Tag Archives: MENA

A Ray of Hope on Health Care from an Unlikely Source

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Health care professionals in Egypt conduct a stakeholder analysis to help spell out governance principles for Egyptian hospitals.

A hip replacement in the United States, paid for out-of-pocket (i.e., without health insurance), would cost anywhere from $11,000 to $125,000, depending on what hospital you go to, according to a 2013 survey of 100 hospitals featured on National Public Radio.  And that was among the hospitals that, when asked, could actually produce a quote – 40 of the 100 hospitals surveyed couldn’t quote a price at all.

Those fortunate enough to have insurance don’t need to worry about price-shopping.  When I go to my primary care physician, I pay a $20 co-pay.  (Under our previous insurance, provided by my wife’s former employer, it was $10.  Why the difference?  Who knows?)  I have no idea how much my insurance company pays the doctor.  I suppose I could find out, but… honestly?  There’s really no compelling reason for me to do so.  It’s $20 no matter who I see.

And it turns out that, even if there were more incentive for me to price-shop, more expensive hospitals aren’t necessarily better hospitals, according to a 2014 study.

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Sesame Street, Swine Flu, and Unintended Consequences in Egypt

Zabbaleen boys in Mokattam Village in 2009. (Photo: Wikipedia)

“The law is not feeding me.”  That was the quote that really caught my eye.  At CIPE we talk about “Democracy that Delivers,” but I have never seen such a fundamentally honest and genuine expression of the concept – a democracy will not work unless it is delivering in tangible ways for its citizens.

“The law is not feeding me.”

The source was a black market pig farmer quoted in a fascinating article on a garbage collection crisis in Egypt in Monday’s Washington Post.  (And no, I didn’t know there was such a thing as a black market pig farmer, either.)  It seems that pigs raised by Cairo’s Coptic Christian Zabbaleen community used to consume a significant portion of the city’s garbage.  Reacting to the global swine flu epidemic in 2009, the Egyptian government slaughtered all of the country’s pigs and, from then on, banned ownership of trash-fed pigs.  This usurped the livelihood of the Zabbaleen – and resulted in a city-wide backlog of unconsumed, uncollected garbage.  To make matters worse, in the current economy, government-contracted sanitation firms are being short-changed by a full half of their fees and have had to cut back service accordingly.

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What do Libya, Norway and El Dorado have in common?

(photo: NewsWarped.com)

Husni Bey, a Libyan entrepreneur, employed the language of legend to express confidence in his country’s ability to rebuild itself after decades under Gaddhafi. “Definitely, Libya is an El Dorado,” he said.  “It has great resources that [will] really allow it to turn around in no time.” Indeed, with vast fields of oil beneath it, Libya’s natural wealth is substantial. While many countries would buckle under the weight of a post-civil war reconstruction that some estimate will cost $80 billion, Libya should have no problem paying its bills.

Yet, while this oil revenue should ease the costs of Libya’s reconstruction, many observers are concerned that it could make Libya’s path to democracy hazardously slick. That’s because all too often an abundance of natural resources, oil in particular, allows wealth and power to gather into the hands of the few and prevents the development of democracy. El Dorados usually make poor democracies.

Indeed, since the 1960s and 1970s when many states began to seize control of their oil resources from Western oil companies, many scholars have noted an inverse relationship between oil export revenues and freedoms in a given country. Headed by countries such as Saudi Arabia and Iran, a perusal of the world’s largest oil exporters reads like a roll call of autocracies. This relationship is more than a correlation.

In these countries, oil distorts the relationship between state and citizen. States that do not require tax revenue to provide services to their citizens are less likely to feel accountable to them. When citizens express frustration, the state can co-opt them with handouts. If that fails, these states are able to lean on their disproportionately well funded coercive apparatuses. Unaccountable to their citizens and flush with revenue, resource-rich states can become incubators for corruption. Such was the case under Gaddhafi whose nationalization of Libya’s oil allowed the country’s descent into kleptocracy.

Fortunately, the connection between oil and corruption is not a fait accompli in Libya. In the wake of Gaddhafi’s fall, some have shifted their attention to Norway, which has largely broken the link between oil and corruption, as a possible model for Libya. By limiting the amount of oil companies may drill and shielding oil revenues from the reach of government officials, Norway has managed to facilitate the growth of a diverse economy and transparent political system.

In Libya, a country in which tribal identity is an important means of social organization, the distribution of oil revenue has the potential to combust. The distribution of oil revenue has already emerged as a source of contention: Businessmen based in Benghazi, an eastern city that suffered disproportionately under Gaddhafi and ultimately spawned the now ruling National Transitional Council (NTC), have launched a campaign to pry the state-owned National Oil Company away from Tripoli.

The Norwegian model cannot and should not be applied directly to Libya, a country whose similarities to Norway may start and end with its oil wealth. Still, it is heartening to know that by fostering transparency and accountability, a country can avoid succumbing to the oil curse. With critical decisions regarding the distribution of oil revenue among Libya’s many tribes looming, the time to focus on instilling and institutionalizing these values is now.

Libya will likely resume oil exports in the next week or so. The International Energy Agency projected that Libyan oil production, currently operating at about ten percent capacity, will reach 1.1 million barrels a day by the end of next year. While this amount would still be below capacity, it would nevertheless represent a massive flow of revenues into the economy.

Should consequential decisions about oil revenues be made by the consensus of representatives of all Libyans in an atmosphere of transparency and accountability, they could infuse Libya’s fragile transition with the confidence of its people. Should it appear that the victors of Libya’s civil war are merely collecting their spoils at the expense of the losers, however, Libya’s transition to democracy will have been made more difficult. Libyans would be wise to focus on creating a transparent system that limits opportunities for abuse before the oil resumes its free flow. Many El Dorados have become miserable places in which to live. With transparency and good governance, Libya – like Norway – can become an exception.

Entitled to accountability

Two generations of Bedouin men at camp in Wadi Rum, Jordan. (Photo: Dorothy Smith)

It was my first visit since the Middle East’s wave of popular uprisings began, and I was curious to see if I felt anything different. Of course, the conference on corporate governance I was attending took place in Jordan, perhaps the quietest front in the Arab Spring spectrum, so it wasn’t really a fair test. Yet that didn’t prevent me from gaining a sense of change.

One Egyptian that works for a multinational organization noted, “What’s different these days is the demand for accountability. Nobody wants to sign his name to anything unless he’s certain that everything is in order and can be justified – both in the government and the private sector. People feel they will be held accountable for their decisions, and this is a radical difference.”

Surrounded by another Egyptian, a Tunisian, and a Jordanian – all participants in the conference from the business community or development organizations – they all nodded their heads in agreement.  Yes, they concurred, people are no longer willing to turn a blind eye to abuse of power and there is a sense of entitlement to open access to information.

My Egyptian colleague continued, “Of course, the downside to this is that nothing is moving in the economy. Since everyone is so cautious, there is little activity taking place and the result is a bit of stagnancy. But, this is a normal reaction, and the pendulum will swing back toward the middle and momentum will pick up again. Even with the short-term pain people are feeling, it is worth it. Nothing will ever be the same – we will never go back to the way we were before. Now we know we can make our own future.”

After reading report after report about dire economic forecasts for Egypt, Tunisia, and Yemen, I was encouraged by his sense of optimism.

Over the past several months, the initial euphoria from the youth revolutions has waned in Washington, and a tendency towards cynicism has emerged. My colleague leaned forward and relayed his story about joining the demonstrators in Tahrir Square in the early days of the revolution, about thousands of people streaming in from all directions and joining together in an unplanned, spontaneous moment. As his eyes lit up and his voice gathered strength talking about the sense of momentous change and invincibility in the air, I couldn’t help but be swept up by his excitement.

There is no doubt that it will be a long, bumpy ride for Egyptians and others in the region, and there will surely be many setbacks and disappointments ahead. But with a new generation of leaders and reformists like those I met in Jordan, there is a fighting chance that great progress lies ahead.

The 128th most influential Arab

Click. Scroll. Click. Scroll.

I sat paging through Arabian Business’s list of the 500 most influential Arabs. #2 Wael Ghonim – Google exec made famous by his role in the Egyptian protests. #21 Amr Diab – played his pop music on repeat while in Egypt. #22 Amin Maalouf – one of my favorite authors. Click. Scroll. But the most powerful Arab names in business, science, media, sports, and culture soon became less and less recognizable. I began to become discouraged: Do I really have such a narrow understanding of this region after years of study, learning Arabic, and living abroad?

Then I got to #128 Elia Nuqul. Here was a prominent, though likely lesser known, businessman of whom I knew a disproportionate amount. Elia Nuqul is the founder and current chairman of Nuqul Group, a Jordanian firm established in 1952 that has grown to encompass more than 30 companies. No, I don’t follow the region’s corporate developments with microscopic attention, though I wish I could. But Nuqul Group made a powerful impression on me after I read about the group in CIPE’s case study guide Advancing Corporate Governance in the Middle East and North Africa: Stories and Solutions, and listened to Vice Chairman Ghassan Nuqul explain the group’s self-discovery of corporate governance.

In fact, on June 12, CIPE Program Officer Danya Greenfield presented alongside Ghassan Nuqul at the Third Strategic Corporate Governance & Responsibility Forum, which took place in Amman, Jordan. Danya launched the case studies guide and accompanying DVD on a panel that included Philip Armstrong, Head of the Global Corporate Governance Forum (CIPE’s partner in producing the case studies), and Slim Othmani, chairman of NCA-Rouiba (an Algerian company also profiled in the case studies and DVD).

I was not surprised to find Elia Nuqul listed as one of the most powerful individuals from the Arab world. I remembered from the case studies that Nuqul Group had undergone a rapid expansion since its establishment, but found that implementing corporate governance practices allowed for the decentralization of decision-making and formalization of roles and procedures to allow the group to sustain its growth. As Vice Chairman Ghassan Nuqul explained, “I can tell you in my case what developed and what evolved in Nuqul Group was done in response to challenges and actual needs on the ground — and it turned out to be what you call corporate governance.”

I wouldn’t be astonished to find that many more of the 500 most influential Arabs were implementers of corporate governance in their corporations.

Leadership by example for a region in change


Also available with subtitles in Arabic.

Given the tumultuous change and economic stagnation throughout the Middle East and North Africa, one might be tempted to ask, is corporate governance even relevant in the current environment? The answer is yes, and here’s why.

Corporate governance is intrinsically linked to the concerns being expressed by people throughout the MENA region because good corporate governance and good democratic governance both are based on the values of accountability, transparency, responsibility, and fairness. There is now a new opportunity to talk about these issues – and how to establish institutions that uphold these values – that was never possible before.

CIPE and the Global Corporate Governance Forum officially launched their new guidebook and video resource for corporate governance, Advancing Corporate Governance in the Middle East and North Africa: Stories and Solutions, at the Corporate Governance and Responsibility Forum in Amman, Jordan on June 12-14, 2011.

The conference gathered more than 100 practitioners and businesspeople from around the world and raised issues related to corporate governance, corporate social responsibility, and sustainability.

The driving force for the region’s popular uprisings is economic concerns, including unemployment and a low standard of living. Addressing these issues will require a dynamic private sector that will generate new job growth. To achieve the aspirations of the youth, it is essential to help develop stronger, more sustainable business, which depends on creating an environment where the private sector can flourish.

Implementing corporate governance is one important step in this direction – it will help companies attract investment, instill shareholder confidence, and improve productivity, and will also help rehabilitate the reputation of the business community in an environment where the private sector’s reputation is under attack. Corrupt crony capitalists associated with the ruling regimes in Tunisia, Egypt and elsewhere have given the private sector and free markets a bad name.

Standing against corruption and demonstrating a commitment to corporate governance, transparency, and disclosure of conflicts of interest is an important way for businesses to generate trust and regain credibility that may have been lost.

Lofty democratic ideals will not motivate all business owners, but there are concrete benefits that corporate governance helps realize. CIPE and GCGF talked with companies around the region in order to gather success stories of how and why they made governance changes and what positive impact it had. The resulting guidebook presents real-world, practical examples that show how companies in the region overcame barriers and improved their governance practices in ways that benefited performance and growth.

The guide is intended to serve a real-world purpose: To provide assistance and motivation to directors, senior managers, regulators, and others as they try to improve existing corporate governance practices.

As governments increasingly look to the private sector to stimulate economic growth, the business community has a unique part to play in promoting values of accountability, fairness, and responsibility. This new role will help to advance democratic institutions and strengthen business ethics to the benefit of the public sector, the private sector, and society at large.

Building democracy one conversation at a time

The world is anxiously watching Egypt: How will the country reconcile more than 80 million voices so that it can proceed along the path of democracy?

Egyptians now widely recognize that the difficulty of toppling Hosni Mubarak – once seen as an insurmountable challenge – pales in comparison to the complexity of building consensus on the steps necessary to construct institutions of democratic governance for a new Egypt.

CIPE Egypt office staff and partners recognized this challenge early on. From February 22-24 CIPE partners Al Masry Al Youm and the Federation of Economic Development Associations (FEDA) organized a conference at which more than 200 representatives of business associations, political parties, youth and other political movements, think tanks, media outlets, academia, government, and the Supreme Council of the Armed Forces itself presented a set of recommendations on the transitional period and future reforms.

As part of this series of seminars to foster an inclusive discussion on Egypt’s future, CIPE co-sponsored a roundtable with Al Masry Al Youm last week to discuss the relationship between political and economic freedoms and the connection between democratic governance and market-oriented reform. As featured speaker, CIPE Executive Director John D. Sullivan stated,

Our purpose today was to gather together some important thought leaders and to begin to identify the most fundamental issues that Egypt has going forward.

Journalists, academics, political party leaders, youth movement leaders, and business association representatives sought to answer: Why did Egypt’s earlier attempts at market-oriented reform fail to deliver for most Egyptians? And, what democratic institutions will need to be in place for the majority of Egyptian citizens to share in the country’s economic growth and prosperity?

Learn what prominent Egyptians have to say about the need for institutions that support transparency and accountability in Egypt, public awareness about the functions of democratic institutions, and more by watching Al Masry Al Youm’s segment on the roundtable discussion.