Monday, April 16, 2012

Landlocked - Hub Ingredient!

We always view land-locked as an obstacle to technology due to no access to the sea. True, but that's just failing to think out of the box! The opposite can be true - unless you need sea- water to develop.

Zambia has always used that excuse to say we cannot do a lot as we are cut off the sea. But every day I see all these vehicles and unbelievable quality of cars on the road. They are not made here, and maybe they flew in but most of these came in through the sea. So what's the problem? 

We need to think about what we have and use it and not be crying about what we don't have. I worked with computers a lot so examples here may make sense to people in IT better than those completely hidden from the IT age!

To start with, a router need not be at every end of the network, but the starting point. So one located in the centre would actually mean greater reach to all end points. Economics of location also has a similar idea in location theory (which covers both economics and geography). Harrod Hotelling's (1929) location model is based on this idea. The model  demonstrates the relationship between location and pricing behavior of a firm. In the crudest possible way, if firms produce an identical product and charge the same price, location of the firm to the customer will matter! You prefer buying from the closest shop than spend extra on transportation or time to reach a far-off shop. Therefore, our location of being in the middle of Southern Africa should be used to our advantage. It would be easier (and cheaper) for someone going to China or Australia to get to Lusaka's KK international airport from Malawi on or Angola than going to Johannesburg's OR Tambo airport. It automatically makes sense for us to think of creating an airport hub in Lusaka. Develop the current one and allow more airlines to land and connect from here than miss this opportunity. That's why we have a lot of airlines establishing presence in Lusaka! We just don't see that!

So my development agenda in the aviation industry in Zambia would be, to start with an idea of development airport infrastructure in Lusaka. This would allow development of the sector which has trickle down effects to industry, employment, technology, engineering, fuel sector, transportation, accommodation, tourism, etc. And looking at the investment - return ratio, this would be a very good approach as it would inject in all sectors from a single investment. Marketing of the country for tourism would be half-done! People would be in the country even for connecting flights! The second phase would then be to develop the local aviation sector by promoting establishing of budget airlines to move people from one part of the country to the next. This would push local private sector to then develop lodges, motels, hotels for tourist centres. This is a better approach than zero-rating accommodation in Livingstone! We benefit from aviation regardless of how far the sea is! No landlocked economics in that area.

The next arena, is technology! We are nicely placed in the centre of activity. We may not have a direct cable to the sea, but we can use our location. A fibre connectivity across the SADC region would gain more with a technological hub in Lusaka! Besides we have plenty of land such that if we setup server farms and have direct connection to two sea cable connections in South Africa and in Kenya, the whole region would be place in our hands for e-commerce and server farms. The only need to be reliable. The one single issue which I complain about Zambian companies. Imagine how productive Zamtel would be with reliable internet service to all parts of the major cities. They have a land-line network. The single investment of lines need to just be converted to ADSL network supply. They need little effort in making people realise how expensive other service providers are. We all know how much we spend on air-time credit on our mobile phones. Zamtel should not be chasing shadows to catch up with other mobile services, they need to use the resources that they have and beat them all. The Zamtel mobile service will simply be an icing on the cake. In other countries, most small service providers simply rent ADSL servers and do the marketing in order to get a share of the "cake" with the likes of Zamtel. Many will realise this when they visit South Africa and are greeted with "ADSL! you only need a Telkom line". So the investment cost is shared.

If ZESCO ran for half a year without a blackout, I think the development of our economy would jump in double digit percentage! We have put up so many measures as we expect the power to be out any time. So there is un-necessary investment in backup power generators, invertors, etc. A development of the electricity supply would put this country on a good path to achieving greater things. Not only would the stability ensure continuous supply of electricity to industry and encourage production, it would lead to good returns and reliable exports of this.  

Those are sample issues that would bring in some perspectives not addressed by people looking at the landlocked status of the country. There is so much we can do with our status and current infrastructure. We need to think out of the box for any progress to come to this country. We don't need a lot of searching around. Most of these issues need a will on the part of decision makers to make head way. 

Point of great interest has always been on the way most Zambia companies rely on rent seeking for their business to move. The worst possible way to develop. This has led to unreliable decisions from political leaders. Why would a company need to meet the minister? What can they possibly present to him which would not make sense to technocrats who deal with issues on a daily basis? Rent-seeking and all forms of corruption need to be kicked out of business environment in Zambia for any meaningful progress. Alstom's bribery on people in political office should not be seen as an isolated act. We need to  seal all holes that lead to bribery and rent-seeking. That is important. The political leaders need to look at their business, not take up the technocrats area of operation. If they don't want to do that, maybe they need to join the civil service and be technocrats.

There is a lot of expectations on the people of Zambia. We need to work on formulas that will ensure the country moves in the direction that will please - regardless of their political standing. Development is the only key that will get us all moving united together. We need to start thinking outside the box. We can do what we want if only we work on it.