Africas FDI Inflow 1980-2003 Analysis

Africas FDI Inflow 1980-2003 Analysis CHAPTER ONE: INTRODUCTION 1.1 INTRODUCTION Foreign Direct Investment (henceforth FDI) is one of the most important integral parts of todays highly talked about global economy. The enormous growth of FDI towards developing countries over the past few decades has ignited a huge interest from researchers in both economics and finance fields. A number of studies have been undertaken with the aim to empirically examine what motivates firms to be involved in cross-border investments and what motivates countries to undertake different policy reforms and other measures in pursuit of attracting FDI. There is a consensus among FDI researchers that FDI can improve the recipient countrys development in various ways even when foreign firms do not provide externalities. The benefits of FDI to recipient countries are not ambiguous. FDI is seen as a solution to a countrys economic woes by providing the most needed foreign capital that boosts the economic activities of a host country. According to Goldberg (2000), FDI leads to transfer of tec hnology and other skills from foreign firms to local firms. It is through FDI that supplementary resources such as capital, management, technology and personnel become available to host countries. These resources may stimulate existing economic activities in a host country, encourage internal competition, and raise the level of national output. The presence of foreign producers is primarily believed to benefit the host countrys citizens by introducing a variety of new products into the domestic market, which are of superior quality and lower prices. Most importantly, FDI is a channel through which recipient countries gain access to international financial markets and earn foreign exchange. FDI creates a number of employment opportunities as foreign entities establish business units in various locations throughout the host country and relatively higher wage rates are offered. Backward linkages and spillovers are secondary benefits of FDI enjoyed by the recipient countries. Spillovers spur strong growth in industries into which FDI flows, especially when the competition between domestic and foreign firms is efficient. Foreign firms also go into joint ventures with domestic firms and a large percentage of profits generated through such collaborations are ploughed back into the domestic market, thereby contributing to the host countrys macroeconomic growth and development without necessarily providing externalities. Externalities provide another form of benefits that FDI recipient countries enjoy. The existence of foreign direct investors spawns the seepage of managerial, personnel, and technological expertise from the foreign to domestic companies. For instance, Old Mutual plc training programme in South Africa may benefit the South African insurance and financial sectors as a whole. It is because of the above-mentioned benefits that developing countries are actively embarking on measures involving macroeconomic as well as socio-political reforms with clear intentions of advancing their investment climate to attract FDI on a large scale and achieving sustained economic growth. Developing countries have formerly depended on loans and official development assistance as a source of foreign capital, principally provided by international agencies such as the World Bank and OECD countries. However, the flow of such funds from these institutions has been declining. For instance, Asiedu (2002) reports that financial assistance to Sub-Saharan Africa (SSA) fell from 6% in 1990 to just 3.8% in 1998 and foreign aid per capita fell from an average of $35 for the period 1989-92 to $2 for the period 1993-97. It is in situations like this, that FDI plays a pivotal role as an alternative source of foreign capital for the developing world. For developing and the least developed countries that are making efforts to attract FDI as a way to enhance their economic growth and hence their sustained development, it is particularly essential to identify and comprehend the prime factors that shape FDI inflows as they apply to each country in particular. Since FDI plays a pivotal role in the growth dynamics of a country, a number of factors that are believed to influence FDI inflows towards developing countries have been intensely investigated. Among these factors the following have been most frequently considered: exchange rate volatility, market size, GDP growth, trade openness, infrastructure development, country size (also size of economy), per capita GDP, quality of the labour force, labour cost, inflation, return on capital, export orientation, political stability. Such analysis has immediate policy relevance as it identifies areas of comparative advantage that these countries should favour in terms of resource allocation . 1.2 OBJECTIVES OF THE STUDY The main aim of this study is to carry out an empirical investigation of the factors explaining FDI inflows to South Africa over the period 1980-2003. The review of previous theoretical research and the review of previous empirical evidence are means to this end. 1.3 THE STRUCTURE OF A PAPER The structure of this paper is as follows: Chapter 2 provides a review of both the theoretical and empirical literature on factors believed to be the major driving force behind inward FDI activities for host countries. In Chapter 3, the paper provides an overview of the South Africas macroeconomic performance, FDI regulatory framework currently in place and incentives provided by the government to foreign investors. Chapter 4 discusses the data set and econometric methods used to carry out time series analysis for the study. The data and variable specifications are also described and clarified in this chapter. Chapter 5 reports and discusses the econometric results. A summary of findings, conclusions and policy implications are presented in Chapter 6. CHAPTER TWO: REVIEW OF FDI LITERATURE 2.1 INTRODUCTION The main aim of this chapter is to present theories of FDI as developed by previous research and review the empirical evidence on the determinants of FDI. Before these are considered in more details, a brief overview of the definition of FDI and related concepts is provided. Given that FDI has direct effects on the economic growth of the host country, a specific section provides a brief exploration of the relationship between FDI and growth. 2.2 FDI: DEFINITION AND CONCEPTS In its archetypal form, FDI is conventionally defined as the physical investment made by acquiring foreign assets such as land and factory buildings with operational control residing with the parent company (Buckley, 2004). The definition can be extended to include such investments that seek to exercise considerable influence on the management of the foreign entity. A parent company is required to hold at least 10% of the ordinary shares or voting rights in order to exercise control over an incorporated foreign company. An ownership stake of less than the stated 10% is regarded as foreign portfolio investment and does not qualify as FDI. FDI made by transnational companies (TNCs) is an indication of internal growth and it can be made in the form of greenfield investment or mergers and acquisitions. Greenfield FDI refers to an investment where a new entity is established in a foreign location. It entails formation of completely new production facilities in the recipient country (Eun and Resnick, 2007). Cross-border mergers and acquisitions are twofold. On one hand, they involve merging both domestic and foreign companies into one bigger company. On the other hand, they involve an acquisition of a domestic company by a foreign company. FDI is beneficial for the host country as it is a channel through which foreign capital and new technology are provided. FDI is regarded as a stimulus for economic activities and accelerated growth. The OECD (2002) describes FDI as a catalyst for speeding up the development process. Nevertheless, a recipient country must display a certain standard of development before it attracts FDI. Dunning (1977, 1979) identifies fundamental factors including firm specific and host country specific advantages that must be met before FDI occurs. These advantages are discussed in detail below. 2.3 FDI AND ECONOMIC GROWTH A number of empirical studies have analysed the relationship between FDI and the economic growth of a host country. Lipsey (2000) finds that FDI and economic growth are positively correlated. Abwona (2001) urges that the effects of FDI on growth may vary between countries, as not all countries are at the same level of development. Lim (2001) points out that FDI positively affects economic growth of a host country by transferring advanced technology from the industrialized to developing economies (Lim, 2001, p.3). Conceptually, FDI increases GDP growth because it increases the amount of goods and services produced in a host country. Benefits of FDI are only evident in increased level of output because of the host countrys ability to absorb technological spillovers from foreign firms. This, therefore, suggests that the positive contribution of FDI on growth is conditional upon the recipient countrys absorptive capacity of all the benefits that FDI brings. Much as there is general awareness that FDI influences economic growth, there is no general agreement on the causal relation between FDI and economic growth. De Mello (1997) argues that the relationship could run either way, as the prospects of economic growth make the host country more attractive to FDI. Once operational in a host country, FDI enhances growth by allowing the host country to integrate new inputs and technology to expand production. 2.4 THEORIES OF FDI In a study of TNCs, Hymer (1976) explains that because foreign TNCs have offsetting monopolistic advantages over domestic companies, they are able to compete with domestic companies that are in a better position with regard to knowledge and understanding of the domestic market. Kindleberger (1969) who suggests that these advantages should be adequate to tower over limitations and must be company specific reiterates this. According to Hymer (1976) and Kindleberger (1969), these advantages can be in the form of access to ownership patents, technological expertise, managerial expertise, marketing skills, etc. These skills should be scarce or completely unavailable to domestic companies. The basis of the argument here is on the theory of market imperfections in factor markets and product differentiation. In circumstances where market imperfections exist, firms find it rewarding to engage in cross-border direct investment instead of exporting to foreign markets or licensing. In this way, they can fully utilize their monopolistic market supremacy (Assefa and Haile, 2006). In the same year as Hymer (1976), Buckley and Casson (1976) developed the internalization theory. This theory stipulates that in some instances it is desirable for TNCs to refrain from licensing and to choose cross-border direct engagement over exporting. FDI occurs when TNCs undertake an internal operation rather than a market operation. TNCs internalize their activities to circumvent impediments presented to them by the external market. These impediments arise because of market flaws such as lack of managerial expertise, human capital, etc. The benefits of internalization include both time and cost savings. According to Moosa (2002), the rationale behind internalization is the persistence of externalities in both goods and factor markets. However, Rugman (1980) disapprove of the internalization theory by contesting that it cannot be empirically analysed. Twelve years after introducing internalization theory, Buckley (1988) came back to warn that the theory cannot be directly analy sed, claiming that the theory needs to be modified in order to allow rigorous analysis. He urges that there is still a room to develop advanced theories that can be empirically tested. Another line of study dealing with factors influencing FDI is based on Vernons (1979) product life cycle hypothesis. Assefa and Haile (2006) and Udo and Obiora (2006) relate their studies to Vernons product life cycle to explain that FDI is a stage in the life cycle of a new product from innovation to maturity. Home production is unique and strategic for some time, after which the new product reaches maturity and looses uniqueness. New similar products also enter the market and intensify competition. At this stage, the firms would then replicate the home production in lower cost foreign locations that offer cost benefits to the firm. The lower cost that can be achieved by producing in foreign locations can be due to cheaper factors of production and complementary government policies. Dunning (1993) develops an eclectic theory which is referred to as OLI framework. OLI is the short name for ownership, location and internalization advantages. In his theory, Dunning identifies three sets of advantages that must be met for a firm to get involved in foreign direct investment. The first set is ownership advantages, which entail technological expertise, patents, marketing skills, managerial capabilities and the brand name. A TNC must have these firm specific advantages over its rivals in a foreign location. In the absence of these advantages, the firm will be exposed to fierce competition from its rivals in the market it serves. The second set of advantages that must be met is the location advantages, which Dunning (1993) explains as the degree to which the foreign location is more favourable to invest in. Examples of these advantages are an abundance of natural resources, exceptional infrastructure development, political and macroeconomic stability. These advantages s hould be adequate to validate investment in a preferred foreign location. The third set of advantages is internalization benefits. The ability of a TNC to internalize its operations is the manner in which it enters foreign location. According to Dunning (1993), this could be by a greenfield project, product licensing or acquisition of foreign assets as long as it fits the management strategy, the nature of the firms business and the firms long-term strategic plan. Another rationale for FDI to occur is embodied in the in the industrial organization hypothesis (IOH) (Tirole, 1988). This hypothesis presupposes that there are various potential uncertainties that a TNC faces in foreign markets. The uncertainties may be political, religious, social, cultural and so on. If the firm decides to establish a subsidiary in a foreign location despite these uncertainties then the benefits accrued should be adequate to outweigh these obvious risks and restrictions. Lall and Streeten (1977) emphasize the importance of marketing and managerial skills, availability and ownership of capital, production technologies, scale economies and access to raw materials. They also put forward that FDI occurs because of the complexity of trading intangible assets abroad. Examples of these untradeable intangible assets include a TNCs organizational ability, executive skills, position in foreign financial markets and a well-established network with different government burea ucrats. 2.5 MOTIVES FOR FOREIGN DIRECT INVESTMENT Assefa and Haile (2006) assert that the ownership and internalization advantages as developed in Dunning (1993) eclectic theory are firm specific advantages, while location advantages are regarded as host country qualities. Firms choose locations where all these advantages can be combined together to advance the firms long-term profitability. Asiedu (2002) and Dunning (1993) distinguish the motives of FDI as either market seeking or non-market seeking (efficiency and resource seeking). According to Dunning (1993), a market seeking FDI is that which aims at serving the domestic and regional markets. This means that goods and services are produced in the host country, sold and distributed in the domestic or regional market (Asiedu, 2002). This kind of FDI is therefore, driven by host country characteristics such as market size, income levels and growth potential of the host market and so on. A non-market seeking FDI can either be classified as resource/asset seeking and/or efficiency s eeking. Resource seeking FDI aims at acquiring resources that may not be available in the country of origin. Such resources may comprise natural resources, availability and productivity of both skilled and unskilled labour forces as well as availability of raw materials. Efficiency seeking FDI aims at reducing the overall cost of factors of production especially when the firms activities are geographically scattered (Dunning, 1993). This allows the firm to exploit scale and scope economies as well as diversify risks. Apart from the economic factors that are believed to be the major motivation for FDI, the host countrys FDI policy also plays a major role in attracting or deterring FDI. This therefore, suggests a need for the host country to develop policies that provide a conducive environment for business if the authorities believe in the benefits of FDI. This necessitates a regular monitoring of the activities of TNCs and an acceptance by the host government that, if FDI is to make its best contribution, policies that were appropriate in the absence of FDI may require amendments in its pr esence. For example, macroeconomic policies may need to be altered in order to provide a favourable climate for FDI. Stronger competition as a result of FDI may also induce a host government to operate an effective and efficient competition policy. 2.6 EMPIRICAL LITERATURE There is an extensive empirical literature on the determinants of FDI. A large share of this literature focuses on the pull factors or, equivalently, on the host countrys location advantages. Given the increasing flows of FDI towards developing countries, especially in Asia, most academic researchers have been poised to investigate what factors influence flows of FDI into those countries. The African continent instead remains under researched, especially a country such as South Africa, which is regarded by many as one of the economic giants of the continent. The following studies have attempted to examine the link between FDI and predictor variables such as market size, GDP growth, inflation, exchange rate, political stability and many more. Goldar and Ishigami (1999) use panel data techniques to empirically analyse the determinants of FDI for 11 developing countries of East, Southeast and South Asia for the years 1985-1994. The authors estimate two separate models, one for Japanese FDI and the other for total FDI flowing towards these countries. They report a strong positive relationship between the size of the economy and FDI inflows for the two models. They also find a positive relationship between FDI inflows and the exchange rate. Intuitively, this suggests that lower exchange rates should make the host countrys exports more competitive in foreign markets and therefore act as an important factor for attracting FDI. Interestingly, Goldar and Ishigami (1999) report contrasting results for the relationship between FDI inflows, domestic investment and trade openness for the two models. They find both domestic investment and trade openness to be significant determinants for the Japanese FDI model but the authors fail to find support for the two variables for the total FDI model. Market size has generally been accepted as an important factor influencing FDI by many empirical studies. In a cross-country empirical study, Chakrabarti (2001) finds strong support for market size as an important determinant of FDI. He further reports that the relationship between FDI and other explanatory variables, such as trade openness, tax, wages, the exchange rate, the GDP growth rate and the trade balance is highly sensitive to small changes in these variables. That is, a small change in these variables is likely to deter or increase FDI inflows with a large magnitude. Campos and Kinoshita (2003) use two trade related variables to examine the extent to which trade openness influences FDI inflows for 25 countries in transition between 1990 and1998. The authors employ an external liberalization index and trade dependence as proxies for trade openness. They argue that, the greater degree of trade openness does not only increase international trade, but also increases FDI inflows. Chang et al. (2009) also study the importance of trade openness in the economic growth of a country. They use a sample of 82 countries from all over the world for the period 1960-2000. They conclude that trade openness, used in conjunction with complementary trade policies, enhances economic growth through increased FDI inflows into a country. Their finding further bolsters the position of trade openness as an important determinant of FDI. Root and Ahmed (1979) seek to analyse the determinants of manufacturing FDI in 58 developing countries for the period 1966-1970. They classify these determinants under three categories: economic, social and political. Among the four important economic variables they study, infrastructure, per capita GDP and GDP growth rate appear to be important predictor variables while the absolute of size of GDP does not help to predict FDI. They also put forward that foreign investors view long-term political stability and the extent of urbanization as important factors when choosing the location for their investments. Nunnenkamp (2002) adopts Spearman correlations to study the relationship between FDI and its determinants for 28 developing countries between 1987 and 2000. His findings show that variables such as GDP growth rate, entry restrictions, post-entry restrictions, market size, infrastructure and quality of the labour force, as measured by the years of schooling, have no effect on FDI inflows. However, he also reports positive effects on FDI of non-traditional factors such as factor costs. That is, the cheaper costs of factors of production, like lower costs of raw materials and lower costs of labour, are essential for attracting efficiency-seeking FDI. Tsai (1991) presents an opposing view by arguing that in Taiwan FDI inflows have increased with increasing labour costs. His findings suggest that in Taiwan, there are far more important determinants of FDI than cheaper costs of factors. Indeed Tsai (1991) observes that for the years 1965-1985, Taiwans economic performance was spectacular, with an expanding domestic market and purchasing power of the economy as measured by rising GDP per capita. Singh and Jun (1995) look into three determinants of FDI in developing countries. They pay particular attention to socio-political stability, favourable business operating conditions and export orientation. They employ other macroeconomic variables as control factors. The authors use a political risk index (PRI) developed by Business Environment Risk Intelligence, S.A (BERI, 2009), as a measure of socio-political instability. When used in conjunction with traditional determinants of FDI such as GDP growth rate and per capita GDP, PRI appears to be highly associated with FDI for 31 developing countries for the period 1970-1993. Schneider and Frey (1995) also find political instability to be a significant deterrent of FDI for 54 less developed countries, considered over three different years 1976, 1979 and 1980. Furthermore, Singh and Jun (1995) employ an operation risk index (ORI) also developed by BERI, S.A, and taxes on international trade and transactions (ITAX). They further find that ORI is highly associated with FDI flows and has a positive sign. ITAX is also reported as an important determinant of FDI. They also find export orientation to be highly related to FDI flows, especially manufacturing exports. Asiedus (2002) investigation on the determinants of FDI in 71 developing countries provides further evidence of the importance of these extensively studied FDI determinants. Asiedu goes a little further to assess whether the same determinants of FDI have a similar impact on FDI flowing towards Sub-Saharan Africa (SSA) between 1980 and 1998. After a detailed analysis, she concludes that factors influencing FDI in other developing countries do not necessarily have a similar impact on FDI flows to SSA. She notes that infrastructure development and a high return on capital influence FDI flows towards developing countries in other continents, but the same factors have no influence on FDI flows towards SSA. Bende-Nabende (2002) also undertakes a study probing into the determinants of FDI flows towards 19 SSA countries for the period 1970-2000. In this study, market growth, trade liberalization and export orientation turn out to be important factors explaining why countries are able to attract foreign investors. Obwona (2001) argues that the Ugandan market size has been one of the driving forces behind FDI flows into the Ugandan economy between 1975 and 1991. Yasin (2005) uses panel data from a sample of 11 SSA countries for the period 1990-2003. His findings lead to the conclusion that official development assistance (ODA), trade openness, growth of the labour force and the exchange rate are important determinants of FDI, while his findings do not suggest that the growth rate of per capita GDP, a political repression index and a composite risk index have explanatory power. Ahmed et al. (2005) examine the composition of capital flows between 1975 and 2002, to assess if South Africa is different from 81 other emerging markets. They classify relevant factors into macroeconomic performance, investment environment, infrastructure and resources, quality of institutions, financial development and global factors. The authors argue that some factors influencing capital flows are limited to particular forms of capital, while other factors have comparable effects on FDI, bond and equity flows. They further assert that the more open the economy is to international trade, the richer it is in natural resources, and the fewer barriers to profit repatriation it has, the more likely it is to attract FDI on a large scale. The implication of this study is that South Africa should ease its capital controls in order to avoid deterring FDI. South Africa is currently allowing repatriation of profits only within six months (Ahmed et al., 2005). The agglomeration effect is another important factor that can be used to explain why countries that have attracted FDI in the past still receive a large share of it. Notable magnitudes of existing FDI stocks in recipient countries tend to attract more FDI inflows (Lim, 2001). Foreign investors incorporate the size of the existing FDI stocks in their decisions as they seek locations where to expand their operations. Campos and Kinoshita (2003) also confirm that for 25 countries in transition between 1990 and1998, foreign investors tend to locate where others are investing, as the decision by other firms implies a favourable atmosphere for investment offered by counties in which they locate. Asiedu (2003), Loree and Guisinger (1995) and Lee (2005) consider effective government policies, especially the monetary and fiscal policies, as important factors that can be used to effectively attract or deter FDI inflows. Loree and Guisinger (1995) use effective tax rates for 48 countries (classified into developed and developing countries) in 1977 and 1982. After finding the effective tax policy variable to be significant, they conclude that government policies are important and that policy reforms are likely to attract more FDI. Lee (2005) investigates some evidence on the effectiveness of policy barriers to FDI for 153 developing and developed countries between 1995 and 2001. He finds strong support for the proposition that restrictive public policies deter FDI inflows. Asiedu (2003) studies the effects of investment policy on FDI for 22 SSA countries over the period 1984-2000. Her findings show that governments can increase FDI flows by developing and implementing policies th at provide investor friendly environment.s CHAPTER 3: SOUTH AFRICAS MACROECONOMIC OVERVIEW, FDI REGULATORY FRAMEWORK AND INCENTIVES. INTRODUCTION The purpose of this chapter is to provide an overview of the South African macroeconomic performance over the period of study (1980-2003). This has been based on two regimes – the apartheid regime and the democratic regime. Other sections of the chapter are dedicated to the regulatory framework for FDI and the incentives offered to foreign investors by the South African government. 3.2 THE APARTHEID SOUTH AFRICA According to Lester et al.(2000), the pre-1994 period was one during which South Africa was politically unstable as a result of the racial discrimination philosophy (apartheid) that was adopted by the Nationalist government then in power. This created internal resistance by black South Africans, who protested against the racial discrimination practices. In 1960, the Nationalist government banned organizations such as the African National Congress (ANC) that represented black South Africans and this intensified demonstrations against the government. In response to the protests, the Nationalist government using armed forces, killed and arrested many black South Africans activists. These incidents drew attention from the international community, who condemned the repression against black South Africans by a Nationalist government that predominantly looked after the interests of white South Africans. These events also caused distress among foreign investors, who became sceptical of the p rospects of South Africas economic stability and the protection of their investments. This led to capital outflow, a mounting pressure on the South African rand in foreign exchange markets, effective economic sanctions and the isolation of South Africa from the rest of the world. Despite being blessed with an abundance of natural resources, especially gold, diamonds, platinum and other minerals, South Africa was not a favoured location for investment during this period. Political instability, investment insecurity and violation of human rights severely inhibited FDI. Realizing the challenges that came with economic isolation, the Nationalist government, in an attempt to uphold domestic capital growth, introduced incentives for import substitution industries such as car manufacturers and military equipment (Lester et al., 2000, p.187). Despite these attempts, this period saw South Africa undergoing falling investment, diminishing international reserves, sinking economic growth, soaring rates of inflation and lofty interest rates (Nowak, 2005). During this period, the economic performance was notably disappointing as investors left South Africa in search of other locations that offered better conditions for their investments. As shown in Table 3.1, the GDP growth rate was declining in some years with an average annual growth estimated at 1.44% per annum for the years 1980-1990. In addition, inflation and interest rates were continuously increasing with no signs of stabilising. All these were signals of loss of effective control of macroeconomic policies. Table 3.1: GDP growth, inflation and interest rates in South Africa for the period 1980-1990 Year 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 GDP annual % change 5.4 -0.4 -1.9 5

Native American educational traditions passed Essay

Before contact with Europeans, Native Americans developed an effective system of informal education call aboriginal education. The system included transmitting knowledge, values, skills, attitudes, and dispositions to the next generation in real world settings such as the farm, at home, or on the hunting ground. Education was viewed as a way to beautify and sharpen the next generation and prepare them to take over the mantle of leadership. The purpose of education was for an immediate induction of the next generation into society and preparation for adulthood. Education was for introducing society with all its institutions, taboos, mores, and functions to the individual. Also, education was intended for making the individual a part of the totality of the social consciousness. Native American education delineated social responsibility, skill orientation, political participation, and spiritual and moral values. The cardinal goals of Native American education were to develop the individual’s latent physical skills and character, inculcate respect for elders and those in authority in the individual, and help the individual acquire specific vocational training (Franklin, 1979). Native American education was also for developing a healthy attitude toward honest labor, developing a sense of belonging and encouraging active participation in community activities. Both boys and girls had equal access to education. Boys were taught by their fathers, uncles, grandfathers, and other male elders. Girls were instructed by their mothers, aunts, grandmothers, female elders and other members of their families. Sometimes, both boys and girls received instruction at the feet of either male or female elders (Mould, 2004). There were barely any dropouts and the community ensured that every child received a full education. Youth appropriate information and knowledge was not hidden from any child. Several teaching strategies, including storytelling, were utilized to pass on knowledge and culture to the youth. In fact, Mould (2004) believed that storytelling was a sacred and vital part of a Native American youth’s education. Knowledge and culture were passed down orally, â€Å"crafted into stories that would instruct, inspire, provoke, question, challenge, and entertain† (Mould, 2004). Often, the youth would gather together to listen to the elders as they related the knowledge once entrusted to them when they were children (Mould, 2004). The philosophy of education was that of the development of the individual as well as the whole society (Johnson et al. , 2005). Educational philosophy also emphasized the importance of nature. The pursuit of knowledge and happiness were subordinated to a respect for the whole universe. According to Johnson, knowledge was equated with an understanding of one’s place in the natural order of things and educators were encouraged to study and teach the physical and social world by examining the natural relationships that exist among things, animals, and humans. Studying ideas in the abstract or as independent entities was not considered as important as understanding the relationships among ideas and physical reality. The essential components of an educational experience included hands on learning, making connections, holding discussions, taking field trips, and celebrations of the moment (Johnson et al. , 2005). These highly effective teaching methods were utilized by adults to transmit culture to or educate the next generation. The youth learned at their own pace and barely competed against one another. The youth were taught to be supportive and nurturing of one another in the learning process. As a result of the holistic education that all youth were exposed to in the period before their contact with Europeans, there were barely any miseducated Native American children. At the time of European contact with Native Americans (from 1492), an advanced system of informal/aboriginal education had been developed by Native Americans as noted earlier. That system was misunderstood by Europeans who thus made efforts to impose their formal system of education on Native Americans. After contact with Europeans, formal education for Native Americans was initially conducted by missionaries and private individuals until the 1830s. There were increased European government efforts to formally educate Native Americans after the passage of the Indian Removal Act (1830) which forced Native Americans onto reservations (Tozer 2009). The purpose of formal education of Native Americans, as far as Europeans were concerned, was forced acculturation or assimilation to European culture (Tozer 2009). The aim of the European system of education was to â€Å"civilize†, Christianize, and Europeanize the Native Americans in European-controlled schools. To achieve this purpose and aim, many Native American children were forcibly removed from their homes and enrolled in European-controlled schools. By 1887, about 14,300 Native American children were enrolled in 227 schools run by the Bureau of Indian Affairs or by religious groups (Tozer 2009). The schools were operated based on an Anglo-conformity assimilationist approach. The Anglo-conformity assimilationist approach included the following: 1) Educating the Native Americans away from their culture due to the philosophy of Europeanization or Christianization or â€Å"civilizing† of the Native American through education; 2) Intensive efforts were made to destroy extant Native American cultures by excluding Native American cultures from the school curriculum; 3) Concerted efforts were made to prevent Native American students from following their own culture; and 4) Native American students were punished for speaking their native languages (Feagin & Feagin, 2003). This approach motivated European American educators to force Native American students into boarding schools where it was believed that it would be easier and much more effective to Europeanize, Christianize, and â€Å"civilize† them. Students were forced to dress like Europeans, convert to Christianity, and take European names. Students who refused to conform were severely punished. The effects of the Anglo-conformity assimilationist approach on Native Americans cannot be overemphasized. Many of them lost or became confused about their cultural identity. Some tended to know a lot more about European culture, history, philosophy, and languages than about their own culture, history, philosophy, and languages. Europeanization, Christianization and â€Å"civilizing† of Native Americans through formal education seriously undermined the very foundation of Native American cultures and alienated many Native Americans from their own cultures and environment. Formal education forced many Native Americans to absorb European lifestyles and led to individualism as well as serious weakening of traditional authority structure and kin group solidarity. Many Native Americans lost faith in their own cultures and civilizations and absorbed those of Europeans. Some have neither fully adopted European culture nor fully embraced Native American culture and consequently swing between the two in a state of cultural confusion. Eurocentric education has been a miseducation of Native Americans as has been for all minority groups in the United States. These and many other political, social and economic effects of formal education on Native Americans have permeated Native American cultures till today. European American teachers and administrators have blamed Native American educational problems on cultural differences. This is known as cultural deficit theory. According to cultural deficit theorists, disjuncture’s or differences or deficits between the culture of the home and the culture of the school are the reasons for the poor academic achievement of non-European students (Johnson et al. , 2005). European American schools focus only on the dominant culture and expect all students to operate as if they are members of the dominant culture, giving an advantage to students from the dominant group and a disadvantage to those from minority groups (Johnson et al., 2005). What cultural deficit theorists advocate is that students from minority groups, including Native American students, must reject their own cultural patterns and absorb European American cultural patterns in order to be successful in school. Thus, in an effort to assist their students to be high achievers in school, many European American teachers have attempted to make their students â€Å"less Native American† by educating them away from their own cultures and imposing Anglo-European culture on them. Many schools and textbooks exclude Native American experiences and their immeasurable contributions to this society and the rest of the world and provide little to nothing to assist Native American children identify with their own cultures. From the 1930s some boarding schools were replaced by day schools closer to reservations and a bilingual policy of educating Native American students in both Native American languages and the English language was discussed (Feagin & Feagin, 2003). Since the 1960s, organized protest has led to increased government involvement and aid for primary, adult, and vocational education for Native Americans on and off the reservations. Federal and local governments have focused more attention on local public schools (outside the reservations) and Bureau of Indian Affairs (BIA) schools in the reservations. For greater inclusion of Native Americans in their own education, Native American advisory boards have been organized in mainstream public schools. More Native Americans have been added to school faculty and staff. Native American art, dances, and languages have been included in the school curriculum. The central curriculum taught in both BIA and mainstream schools have remained the same from colonial times until recently. The curriculum indoctrinates Native American children with the same European American values as in the past (Feagin & Feagin, 2003). In many reservations today however, there are efforts to reverse this by teaching students in Native American languages and culture from the early years of their education. In the Choctaw Reservation in Choctaw, Mississippi for example, students are taught in the Chahta and English languages in the first three years of formal schooling and in the English language from the fourth grade onwards. Throughout their schooling to the high school level, they are taught and exposed to Choctaw culture and encouraged to speak the Chahta language in and outside of school. One of the essences of the Annual Choctaw Indian Fair is to educate both the youth and adults in Choctaw cultural practices and traditions and to transmit Choctaw culture to the next generation. The author of this article, who happens to be an African and from a continent which has had similar experiences as those of Native Americans, greatly applauds the new forms of formal education among Native Americans on the reservations, which include an integration of the Native American system before their contact with Europeans and aspects of the European system as a way of preserving what is left of Native American cultures, preparing contemporary Native American youth for their real world settings, and meeting the needs of Native Americans. The large scale migration of many Native Americans to the cities since the 1950s has led to a decline in the number of children in BIA schools. By the early 1990s less than ten percent (10%) of Native American children attended BIA schools (Feagin & Feagin, 2003). Today, most Native American children attend mainstream local public schools due to the fact that majority of Native Americans live off reservations with their children (United States Census Bureau, 2001). The mainstream educational system has however failed to meet the needs of Native American students. The failure stems from the absence of a Native American perspective in the curricula, the loss of Native American languages, the shift away from Native American spiritual values, and the racist and discriminatory activities of many European American teachers and administrators (Feagin & Feagin, 2003; Schaefer, 2004). Perhaps, mainstream educators could borrow the new forms of formal education being practiced on the reservations which seem to much better meet the needs of Native American students rather than continually imposing the Eurocentric system which has not worked for Native Americans. With regard to higher education, since the 1960s, many mainstream colleges have established Native American Studies centers to provide facilities for the study of Native American issues (Feagin & Feagin, 2003). By the late 1990s, more than 134,000 Native Americans were enrolled in colleges and universities throughout the United States (Schaeffer, 2004). Majority of the students attended predominantly European American public colleges and universities. Some of the students were not very successful due to the ingrained racist and discriminatory practices in those institutions. Consequently, many Native American students dropped out of those institutions. In general, Native American formal educational attainment has remained lower than that of the general population due to the Eurocentricity of the educational system. By 1990, less than two-thirds of Native Americans over the age of twenty-five were high school graduates compared to three-fourths of all Americans in that age range. Native American students in mainstream schools are disproportionately placed in special education classrooms. The proportion of Native American students who drop out after tenth-grade is 36%, the highest of any racial or ethnic group and more than twice that of European Americans (Schaeffer, 2004). In view of the aforementioned issues in education among Native Americans, a Department of Education Task Force organized in the late 1990s recommended the following for addressing Native American educational issues: implementation of multicultural curricula that inculcate respect for Native American history and culture, and establishment of programs that guarantee that Native American students learn English well. The task force assumed that if Native American students learn English very well then they will be successful in school, an assumption which is traced to the cultural deficit theory discussed above. Today, many Native American students attend Native American-controlled community colleges. The community colleges integrate Native American history and culture into courses. More attention is given to students and their cultures in the Native American-controlled educational institutions. Native Americans had established an effective educational system which ensured the smooth transmission of their cultures to the next generation before their contact with Europeans. The system included passing on of knowledge, values, attitudes, skills, and dispositions required for successful functioning of every individual in real world settings. Access to education was denied neither to male nor female while all children were taught to support and nurture one another and not necessarily compete against one another in the learning process. Learning was undergirded philosophically by a reverence for nature and a sense of humans’ responsibility to nature (Johnson et al. , 2005). The arrival of Europeans from 1492 onwards led to the imposition of a Eurocentric educational system which was underpinned by an Anglo-conformist assimilationist approach discussed above. This approach included educating Native Americans away from their cultures as a way of rendering them â€Å"less Native American† and more European American. The Anglo-conformist assimilationist approach in the formal education of Native Americans has left many of them miseducated and quite confused about their cultural identity. The political, economic and social impact of the European aim of Europeanizing, Christianizing and â€Å"civilizing† Native Americans through formal education are discussed at length in a paper presented by the author at the National Association of Native American Studies Conference in 2004. Fortunately, today, Native American leaders are successfully making efforts to reverse the adverse effects of the imposed Eurocentric educational system by synthesizing traditional Native American educational practices with European American practices. Works Citied Feagin, J. R. and Feagin, C. B. (2003). Racial and ethnic relations. Englewood Cliffs, New Jersey: Prentice- Hall Johnson, J. A. ; Dupuis, V. L. ; Musial, D. ; Hall, G. E. ; and Gollnick, D. M. (2005). Introduction to the foundations of American education. Boston, Massachusetts: Allyn and Bacon. Mould, T. (2004). Choctaw tales. Jackson, Mississippi: University Press of Mississippi. Schaefer, R. T. (2004). Racial and ethnic groups. Upper Saddle River, New Jersey: Pearson Education, Inc. Steven Tozer (2009) School and Society : Historical and Contemporary Perspectives. McGraw- Hil Publishing Company.

Testing for Drugs In The Olympics Essay - 1507 Words

Have you ever watched the Olympics and wondered how the athletes can be that strong and fast? The International Olympic Committee (I.O.C.) certainly has. Each year the athletes come up with new ways to enhance their performance, and make it harder for the Olympic drug testers to detect banned substances. With performance enhancing drugs becoming harder to police, the burden of trying to keep the Olympics as clean as possible falls on the I.O.C.s shoulders. Drug use in the Olympics is not a new idea. Dating back to the runners and javelin throwers of ancient Greece and Rome, athletes have been looking for supposedly magic potions (Corelli, par. 1). With competition growing stronger and stronger throughout the†¦show more content†¦The I.O.C., fearing false positive tests of clean athletes and subsequent lawsuits in nations that enjoy due process, such as the United States, has set the dirty bar extremely high (Are Drugs, par. 6). Therefor, most athletes are careful to choose the hard-to-detect drugs, or stop taking the drugs well in advance of announced tests. One agency that is separate from the I.O.C., called the World Anti-Doping Agency, may be able to make a difference. This agency is currently conducting 2,500 out-of-competition tests, the only kind with any reasonable chance to catch a cheat. Frank Shorter, chairman of the U.S. Anti-Doping Agency says, I want reciprocity, so any country thats not tested up to our standards cant compete here...I want to get the athletes involved...the Australians are voting on maybe giving voluntary blood tests in Sydney to prove theyre clean. Thats a sign of willingness (Are Drugs, par. 26). The I.O.C. is constantly making efforts to find more reliable tests for detecting performance-enhancing drugs. 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