@wesley80: 100s of millions raised out of poverty in China. Shouldn't that be enough for us to conclude that capitalism is good?

India and China were in similar situations in 1980, yet now China has zoomed past them. . . India is about as wealthy per capita as Nigeria. Don't you think their history would have turned out a lot better if they'd reformed earlier?

wesley80:

Yes the West is failing because of Capitalism. The key ingredient as u know in every economic system is the allocation of resources and while its left to market forces in capitalism, its not in say China and that's enough to make all the difference. Good thing you mentioned India and China, while India has embraced Capitalism and opened up its mkt, its economy has prospered right? Wrong! Maybe on paper it has but fact is some of the worse levels of poverty exist alongside a fledgling economy and the gulf grows deeper each day and the problem isnt just economic dualism but the inefficient allocation of resources thanks to capitalism. The success of the economy is only self serving, while there is progress, there's a divide that capitalism can not bridge but the illusion of a prospering economy is promoted by deceptive economic aggregates.
Now compare India to China where the govt embraces protectionism and active market regulation, the difference in standard of living and general economic well being becomes all to

India doesn't really practice Capitalism; it is more like modern feudalism. The rich families are the same ones who have been rich for centuries. They have just tended to change industry as time as progressed. That is why many Indians move out of India because to stay in India is to accept your position in society.

Ibime:

@ Ekt bear,

Germany are not laissez faire capitalists due to the need to integrate East Germany into the country. Whilst Britain was downgrading its manufacturing sector and focusing on "service economy", Germany was upgrading their manufacturing sector in order to provide enough employment to account for the East Germans. Germany is no longer price-competitive with regard to Labour so they focus on high-end manufacturing which needs an advanced skill base, similar to the way Taiwan re-engineered their economy to highly advanced manufacturing.

I have never really understood this service economy stuff. Buying and selling within your own country is fine, but it seems to me that you need to export stuff and ideally manufacture goods in order to really grow. I'm actually slightly concerned about the long-term prospects of the US for this reason.

Regarding your first comment, in what way? Welfare and such for East Germans? Just trying to get an idea of what it looks like.

Katsumoto:

Philosophy and political ideology must not be fixed and rigid. Each country must find the model that suits it best based on resources, rich poor imbalance, and socio-economic factors. Thats why I said I like State Capitalism in Brazil and China, the scandinavian model in self sufficient economies. Poor countries without resources and innovation will remain poor regardless of political ideology.

Bolded is true, but I think misses the point a bit. Poor countries should strive to grow their economies as quickly as possible so that they'll be less poor. My belief is that capitalism leads to the most economic growth.

ekt_bear:

@wesley80: 100s of millions raised out of poverty in China. Shouldn't that be enough for us to conclude that capitalism is good?

India and China were in similar situations in 1980, yet now China has zoomed past them. . . India is about as wealthy per capita as Nigeria. Don't you think their history would have turned out a lot better if they'd reformed earlier?

I dont think u've gotten me yet and you'd find it difficult to prove China is a 'capitalist' economy. India reformed by embracing capitalism wholeheartedly and the result is a chasm between the rich and poor and a perfectly dual economy, China did same by adopting a more cautious approach - embracing a selective open market system while determining the direction resources went and economic activities in general and the result is there for all to see. So who did capitalism benefit? Certainly not india.


@Ajanlekoko,
That article on Cows is a classic! extremely hilarious. God knows i'm saving it.

Ibime:

@ Pifa,

You can read here:

http://www.airliners.net/aviation-forums/general_aviation/read.main/1579643/

Some start as low as 15k so that documentary (Michael Moore, hehehe) was telling the truth, although obviously, pay can rise to close to $100k over the years.

@ Topic/Ajanlekoko,

First of all, Michael Moore is a m.o.ron who finds the worst of a situation so that that he can portray it sensationally. I don't want to indignant, but I don't take seriously anybody who cites Michael Moore as an authority on socio-economic matters.

The pay of airline pilots follow the capitalist model in any capitalist society: You are worth as much as anyone is willing to pay you. If your skill is in high demand, you make a lot of money. If not, you have to make employers want you and be ready to earn your “chops” in order to climb the economic ladder. You can find instances of university graduates in any country who are just getting by economically because they posses skills that are not very useful to employers. The airline industry has a finite number of pilots it can absorb and pilots who have little piloting skills will find it harder to break into the piloting workforce than those who are skillful, experienced and employable. Michael Moore, off course, will never illuminate that situation. He is a socialist, just as the rest of the Hollywood dilettantes, and his slanted views often reflect that.

ekt_bear:

Bolded is true, but I think misses the point a bit. Poor countries should strive to grow their economies as quickly as possible so that they'll be less poor. My belief is that capitalism leads to the most economic growth.

But Capitalism is based on the concept of perfect competition and efficient allocation of resources. For instance, China was dependent on the need for cheaper land and labour by Western corporations to grow. It could not grow on its own; all it could do was to provide the conditions necessary for cheap production.

The only way, a poor country that grow out of poverty is to innovate. If you don't supply something that the richer nations dont already produce, then you will remain poor.

Katsumoto:

But Capitalism is based on the concept of perfect competition and efficient allocation of resources. For instance, China was dependent on the need for cheaper land and labour by Western corporations to grow. It could grow on its own; all it could do was to provide the conditions necessary for cheap production.

The only way, a poor country that grow out of poverty is to innovate. If you don't supply something that the richer nations dont already produce, then you will remain poor.

What do you mean by "innovate"? What does Singapore produce that other rich countries already don't make? There is very little original or innovative coming from Singapore, yet that country is pretty well off (actually, Singapore may not be a perfect example, but I'm sure a suitable one can be found.)

I don't really think innovation per se is really necessary to build a pretty good country. I doubt Nigeria will ever produce rice as efficiently as Thailand does, yet it is something we can still produce for export. Slimmer profit margins than the Thai, but still positive profit.

Also, the principle of comparative advantage seems relevant here, does it not? That Country X produces nothing innovative and that what it produces it produces less efficiently than Country Y doesn't mean that Country X is useless or destined to be poor.

Katsumoto:

India doesn't really practice Capitalism; it is more like modern feudalism. The rich families are the same ones who have been rich for centuries. They have just tended to change industry as time as progressed. That is why many Indians move out of India because to stay in India is to accept your position in society.

I believe they do. India's founding fathers and shapers of their economy like Panjit Nehru where protectionists - i recall indian movies always had weird looking cars like u'd never see elsewhere which always had me baffled but later got to understand that foreign vehicles were banned in the country and this period was a great incubatory period for their local technology until they eventually were forced to open up. Capitalism was supposed to be the panacea that would cure all ills and the West handed them all sorts of incentives to open up with their eyes firmly on its market, the rest as they say, is history.

ekt_bear:

What do you mean by "innovate"? What does Singapore produce that other rich countries already don't make? There is very little original or innovative coming from Singapore, yet that country is pretty well off (actually, Singapore may not be a perfect example, but I'm sure a suitable one can be found.)

Singapore practices State Capitalism as well. It provides a business environment that is interference-free and subsequently encourages many corporations to site operations there. It is dependent on a mixture of service-oriented and manufacturing (technology) oriented industries. Innovation is not always about tangible products.

ekt_bear:


I don't really think innovation per se is really necessary to build a pretty good country. I doubt Nigeria will ever produce rice as efficiently as Thailand does, yet it is something we can still produce for export. Slimmer profit margins than the Thai, but still positive profit.

Thats why I said innovate or be dependent on resources. How do you know Nigeria can't produce rice as efficiently as Thailand? Innovation always changes things.

wesley80:

I believe they do. India's founding fathers and shapers of their economy like Panjit Nehru where protectionists - i recall indian movies always had weird looking cars like u'd never see elsewhere which always had me baffled but later got to understand that foreign vehicles were banned in the country and this period was a great incubatory period for their local technology until they eventually were forced to open up. Capitalism was supposed to be the panacea that would cure all ills and the West handed them all sorts of incentives to open up with their eyes firmly on its market, the rest as they say, is history.

You are proving my point; India protected and still protects industries that belong to feudal families. Besides, having a protectionist economy does not make it capitalist.

There is a great deal of truth (both academic and practical) in what Katsumoto is saying. A good case study is Nigeria’s inability to innovate an automobile that is suitably adapted to the African climate and affordable to the African economic profile. So, India’s Tata Industries has seized the opportunity and will soon start to export its $3000-$5000 Nano automobiles to Africa. This area of adapting technology to suit the landscape is what Nigeria could have pursued and dominated within the African continent, if the whole country had not been drunk on sweet crude.

@ ekt_bear

I don’t think Katsumoto is referring to technological innovation only when he said “innovation”. By thinking innovatively for example, China has effectively changed its course in history and now on the cusp of world “powerdon”. And they’ve been able to achieve this with a unifying and innovative socio-political thinking. Their socio-political thinking itself is an innovation that allows capitalism to thrive within a communist society.

BTW, are you eku_bear, the poster who lives in California?

Capitalism is all about the profit motive and that is why it trumps any other economic system out there. Without capitalism, there would be no mtn, toyota, Boeing, Nestle, Zenith, Oando etc. It is private individuals that create wealth. The state only benefits from that wealth through taxes. State bureaucrats could not possibly have created the oil industry, telecom industry, aviation industry, arms industry, beverage industry. These came about due to private initiative and enterprise. 

Innovators, inventors and entrepreneurs don't create the next big thing because they love humanity, they do it because they dream of reaping bountiful rewards for their labor and risk taking. Resources are best allocated by someone with a profit motive in mind. Goods and services are best provided by firms doing it for profit because they have a powerful incentive to do it efficiently. Why? To maximize profit (minimize costs)

That is why food will never be scarce in nigeria, telecom services will never  be scarce , transportation services will never be scarce. Why? because it is provided by private firms doing so at profit. Compare that to poor electricity provision, poor fuel provision, poor public education, poor public healthcare, poor security and shortages / inferior quality of anything provided by the state.  Why are these goods poor in quality and scarce? because they are mostly provided by socialistic firms (NNPC,  PHCN etc).

For instance, kerosene would never be scarce if the government does not not force private firms to sell at below market price due to populist demand. There would never be electricity shortages if private firms are allowed to come in and provide electricity to the populace at profitable rates. Only that can incentivize the entire value chain to go through all the trouble to provide these necessities. Otherwise the status quo will continue

You might say "Oh, but a government with political will can solve all these problems"  Political will (socialist thinking) can never trump profit motive (capitalist thinking) when it comes to sustainable provision of goods and services. Read Adam Smith's wealth of nations. You have food to eat because a farmer knows he will make a profit off you for all his labor. Not because he loves humanity and wants to serve it. Why not look to the state for all your needs and see if you will love it. At least our experience in the last 50 years of our independence has shown how inept the state is in providing basic goods and services to its citizenry.

Pifa:

@ ekt_bear

I don’t think Katsumoto is referring to technological innovation only when he said “innovation”. By thinking innovatively for example, China has effectively changed its course in history and now on the cusp of world “powerdon”. And they’ve been able to achieve this with a unifying and innovative socio-political thinking. Their socio-political thinking itself is an innovation that allows capitalism to thrive within a communist society.

BTW, are you eku_bear, the poster who lives in California?

China's rise has nothing to do with it's own innovation and enterprise. China rose because global Capital decided [/b]to go to china to exploit cheap labor. Global Capital can and will go anywhere that will allow it to maximize its profits by minimizing its costs. If China had not opened its borders to foreign capital in 1979 (due to Deng Xiaoping), they would have remained poor.

The success of countries like Singapore, Brazil, South Africa, Malaysia, India, Taiwan, South Korea, Hong Kong closely mirror the success of China. [b]They opened their borders to global Capital otherwise known as globalization. Many of those countries are not known for indigenous technical innovation. South Korea got its technological start by demanding technology transfer from Western firms wanting to do business there. Japan did the same, China is now doing the same.

Katsumoto:

Singapore practices State Capitalism as well. It provides a business environment that is interference-free and subsequently encourages many corporations to site operations there. It is dependent on a mixture of service-oriented and manufacturing (technology) oriented industries. Innovation is not always about tangible products.

So what in your opinion is innovative about Singapore? Just that their business environment is fairly liberal? This is not unique to Singapore though. In a nutshell, I don't think you need to "innovate" (by this I guess you mean provide something new/novel) to have a pretty good country.

Thats why I said innovate or be dependent on resources. How do you know Nigeria can't produce rice as efficiently as Thailand? Innovation always changes things.

Fine, so I guess for Nigeria, it has sufficient amounts of natural resources to not fall under the "innovate" case you believe is necessary to escape poverty. Regarding Nigeria producing rice as efficiently as Thailand? Because we are so far behind, and too dependent on primitive farming techniques. I dunno, let me not say never, but I remain skeptical we'll ever hit the massive rice yields they have in Thailand (like 3-4 tons per hectare or something, I can't remember off the top of my head).

Yet Nigeria still can be a major rice producer and exporter w/o being one of the best in the world, imo.

Pifa:

There is a great deal of truth (both academic and practical) in what Katsumoto is saying. A good case study is Nigeria’s inability to innovate an automobile that is suitably adapted to the African climate and affordable to the African economic profile. So, India’s Tata Industries has seized the opportunity and will soon start to export its $3000-$5000 Nano automobiles to Africa. This area of adapting technology to suit the landscape is what Nigeria could have pursued and dominated within the African continent, if the whole country had not been drunk on sweet crude.

This is true, but India has a functional indigenous steel sector and better power supply than Nigeria does. So there is no real reason to expect Nigeria to be able to produce cars at competitive prices w/o these two ingredients.

@ ekt_bear

I don’t think Katsumoto is referring to technological innovation only when he said “innovation”. By thinking innovatively for example, China has effectively changed its course in history and now on the cusp of world “powerdon”. And they’ve been able to achieve this with a unifying and innovative socio-political thinking. Their socio-political thinking itself is an innovation that allows capitalism to thrive within a communist society.

BTW, are you eku_bear, the poster who lives in California?

I see. You guys have a bit broader definition of innovation than I. But I still don't think innovation of this sort is necessary. I don't need to manufacture t-shirts as cheaply as China does to still make a healthy profit doing so. I don't need to be Coca-Cola (the giant and leader in the field) to turn a profit canning soda. . . I can be the guy who produces the cheap generic brand. Etc, etc.

Yep, I'm eku_bear. Nice to see you again.

kalokalo:

China's rise has nothing to do with it's own innovation and enterprise. China rose because global Capital decided [/b]to go to china to exploit cheap labor. Global Capital can and will go anywhere that will allow it to maximize its profits by minimizing its costs. If China had not opened its borders to foreign capital in 1979 (due to Deng Xiaoping), they would have remained poor.

The success of countries like Singapore, Brazil, South Africa, Malaysia, India, Taiwan, South Korea, Hong Kong closely mirror the success of China. [b]They opened their borders to global Capital otherwise known as globalization. Many of those countries are not known for indigenous technical innovation. South Korea got its technological start by demanding technology transfer from Western firms wanting to do business there. Japan did the same, China is now doing the same.

This. I don't think Nigeria for example really needs to do anything innovative to begin marching forward rapidly.

If there is constant electricity, we can just copy practices from elsewhere in the world. Even if we are slightly less efficient than the Chinas of the world at producing everything which we then manufacture, at least the goods are made locally and don't require the transport costs, import duties, etc of Chinese goods.

And I strongly believe that there are least a few things we'll be able to produce more cheaply than China (processed cassava products for one. I could probably find other examples.)

.

It is so simple, let each individual country take a proper stock of what they have and then channel their brains into developing political and economical ideologies that will suit their developmental goals.

The USA, and largely the Western Europeans should not be the ones to dictate what kind of ideologies to adopt.

In my own opinion, capitalism, democracy, communism and all other fancy ideological words are just frauds.

Big Meat:

It is so simple, let each individual country take a proper stock of what they have and then channel their brains into developing political and economical ideologies that will suit their developmental goals.

I don't really disagree with this. . . but if the answer ends up being something very different from capitalism, then I doubt they came up with the best.

The USA, and largely the Western Europeans should not be the ones to dictate what kind of ideologies to adopt.

I sort of agree. I doubt the USA has ever been a poor, underdeveloped like Nigeria. Europe hasn't been poor for probably hundreds or thousands of years. However, countries like Singapore, China, Dubai, South Korea were poor 50-60 years ago but now are doing pretty well. They are what I'd use to argue in favor of capitalism, not really the US or Europe.

In my own opinion, capitalism, democracy, communism and all other fancy ideological words are just frauds.

Can you elaborate?

ekt_bear:

This. I don't think Nigeria for example really needs to do anything innovative to begin marching forward rapidly.

If there is constant electricity, we can just copy practices from elsewhere in the world. Even if we are slightly less efficient than the Chinas of the world at producing everything which we then manufacture, at least the goods are made locally and don't require the transport costs, import duties, etc of Chinese goods.

And I strongly believe that there are least a few things we'll be able to produce more cheaply than China (processed cassava products for one. I could probably find other examples.)

The presence of constant electricity alone will not spur great growth in Nigeria. Even to copy things, you need huge investment in manufacturing. With the unstable political climate and with the recent rice of the Boko Haram, Nigeria continues to send the wrong signal to investors.

Manufacturing requires huge investment, why would any investor choose Nigeria over Ghana or South Africa? The key question here is, what is Nigeria's competitive advantage? As it is, Nigeria is only good for investors who want to target the market but in terms of export-oriented industries, Nigeria offers no incentives.

I don't even want to go into education and labour. Nigeria has a lot to do.

ekt_bear:

So what in your opinion is innovative about Singapore? Just that their business environment is fairly liberal? This is not unique to Singapore though. In a nutshell, I don't think you need to "innovate" (by this I guess you mean provide something new/novel) to have a pretty good country.

Its not just the business environment. Singapore is a multicultural society that Europeans love because its landscape is beautiful like other Asian nations, corruption is low and it is relatively safe like in most European societies, it is stable politically, and because there human rights are unlikely to be suppressed. So no, Singapore's competitive advantage is not just because of its liberal business environment but also because of the quality life. Singapore has good roads, superior technology, constant power, and solid infrastructure.

Sometimes, innovation isn't in the global context; it can be regional. If you provide something that your neighbours aren't able to produce assuming you all compete in a certain market, then you have an advantage. So many managers that are locating in China, Vietnam, India, and Taiwan but don't want to live in those countries, live in Singapore and travel to those locations when they want to. General Electric Co Vice-Chairman John Rice and Caterpillar's Emerging Markets Chief Rich Lavin moved to Singapore. HSBC's former CEO also moved to Singapore. According to the World Bank report 'Doing Business', Singapore is the easiest place to conduct business in.

In strategy, Michael Porter put forward three types of strategies that a company must excel at to succeed. These strategies are product differentiation (think Apple), product cost advantage (think Dell), and differention or cost advantage in a niche market. These strategies can also be used by companies to succeed. China, South Korea, are examples of Cost leaders while Japan, Germany, the US are examples of Differentiation leaders. Nigeria must pursue one of these strategies if it is to have a 'good country' as you put it.

ekt_bear:


This is true, but India has a functional indigenous steel sector and better power supply than Nigeria does. So there is no real reason to expect Nigeria to be able to produce cars at competitive prices w/o these two ingredients.

Thats the point he was making; Nigeria missed the opportunity because it didn't provide the climate.

ekt_bear:


I see. You guys have a bit broader definition of innovation than I. But I still don't think innovation of this sort is necessary. I don't need to manufacture t-shirts as cheaply as China does to still make a healthy profit doing so. I don't need to be Coca-Cola (the giant and leader in the field) to turn a profit canning soda. . . I can be the guy who produces the cheap generic brand. Etc, etc.

China is a cost leader in some products but it isn't a cost leader in all products. The frugal innivative products that India is lauded for are generally outside industries that China is a cost leader in such as medical and laboratory equipment, refrigeration, telecoms, banking, etc.

ekt_bear:

I sort of agree. I doubt the USA has ever been a poor, underdeveloped like Nigeria. Europe hasn't been poor for probably hundreds or thousands of years.

This is not true. Prior to the industrial era and urbanization the standard of living for the average European/American was substantially lower. Peoples livelihoods were tied closely the land which forced them to subsist. This part should be a familiar story, as this was the way most Africans made a living.

During the industrial era people moved to the cities where they could earn a better(and more certain) living than living off the land. As terrible as living in the cities were(it could be pretty bad), it was still better than trying to eek out a meager existence on a farm. At the same time farming practices improved with new technology increasing crop production.

The problem with the African model, such as it is, is that our cities are not industrial centers. They are centers of commerce, governmental bureaucracies, and trade but they simply do not produce much in the form of material exports. Of course these areas are not for everyone. So people are moving to cities like Lagos but not finding wage/certainty that Europeans/Americans found, and Chinese/Indians are finding.

On top of that African farming practices are still not improving in spite of the increasingly advanced technologies available. Part of it is ignorance of technology and another part is the lack of funds/investment. If foreign investor wanted to invest in agricultural goods in Africa, they simply come and produce it themselves(we of course see this as well).

Hence Africa's current predicament. Explosive growth in urbanization/population without growth in industrialization and agriculture. It is a recipe for disaster.

@idehn: Hrm, I meant poor in a relative sense. Europe in 1500AD was probably still amongst the wealthiest places in the world, no? It was not poorer than Africa for example, right?

Katsumoto, I think you and I have had discussions on this in the past. Basically, I think electricity alone will solve most of the problems facing Nigeria. I'll may respond more thoroughly tonight.

capital

ekt_bear:

@idehn: Hrm, I meant poor in a relative sense. Europe in 1500AD was probably still amongst the wealthiest places in the world, no? It was not poorer than Africa for example, right?

In certain respects they were relatively wealthier especially in the fields of science/technology. However, in history we tend to conflate the wealth/advances of the ruling classes with that of the nation. Life for the average European in 1500 was still very harsh especially with brutal autocracies, plagues/famines, and constant threat of political/ethnic/religious strife. For the average peasant life looked much the same to similar populations in Africa(Yoruba City States,Benin Kingdom, Abyssinia,Bornu etc . . .). Looming threat of wars, poor living conditions, having to subsist on land owned by nobles/aristocrats, growing political corruption/abuses etc. . . This was the life of the majority of people.

For example while we know Nigeria exports billions of dollars in crude oil and has many millionaires(and secret billionaires), Nigeria as an aggregate is still a poor nation.

capitaism will be the destruction of this world. it is the devils tool predicated on greed, one of the deadly sins, that will be used to end this world. its predicated on extracting infinite resources from a finite supply.

ekt_bear:

@idehn: Hrm, I meant poor in a relative sense. Europe in 1500AD was probably still amongst the wealthiest places in the world, no? It was not poorer than Africa for example, right?

How do we measure that? why did you choose 1500AD anyway?

Were Africans begging for food or starving before the first Arabs or European stepped into the continent?

Have you measured the rate of poverty in the Ashanti Kingdom or Benin Kingdom Vs an European Kingdom of commensurate size prior to European incursion?

what is Europe? does that include the potato famine era?

Better still, can you define "poverty" in the context of the early 1500s so we can measure correctly?

Hrm, 1500AD was a somewhat arbitrarily chosen date.

I sort of imagined that Europe would be far wealthier than Africa prior to that time (say in a GDP/capita sense, poverty rate sense, HDI sort of sense).

To be frank, I haven't read anything on the subject. . . my guess was based upon the technology they'd have had available that we didn't.

I didn't really mean to derail the thread on this subject, it was mostly a tangent.

I will google around a bit though to find out what the answer is.

@Idehn: I understand your POV, but am guessing that the lot of your average European was better than that of your average African in say 1500AD.

@Idehn and @okada_man: It looks like my guess was right:


http://www.sciencedaily.com/releases/2010/12/101205234308.htm

This blog post and its comments are also interesting: http://blogs.discovermagazine.com/gnxp/2010/12/was-the-medieval-european-peasant-wealthier-than-an-african/

Katsumoto, I'd chose Nigeria over Ghana probably for the same reason McKinsey decided to open its office in Lagos rather than Ghana. . . simply because it has a much larger local market and man-power base.

I don't want to get too abstract. . . let me talk concretely for a second. I've not figured out yet what I want to do with my life, but one option I'm considering is to one day start a technology company based upon my own area of expertise. If Nigeria gets its act together and power supply becomes regular and internet access become cheaper and faster, I'd absolutely love to open an office in Nigeria someday.

Why? Simply because I can hire a Nigerian or African at a much lower cost than the equivalent American. Now, you'll probably say that Nigerian labor is pretty crappy or something. Be that as it may, if it costs me $100,000 a year (salary, healthcare, retirement plan, etc) to hire an American to fill role X in my company and I can pay a Nigerian $20k who'll even be only half as effective, why would't I be interested in investing in Nigeria?

And I think an annual salary of $20k/year is pretty elite in Nigeria, so I can attract some of the best brains the country has to offer.

ekt_bear:

Katsumoto, I'd chose Nigeria over Ghana probably for the same reason McKinsey decided to open its office in Lagos rather than Ghana. . . simply because it has a much larger local market and man-power base.

I don't want to get too abstract. . . let me talk concretely for a second. I've not figured out yet what I want to do with my life, but one option I'm considering is to one day start a technology company based upon my own area of expertise. If Nigeria gets its act together and power supply becomes regular and internet access become cheaper and faster, I'd absolutely love to open an office in Nigeria someday.

Why? Simply because I can hire a Nigerian or African at a much lower cost than the equivalent American. Now, you'll probably say that Nigerian labor is pretty crappy or something. Be that as it may, if it costs me $100,000 a year (salary, healthcare, retirement plan, etc) to hire an American to fill role X in my company and I can pay a Nigerian $20k who'll even be only half as effective, why would't I be interested in investing in Nigeria?

And I think an annual salary of $20k/year is pretty elite in Nigeria, so I can attract some of the best brains the country has to offer.

$20k a year is pretty elite in nigeria ? you must be smoking the product. i know guys in etisalat on 50 million naira annually.

$20k/year is not an elite salary for a Nigerian engineering graduate fresh out of college? I'm not talking about senior staff or whatever