Malach Onditi started Elemach Scales, a small business that manufactures weighing scales, in Nairobi, Kenya twelve years ago with a startup capital of $120 and one employee. Today the company has an annual turnover of $52,000 dollars, has twelve employees, and sells the scales not only in Kenya but also in Uganda and Tanzania. To exist this long in an environment where over 90 percent of business start-ups do not survive to the third year has not been an easy undertaking. Elemach Scales has experienced several challenges along this journey including inaccessibility of affordable credit, barriers to regional trade and access to markets, and harassment by county government officials in regards to licensing and workspace
Elemach Scales typifies a majority of small businesses in Kenya — a sector which currently provides 78 percent of the country’s total employment, more than 90 percent of new jobs, and 18 percent of GDP. CIPE has worked with its partners over the last five years in efforts to build awareness for micro and small enterprise policy reform, facilitating extensive stakeholder input and building capacity for its advocacy which culminated in the signing into law of the MSE Act in December 2012.
Like many Arab Spring countries, Tunisia is experiencing a “youth bulge,” but neither that nor the lingering effects of the European financial crisis can entirely explain Tunisia’s high rate of youth unemployment. Youth unemployment in Tunisia is the result of structural issues in its education system and its labor market, as well as an ingrained understanding of “employment” based on decades of social and political development.
While talks between Tunisia’s political parties dominate the headlines, the emotional political debates going on right now belie troubling economic conditions that could prove just as debilitating to the country’s democratic transition.
Today, the unemployment rate in Tunisia among young people with a university degree is 30 percent, more than twice the 2005 rate of 14 percent. The spike in overall unemployment (now at 17 percent) is partly explained by the larger political and economic situation. Since Tunisia’s 2011 revolution, the economy has had a hard time regaining its pre-Arab spring growth rates. Al Qaeda’s presence in North Africa has grown in the last few years. Instability in neighboring Libya has only added to anxiety over the security situation in Tunisia, a country traditionally boasting healthy tourism revenues. Finally, demand for Tunisian exports has dried up in the European Union, Tunisia’s most important trade partner. These are well-known elements of Tunisia’s post-revolution narrative.
That’s just part of the equation, though. The European market may right itself, the Tunisian government may reassert its ability to secure the country, but Tunisia will still face the nagging issue of high unemployment among its young graduates. That 30 percent unemployment rate among recent graduates isn’t a result of just cyclical unemployment—from regional and global fluctuations—but structural unemployment.
According to the most recent Global Competitiveness Index from the World Economic Forum, the Tunisian labor market has failed to efficiently marshal its young talent to create jobs and growth. A seemingly concise diagnosis, but, when unpacked, it reveals a few phenomena that have combined for the perfect storm of youth unemployment: a gap between labor supply and demand, a prohibitively rigid labor market, and lingering cultural assumptions about self-employment and entrepreneurship.
A Contest for Supremacy is a book that thoroughly examines the history of Sino-American relationship and provides a clear view of the challenges and risks for the United States as China’s power continues to grow.
Despite the fact that author Aaron Friedberg inevitably touches on recycled opinions made by other Western China experts, he indeed offers unique insights and assessments on this widely discussed topic, proving to the readers that the book is unlikely to collect dust on the shelf for the upcoming years.
Friedberg’s core argument is two-fold: China and the U.S. are on the path to compete for power and for influence worldwide, with an emphasis on the Asia region — a newfound source of economic dynamism. The Sino-U.S. relationship, according to Friedberg, is increasingly intensified while the power gap narrows. Furthermore, Friedberg argues that an emerging Sino-U.S. rivalry is not the product of easily correctable policy errors or misperceptions, but rather is driven by the differences of ideology and political agenda.
While delivering the keynote speech at the recent Asia-Pacific Economic Cooperation summit in Bali, Chinese president Xi Jinping stated that the government was drafting a “master plan for reform.” Speaking to a group of leaders who invariably have a stake in China’s continued development, Xi touched upon topics including politics, society, and the environment. Given the recent slowdown in growth, Xi’s remarks mainly aimed to assuage the concerns of economic and business leaders regarding the stability of China’s economy.
Some of the most discussed topics that come to mind when thinking about economic reform in the Middle Kingdom include liberalization of interest rates, freer access to capital for small firms, and correcting market distortions such as real estate prices. These factors are admittedly extremely important to rectify if the economy is to avoid stalling out, but there is also another issue on the minds of many business leaders looking to become or stay involved in China’s economy – corruption.
Saadia Zahidi, Senior Director, Head of the World Economic Forum’s Women Leader and Gender Parity Programme, visits the New York Stock Exchange with partner companies on International Women’s Day 2012. (Photo: WEF)
Women represent more than half of the world’s population and yet no single country has achieved full gender parity. A country’s global competitiveness depends on utilizing the human capital of its entire workforce, including the untapped skills and knowledge of women. Since 2006, the World Economic Forum has published its annual Global Gender Gap Report as a means of assessing and quantifying the state of gender equality in the world. The report focuses on four main factors that make-up individual country’s scores: “economic participation and opportunity, education attainment, health and survival and political empowerment.”
Sanctions on Iranian oil exports have strained the country’s already fragile economy.
Because of sanctions and a host of other fundamental issues, the newly-elected Iranian government faces serious economic challenges — including a shrinking economy, double-digit inflation, and high unemployment — that it will need to overcome in order to fulfill the high hopes for reform that led to its unexpected victory at the polls in June.
With the latest round of P5+1 talks coming to a close last week, and a new round scheduled in early November, the state of negotiations between Iran and the West have been closely followed for any signs of a sanctions deal and what terms that deal might include. But whatever happens with the sanctions, Iran’s underlying economic problems urgently need to be addressed.
Last week, the Center for International Private Enterprise (CIPE) hosted Bijan Khajehpour, Managing Director of Atieh International, for a discussion on the economic challenges facing new Iranian President Hassan Rouhani. The event provided CIPE staff and guests with a look inside the Rouhani administration, the economic challenges facing Iran, and policy recommendations that could help overcome these challenges.
Economist Dani Rodrik argues that democracy as we know it is a product of industrialization.
Most rich countries followed the same historical path to economic development: a period of industrialization, followed by rising productivity and a shift away from manufacturing to a service economy. But economist Dani Rodrik argues that today’s developing countries seem to be de-industrializing at an earlier, and poorer, stage — a process which could threaten the development of democracy.
In the United States, employment in manufacturing peaked at about 27 percent of the workforce, followed by a transition to a service-oriented economy which today employs less than 10 percent of its workforce in industry. Other Western countries followed similar trajectories: Germany, for example, peaked at about 40 percent before steadily declining.
But, Rodrik points out, today’s emerging economies seem to be shifting away from manufacturing at a much earlier stage. Even industrial powerhouse China seems to have never employed more than about 15 percent of its population in manufacturing — and that share is already declining, even as China’s economy continues to grow.