Author Archives: Pamela Beecroft

Uniting to Achieve a Common Goal: Advocating for Economic Reform in Algeria

CARE’s Project Coordinator Amel Belaid (right) and CIPE Advocacy Expert Haroune Sidatt (center) deliver an advocacy training to members of the Association for Business Development and Promotion in Algiers.

Algeria is a country in dire need of economic reform. As global oil prices have dropped and the dinar has depreciated, Algeria’s export revenues have been cut in half, and the state deficit has risen rapidly. Unemployment continues to go unchecked, and job creation is not high enough to keep up with a population in which 70 percent of people are under age 30.

For nearly three years, the Circle for Reflection and Action on Business (“CARE” in French) has mobilized members of Algeria’s business community to work with each other — and with the Algerian government — to bring about much-needed economic reform. With support from CIPE and funding from the Middle East Partnership Initiative, CARE recently achieved a major milestone that puts it on the path to success.

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Keeping the Economy on the Radar, Even in the Hardest Times

A new job category in Aleppo -- "the crosser" who ferries good across the border under dangerous conditions. (Photo: Syrian Economic Forum)

A new job category in Aleppo — “the crosser” who ferries good across the border under dangerous conditions. (Photo: Syrian Economic Forum)

In Beirut during Lebanon’s civil war, people continued to go to school and attend theater performances. One woman once told me how, to get to her university, she would take a taxi to the line between East and West Beirut, dash to the other side behind overturned trash dumpsters to avoid snipers, and then catch another ride to university — always with a change of clothing in case she could not get home again for a while.

Not every war sees people able to defiantly and bravely continue school and go to the theater, but the story underscores an important point left out of most news reports: conflict is not a permanent state…even during conflict.

Media reports show the most bullet-ridden, shell resounding, civilian-fleeing dramatic moments, but even in situations of all-out war, pockets of fighting revolve and front lines move. Whenever there is a lull in violence, civilians generally try to make life go on as much as they can, however they can. And that includes the economy. Farmers will return to their fields and factories will resume operation as often as possible, and people will buy, sell, and barter what they need to survive. And yes, sometimes they even study for exams by candle in hallways lined with mattresses during shelling (another story I once heard from another Lebanese).

Recently, a group of CIPE staff with experience in conflict-affected settings formed a task force to do some more thinking about CIPE’s own projects in conflict-affected areas. We found it interesting that we work with local groups in areas that range from unstable to war-torn, but that we rarely think of them as “conflict projects” per se. So we started throwing around a lot of questions: is it worth even thinking of our projects through a conflict lens ? (Short answer: yes.) What is our approach to conflict and is it unique? What are the various ways CIPE has either reacted programmatically to conflict, or designed programs to be conflict sensitive?

We’re still thinking, but we have started to articulate what we think we know (more on that at the end of this post). So here it goes…

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Tunisia’s Nobel Peace Prize: Keeping the Boat Sailing

When I heard about the Nobel Peace Prize awarded to Tunisia, my first reaction was happiness – they deserve it. Not just the members of the Quartet who were the recipients, but every Tunisian participating in this grand democracy experiment.

I have worked in places that never got this far, despite the presence of amazing, intelligent, admirable people trying their best. Over time I have come to think that will is the true secret ingredient. Capacity can be built, but some kernel of shared will needs to be there from the start. You need the right people, with the right intentions, at the right time, and there is no substitute for it.

I think about this same thing every time I read writings from America’s Founding Fathers. From the distance of history, America’s birth looks like a process; a lot of people met repeatedly, argued a lot, reacted to foreign events, hammered things out, and a nation came to be.

But then read the letters between John and Abigail Adams, and you suddenly are plunged into the chaos, stress and daily-ness of it all. Abigail is alone running the farm and business, dealing with insecurity and tending sick children. John is riding back and forth to Philadelphia and beyond, complaining bitterly about recalcitrant short-sighted delegates. There is tedium, inching progress and failure along the way. John was exhausted and frustrated as much as he was inspired. Unlike us reading his letters, he didn’t know if they would succeed.

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Tunisian Business Leaders Weigh in on Country’s Future


Since the revolution, CIPE partner IACE – the Institut arabe des chefs d’entreprises, or Arab Institute of Business Leaders – has reached out to citizens from all walks of life in Tunisia – young entrepreneurs, business leaders, students, policymakers and more – to debate and search for solutions to Tunisia’s persistent economic challenges. To involve even more people in the exchange of knowledge and ideas, IACE just launched a new newsletter to share updates on Tunisia’s economic progress and upcoming events.

Among other features, the newsletter includes a new op-ed, The Second Republic, or the Third Conflict Cycle? The piece makes the urgent and vital point that even with a new Constitution approved and focus on upcoming elections, it is the economy that still matters most.

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Authors Needed for Book on Corporate Governance in Emerging Markets

Several countries in the Middle East and North Africa (MENA) are undergoing full democratic transition and others are looking for new ways to generate jobs and provide economic opportunity for citizens, especially for a growing population of youth. In this context, corporate governance reform has taken on a whole new urgency. More fair and transparent management of local companies will level the playing field for business and encourage healthy economic growth inside the country, while creating an environment of rule of law and openness that will attract investment from outside the country.

Enter Sabri Boubaker from the Groupe ESC Troyes en Champagne and Duc Khuong Nguyen of  ISC’s Paris School of Management in France. With the MENA region in mind, they are editing a new book that will try to fill research gaps they see on corporate governance at both the country and the firm level. The book, to be published by Springer Verlag in 2013, will be called Corporate Governance in Emerging Markets: Theories, Practices and Cases.

What these editors need now are applications from potential chapter authors. They are seeking any experts, academic or otherwise, who have new knowledge to contribute. Are you interested?

The editors are requesting submission of a two to four page proposal by the 30th of November. You can find the official call for authors here with Boubaker’s and Nguyen’s contact information and all the other information needed. Among some chapter topic examples they give are: ownership structure in listed and unlisted firms; the effect of corporate governance characteristics on firm decisions and performance; barriers to effective corporate governance reform; best practices in corporate governance; and recommendations for future application of corporate governance in emerging markets. They are also open to any other relevant ideas.

We hope you apply, and if you do, please mention that you learned of the opportunity from CIPE’s blog!

How Improving Egypt’s Business Environment Could Reduce Traffic in Cairo

Photo by Flickr user “tronics”

Having lived in Egypt as a kid in the early ’80s, I still have vivid memories of Cairo traffic – the honking, the intermingled smells of hot dust and exhaust and garbage, the sight of busses going by with people hanging from every handhold like a human fringe – everyone inching along and maybe, eventually, getting somewhere. According to a recent New York Times Cairo Journal article, A Dictator Is Gone, but Egypt’s Traffic and Congestion Seem Immovable, three decades and one revolution later the Egyptian capital still hasn’t resolved its congestion problems.

What struck me most about the article was the connection made between traffic and street vendors. The author quotes a tamarind vendor, Mohammed Ghaleb, who explains that his road-side business works because, “The people in the cars coming this way are all hot, and so they want something to drink.” The article interprets the chain of cause and effect a bit differently: “The people are hot, in part, because of the traffic, and the traffic is bad, in part, because of Mr. Ghaleb.”

Egypt’s President Mohammed Morsi seems to have bought this logic. He has pledged to remove the street vendors and reduce traffic, and has proposed building designated markets or market areas to bring order to chaos.

Designated markets are not always a bad idea, but in many countries such initiatives lead to “forced resettlement” of merchants and end in failure. Why? Because officials rarely think to involve vendors themselves when planning new markets. All too often they end up with shiny new buildings way outside of town. If you’re a vendor surviving on a very narrow profit margin, it’s often better to stay where you are near your clients even if it means continuing to dodge authorities when you must.

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Jobs for Libya’s Ex-combatants…and Everyone Else

Libyan fighters celebrate the capture of Sirte in September 2011. (Photo: Reuters/Esam Al Fetori)

In December 2011, Libya’s National Transition Council announced it would spend $8 billion on a disarmament, demobilization, and reintegration (DDR) program to help militia members disarm and transition to civilian life.

I’ve been following this all with great interest, largely since, before I came to CIPE, I was working exclusively on supporting implementation of DDR programs, albeit in Africa’s greater Great Lakes region. What has been increasingly striking to me is how my DDR past and my CIPE present are meeting.

The Libyan government says it expects that at least a third of their demobilized combatants will be hired by the public sector, primarily by the army and police. A few months later, the interim Prime Minister also announced that the government would pay unemployed former rebels for the year they fought, and that rebels who are now students would receive financial grants.

But there are two issues here that I see. One is that DDR programs themselves rarely go quite as planned. Ideally, they serve to create time for peace, taking enough young men out of armed life so that instability decreases and space for development increases. If they work really well, they may provide some ex-combatants with new skills and alternative sources of livelihood, pride, and status that encourage them to stay in civilian life.

However, in reality it is difficult to fully realize either of these goals. The logistics are hard enough – imagine figuring out how to pay thousands of people throughout a country with little infrastructure. Or developing a registration and verification system that will ensure ex-combatants – and only ex-combatants – receive benefits.

Then there are the political dimensions. Militia leaders often want to transform their military clout into political influence once the fighting is over. The period before DDR is full of jockeying and number games over personnel and what will happen to them. Some commanders may keep their fighters from disarming while they negotiate for a place in the future government. Once disarmament begins, they may encourage as many of their men as possible to enter the army or police to become a power base for the future. Commanders will even sometimes “recruit” additional people to register as combatants and increase their “footprint” and leverage even further.

Sure enough, thus far Libya’s DDR experience mirrors several of these dynamics. The first thing many militia commanders did after Qaddafi was overthrown was to delay demobilizing their groups while they negotiated for cabinet positions. Payments were suspended in April after officials discovered that, by some reports, over 450,000 people were paid, even though there are at most 250,000 militia members. If this is true, that means there were at least 200,000 cases of fraud.

Disarmament and demobilization are also not making great headway. Weapons have flowed back to home district caches and some armed groups are getting involved in tribal and regional politics; recent clashes in the southwest left 70 people dead, and there was an attack in Tripoli on the Prime Minister’s offices to protest suspended payments. And then only days ago militias took over the national airport, insisting that the state was holding a militia commander and demanding his release.

Which brings us to the second issue I see as I watch Libya, which is that DDR cannot happen in a vacuum. Even if it is going perfectly it is not enough. In several countries in Africa’s Greater Great Lakes Region where I or my colleagues worked, many ex-combatants came out of DDR programs with allowances, new vocational training and start-up kits. But they could not find jobs. This was not necessarily due to the training – although certainly its quality could vary – but because there were few jobs to find. Economic absorption, as they call it, was extremely low. Starting businesses was almost as difficult. Markets and supply chains were inadequate, and sustainable development was taking much longer than anybody expected.

As I now watch Libya, it seems to me that there is a danger of something similar happening. DDR in Libya is not working well enough to absorb frustrated young fighting men as it should be and some militia leaders apparently still have full or partial command and control of their forces. Indeed, DDR itself may well fail if the broader economic environment is not addressed. The public sector cannot hire every single ex-combatant, and many of those initially absorbed into national security forces ultimately will not be qualified to be soldiers or policemen. Sooner or later they will need something else to do.

And beyond combatants, there are thousands of young civilian men and women who are not eligible for DDR and also need jobs and dignity.

Long-term stability and prosperity in Libya will require a much broader-based, sustainable, and inclusive approach that complements DDR – one that addresses the economic needs of all citizens, ex-combatants included, and creates opportunities that Libyans can access based on merit, rather than identity.

Critical to this approach will be support for small and medium-sized enterprises (SMEs), which must be major engines for job creation and economic growth in Libya. The International Finance Corporation reports that, on average, 29 percent of formal GDP in low-income countries is generated by SMEs. This is particularly true in countries with political and civil instability, where Shari Berenback of USAID recently remarked that, “private enterprise is an important stabilizing force.” And note that this statistic only speaks of formal income. In the Middle East, unregistered businesses contribute even more, well above that 29 percent.

Unfortunately, all too often in post-conflict situations, SMEs lose out on both ends: donors tend to focus on micro-enterprises, while local banks are unwilling to risk giving the small-scale loans SMEs often need, or they are not structured to do so. (For more about this, see Gayle Tzemach Lemmon’s recent working paper on entrepreneurship in post-conflict situations.) For aspiring women entrepreneurs, the challenges to access can be even greater. Cultural factors come into play, as do administrative ones – women often do not hold the deeds to land, for example, and so banks are even less willing to lend them money.

Faced with these and other barriers, many SMEs end up going into the informal sector, meaning they do not register their businesses. Without legal identity, their owners and employees are often invisible and voiceless. If they are abused they cannot go to court, they cannot easily participate in policymaking or join associations, and their taxes do not support national services, along with a host of other costs.

The key, then, will be for Libyan reformers and their international partners to not just focus on helping small business owners, but also on building an environment for small business. Bank financing thresholds, property rights, tax laws and incentives, bankruptcy regulations – these may not be sexy, but they are vital to fostering tolerance for risk and innovation, both among banks and investors, and among aspiring entrepreneurs. Who will start a business if failure and debt mean ending up in jail? How can a bank lend money to a person without legal property, presuming that bank is willing to lend money to a small business or aspiring entrepreneur at all?

With elections coming up in Libya in late June, it’s the right time to ask these and a host of other questions. Systems and institutions that are inclusive, transparent and fair will go a long way to fostering the kind of job growth that all Libya’s young people need to have a bright future, ex-combatants included.