By Elie Obeid
Lebanon, it’s that country in the Middle East that you sometimes miss while going through a map. Despite its small size, Lebanon enjoyed quite a reputation in the 1960s and early 1970s as being the Switzerland of the Middle East, and Beirut, its capital, was known as the Paris of the Middle East due to the number of tourists it attracted and its role as a financial and trade hub for the region.
In recent years, however, Lebanon has been suffering from various social, political, economic problems. To discuss all these issues and possible solutions for them would require volumes so we’ll stick to economics this time with a little twist of politics. But before getting into that, how about we take a look at the numbers first.
By Otito Greg-Obi
On May 20th, 2015 the lights went out in Nigeria, Africa’s biggest oil producer. Nigeria suffers from a phenomenon known as the curse of oil which is a subset of a larger issue known as the resource curse. The idea behind the curse of oil is that countries with large oil reserves cannot seem to manage revenues in a way that benefits the majority of the population economically and socially. Some of the symptoms of the curse of oil include lack of economic diversification, revenue volatility, inability to provide public goods and services, corruption, government inefficiency and the Dutch Disease.
As soon as the massive fuel shortage in Nigeria struck, numerous businesses and banks shut down. Power outages also affected common households because neighborhoods are typically powered by individually owned generators due to inconsistent provision of public utilities. As soon as licensed gas stations closed down, black market vendors looking to make a quick Naira (Nigeria’s currency) began selling low quality oil at exorbitant prices. The shortage exemplifies the curse of oil by revealing an inability to provide a crucial public good. Furthermore, the shortage unveils the existence of corruption in black market practices.
Oil importers shut down operations claiming that the government owed them $2 billion. Nigeria’s Minister of Finance Okonjo-Iweala countered that importers misrepresented the debt in an attempt to recover lost revenue from the recent decrease in value of the Naira due to global declining oil prices. The global decrease of oil prices is a perfect example of the volatility that comes with the curse of oil and how it can complicate economic transactions between the governments and oil corporations.
Fortunately, oil suppliers and distributors eventually met with the government for negotiations that put an end to the crisis. The specifics of the negotiations have not been revealed but it appears that the crisis has been averted for now. But as global oil prices continue to decline, economic shocks are imminent. What will the government do to thwart the curse of oil?
By Fayyaz Bhidal, Research Manager at Sustainable Development Policy Institute
Internationally, the average age of eligibility for election to national parliament starts at 25 years old. According to a UNDP 2012 Global Parliamentary Report, approximately 1.65 percent of parliamentarians globally are in their 20s, while 11.87 percent are in their 30s. However, the global average age of parliamentarians is 53 years old.
In Pakistan, youth represent 60 percent of the total population, but their voice is largely unrepresented in the political system. The youth population is not only a dynamic source of innovation and creativity, but has contributed to and even catalyzed important changes in political systems, power-sharing dynamics, and economic opportunities since Pakistan was created. One leading force for these changes is the Youth Parliament of Pakistan which was created in 2007 to engage youth in dialogue on important issues affecting Pakistan. Within local government, youth are also taking an active role in achieving implementation of work. In the recently held local government polls of Khyber Pakhtunkwa Province of Pakistan, 3,339 seats were devoted for the youth.
By Otito Greg-Obi
Recently, African heads of state gathered together in Egypt to sign the Tripartite Free Trade Area agreement (TFTA) which will join the forces of the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), and the Southern African Development Community (SADC).
Free trade is crucial to global economies because it reduces tariff barriers which in turn results in trade creation. The benefits of trade for developing nations in general are numerous. To name a few: first and foremost, trade allows for specialization meaning countries can build a comparative advantage by focusing on producing goods with low opportunity costs. Secondly, trade encourages healthy competition which incentivizes businesses to increase efficiency and cut costs. Lastly, trade can reduce dependence on existing markets and stabilize countries affected by seasonal changes in markets.
By Otito Greg-Obi
It is a popular opinion in the international development community that remittances – money transferred by a foreign worker back to someone in his or her home country – can have a negative effect on economic growth because recipients tend to spend cash flows on day-to-day subsistence. However, research shows that the opposite is true. A study on the effect of remittances on growth in Africa reveals that remittances seem to have an overall positive effect on Gross Domestic Product (GDP). When compared to foreign aid and Foreign Direct Investment (FDI), a 10 percent increase in remittances leads to a 0.3 percent increase in the GDP per capita income.
By Bahaa Eddin Al Dahoudi, CIPE-Atlas Corps Think Tank LINKS Fellow
What future awaits the Middle East? This question remains pivotal following the outbreak of the Arab revolutions four years ago. It keeps popping up as regional developments arise, especially with the decline of democracy and presence of revolutionary forces in many Arab countries. The region’s resort to military tools is increasing due to the rise of terrorism, violence, and political polarization, a decline of charismatic leaders, and a lack of support for institutional structures and democratic transitions. In a Middle East where “there is no winner,” two vital questions emerge: Is the Arab revolution the reason behind the chaos and collapses? And, what are the future scenarios for this inflamed region?
By Milos Djuricanin, Program Manager at Serbian Association of Managers. Duracanin was a 2014 ChamberLINKS participant.
“It is clear that youth unemployment is one of the biggest problems of our society. If we want to successfully solve the problem of unemployment, we have to listen more to the voice of the economy and private sector. This is the absolute priority of the Government of Serbia. That’s why we initiated conversations with businessmen, in order to get first-hand information on their personnel needs and to create a common set of measures which will enable increase of youth employment”– Vanja Udovicic, Minister of Youth and Sports.
The status and position of young people in the labor market in Serbia falls into the category of challenges with no quick fix. Year after year, we are faced with statistics that continue to confirm that every second, a young person is left without a job. According to data presented at the National Youth Strategy for 2015-2025, youth unemployment in August 2014 in the Republic of Serbia is 41.7 percent for people aged 15-24, and 33.27 percent for people aged 15-30 years. Young people are inactive in the labor market: last year the inactivity rate of young people aged 15-30 years was over 50 percent and in 2013, it was noted that 20 percent of young people ages 15-24 belonged to the category of young people NEET (not employed, in education or training).
One of the key issues affecting the high youth unemployment is a mismatch between the skills that young people acquire through formal education, and the knowledge and skills that employers expect them to have. According to research conducted by the Union of Employers of Serbia, young people throughout the formal education system receive and adopt only theoretical knowledge and only 4.12 percent of young people are considered to possess the knowledge and skills for real business. Eighty-six percent of young people reported that they felt they did not possess any practical knowledge.
Among the barriers for business development in Serbia, the lack of adequate staff is increasingly climbing on the list: from an 8th place ranking in 2006 to third place ranking in 2013. This is a clear indication of how difficult it is to find high quality staff.
Given this information, the Serbian Association of Managers (SAM) with the support of the Center for International Private Enterprise (CIPE) organized an event titled “Support for the youth – future for the country,” during which a Memorandum of Cooperation was signed between the Ministry of Youth and Sport and SAM aiming to increase opportunities for top university students in the country to intern for SAM’s member companies.