“There is no development that can be done if it’s not budgeted for.” These are the words of Edwin Kiprono, the president of Kerio Community Trust Fund, explaining the importance of citizen’s alternative budgets in Kenya.
In 2010, Kenya adopted a new constitution, establishing a system of devolution in which more control and responsibility was shifted from the national government to newly-created county-level governments. These governments, which began operating in 2013, now oversee certain aspects of local health care, infrastructure, and education. For the first time, the counties are now expected to raise their own revenue through taxes and fees and establish their own budgets for spending that revenue.
Such a move provides great opportunity for local development to be taken into the hands of local citizens – but it also requires citizens to be engaged and provide input and feedback to their local governments.
Throughout Kenya, CIPE has been working with local partners to develop citizen’s alternative budgets – a system of participatory budgeting made possible through the devolved government system. One of the counties CIPE has been working in is Elgeyo Marakwet – a diverse county in which citizens have various and competing concerns and opinions on what the priorities of their county should be when developing a budget and spending its resources.
The much-analyzed nuclear deal with Iran to lift international sanctions is, if approved, expected to have a substantial impact on the Iranian economy by enabling the country to increase its oil and gas exports and by creating new possibilities for foreign direct investment (FDI). Many observers hope that the deal will allow for increased interaction with multinational companies and could help build more constructive relations between Iran and the international community.
However, one aspect of the story has not been widely covered: how the nuclear deal could have a massive economic and social impact on the region at large, including Central Asia and South Caucasus. One country which could make considerable gains from the nuclear deal is Armenia, which shares a border with Iran.
Those wishing to send aid, remittances, and investment overseas face exchange rate manipulation and inflated fees when using traditional money transfer services. One emerging alternative to using these services is to transfer Bitcoin internationally. Bitcoin is alluring because financial institutions do not manage its online trade. The transfer of Bitcoin is therefore much less costly than transferring traditional currencies because it bypasses bank fees and regulation.
Several organizations are already beginning to trade and transfer Bitcoin across international borders, and profitable businesses have developed plans to facilitate these trades. Although hesitant investors remain wary of Bitcoin, optimists see the potential to make a big splash in the way $167 billion of foreign aid and $436 billion of global remittances are transferred to the developing world.
Bank-less money transfers are swiftly becoming the norm in the developing world, where less than fifty percent of adults own a bank account. Hassle-free mobile money services such as Kenya’s M-Pesa, Vodacom Tanzania and MTN Uganda are used in lieu of credit and debit cards in these areas. However, the benefits of convenience and low cost mobile transfers are largely limited to domestic transactions.
Major global trends are changing the way we approach international assistance and policy reform. Private sector-led growth has produced enormous opportunities, even as market freedom and access to opportunity remain uneven. Political upheaval has raised hopes for democratic freedoms, yet freedom too often is undermined by poor governance.
Governance reforms must adjust to these shifting circumstances. As a rule, effective reforms tap the power of free markets and the strength of citizen engagement. Each country requires distinctive sets of solutions that reflect local capabilities and needs. These solutions take shape through policy coalitions forged by local partners. Often, they benefit from international experience in convening dialogue and mobilizing support.
Strategies for Policy Reform illustrates CIPE’s approach to improving governance in cooperation with local entrepreneurial leaders. This international case collection shares program experiences and results achieved across CIPE’s four focus areas: Enterprise Ecosystems, Business Advocacy, Democratic Governance, and Anti-corruption & Ethics.
“REN-CIPE is [about] teamwork, working together with a person who is blazing a trail for me to follow,” said Noeilin Escobar, mentee and owner of Velas Amazonia, “so that my journey is clearer and easier.”
Dismal statistics state that 90 percent of start-ups will fail. But mentorship can help turn such potential points for failure into opportunities for success. By identifying the toughest moments faced by aspiring and starting entrepreneurs – particularly those who are women – support can be better targeted so that such barriers can be overcome.
In a partnership with Red de Empresarias de Nicaragua (REN), CIPE accounted for the particularly difficult stages in the journey to becoming a successful women entrepreneur: transitioning from the classroom to practical experience in the workforce, moving from the informal to formal economy, getting through the first few years of operating your business, and then continuing to develop and grow your enterprise.
Through connecting a mentor with a successful business to a mentee who is just beginning her venture and a female university student studying business, CIPE and REN created a value chain of knowledge sharing.
Posted on18 August, 2015byGuest|Comments Off on Shock Therapy Isn’t Enough to Jumpstart Ukraine’s Economy
Photo: Wikimedia Commons
By Ann Mette Sander Nielsen
The high level of economic development in Poland today is often accredited to the rapid implementation of liberal free market policies, or “shock therapy”, in the immediate aftermath of the collapse of Communism in Poland.
The architect behind economic shock therapy was the former Minister of Finance and Deputy Premier of Poland Leszek Balcerowicz, who earlier this year was invited by Ukraine’s President Poroshenko to design a similar economic reform policy for Ukraine, implying that Ukraine could emulate the success story of Poland.
However, Poland’s positive transition does not provide a comprehensive blueprint for Ukraine, as other social and institutional factors were imperative in ensuring the economic growth of Poland.
In a world saturated with media, the power of a single, compelling image can cut through the clutter. CIPE’s 2015 Global Photo Competition seeks to highlight creative and inspiring visual answers to this crucial question:
How can individuals be empowered to improve their lives and contribute to the democratic development of their communities and countries through entrepreneurship?
We received over 100 entries from dozens of countries, and our judging committee selected 10 as semi-finalists. Now, we want YOU to vote on the winners!
The CIPE Development Blog provides coverage of the Center for International Private Enterprise and its partner network at work -- highlighting successes, drawing out lessons from failure, and exploring the broader issues of political and economic development. For more information visit CIPE.org.