Tag Archives: economic reform

CIPE Partner Helps Pakistan Government Measure Its Performance

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On October 28, Pakistan’s Prime Minister Nawaz Sharif announced that the performance of each of his ministries will be evaluated in what the government describes as the country’s first-ever such accountability exercise. Planning and Development Minister Ahsan Iqbal of the ruling Pakistan Muslim League-Nawaz party (PML-N) has said that four benchmarks will be used assess each minister: implementation of the PML-N campaign platform from the 2013 election; internal department and ministry reforms; public service delivery and public welfare; and whether the ministry has a strategic plan, or a “future agenda.”

This development is particularly notable because for the past year, CIPE and one of its key partners in Pakistan – the Policy Research Institute on Market Economy (PRIME), an Islamabad-based think tank – have spearheaded a program to track the government’s implementation of its economic policy platform. PRIME issues a quarterly performance scorecard, tracking key macro- and microeconomic indicators, as well as legislative and policy initiatives, to measure whether the government is following through on its 2013 pledge to overhaul the economy.

The idea of such monitoring follows, in turn, on CIPE’s earlier work to engage the business community in policy advocacy and encourage the parties to campaign on specific economic platforms – at the time a first for Pakistan. This program by PRIME and CIPE continues that innovation, and also set the tone for the government’s own accountability push.

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Puerto Rico Looks to the South for Entrepreneurial Boost

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Despite its strong economic growth in recent years, Latin America continues to be a challenging region in which to be an entrepreneur. Difficulty in navigating complex bureaucratic regulations, a lack of infrastructure, and a large informal sector can be formidable obstacles to starting one’s own business. Furthermore, cultural factors, such as a risk-averse mentality, lack of familiarity with the concept of “entrepreneurship,” and perceptions of the government as the main source of jobs have also posed significant difficulties to entrepreneurship in the region.

In the face of these daunting challenges, entrepreneurship initiatives have sprung up across Latin America and the Caribbean in recent years in an effort to educate youth about the importance and benefits of free enterprise for democratic and economic development. Countries such as Chile, Brazil, Peru, and Ecuador have adopted programs to educate youth about entrepreneurship and prepare them for running a business, with positive results. Now, one such initiative has arrived in an unexpected place: Puerto Rico.

In many ways, Puerto Rico is a bridge between the United States and Latin America. While the island is a self-governing U.S. commonwealth and its inhabitants possess U.S. citizenship, its language, culture, and geography link Puerto Rico to Latin America and the Caribbean. Indeed, Puerto Rican entrepreneurs and small business owners often face many of the same obstacles that their counterparts throughout Latin America must confront.

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Egypt’s New Suez Canal Project Unearths More Than Just Dirt

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Egyptian President Abdel Fattah al-Sisi’s government is counting on a new multi-billion dollar Suez Canal project to help overcome what has been described as Egypt’s worst economic crisis since the 1930s, with high unemployment — 13.4 percent — and 45 percent of the population living below the international poverty line of $2 per day. Yet, what’s more important than the new Suez Canal’s objective to stimulate the economy and create jobs is who made it financially possible to carry out such an ambitious project and what that could mean for Egypt.

In eight days, Egyptians invested 64 billion EGP (about $9 billion) in the new Suez Canal project — and 82 percent of that investment came from individuals versus just 18 percent from institutions. The influx of investments introduced 27 billion EGP (about $3.8 billion) into the banking system, which is especially notable given that only one in ten Egyptians has a bank account. The overwhelming turnout of individual, cash-heavy investors from an underbanked population points to Egypt’s strong cash economy, which in turn begs the questions: how much more money is hiding under mattresses and why have these assets remained unused?

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To Escape From Violence, Iraq Must Tackle Its Economic Problems As Well As ISIL

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Smoke billows from a key oil refinery damaged by ISIL attacks in northern Iraq in June. Repairs are expected to take more than a year.

After months of political wrangling in Baghdad and advances made by the Islamic State of Iraq and the Levant (ISIL) – also known as IS or ISIS – the Iraqi Parliament finally approved a new, more inclusive government led by a new prime minister, Dr. Haider al-Abadi, in early September.

At a recent roundtable event with Iraqi and U.S. experts, held under the Chatham House Rule, participants expressed cautious optimism over the new government. However, in the uphill battle to confront immediate threats to the country’s security, Iraq’s economic crisis has largely been ignored.

According to one participant, the fact that the new cabinet of ministers included members of Iraq’s various minority groups, and that three leading political rivals – former Prime Ministers Nouri al-Maliki and Iyad Allawi and former parliament speaker Usama al-Nujaifi – were given posts as vice presidents, was a good sign.

Another in the room pointed to the moderate leadership of Iraq’s new Prime Minister. Dr. Abadi, who belongs to the Shi’ite Islamic Dawa party, has a reputation as a political moderate, was educated in the UK, and has served on various Iraqi parliamentary committees since 2006, including those for finance and economics. A change in political leadership at the top, the participant argued, could rebuild trust between the central government in Baghdad and Iraq’s marginalized communities. More importantly, Abadi has pledged to foster national dialogue, political reconciliation, and decentralization.

Iraq’s economic challenges – high unemployment, poverty, rising prices, and food shortages – will only contribute further to the security crisis if they are not addressed. More than 50 percent of the goods imported into Iraq – including raw materials and food – have been blocked at the only official border crossing with Jordan, which is now under the control of ISIL. Iraq’s final budget for fiscal year 2014 remains unapproved by the Iraqi Parliament, and since the economy is dominated by the public sector – the government and state-owned enterprises employ about half of Iraq’s total workforce – the lack of government spending has ground the entire economy to a halt.

At the end of the day, ordinary citizens in Iraq are bearing the brunt of economic damages caused by the regional insecurity and the political process in Baghdad.

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Training Political Parties for Democracy

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A new Congress is inaugurated in Colombia.

Strong and well-functioning political parties are an essential component to any thriving democracy.  Political parties link citizens and their governments, represent the interests of constituents, and influence economic policymaking. In any political system, a party’s capacity to influence policy determines its success, so party platforms are instrumental for parties to participate effectively in the discussion and implementation of policies.  The party platform outlines a set of policy alternatives that the party seeks to implement.  The economic component of a party platform is crucial to create and implement policies that deliver economic growth and opportunities to people.

The ideas presented in political party’s economic platform will influence the operation of businesses and shape national economic policy. These platforms are not static documents as they continually evolve and respond to the challenges a country faces at a particular moment in time.  Successful political parties will be ready to revise and adapt the economic component of their platforms to changing economic conditions. Training political parties to not only develop solid economic platforms but to revise and respond to ever changing economic conditions is an important initiative in the efforts to support thriving market oriented democracies.

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Case Studies on Democratic Reform in Yemen and Paraguay

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Democracy is a process of governance most often based on compromise, grounded in broad-based inclusiveness of differing viewpoints and the representation of diverse constituency interests. While free and fair elections are certainly one of the most recognizable hallmarks of the democratic process, a vibrant dialogue between political candidates preceding an election makes a vitally important contribution to the quality of governance.

Candidate debates serve multiple purposes. First, debates inform the electorate of the issues being considered. Second, televised debates offer an opportunity for voters to form an opinion and differentiate between candidates based on the substance of their policy positions. Third, debates promote transparency and improve the quality of democratic governance as candidates are able to directly express their views to the electorate, engage with their colleagues, and elevate certain issues over others in the national consciousness. Similarly, input from the private sector and civil society in the formulation of economic and social policy is another characteristic of a vibrant democracy as broad-based participation in the policymaking process ensures that proposed legislation represents the interests of all constituents.

CIPE possesses over thirty years of experience in strengthening democracy worldwide and promoting market oriented reforms in various country contexts. In the forthcoming publication Strategies for Policy Reform, two case studies from Paraguay and Yemen represent distinct approaches to ensuring that democracy delivers economic and political freedoms to citizens. 

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The Democratic Alternative from the South

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Each year on September 15, the UN observes the International Day of Democracy to celebrate efforts to promote and consolidate democracy around the world.  Despite these efforts however, the realization of consolidated democracy continues to be a struggle for many reformers.  This year, the UN has chosen a theme of “Engaging Young People in Democracy” and acknowledges that “study after study show declining faith among young people…with declining levels of participation.”  Compounding this declining faith in democracy is a rising ideological competitor in the form of economically successful authoritarian regimes.

As much as young people are recognized as dreamers and agents of change, these characterizations tend to be the result of youth wanting to see an improvement in their quality of life.  In emerging countries such improvements are often delivered through economic growth, and in cases such as China and Singapore youth populations can honestly say their standard of living has gotten better year after year.  These examples can lead youth to become disillusioned with democracy, especially at a time when the world’s major democracies are suffering the aftereffects of a major financial crisis. Meanwhile, in the developing world, kickstarting growth in democratic regimes often takes time due to a need to build consensus and develop proper policies.

Quality of life, however, is not measurable only in terms of indicators such as income levels, consumption, and GDP — though almost all of the world’s most prosperous countries are democracies.  Other, arguably more important aspects such as human rights, liberty, and freedom are also vital components.  Since 2012, CIPE has been part of a consortium seeking to analyze the development paths of three emerging democracies (India, Brazil, and South Africa) in order to create an argument in support of democratic development.

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