Analysis of Daewoo Land Deal in Madagascar: Presentation

1,720 views
1,411 views

Published on

For INAF U6355 Globalization at School of International and Public Affairs, Columbia University

Published in: Education, Travel, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,720
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
23
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Analysis of Daewoo Land Deal in Madagascar: Presentation

  1. 1. how to create win-win land dealsStrategic review of Daewoo land deal in Madagascar as case study<br />INAF U6355 GLOBALIZATION<br />Spring 2011<br />School of International and Public Affairs, Columbia University<br />Presented by Kevin Cyrus Hong<br />
  2. 2. Global trends<br />
  3. 3. Driving forces<br />Price volatility in global markets<br />Global food crisis<br />Surging demand for agrofuels and other energy and manufacturing demands<br />Sharp rise in investment in both the land market and the soft commodities market<br />
  4. 4. Client context<br />Growing demand for food in China<br />Decrease in available arable land due to environmental degradation and urbanization<br />Chinese investment in infrastructure development<br />MOU signed in June 2007 for Chinese settlers to move to the Zambezi valley<br />Government denies such a deal following a public uproar<br />Re-visiting the suspended deal<br />
  5. 5. Land Deals as “win-win”<br />Investee Country<br />Investor Country<br />Foreign direct investment<br />Improved agricultural infrastructure<br />Increased employment opportunities<br />Increased access to agricultural resources, especially for food-insecure countries<br />
  6. 6. Land Deals as “land grabbing”<br />Described as “neocolonial land grabs”<br />Exploitation of soil fertility and water access<br />Exportation of all produce<br />Displacement of local farmers and residents<br />No or little tangible benefits to local communities<br />
  7. 7. Background - Madagascar<br />Capital: Antananarivo<br />Area: 587,041 sq km<br />Arable land: 5.03%<br />Irrigated land: 1.85%1<br />Population: 21,926,2212<br />Median age: 18.2 years<br />Literacy: 68.9%3<br />GDP: $20.73 billion4<br />Economy: primarily agriculture (26.5% of GDP, 80% of employment)5<br />
  8. 8. Daewoo logistics<br />Set up in 1999 after the spin-off from Daewoo Corp.<br />Logistics, shipping and resource development<br />Filed for bankruptcy in 2009<br />Currently operating under Chapter 7<br />
  9. 9. Details on Land deal<br />99-year lease for 1.3 million hectares (3.2 million acres), equivalent to half of the total arable land in Madagascar<br />Production of food and biofuel for export<br />Cost of leasing: $5 vs. $0 per hectares per year <br />$2bn infrastructure investment in a port, roads, irrigation, and power plants, along with schools and hospitals for locals<br />
  10. 10. timeline<br />
  11. 11. Distributive politics<br />
  12. 12. What went wrong<br />
  13. 13. Wilson/Lowi Matrix<br />
  14. 14. Entering Mozambique<br />
  15. 15. Madagascar vs. Mozambique<br />
  16. 16. Distributive politics<br />
  17. 17. Recommendations<br />Careful analysis of local context<br />Land availability<br />Land tenure<br />Transparent negotiation process<br />Innovative business model<br />Long-term engagement with local interests<br />Image and reputation management<br />

×