Syrian Economic Forum students learning civic education in Syria.
Last Thursday marked five years since Tunisian President Zine El Abidine Ben Ali was ousted from power in what has come to be known as the Jasmine Revolution. A well-waged campaign of civil resistance, provoked by the self-immolation of Mohamed Bouazizi, ultimately led to the upending of Ben Ali’s autocracy and catalyzed a series of protests across the Middle East and North Africa.
Five years after the first Arab Spring uprising, we have the benefit of hindsight. We can pinpoint, with relative certainty, the various elements that contributed to the revolutions occurring when and where they did. Five years on, and we continue to grapple with both the inspiring and heartbreaking implications of revolutions in Syria, Egypt, Libya, and Tunisia. A critical element that drove the protests, often mentioned in the early days but since relegated to the margins of the conversation, is the youth populations of these countries.
Photo: Hanna Rhodin
By Hanna Rhodin
There is a long history of a bustling merchant culture in Kuwait. Since the 18th century, the country has been known for trade: whether in exchanging goods with India, boat-building, or its pearling industry. Wealth has come to be associated with certain families within the country, thanks to their past success in business that, in some cases, dates back generations. Today these families continue to dominate the private sector. However, according to the official statistics, nearly 85 percent of the Kuwaiti population is still employed by the government. While the last decade has showed a surge in entrepreneurial initiatives, roadblocks and barriers remain.
By Hanna Rhodin
How do you go about starting a business when you lack the education or financial means? The answers often depend on the region, country, or city you live in. In early 2015 I traveled to Beira, Mozambique to volunteer with Care for Life, an NGO working with a holistic approach to assisting families in low-income communities. Part of this approach was to enable individuals to take charge of their own livelihood by establishing a small family business. This included their work with starting associations and mutual businesses — the latter being a 10-step process which many do not know how to undertake.
Registering a business should not take more than a few weeks (or, in more developed countries, a few days), yet during the two months I was working with these associations the process proved to take longer than that. For various reasons, several did not complete it and were still working on it as I completed my time there.
With reports showing a steady increase of the level of informality in Albania and recent World Bank reports that Albania’s informal sector is estimated to make up as much as 40 to 50 percent of the country’s economy, the issue of informality is integral to Albania’s development. Now especially, as the European Union has granted Albania conditional EU candidate status. The gesture indicates both a challenge and an opportunity – formal accession negotiations will not begin until Albania addresses several key priorities, particularly reforming the country’s finances and reducing corruption.
Over the last decade, the number of businesses around the world operating in the shadows has grown. Men and women who stand at cash registers and add up their profits at the end of the day are increasingly doing so outside the jurisdiction of the state. Profits derived from the informal economy represent a significant share of the global economy, both in terms of currency and workforce labor, accounting for between 25 and 40 percent of annual output.
In developing countries with large informal sectors, thousands of entrepreneurs are locked out of the formal legal economy by a maze of regulations, burdensome procedures, high tax rates, and other barriers. These entrepreneurs can neither thrive personally nor contribute to their economy. Further, these entrepreneurs, and their employees alike, lack legal protection, access to credit, and have no legal ground to push back against corruption.
Thus the concerted effort to reduce informality has taken a front and center role in Albania. Recognizing how the informal sector is a breeding ground for corruption, one of the country’s leading think tanks, the Albanian Center for Economic Research (ACER), began working on the issue with a group of reform-minded business organizations.
Karen Kerrigan is the president & CEO of the Small Business & Entrepreneurship Council and a board member and former chair of CIPE. For more than twenty years Kerrigan’s leadership, advocacy and training work has helped foster U.S. entrepreneurship and global small business growth.She regularly testifies before the U.S. Congress on the key issues impacting entrepreneurs and the economy, and has been appointed to numerous federal advisory boards including the National Women’s Business Council, the U.S.-Iraq Business Dialog, the U.S. Treasury’s Taxpayer Advisory Panel, and the National Advisory Committee for Labor Provisions of U.S. Free Trade Agreements. Kerrigan regularly engages with the President’s cabinet and key advisors, and has participated in several White House economic summits, scores of events hosted by the U.S. SBA, U.S. Treasury Department and other federal government agencies and departments. She has written hundreds of Op-Eds and newspaper columns, and regularly appears on national television and talk radio programs.
Medhawi Giri interviewed Kerrigan for CIPE.
How did you get started in the path to entrepreneurship and what motivated you initially?
My path to entrepreneurship was a journey. Before starting out on my own, I had a variety of career experiences that helped me build critical skills that are necessary for successful entrepreneurship. These skills and experiences provided me with confidence and know-how. The motivation to start my own business came about when several factors aligned. I saw a need in the marketplace. I had a desire to work on my own terms and innovate and create with fewer restrictions. In addition, I wanted financial independence. Of course, I was passionate about my idea and business opportunity and felt confident in my ability to execute. The bottom line is I wanted more freedom, and entrepreneurship allowed for that.
When you were getting started, how difficult was it to bring your idea to life and to make a business out of it?
Participants at the ITCILO training in Turin. (Photo: ITCILO)
As many previous CIPE blog pieces have pointed out, empowering women entrepreneurs leads to inclusive economic growth around the world. This point was further explored in a recent McKinsey report, The power of parity: How advancing women’s equality can add $12 trillion to global growth:
“We consider a “full-potential” scenario in which women participate in the economy identically to men, and find that it would add up to $28 trillion, or 26 percent, to annual global GDP in 2025 compared with a business-as-usual scenario.”
One way to increase the number of women entrepreneurs is by addressing the bottlenecks that prevent women from becoming business owners or circumstances that prevent them from expanding their businesses. And this can be done through policy reforms via business associations and chambers. To this end, CIPE and the International Training Centre of the International Labour Organization (ITC-ILO) held a joint week-long training-of-trainers session “Women Empowerment through Business Member Organizations (BMOs)” at the ITC-ILO campus in Turin.
Earlier this month, I had the pleasure of presenting at the 2015 Global Youth Economic Summit in Washington, DC, where over 450 leaders and practitioners from 50 countries came together. The theme of the overall summit was “Scale in Practice,” and it examined how best to design youth economic empowerment projects that maximize impact, scale, and sustainability.
My session was “The Voice of Youth in Economic Policymaking: How to Advocate for the Right Reforms” and I presented with Simon Van Melick from SPARK (a Dutch-NGO specializing in youth entrepreneurship in conflict affected societies) and Hania Bitar from Palestinian Youth Association for Leadership and Rights Activation (PYALRA). Unlike the other presenters at the Summit, who focused on the initiatives like vocational programs, microfinance, and innovations in mobile-based educational games, my panel focused on how to engage and empower youth to be involved in political and economic reform of their local communities.
CIPE’s strategy for youth programming is to prepare young people to become self-dependent and take initiative. To empower and engage youth as leaders of tomorrow, CIPE takes four approaches: teach civic education, equip youth with leadership skills, empower civil society to be inclusive and engage youth in the policymaking process, and provide platforms for youth to share ideas on reform.