Tag Archives: economic reform

Growing Pains or Insurmountable Odds?

south-sudan-un-refugees

South Sudan just successfully hosted one of the largest events in the country’s short two-year history. On December 4 and 5 an impressively diverse crowd of potential investors and business owners from more than 60 countries came together in the capital Juba for the South Sudan Investment Conference, titled “Investment for Economic Diversification and Prosperity.” With more than 800 people registered to attend the two-day event, and at least 500 actually in attendance, observers and participants alike were relatively pleased that the event was carried out with only a few hiccups.

Logistically, it was just shy of a miracle. With only one major paved road in the entire country, a nascent hospitality and service industry, and a lack of local transportation options, it is noteworthy that an event of this magnitude even took place.

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Asking the Right Questions to Promote Entrepreneurship in MENA

Entrepreneurship is increasingly touted as a key ingredient to economic growth, job creation, and expanding opportunity, particularly for youth and women, in the Middle East and North Africa region. As a result, the number of initiatives supporting entrepreneurship in the region has increased exponentially, particularly following the Arab Spring.

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Why Trade is Vital for International Development

container-ships-passing

We live in a globalized world where goods and services are traded across international borders and consumers are able to purchase products with components produced in several countries. What is the role then of international trade in development?

Economists such as Adam Smith and David Ricardo articulated the economic advantage of free trade, which was primarily driven by the idea of “comparative advantage.” A country with a comparative advantage can produce certain goods and services more efficiently and cheaply than others. In terms of international trade, countries with comparative advantage will export goods and services they can produce more efficiently, while importing those they produce relatively less efficiently.

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The Private Sector and the Future of Venezuela

Venezuela's President Maduro talks to supporters during a meeting at Plaza Bolivar in Caracas

By Aurelio Concheso

December’s local election results are in for Venezuela, and the opposition can rightly claim that it not only retained major urban areas such as Greater Caracas, Maracaibo and Merida, but regained others it had lost such as Valencia, Barquisimeto, and San Cristobal. In addition they made inroads in “Chavista cities” such as Chavez´s own home town of Barinas and Diosdado Cabello’s home town of Maturin. Moreover, despite how the Electoral College blatantly manipulated the way results were broadcast, in the overall national vote tally the opposition candidates beat out the government’s by 51 to 49 percent.

On the minus side for the opposition, former presidential candidate Henrique Capriles tried to bill the contest as a referendum on President Maduro, but this didn´t pan out either from the perspective of voter turnout (only about 58.5 percent vs. over 80 percent in the April presidential election) or the difference in total vote.

What we are left with moving forward is a political environment that continues to be polarized. During the two months previous to the election, the government made private business the culprit for inflation and scarcities of goods, while simultaneously taking steps that practically insure higher inflation, perhaps hyperinflation in 2014.

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Creating a Framework for Small Business Growth in Kenya

kenya-scales

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.

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The Youth Unemployment Crisis in Tunisia

FaculteLettre9AvrilTunis

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.

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Book Review: A Contest for Supremacy – Dragon vs Eagle

contest-supremacy

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.

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