Azerbaijani students attending a two-day seminar on entrepreneurship December 27-28 respond to the question, “who believes that they could start their own business?”
Forty percent of Azerbaijan’s population is under the age of 25, but less than a third of Azerbaijani youth are employed. This is partly due to economic policies that have restricted the private sector, particularly small and medium-sized businesses, leaving many young people to regard the government as their only path to employment. Topics such as free market economics, democratic governance, and entrepreneurship are largely absent from university curricula, and many young Azerbaijanis are not even aware that starting their own business is even a possibility, let alone a viable career option.
Since 2011, CIPE together with the Entrepreneurship Development Foundation (EDF) and its partner the Baku Education Information Center (BEIC) have trained 92 young Azerbaijanis on economics and business topics – and this number will be more than doubled as the training programs are scaled up in 2014-2015.
Participants, ranging in age from recent university graduates to mid-career professionals, attended weekly seminars over a ten-week span, tailored to the local context, based on CIPE’s Development Institute materials which were designed to improve young people’s understanding of the core democratic values underpinning entrepreneurship and the functions of a free market economy.
Students in a meeting with company executives in Bishkek, Kyrgyzstan.
The American Chamber of Commerce (AmCham) in the Kyrgyz Republic has had a busy few months. After learning that the current education system isn’t preparing students to compete for private sector jobs, AmCham – with the assistance of CIPE – has been working with universities and its own member companies to address this challenge. Since there is no simple solution to eliminating the gap between what students learn in classrooms and what is expected of them in the job market, AmCham’s youth-mentorship and educational reform project has taken a multifaceted approach to tackling this issue.
Aiming to establish a stronger connection between the private sector and youth in the country, AmCham organized a program bringing the two groups together. This entailed leading a lecture series on career development for university students and visiting member companies’ offices to meet with top executives in Bishkek. At the end, students were asked to write essays detailing how they can become successful in the private sector based on what they learned from all the activities.
The essay contest was the highlight of the program because it proved that both the youth and companies deeply care about investing in the future of the Kyrgyz Republic’s economy. The essays composed by the participating students reflected how motivated they had become after meeting and hearing success stories from top corporate managers. Likewise, companies (including Hyatt Hotel and KPMG) also showed enthusiasm about engaging with youth. Not only did 15 AmCham member companies (in addition to CIPE) serve as judges for the contest, but they also funded the two first-place winners for a month-long English language program in London. Several companies also offered internships to few of the finalists – and internships are not as common in the country as one may think.
AmCham is also facilitating a dialogue between policy-makers, universities, and the private sector to address the educational gap. Members of the business community have started engaging with economics schools and the Ministry of Education to create a “Trustees Council” in order to review curriculums and establish a working partnership between employers and the youth. In the coming months, AmCham will host a roundtable discussion with stakeholders to discuss the current state of the education law and will continue to work to improve the education system to better prepare students for life in the real world.
Bringing together the youth, the private sector, and the government to address some of the pressing issues is not an easy task, but thus far Kyrgyzstan seems to be on the right track.
Societies everywhere invest in youth in order to prepare them for the future. But what happens when a generation, educated and prepared for anticipated occupational roles, finds an absence of opportunities? This has happened over the past decade, as the youth unemployment rate increased across all regions, excluding developed economies. Youth are three times as likely as adults to be unemployed, and account for 40 percent of unemployment worldwide [International Labour Organization]. Those who have completed their education increasingly find a mismatch between their skills or aspirations and employers’ needs. These strains will intensify as the percentage of the population aged 15 to 24 will peak in the next 10 to 20 years. Entrepreneurship promises to be the best solution to youth unemployment and frustration.
The Middle East Youth Initiative has recently published “Missed by the Boom, Hurt by the Bust: Making Markets Work for Young People in the Middle East,” a report highlighting the challenges the region faces with providing job opportunities for its growing youth population. The report demonstrates that even during the “boom” years of 2002-2008 young people in the region were afflicted by high unemployment rates. The current economic slump – which coincides with demographic pressures of historically high levels of young job seekers – has only made things worse, raising even more concerns about the future.
“Young people continue to struggle in attaining job-relevant skills and high quality education. They continue to wait for good jobs, enduring long spells of unemployment or spending their most productive years trapped in informal jobs that fail to prepare them for better positions. In turn, young men and women increasingly delay marriage and family formation, unable to meet the costs associated with these life stages. Moreover, since outcomes in these spheres are interdependent, failure in one transition spills over into others, resulting in a debilitating state of waithood, when young people are left waiting to achieve a full state of adulthood.”
Over 25 percent of firms in MENA report the lack of skills among prospective young workers as a major constraint on business growth. In a functioning market economy, employers can signal what skills they need and value, which in turn provides incentives for the youth to acquire those skills. In MENA, however, wage scales offering higher pay in scarce government jobs, coupled with very rigid labor laws, skew those incentives.
The report concludes that “for policy makers, a vital lesson of the oil boom years is that improvements in the macro environment alone will not erase the deep inequities that define the older and younger generations. (…) Without a sound microeconomic foundation—one in which institutions generate the right signals and incentives—the benefits of macroeconomic and trade reforms, as has been demonstrated during these last few years, are limited.” Yet more than just education, employment, or housing policies need to be reformed to help the youth. A redefining of MENA’s long-standing social contract requires a broader and more open public policy discourse that empowers the voices of youth and other excluded groups – and engages the private sector on key reform issues.
With the price of oil at its record highs, it can be hard to imagine that key exporters thereof, six countries of the Gulf Cooperation Council (Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and United Arab Emirates) may currently be facing economic problems of any kind. The signs of prosperity seems to be all around as gleaming towers rise in the middle of the desert and guests arrive by helicopter at the world’s only seven-star hotel, Dubai’s sail-shaped Burj al-Arab. And yet not all is well.
A somewhat unexpected addition to the region’s stunning architecture is a… diabetes center in Abu Dhabi. Nearly one-fifth of the UAE’s native population now suffers from diabetes and the statistics are not much better in the rest of the GCC. A result of more sedentary lifestyle and unhealthy diet? Certainly. But, as the Economist points out, the diabetes problem can also be a useful metaphor for how…
The region’s economies are struggling to absorb petrodollars, accumulating like glucose in the bloodstream. The risk they face is the economic equivalent of renal failure: inflation, a hollowing-out of the non-oil sector, and a young, growing workforce in chronic need of outside labor to supplement it.
Last year the GCC countries earned a total of $381 billion from oil exports, plus another $26 billion from gas. This accounts for over a half of their economies with the combined GDP of $800 billion. But at the same time inflation sped up, which – coupled with the global boom in commodity prices – is making construction materials, real estate, and food more and more expensive.