African-American prosperity is producing surpluses that can fund a wide spectrum of new endeavors. Given the relatively slow growth outlook for the U.S., black entrepreneurs should consider using those resources to fund international ventures which hold the promise of higher returns.
The timing is perfect for such considerations as the administration has plans to double U.S. exports by 2015. Larger foreign direct investment flows are likely to accompany the surge in exports.
Traditional thinking concerning African-American business abroad has mainly focused on Africa. Following that tradition may seem logical today as many of the continent’s economies are expanding. The International Monetary Fund’s (IMF’s) outlook for Africa’s growth averages 5.2% over the next two years, compared to 2.9% for the U.S.
In addition to market projections, there are other factors that may lead some to Africa’s doorstep. Like Malcolm X, who’s journeys and diplomacy raised the specter of opportunity for blacks on the continent, these individuals are drawn by concepts like brotherhood and self-sufficiency. One need only look at Andrew Young, former ambassador to the United Nations and former mayor of Atlanta, and his deal-making track record in Africa, as proof that entrepreneurial success is possible.
But even as it is possible, there are valid reasons to hang back. While a few countries offer dual citizenship to black Americans, suggesting that the door is open, some Africans offer a more tepid reception. Real or perceived, the role of blacks in Liberia’s recent turmoil, U.S. operations in Somalia and inaction during Rwanda’s crisis, serve to chill what might otherwise be warm relations across the diaspora.
Entrepreneurs undeterred by the obstacles, anxious for a foothold in a growing economy, are wise to investigate the impetus for that growth. It is true that the quality of African leadership is improving. True that this leadership is engineering stronger economies. But it is also true that a significant portion of growth within some of these markets is attributable to outsiders. China, India, and Japan, for instance, have all convened African summits in the past few years, during which they’ve made plans to increase their economic presence in the region.
Consequently, investors face increasingly stiff competition in Africa. But decreasing opportunities in Africa are likely to be more than offset by increasing opportunities in Asia. Given the IMF’s outlook for “Emerging Asia” of 8.7% growth through 2011, blacks cannot afford to overlook this opportunity. The three-billion-person-strong Asian market offers substantial opportunities for businesspeople willing to entertain global ambitions.
Both China and India have rural populations of at least 600 million for whom income is on the rise. Significant opportunities across the service sector will surface as people begin to demand services commonplace in advanced economies.
But lest you think that one need only be eager and able to build a viable enterprise, I will remind you that much in business, as in life turns, on perception. Just as adverse images of African-Americans are damaging to progress in this country, those same images are a hurdle to success abroad.
We can hope that within an increasingly globalized world and continued exposure to various cultures, this might one day be overcome. In the meantime, African-Americans should consider partnering with Asians who have facility with the language and would be motivated due to their partial claim on profits. This is an old strategy. Blacks have long sought collaborations in the U.S. to circumvent discrimination. Bringing that same practice to bear on international business ventures is critical.
Dr. B.B. Robinson is an economist and director of BlackEconomics.org, a resource for economic concepts, issues and policies affecting African-Americans.
