Building Business in Developing Countries (Especially Madagascar)

Sanjiv Teelock and Asha Dursun at home in Arlington.

This week, I spoke with the finance director of an international global consulting firm, Sanjiv Teelock. As a native of Mauritius, he had a lot of ideas and perspectives about business in emerging economies like Madagascar, and its neighbor Mauritius. He shared some of those ideas with me.

Mr. Teelock told me when the economy in mature marketing countries are facing an economic crisis, the rest of the world suffer with them, especially the third world countries. For instance, one of the major sources of income for Mauritius is tourism. The fact that Europeans have less money to spend means they are going to take less vacation. Therefore, Mauritius’ economy suffers because their tourism business from European visitors slowed down. However, as Mr. Teelock, said, “It depends where you are in the world, but generally, when the big the economies get hit, the small ones suffer as well.”

There are a lot of issues that could confront a local business owner in Madagascar, according to Mr. Teelock. The majority of the population in Madagascar tends to think that everything imported from outside of the country is better than anything made locally. That attitude makes things difficult for a local producer. Mr. Teelock said, “it’s all perception,” but it has a real affect on demand for local manufactured goods. If a product has a French or English name, Malagasy consumers tend to think the product is automatically better. Mr. Teelock said that this kind of perception problem happens in other third worlds countries, too.

There are many business opportunities in Madagascar because “basic stuff does not exist,” Mr. Teelock said, The Malagasy economy suffers because many people lack access to some basics that are taken for granted in developed nations. The electric power is not reliable, the roads are horrible (it is an hour flight from Sambava to Antananarivo, but it takes two days on a bus), and many homes don’t have running water. But, these problems can also open up opportunities for business people, Mr. Teelock said. Business owners don’t have to create a new iPad or come up with the latest technology to be successful, the just need to be able to deliver the basics.