-F
· It has an area of 1972550 km2
· Its population is around 111 millions
· It has a GDP of USD 1559 trillions and teh GDP per capita is of USD 14200.

In the presentation they talk about Mexico and its most important features, drawing special attention to its natural resources with oil, copper, gold, zinc…, its climatic and geographical diversity, and its cultural background with the Spanish and the inidigenous cultures, that still play a significant role for the community.
With the exports they are very important with grain crops, being the most important the corn.

(Image taken from Getty Images. "Mayan Pyramid, Chichen Itza, Yucatan, Mexico" by Martin Shields)

Mexico is a presidential democratic republic.

Economically, they are growing fast, and they are becoming important in sectors as telecommunications not only inside Mexico, but in Latinamerica.

In their culture, the social stratifications and the machism play an important role. And they are in their body language very expressive and enjoy being close to people.

It is a very touristic country, and there are many nice places to explore and they have a very reach culture.

Finally, the corporate culture has values as puntuality, hey like to take time for the negotiations so they go slowly and Spanish is usually the language to go with for business.
(Foto taken from Getty Images. "Performers in front of Palacio de Justicia" by Ryan Fox)

North America, is definetly a place full of opportunities and interesting features to study and these three countries are leaders somehow in today’s world, so it is important to keep an eye on them, look for partnerships and learn from them.

Special Note:

This Blog was made and design by María Camila Restrepo Zuluaga, Julia María Rodas Jaramillo and María Natalia Suárez Vallejo

References:

1. Barco, N.. & García, L. & Ekström A. & Nilsson, M. 2009. Presentation "North America" part of the subject Organizations and Cultures at the University EAFIT.

2. Notes of the subject “North America studies” at the University EAFIT, 2008

Australia and its culture and strategies

Influence of Culture in Business

1. Describe Baird et al (2007)’s paper in terms of research methodology

As the authors said at the beginning of the paper “The culture of Australian organizations and its relation with strategy”, the first purpose of it is to add and corroborate the research of Sarros and co-authors by examining the culture of Australian organizations, but using a different version of the Organizational Culture Profile and a different subsample of Australian managers.

So, been persistent with their objective, they selected randomly from the Kompass Australia Directory 400 financial controllers in manufacturing and services industries in the country and sent to them a format with some questions via mail. Only 184 completed surveys where receive which represents the 46% of the total of the questionnaires.

The results that the research dropped was grouped and analyzed in order to realize if the hypothesis that they had established (According to what the authors that they mentioned in the paper said) and their research about the topic converged with the findings.

The hypothesis where the following:

1. Organizations with a prospector strategy will have an organizational culture that is (a) more innovative, (b) less stable, (c) less focused on attention to detail, and (d) more outcome oriented than organizations with a defender strategy, with analyzers in between.
2. Organizations with a reactor strategy will have an organizational culture that is weaker in respect of all organizational cultural dimensions than organizations with a defender, prospector, or analyzer strategy.
These hypotheses are developed after two structures were well thought-out. In the first one Organizational culture was measured using the Windsor and Ashkanasy (1996) adaptation of the Organizational Culture Profile (OCP) of O’Reilly et al. (1991) and the second one, was done under Sarros et al. (2002)

Both structures showed similarities because in some way, the authors that were selected to make them used the adaptations of the OCP that was derived from O’Reilly et al.’s (1991). But according to the authors of the paper “the main difference between the two structures is that Outcome Orientation in W&A is split into two factors, labelled Performance Orientation and Competitiveness by Sarros et al. (2002). The Outcome Orientation values of ‘being results oriented’ and ‘having high expectations for performance’ loaded on Sarros et al.’s (2002) factor labelled Performance Orientation, while the values of ‘being achievement oriented’ and ‘being competitive’ loaded on Competitiveness”

By the other side, the results of the questionnaire help the authors to develop a table about the factor loadings and descriptive statistics for organizational culture component items, where they could identify how much important was for the sample, in average, each of the principal component of the OC. Also, they did the same, but just with the principal factors, and in conclusion, the order of importance that the Australians gave to these factors in the organization was:
Outcome Orientation
Respect for People
Attention to Detail
Team Orientation
Innovation
Stability

Then the next analysis was base on notice how much importance each strategic types gives to these principal factors and for last, the same exercise was made, but instead of the strategic types, they analyzed the case of the services and manufacturing companies.

In the analysis of the strategic types, according to the authors of the paper, the results for Innovation, Outcome Orientation and Stability are significant and in the expected direction (taking into account that the financial controllers classified from 1 to 5 the factors, where lower scores represent higher levels of cultural factors) For Innovation, prospectors have the lowest mean score (indicating the highest level of Innovation) at 2.58, followed by analyzers (2.74), defenders (2.76) and reactors trailing at 3.58. For Outcome Orientation,
prospectors have the lowest mean score (indicating the highest level of Outcome Orientation) at 1.75, followed by analyzers (1.84), defenders (2.07) and reactors (2.27).
For Stability, defenders have the lowest mean score (indicating the highest level of
Stability) at 2.26, followed by analyzers (2.35), prospectors (2.77) and reactors (2.85).
The results for Attention to Detail show no significant differences (although the means
are in the expected order of greatest importance for defenders followed by analyzers,
prospectors and reactors).

Hence, while the results were in the expected direction for all four cultural dimensions,
Hypothesis 1 is only partially supported in terms of two of the four cultural factors
(Outcome Orientation and Stability).

For last, the results of the analysis of Services and Manufacturing companies where very similar, According to the authors “While previous studies have produced mixed findings, our results suggest no difference in culture across the two industries. The egalitarian nature of Australian societal culture might also explain the lack of observed differences in the organizational cultures of service and manufacturing organizations.”

2. What were the main findings on Baird et al (2007)?

The Culture of Australian Organizations

In the study the Organizational Culture Profile (OCP) of O’Reilly et al. (1991), was used to describe the culture of Australian organizations, as perceived by those organizations’ financial controllers.

The study found the perceptions of financial controllers of Australian organizational culture were similar to the perceptions of managers.

One of the finding was that that the most prominent characteristic of Australian organizational culture was Outcome Orientation, followed by Respect for People, with Stability and Innovation being the least prominent characteristics.

Organizational culture is an important determinant of managers’ and employees’ work attitudes, decisions and behavior and, ultimately, an organization’s financial performance.

Less auspicious is the low ranking of Innovation, a cultural factor characterized by a willingness to experiment, being innovative, being quick to take advantage of opportunities, and risk taking. Most of the findings are consistent with Sarros et al. (2002) study.

With respect to Australian social or national culture, and its implications for organizational culture, tell us that the country is egalitarian, mateship and Individualistic characteristics, Ashkanasy et al. (2000, p. 42) found that the “mateship” characteristic of Australian national culture “represents a leadership style that focuses on the group”, with leaders expected to be “one of the boys” (or girls?).

Egalitarianism (the belief that people should be treated the same and as equals) has consistently been identified as an Australian cultural trait, and seen by Sarros et al. (2005, p. 176) as “the ability of Australian leaders to engage socially with workers while also nurturing and developing their careers”.

National cultural characteristics: according to Triandis (1995, pp. 44-48) Australian society is “horizontally individualistic”. Horizontal individualism recognizes the egalitarianism aspect of Australian culture and describes a culture where people are regarded as independent of each other and self-reliant and self-directed (individualism), countries that are horizontal individualist do not like people who “stick out”,

The egalitarian nature of Australian societal culture might also explain the lack of observed differences in the organizational cultures of service and manufacturing organizations. That is, in a less egalitarian society, organizational culture might be consciously articulated to fit the organizational context such that service industries might seek to generate more people-oriented cultures than manufacturing. However, in a highly egalitarian society, where a people-oriented culture is generally strong, the societal-driven cultural characteristic might transcend industry differences.

References:
Baird, K,. Harrison, G,. Reeve, R. 2007. THE CULTURE OF AUSTRALIAN
ORGANIZATIONS AND ITS RELATION WITH STRATEGY. INTERNATIONAL JOURNAL OF BUSINESS STUDIES . VOL 15, NO1, pg 15 of 41.


3. How does the culture of Australian organizations relate to their strategy?

Before we can explain the relation between the Australian culture and their strategy, as Baird, Harrison and Reeve (2007) did, it is important to define first the general relation between culture and strategy.

As the authors say, a lot has been studied between this relation, and while some findings said that cultures are strategies themselves to overcome basic life difficulties and survive (Bate, 1994), others say that culture limits strategic options (Schein, 2004) and others that it is the strategies that limit cultures (Joyce and Slocum, 1990).

So no matter how it is studied the truth lies in the fact that culture and strategy are interrelated and are basic to make possible for the organization the accomplishment of its goals as (Baird, Harrison and Reeve, 2007).

After clarifying that relation, we can start studying the factors relating those concepts in Australia.

In the research Baird, Harrison and Reeve (2207) carried out and compared to other research they conclude that the most important feature from the Australian organizational culture is their “Outcome Orientation” as well as the “Respect for people”, while the less relevant has been “Innovation”.

Like that when Australians define their strategies they are seeking for concrete results and the important thing is the result achieved more than the pat to get there. As the authors mentioned those results influence the concept of a successful company and determines how the workers should behave and what attitudes there are. That has also made the companies’ strategies to focus in the financial performance (Thanks to that some authors as Windsor and Ashkanasy (2006) consider the Australian organizations “financial controllers).

Due to the importance of results, the companies also define strategies that allow them to have lasting results on time, maintaining the good performances (Baird, Harrison and Reeve, 2007).

That organizational culture and strategies have advantages, but there are lacks in other aspects as Innovation, what makes companies afraid to experiment and be more aware of new opportunities. Somehow, it is also related to their Outcome Orientation, since Innovation also means taking risks, and when your working toward a result you want to achieve you want to get there in the less risky way possible.

But it also depends on other factors as the economical and social ones that are forcing Australia to consider more Innovation (Sarros, 2002).

Some of the economic reasons shown by Sarros are concerning the recent change the industry is facing because of the transition of a protectionist government to the exposure of micro- and macroeconomic reforms that have changes from the labor market to other as tariff.

The social changes motioned by Baird, Harrison and Reeve (2007) are more related to a new tendency leaving behind its “mate” and layback oriented work environment. Australian companies are becoming more aware of the need to innovate in order to succeed in today’s world and as Sarros (2007) said be “more competitive in the global stage”.

Still the mateship orientation has some good features as the importance of the group work and the support among its members. It is pretty much related to “People Respect”, which also encourages the individual rights and the values of people. Like that Baird, Harrison and Reeve (2007) describe the society as horizontally individualistic; it means that they are self-reliant but equalitarian too (Triandis, 1995).

These tendencies in the society makes the strategies of the companies to look for social responsibility establish a good reputation and have a clear philosophy (Sarros, 2002).

After this analysis of the three main characteristics between culture and strategies within the organization, one of the main conclusions was that in Australia stability plays an important role, and that the culture is an essential part of the definition of the strategies.

References:
Baird, K. & Harrison, R. & Reeve, R. 2007. The culture of Australian Organizations and its relation with strategy. International journal of Business Studies, 15(1): 15-41

4. How does Roy Green (2009)’s article relates to Australian culture and Australian organizations?


Roy Green is relating both parts first when he asseverate the willingness of Australia to get out of the crisis, in this is possible just by following the advises given by some economic authorities. In this way they will try to accomplish the challenge of the short term boost to demand, and by creating a sustainable value creation supported in a long term capacity for innovation and entrepreneurship. So, this is the moment when firms can’t just stay rigid waiting for others to act in behalf of them, but is time for firms to be more innovative, to impulse that creativity in their employees. Those that because their culture has that sparkle of creating things easily, thinking about the consumer and its needs, the products and services that could be bought in a store so they can launch them into the market with more success So by the time they are solving something that have more immediate effects by giving what the market is exactly looking for, is injecting some prosperity and hope with that inventive in a long term using their population which its majority like to live in better conditions improving their lives

References

Business Studies, 15 (1). 15-41), and Green (2009) (full reference: Green, Roy (2009). Innovation the key to recovety. The Australian. 1st April 2009).

Special Note: This blog was made by Juliana Chacón Piedrahita, Mónica Ordoñes Buitrago, María Camila Restrepo Zuluaga, Julia María Rodas Jaramillo and María Natalia Suárez Vallejo

Oceania a continet full of surprises

Getting to know Oceania better

(Map of Oceania taken from Yahoo Images)

Oceania is a continent but unlike the other ones, it is not continuous formed but many islands, and a lot of people do not know much about it, the countries that people associate with this continent are Australia and New Zealand. But the other ones are unknown or not easily located on map by the majority of us.

This continent is divided into 4 regions: Micronesia, Australasia, Melanesia and Polynesia.

In this blog we are going focus on the Australia region, this is composed by three countries: New Zealand, Australia and Papua New Guinea. The first two countries are getting a big importance in today’s globalized world, and the tendency is that PNG will follow the steps of their neighbors in order to develop themselves and get both market benefits and transmission of technology.

These three countries have a lot of things in common, but a very important factor is their history, all of them make part of the common wealth and for all of them England represents a big power and the Queen Elizabeth II figures as their monarch.

These three countries are very proud of their aborigine people, and the diversity of ethnic groups and nature are a big deal for these cultures. But things differ; In PNG the majority of the population is aborigine and still conserves a lot of the traditional customs and heritage. And in New Zealand with a 78% and Australia with 92% of white Europeans descendents, are more westernized cultures. This does not mean that the European ethnic group does not respect or try to conserve the original culture of these places, but instead they respect and try to conserve them, they advertise through tourism the origins of the culture, which is very diverse and reach, and for years this countries have been living in a peaceful environment where there is no internal wars, because there is no social discrimination and the people of these countries are either Australian or New Zealand no better or less because of their ascendance.

These differences these countries they live in peace with their past and know how to enjoy the future under tolerance and the multiculturalism approach. Taking the best from everyone and projecting the future with all of the good things that differences bring.

Question: Australia is one of the world´s driest countries, how does it manage to survive these extreme natural conditions?

According to (Marsh, 2002) Australia is one of the world´s biggest agricultural exporters, this comes as a surprise that a country which counts with extremely dry conditions can beat countries like Colombian at the agricultural sector, but the difference is that the government pays a lot of attention and take the right measures so the farmers are incentivized to remain in the countryside and continue to do their job as competitive as possible.

(Photo taken from Getty Images. "Pinnacles at Night" by Grant V. Faint)

As an example for this we can mention the year 2002, when Australia was experimenting harsh drought breaks. So the government created a fund from which farmers could lend money at really low interest rates and up to an amount of a $100,000. The other measure it implemented was the creation of a drought fore, that consists in putting to work unemployed hands alongside famers which suffer from the drought, by doing this farmers will get extra help managing the harsh conditions and employment will be generated. (Marsh, 2002)

Special Note:

This Blog was made and design by María Camila Restrepo Zuluaga, Julia María Rodas Jaramillo and María Natalia Suárez Vallejo

References:

1. Echeverri, S. & Torres, M.L. 2009. Presentation "Oceania" part of the subject Organizations and Cultures at the University EAFIT

2. Marsh, V. 2002. Farmers given more help. Financial Times, London (UK).

Europe's Challenges

Europe needing to improve

1. How is the EU leading the fight against climate change?

The EU is working very hard in this matter, that’s the reason is very committed right now in working for a global agreement so they can control climate change by the time is a leadership in this matter. For instance, the European Union has been at the front of international efforts to combat climate change, so they are an important member in the two major treaties that are: United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol, signed in 1997. This last one is world wide recognized and is a way to control de CO2 emissions. Also they are dedicated to producte energy by different alternatives as are the biofuels and solar energy in order to transform themselves as a highly energy-efficient low carbon economy, additionally they are creating new cleaning methods that are more kind with the environment. The EU, has some objectives by 2020 to cut the greenhouse gas emissions by 30% of developing nations and 20% less carbon emitted. As well they set three key targsts to be met by the same year (2020): a. 20% redction in energy consumption b. Increase to 20% in renewable energies’ shar of total energy consumption c. Increase to 10% the share of petrol and diesel from sustainably produced biofuels. The problem for renewal energies, is that the low carbon alternative is the nuclear energy, which these last days was permited again in countries as Italy and France. This option is not as safe if we remember the terrible accident of Chernobyl.

References

European Commission. Climate Change. http://ec.europa.eu/environment/climat/home_en.htm
Italia recupera energía nuclear de la mano de Francia tras 21 años de rechazo. Diario El País. (2009) http://www.elpais.com/articulo/internacional/Italia/recupera/ener

2. How is Europe managing its migration flows?

It’s important to mention that the European Union migration is the source of the population growth (EU receives approximately 1’600.000 migrants per year), each year a lot of immigrants (legal and illegals) enter to the E.U because it’s a very attractive place to set up and because have many points of entry making easier the "job".

Taking this into account,the EU decided to implement some politics to manage migration as a whole with 2 different strategies:

a. Promote Legal Migrations Channels: EU governments promote legal migration and decided to assist migrants on finding jobs, give them advices, give them all the information they need about money transfer (Migration also brings benefits for the origin country: Remittances helps the developing of home economies) and knowing all of this, they can decided if they want to stay at the home country or migrate to other country but legally.

b. Global approach to migration: Border management that seeks the prevention of illegal migration, the EU governments has institutionalized the Detention Centers, which have as objective to support migrants in transit: they receive protection, legal assistance, advice, guidance and help to going back home.

3. What are the main challenges for an ageing workforce in Europe?

Over the last decades Europe has been facing a decline of its birth rates and a longer life expectancy of its population. Like that comes a huge dilemma for Europe since “the average age of the working population will increase and the number of people of working age will decline”(Naegele and Walker, 2006).

One of the main problems with it lays in the stability and continuation of the Welfare State that many European States hold and for the ones working people able to pay taxes are essential. And the other difficulty is concerning the social security systems (how pensions can be sustainable).


So around this problematic in Europe there are, according to the EUROFOND at their “Employment initiatives for an ageing Workforce”, three main challenges which are:
- How to maintain the health and working capacity of the workers as they age
- How to develop skills and employability of the older workers
- How to provide suitable working conditions as well as employment opportunities for the ageing workforce.

And these challenges need the private sector and governmental policies in order to improve the conditions for the workers and like that establish a longer working life. In that way, not only the working conditions will be better, but it would allow future economic growth, an adequate labor supply, and benefits for the companies and sustainable retirement conditions (EUROFOND).

In order to face these challenges the European Foundation for the Improvement of Living and Working Conditions proposes some other challenges that also need to be faced in the work system and those are:

- The reduction of age-related labor costs
- Good reaction to changes in the external labor market conditions
- Solutions for labor market bottlenecks
- And have a proper age management at work which considers 8 dimensions:
1. Job recruitment
2. Learning, training and lifelong learning
3. Career development
4. Flexible working time practices
5. Health protection and promotion, and workplace design
6. Redeployment
7. Employment exit and the transition to retirement
8. Comprehensive approaches ”(Naegele and Walker, 2006)

Nonetheless, personally we think that there is also a need to consider the young workers and how to engage them with the current system and the companies, since many young people in Europe prefer to work in the United States or elsewhere in order to avoid the high taxes they would have to pay if they stay in Europe, and many of them consider unfair the idea of paying for the elders pension and not have the certainty that future generations will be able to guarantee them the same level of life standards during their retirement.

And the second thing to have into account is the role of women. In some European countries, as Germany, there are some discussions around the role of women as mother or as worker. And finally, the woman is one of the core stones for solving this ageing workforce situation. Nowadays some women realize that they won’t be able to have enough possibilities for raising their kids if they are working (not enough kindergartens or very expensive ones, not enough time for being with them and do basic things as going to the school meetings…) or that they have to sacrifice their studies and just stay at home, so they prefer not to have kids at all. Like that the birth rate has decreased and by not giving them fair opportunities to be mothers and workers they are also leaving behind the potential many women have to do both.


References:
- Gonzales-Perez, M. A. 2009. Presentation "Europe" part of the subject Organizations and Cultures at the University EAFIT
- EUROFOND. 2009. Employment initiatives for an ageing Workforce. http://www.eurofound.europa.eu/research/0296.htm. Accessed 5 May 2009.
- Naegele, G. & Walker, A. 2006. A guide to good practice in age management. Luxenbourg: European Foundation for the Improvement of Living and Working Conditions


4. How European business could overcome the challenges of balancing the interests of cultural diversity and nationalist interests?

Balancing: Cultural Diversity/Nationalism
Several different cultures or subcultures are usually brought together into every individual nation. That is how nationalism and cultures are both terms to group people sharing some similarities, but whilst the first one stresses more on a feeling of belonging and being part of a nation, the latter covers a wider range of features of a group of individuals that makes it a more transcendental affiliation, even thought, from time to time, either can be contained in the other.
It is important to acknowledge the differences existing on one another but also, it is even more important to learn how to deal with both, especially in times when integration and globalization is making the world a smaller place.

In the document “The Future of European Business Leadership” by Manfred Kets de Vries and Konstantin Korotov (2006) the authors rely on these facts to explain in a way, the current situation throughout Europe is passing by. Mobility of peoples and capitals all around the Union has began a strong process of migration of companies that pursue better value for their inversion. So the authors relate how this phenomenon has brought up the differences of particular cultures when compared to a general nationalism, like in this case the European Union. The question that arises is where the line is drawn for a European or a German company. This scenario is generating several difficulties among citizens because from time to time they are just pushed into accepting a European nationalism, forgetting the particular aspects and details of each country’s culture. Europe, as a big pluralist community, pretends to encourage diversity and cooperation between different cultures, but they must make bigger efforts to gather all that amount of peoples, without homogenizing the society, which would end up being unnatural.

References:
Kets, M. Korotov, K. 2006. The Future of European Business Leadership. European Business Forum, 24: 37 – 42.

Special Note: This Blog was made and design by Juliana Chacon Piedrahita, Mónica Ordoñes Buitrago, Stephanie Penaranda Alvarez, David Sierra and María Natalia Suárez Vallejo

Europe a charming continent

The musical Europe

(Map found in Yahoo Image)

Europe is a continent full of history and influences that has impacted the rest of the world.

First with great ancient civilizations, as the Greek and then the Romans, and then they began conquering the world.

Europe like that has given the world many challenges but also many gifts, being one of them the Music, which plays an important role in their culture and everyday life.

In a presentation, made by Juan Manuel Muñoz and David Castaño, music was mentioned with classic musicians as Mozart, Beethoven and Hayden, and then romantic ones as Chopin.

(Photo taken from the personnal colection. "Bach in the Thomas Kirche Leipzig" by María Natalia Suárez Vallejo)

However, they left behind the huge influence music has in Europe and how it can play a role in the negotiation process as a basic part of their lives.

Especially in Germany, as a home of many of the most important musicians, business people are proud to carry the influence of these artists in their products and products.

It is also very common to use music and its history as “small talk” for negotiations or visit to the operas and see one, going to places where musicians were born or lived… can be part of a business visit too.

Music is the air and people are proud of it.

But music plays also an important role today as an Integration booster. There is the Context Eurovision that the European Broadcasting Union started in the 1950s. It basically stated with Germany, France, Switzerland, Belgium, France, Italy, Luxembourg and the Netherlands. Pretty much all the European Union founders except Switzerland.

(Eurovision Logo and Istabul 2004 publicity taken at Yahoo Images)

And with the years it has being growing having all kind of European countries, all the members of the European Union, nonmembers as Russia, Iceland, other as Turkey, the new born countries as Macedonia… and the list goes on. And the nice thing is that it is something that integrates the whole Europe and moves a step further in the bonds created in the continent.

It is definitely an amazing contest, where countries appreciate other cultures other people and everyone participates. There is even a Eurovision for Children.
One of the most wonderful things is that the countries can show their culture, what kind of music, dances, and dresses they have… or they go with other things that are common in all the countries but that finally show that they are not so different. They share they roots, they life styles, their likes… their dreams. It is a show that has been bringing Europe together though music!!!!

So if you are negotiating with Europeans and if you have the opportunity to travel there get ready to enjoy some music, make it part of your life and become a music lover!!!

Question: How is the role of Germany in the European Union?

Despite the fact of that the European Union is a Union as its name says; there are clear leaders who influence a lot the decisions taken and that are the ones pushing the Union to move forward and grow.

One of those leaders is Germany , and Bulmer and Paterson (1996)study that situation in their article “Germany in the European Union: gentle giant or emerging leader?” The first issue they address here is the German diplomacy and the importance for the country to become part of the European Coal and Steel Community, in order to recover the power of its industries and play an active role in the area, and more after the mess they made with the Second World War and the destruction it left behind.

Then they analyze Germany as an economic power. That power has made Germany a strong engine of the Union and a helping hand for the rest of the members. And it is important to mentioned additionally to the analyses of the authors the importance of Germany as the third economy of the world until very recently, because it is now between the 4 and 6 place, which still is good in a global context and they will continue as the European leading economy for a long time.

Economically, Bulmer and Paterson (1996) also mentioned the importance of the reunification of Germany and how they translated in the unification of Europe, pushing for the integration of East Europe to the EU and willing to help them in the process. And from all the members of the EU they are finally the ones who understand better the situation thanks to the experience of the DDR (East Germany). Germany was more sensitive towards the cold war and its effects (Bulmer and Paterson, 1996).

Then they move on with other diplomatic issues, and internal factors, being for me very interesting the role of the public opinion. Even though there is divided opinion, Germany tries to incentive a positive opinion on the process, being careful with issues as a broader Eastern Enlargement and still managing the idea of the Euro, but that at the end with the years we have seen that were able to be addressed because the Euro was implemented and the Eastern countries are entering the EU.

With the civil society, it is also important to see their actions special in the private economic sector, since German companies though trade and investment have gained them a big power and an important role (Bulmer and Paterson, 1996).
In the article the relationship between France and Germany is also addressed and it a core part of the EU establishment and development, and even though there have been differences they have managed to be the main leaders of the Union.

To conclude, Bulmer and Paterson (1996)saw at that time Germany more as a “gentle giant” than as a leader within the EU, first because of their focus on a better reunification of the country with all the financial and political efforts toward it, but they also recognize its important influence as one the largest member states.

But personally, looking at Germany today, I would definetly say that they are leaders and that that they know where to go and how to do it, protecting obviosly internal interests but they are one of the most commited countries and have done all their efforts to take a step further, supporting for example the European Constituion and having like that a Political Union. However, time will tell what happens and how far they come, but I’m convinced Germany will always be in the top spots and influencing the European Union.

(Photos Taken from personal collection. "Händel in Main Square, Halle" and "Organo en el Händelshaus", por María Natalia Suárez Vallejo)

References:
Bulmer, S. & Paterson, W.E. 1996. Germany in the European Union: gentle giant or emerging leader? International Affairs, 72(1): 9-32

Syriana, the power of oil and its mysteries

Syriana

Syriana is a movie that shows the relationships between the oil companies, the governments in the Middle East that produce oil and the government of the United States as well.

It takes different people and different relations, some people working as undercover agents, other working broadcasting the movements of the market and analyzing it, other as migrant workers for the oil companies, others as chiefs of the companies, others as royalty members… and so goes the list on.

With it we see the power and the influence of geopolitics in today’s world. And how connected we all are, especially through a basic element as oil. Showing that one move hear affects something here and there… it goes like a domino effect.

The movie also gives importance to the interaction of the different cultures and makes you think more about everyone’s differences.

t is also interesting to see the corruption and the games of power in the Middle East and the States.

Somehow, it draws a better idea of situations we know are happening there but it makes us a clearer idea and makes a nice connection of the connections around the world.

Note: Syriana is a movie from Stephen Gaghan, made in 2005.

Understanding India today

India and its transitions

(Photo taken from Getty Images. "Indian flag in map" by Jeefrey Coolidge)

1. According to the authors, had economic globalization in India provided significant improvement for lower-Income workers by 1999?

According to the authors the processes of globalization in India have responded in different ways depending on their position in terms of incomes. For the lower-income workers the globalization hasn’t brought lot of benefits; the lower middle class of salaried workers are the most affected ones. The globalization has increased the level of incomes for the lower classes but also has increased the inflation and the interests’ rates. Also, the globalization gave this class the opportunity to have an easier access to credits for purchasing but this also has been a tramp for these people because monthly they’ll have to pay these credits with high incomes. In conclusion, the liberalization or globalization in India has a contradictory effect in the middle class and lower- income workers because they have more opportunities of access to many goods and new things but they aren’t earning more money for paying the dues they have for all the purchasing they do. The globalization hasn’t provided significant improvement for the lower classes in India.

Reference: Class document

2. How is the situation for workers in India today?

“India has the highest percentage of highly engaged workers at 78 percent in Asia as compared to Japan, which has the lowest employee engagement level at 39 percent.

The engagement level of the Indian worker is 20 percent more than his Chinese counterpart. This means that Indian employees are better at understanding the organization’s business goals, the steps required to achieve those goals and how their contributions drive goals, says WorkAsia research study by Watson Wyatt Worldwide”[1].

Even though, there still are poor working conditions, including working more hours than the legal ones, poor payment and children recruitment, Indian government is taking some measures in order to improve their labor force conditions:

“On 17 December 2008 the Indian Parliament passed the Unorganized Workers’ Social Security Bill, which seeks to provide welfare measures for unorganized workers. The House of Representatives in Parliament has described the Bill as the first major step in 60 years that will benefit the poor.

Amongst the workers to be covered under the Act are agricultural workers, migrant laborers and workers in the informal sector. It is estimated that 94 percent of the working class in the country employed in the unorganized sector would get the benefit of health, life and disability insurance, old age pension and group accident scheme.

The Indian Government has also introduced the National Rural Employment Guarantee Act Scheme that gives a minimum of 100 days of employment to those in the unorganized sector, through which the workers’ income will also be raised”[2].

“India has praised its recent Memorandum of Understanding (MoU) with the United Arab Emirates (UAE) and said that similar agreements were likely with Kuwait, Bahrain and other Gulf states. A number of steps were under consultation and implementation to ensure the protection and welfare of the workers. Problems arose sometimes as a significant number of them work in informal sectors, (and) they often do not have the protection of labor laws in the host country. What is required is a win-win situation for both the employers and workers”[3]

3. How cultural globalization has affected Indian in the last 2 decades?

Globalization has brought to India many changes especially in the social and economic field, what brings different developments in the cultural settings, with benefits but damages as well (Banerjee, 2008).

Most of this changes start occurring in the 80’s / 90’s when India opened itself to the world market and decided to become industrialized and reach for an economic growth having as example the western model. And this model has created a socio cultural contradiction between the Indian traditional ways of life (Banerjee, 2008).

According to Banerjee (2008) the issue here is that India has a wide ethno cultural diversity that is attached to the past but feels it has to move within a present that is getting disconnected from all its traditions. So having that in mind, the Government of India in order to keep its culture around the cultural globalization stated “the future of India should be built on a rediscovery of the past”. But it hasn’t been as effective as it should have been, since Benerjee (2008) takes the findings from Kapoor (2004) and Kapur (1982) which say that some Indian people are leaving its traditional values such as spirituality and collectivism and culturally are becoming materialistic, individualistic and consuming oriented.
(Photo taken from Getty Images. "India, Uttar Pradesh, Agra, Taj Mahal, dawn" by Ed Freeman)

So in a way the economic globalization and need to become competitive in the international market has become a cultural globalization too.

That has brought different problems, since poverty has increased, health services are not the same and other issues have arisen, the environment is not protected as before and the moral order of the country has apparently no direction, there is not a strong Indian or Western values’ recognition (Banerjee, 2008).

Like that Banerjee (2008) concludes by saying, that it is well known that the economic growth and globalization can improve competitiveness and produce more national wealth, however the policies around globalization should also have social and cultural results, by giving people education, better health systems… and pursue with that economic development through globalization, but without sacrificing important aspects such as the cultural integrity and traditional social structure from India.

However, other authors side a positive side on globalization and world trade and how to preserve the different cultures and even strength them and then share them with the world.

Those author are Drache and Froese (2006), who talked about a global cultural economy and analyze different aspect such as Film entertainment, music, internet access and sports among others, and how it has changed in this global era. One of the countries they took in their research is India.

Concerning Film entertainment, the film production in India is taking stronger steps in the world with its movies and they are even known around as Bollywood. And like that with technology and communication, India has become one of the most effective promoters of national cultures along with USA and Japan (Drache, Froese, 2006). Connected with the movie industry is coming the promotion of the Indian music and tourism to India and the take off of Indian art (Drache, Froese, 2006).

According to Drache and Froese (2006), “Film is the icon of cultural globalization and one of the dominant contemporary cultural flows”, this generates higher economic income to the countries and promotes local cultures stronger internally and externally as well. So we could conclude that through Bollywood, that produces more films than even Hollywood, India is taking a good road.

Drache and Froese (2006) also speak of the importance of national newspapers and media in India and their increase of internet users. All of them essential for promote local products and services and with it its cultural features.

To conclude, with both authors we can see that there are significant changes in the cultural basis of the countries and more specifically India because of cultural globalization. But countries are not willing to lose their own cultures so they are taking steps related to global markets where they can promote their own culture and also have effects in the cultural globalization of countries away from them.

References:
1. Benerjee, S. 2008. Dimensions of Indian culture, core cultural values and marketing implications: An analysis. Cross Cultural Management: An International Journal, 15(4): 367 – 378

2. Drache, D. & Froese, M.D. 2006. Globalisation, World Trade and the Cultural Commons: Identity, Citizenship and Pluralism. New Political Economy, 11(3): 361 - 382

4. Describe India’s Green revolution

Even tough, the term "Green Revolution" is applied to the period from 1967 to 1978. Between 1947 and 1967, efforts at achieving food self-sufficiency were not entirely successful. Efforts until 1967 largely concentrated on expanding the farming areas. But starvation deaths were still being reported in the newspapers. In a perfect case of Malthusian economics, population was growing at a much faster rate than food production. This called for drastic action to increase yield. The action came in the form of the Green Revolution.

The term "Green Revolution" is a general one that is applied to successful agricultural experiments in many Third World countries. It is NOT specific to India. But it was most successful in India.

There were three basic elements in the method of the Green Revolution:
· Continued expansion of farming areas;
· Double-cropping existing farmland;
· Using seeds with improved genetics.

Some of the results of this revolution where:
· Record grain output of 131 million tons in 1978-79. This established India as one of the world's biggest agricultural producers.
· Yield per unit of farmland improved by more than 30 per cent between 1947 (when India gained political independence) and 1979 when the Green Revolution was considered to have delivered its goods.
· India paid back all loans it had taken from the World Bank and its affiliates for the purpose of the Green Revolution. This improved India's creditworthiness in the eyes of the lending agencies.
· The Green Revolution created plenty of jobs not only for agricultural workers but also industrial workers by the creation of lateral facilities such as factories and hydro-electric power stations as explained above.

References:
http://www.indiaonestop.com/Greenrevolution.htm

5. Did the British Raj enriched or impoverish India?

British Raj is related to the British rule in India between the years 1858 and 1947. The region called India used to include different areas directly administered by the UK, as well as the States that were ruled by individual rulers representing and administrating part of the British Crown.

- Was the administration of Britain good or bad for the country? There are different, ecountered positions on this question and while for some, certain aspects were good for others they were horrible for the natural development of a country.

Below we are going to mention the most remarkable consequences the British raj brought for this land; presenting both the points of view in favour and those against it.
- “India’s share of world GDP went from 22.6% in 1700 to 3.8% in 1952″ some people say this was because the British took away India’s wealth. And others insist that this was because the Western world was living the Industrial revolution at that time and that it came late to the India. They state that Britain was not responsible for this.

- “They did it for selfish reasons!” Many state that everything the British did in this country was only thinking in themselves and their own benefit, others say that this statement could be right, but what should really be looked is what they really ended up doing, like the railways, the modern government and other such things. All of this are good for India and that it does not matter whether it was for selfish reasons or not.

- Good governance? As mentioned before some people think that the modern government system was positive for India, but others opinionate that this was a façade under which the British could justify the greatest famines recorded in the previous 2,000 years, 17-20 million deaths from 1896 to 1900 alone, high taxation to support and subsidize colonial wars, and that the surplus of the production was often shipped to England.

-Unification of all the provinces and kingdoms into a single nation?
Some maintain that thanks to this the country is too centralized. A lot of things which should be left to the states, are actually decided in the national capital, and a lot of things which should be left to local governance units are actually decided in state capitals. Other reason to think this was bad is that this country is full of differences and that Mumbai for example makes the majority of the countries revenue, but because of this it has to pay through taxes the development of poor regions. Other reason to be in favour is the fact that a lot of food gets rotten away while people is starving, because of bureaucratic problems, but if there was more than one country the food-producing ones would want to trade the food with those countries that wanted food.

Others say this is good because it’s a nation with its strengths and its downs, but as a whole it works well due to the fact that some regions, help others to develop.
There are many other factors that people discuss, but we name some of the most important and controversial ones.

References:

From Empire to Independence: The British Raj in India 1858-1947. 2007. http://www.bbc.co.uk/history/british/modern/independence1947_01.shtml. Accessed 28 April 2009.
The examined life. 2005. http://www.ravikiran.com/blog/classic/200506/was-the-british-raj-good-for-india/` Accessed 28 April 2009

Notes and references on question 2: [1] Indian workers most engaged in Asia. 2008. Economic Times, The (India), first quarter 2008. http://search.ebscohost.com/login.aspx?direct=true&db=nfh&AN=2W62W61071440499&loginpage=Login.asp&site=ehost-live&scope=site. Accessed May 13 2009.
[2] Unorganised Workers’ Social Security Bill – India. 2008. United Nations Instraw, third quarter 2008. http://www.un-instraw.org/en/media-centre/world-gender-news/unorganised-workers-social-security-bill.html. Accessed May 13 2009.
[3] India praises Labour Pact with UAE. 2007. Arabia 2000. First quarter 2007. http://web.ebscohost.com/ehost/detail?vid=1&hid=6&sid=10abd82a-00b7-4b2e-bcbd-fe0df3a50e28%40SRCSM2&bdata=JmxvZ2lucGFnZT1Mb2dpbi5hc3Amc2l0ZT1laG9zdC1saXZlJnNjb3BlPXNpdGU%3d#db=nfh&AN=6FI2123195203. Accessed may 13 2009.

Special Note: This Blog was made and design by María Fernanda Piña, María Camila Restrepo Zuluaga, Julia María Rodas Jaramillo, Luisa Fernanda Saldarriaga and María Natalia Suárez Vallejo.

A different Look at Middle East

The Middle East, the root of the Western Civilizations, a place of Culture and Traditions.

(Middle East map available at Microsoft's Enciclopedia Mi primera Encarta)

Usually what we hear about the Middle East is related to Oil or to the different wars in the area; name it US troops in Irak or the conflict between Israelis and Palestinians. But those are finally some aspects that don’t show all the magic of such an ancient region, where the great civilizations that influenced “West” were born.

There are many important things concerning the “Middle East” that are important in order to understand better the relationships among its people, its countries and with the rest of the world.

Different from other subdivisions in the world, as East Asia, the Middle East does not represent a specific part of a continent, but it is the designation that militarily the United Kingdom started using during the Second World War, to define what their Near East within a Geopolitical context was. That’s why as Middle East we find a mix of three continents, the Arabian Peninsula in Asia, Egypt in Africa and Cyprus and Turkey in Europe, recognizing that Turkey is considered as an Asian country too.

Sometimes, the Middle East is also defined as the Arab World, but in a way that is not a good definition since Israel is not necessarily Arab and it is in the region, and there are other countries that consider themselves Arabs and geographically are not located in the designated area. That and other definitions have lead to a “Greater Middle East”, a wider geographical area covering more countries in the north of Africa (Morocco, Sudan…) and going east in Asia (Pakistan, Georgia...).

One of the greatest influences in the Middle East and a way to understand better all the dynamics in the region is the religion. The three greatest monotheist religions were born there and have actually the same roots, but through the centuries they took separate ways. We start with the Judaism, then the Christians and finally the Islam, all of them spread around the world, but while the Christians play a bigger role in Europe and then with the colonization in America, the Middle East remain mostly Islamic and with a tiny part of Judaism in Israel.

And for example Jerusalem the capital city of Israel, is important for the three religions. It is somehow the “Promised Land” for the Israelis and they have the Western Wall, considered a part of Salomon’s and Herodes’ Temples. The Christians have there the Church of the Holy Sepulchre and other major places where Jesus spent his last days, and the Muslims have different Mosques as Al-Aqsa, from where Mohamed went to Heaven.

("Israel, Jerusalem, Western Wall crowded with worshippers at night" by Gil Azouri. // "Ceiling of the Katholikon (main prayer hall) in the Church of the Holy Sepulchre. Jerusalem, Israel, 2008" by Uyen Le.)

("An aerial view shows Jerusalem's Al-Aqsa" by Gali Tibbon. All three images were taken from Getty Images)

All these religions influence all its followers at different points of their lives, but Christians mostly seem to detach religion from business, while the other two still have the religion more present in every aspect of their lives, specially the Muslims, and that has somehow put them in a different position in the way they relate themselves with the rest of the world. And cultures as our, because of lack of knowledge of their culture and traditions or because a lack of comprehension, miss many opportunities of creating better relationships with the Arab world.

Considering the fact that the Muslims have to follow in every single activity they do the Sharia, a set of rules and norms according to the Koran, they had the need to create their own economic institutions and agreements. So even tough, the World Bank or the International Monetary Fund reach the region and have different projects going on in the region, there are institutions as the Arab Monetary Fund and the Arab Cooperation Council, among many others.

Some of these institutions, as the Council of Arab Economic Unity, seek to integrate better the Arab countries and give them tools to answer better the globalization and the international networks in today’s world without leaving behind the Sharia. Of its goals one of the most important was the Greater Arab Free Trade Area.

These initiatives are very important because they want to promote other regional products besides oil, be more competitive internationally and participate more in meetings as the ones from the World Trade Organization, where just a couple of Arab countries are members.

Opposing to the GAFTA, there is the Middle East Free Trade Area, an idea coming from the USA and that wants to include Israel and not only consider free trade, but bilateral investment treaties, gain more memberships to the WTO… But it is not a very welcome initiative, basically Israel and some countries that receive international aid from the US or are important partners in other aspects, are the ones saying yes to the idea.

And in other topics as children rights, women rights… the region still moves according to the religion.

So in order to have a clear idea of the general facts of the region, have a deeper look at economic facts, the role of the Arab women, and countries as Qatar, Yemen and Israel and take a new look at the development of Arab cities as Dubai, here is a video with a presentation, Ismael Ossa, María Fernanda Piña and I did.

For further information or doubts feel free to contact me at: msuarezv@eafit.edu.co

Question: How does the financial system work in the Arab world?

Finances are an essential part of business and play a huge role in today’s world. But the finances we may know are not accepted by the Arab world, so in order to have a system that complies all its needs the Islamic Finances were created.

Mohammed El Qorchi in his article “The expansion of Islamic Finances” highlights the fast spread of the Islamic financial institutions passing from one bank in 1975 in Dubai to more than 300 institutions in over 75 countries.

The idea of the Islamic financial institutions is to follow the Sharia or Islamic law that defines how Muslims should act in their life.

Some of the main rules for finances are:

• 
  Not pay nor receive interests


• 
  
  There must be a match of risk and reward, the institutions share with all its investors and borrowers profits and losses.


• 
  
  Every financial operation must come from a real economic activity, which means it is forbidden to make money from money; there must be a service or product transaction.


• 
  
  Some businesses and investment in those are forbidden, such as alcohol, gambling, tobacco.


• 
  
  There is no uncertainty or speculation in their financial system. It creates further problems and conflicts between the people.


• 
  
  It is important to do charity and not to take advantage of the weaker people.
  

A lot of Muslims, who have gained money through the oil business or in other industries, feel happy to be able to invest their money properly and most of the banks also look forward to assure a more equitable distribution of wealth, administrating like that charity for its costumers and helping Muslims living in not so ideal conditions.

For these investors it was also important to diversify their access to capital in different countries and sectors, but assuring the respect of the Sharia.

In the article “Islamic Finances” it was also mentioned that right now, the Islamic finances are not only for Muslims but a considerable number of non-Muslims are taking part of the system.

Right now besides the Arab World, Great Britain, Germany and the USA are allowing Islamic Institutions.

The article also explains the expansion of the Islamic finances due to the excess liquidity, specially coming from oil and trade, and second as a way to gain a more important role in today’s world and strengthen their institutions in general.

It is also very interesting to see the different products offer within the Islamic Finances covering all the markets, the Banking, the Insurance, Trade, Investments, Construction… and how each transaction complies a different and special set of rules.

Nonetheless, as a new system it still has a lot of challenges. The first one is that it is not a standardized system, it changes from institution to institution, from country to country and the way each bank views it role related to the global financial system and the interpretations of the Sharia change in every institution.

That leads to a huge lack of information, because the databases are kept just for the institutions and the methods for collecting the information are very different as well.

That’s why institutions as the Islamic Development Bank and the Accounting and Auditing Organization of Islamic Financial Institutions are developing different norms and standards, auditing governance and ethics.

And in the way each bank has a Sharia board that are the ones who make sure every single transaction in the Bank is according to the Sharia, as the interpreters of law, there is the intention to create an Islamic Financial Services Board that creates the main standards for the Islamic Finances in overall.

Like that it would be easier for the institutions to integrated themselves and provide a connected service around the world.

Still despite the limitations and challenges the Islamic Finances may face at the moment, they have a bright future, because they are finally addressing the needs of its population and are becoming attractive as well for other societies outside the Muslim World.

References:

1. El Qorchi, M. 2005. Las finanzas islámicas en expansión. Finanzas y Desarrollo, 42(4): 46-49

2. Monger, R. & Rawashdeh, M. 2008. Islamic Finance Enters the Mainstream. Management Accounting Quarterly, 9(3): 1-6

3. Ossa, I. & Piña, M.F. & Suarez, M.N. 2009. Presentation "A different Look at the Middle East" part of the subject Organizations and Cultures at the University EAFIT