THE CONSTRUCTION IN DEVELOPING COUNTRIES:
Some Issues on Indigenous Construction Companies
Abstract
The construction industry is one of the important sectors in an economy and it
contribution to the GDP and to the development of a country has always been
acknowledge particularly to the developing countries. It is also one of the major
contributors in the development of technology in a nation. This is reflect in the high
percentage of share of output in the GDFCF of both developed and developing countries.
The percentage of the GNP in GDFCF tends to increase with the increase in GNP per
capita and thus, the percentage investment in construction also rises. It is also a major
contributor to the intersectoral linkages which indicate that construction provides a
substantive growth stimulus throughout the economy. Despite of construction play a
major role in an economy, its importance is still being ignored which led it to be
inefficient, no proper policies for its future development, lack of fund, used inferior
resources, inadequate equipment, high import-content and the list is inexhaustive.
This paper reviews some basic issues pertaining to the construction industry in
developing countries. A study on the major problems (included it causes) faced by the
construction and its indigenous contractors will led to a better understanding and
perception on the whole issues and a better set of solution can be established to minimise
if not to overcome the problems. This is a survey of literatures approached on the
problems of the construction indsustry as a whole and with a special emphasis on the
SWOT analysis on the indigenous construction companies in developing countries.
It is found that, the majority of the indigenous construction companies are small, lack
capacity, capability and vision, lack of capital, the environment is volatile which led to
very little possibility for them to grow. These problems tend to be exacerbated by an
unpredictable economic environment. Contractors in developing countries face a difficult
growth path because they and their business environment are both underdeveloped. Given
the opportunity, they can probably overcome their inadequacies, but they cannot change
the environment.
It is the adverse environment that is perpetuating their
underdevelopment.
Suggestions and recommendations are put forward to counter the problems related to
weakness in the contruction industry in developing countries. There is an urgent need to
upgrade and develop indigenous construction companies so that they can be more
competitive and capable of undertaking major and complex construction projects both at
home and abroad. Acquiring technology and management know-how from already
developed sources is an option and has proved to be a more popular approach amongst
developing countries. Even if involving foreign contractors in large and mega projects is
inevitable at the moment, developing countries should still tap their experience and
expertise for their own benefits. Programmes should be designed to promote and develop
indigenous contractors toward becoming internationally recognised contractors.