Jordan proposed reforms limit government control over municipalities

Jordan’s Lower House approved reforms Wednesday giving municipalities greater control at the expense of an increasingly corrupt federal government cabinet.

Municipalities will receive a greater piece of the tax pie, which will help balance local government checkbooks. Ethnically diverse communities could splinter into their own municipalities if they get 5,000 or more people, which might be appealing to Christian minorities. Shielding municipal personnel decisions from a corrupt cabinet will ensure stability and long-term planning at the municipal leadership levels. The reforms also promote women on municipal boards.

With protests amplifying in Amman, the nation’s capital, and across the rest of the country, the vote might have been intended to dampen civil unrest. However, protests continue unabated.

In all, the reforms are a positive. If approved, women must comprise 25 percent of municipal boards instead of 20 percent. Also, municipal affairs managers can no longer request the federal government to forcibly remove municipal board members or mayors — now, the courts will review claims against board members and mayors. The municipal councils themselves will now appoint “executive managers” rather than municipal affairs managers making that selection.

The proposed law contains several other provisions. From the Jordan Times:

Under the new law, municipalities will be given 8 per cent of the fuel tax revenues instead of the 6 per cent stipulated in the older version of the law.

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Inhabitants of any district with a population of 5,000 or more can request the establishment of their own municipality or disengagement from a merger with a larger municipality.

So not only does the Jordanian government give up control by shifting responsibility for determining whether mayors and city council members should be removed to the courts, it also gives Jordanians a greater right to self-determination and increases fuel tax revenues 33 percent for municipalities.

In all, these reforms promote stability by taking power over municipal decisions from the cabinet’s hands. However worthwhile, the reforms still might have come too late to squelch Jordanian protests.

 

Cartoon of the Day: Fear in Yemen

Clearly, I’m not in Yemen, but I’ve written about the fractious nation steamrolling toward violence and a significant power vacuum that will only lead to more abuse. Sure, there’s a shadow government in the works, but one that will exert little force or control over Yemen’s tribal militants. Really, Yemen’s society is beginning to sound a lot like Afghanistan, with an important al Qaeda faction to boot.

Dozens were killed today at a Yemeni army base. A brief cease fire at the normally peaceful, intellectual haven of Taiz ended today as clashes resumed. And now, militant groups seeking to exert power and influence have begun kidnapping aid workers for ransom. (For the record, al Qaeda is employing a similar “fundraising” tactic.)

This cartoon from the Yemen Times sums up the feelings of already one of the bleakest nations in the world even before the six-month uprising that have crippled the (already faltering) economy — people have simply stopped paying back loans because they need money, which has crippled banking institutions and hurt any future prospects of economic development — and (never respected) fragile rule of law:

World Bank SME program right thing for Middle East

This new World Bank program aimed at financing small- and medium-sized enterprises (SMEs) is the kind of policy this blog is all about. Democracy and entrepreneurship should work in lockstep. By giving people choice in who they vote for, you give people choice in how they want to live their lives. Entrepreneurship is all about choice — the choice between staying in a stable job (or remaining unemployed) and striking out on your own, risk and all, to do something different.

From the MEMRI Economic Blog:

MSME Sector: Engine Of Growth

“It is indeed the huge MSME sector across the Middle East and North Africa that can and must be the engine for accelerating growth and in so doing drive that all-important factor: job creation.” So says Shamshad Akhtar, vice president for the region at the World Bank. The facility has been a gleam in her eye from the outset, based in a firm conviction that enterprise access to finance and knowhow has proven globally to be a critical path to inclusive economic growth for millions of people. As the challenges of openness and opportunity recast history across the region in its streets and squares, the emphasis on creating employment and entrepreneurship opportunities has never been more urgent.

Lack Of Funding

As elsewhere in the world, the MSME sector in the Middle East and North Africa (MENA) is where significant numbers of people make (or could make) their livelihoods. For example businesses employing up to 100 people make up well over 90% of all enterprises in economies such as Tunisia, Egypt, Jordan and Morocco. But the constraints are sharply felt. Bank lending to MSMEs is lowest in the world along with Sub Saharan Africa, and only 10% of MENA enterprises finance their investment expenditures with bank loans. Smaller players are starved for capital and growth in output, and job creation hits a ceiling.

With a large, educated amount of unemployed youth being one of the driving factors behind the Arab Spring, this program could not have come at a better time. If there are no jobs, people need to create them. Arab youth are right to hold their governments accountable for failing them — that is deserved. But plenty of smart, driven youth could also channel their revolutionary energy into innovative productivity.

Some of the greatest entrepreneurs have failed time and time again before finding the one innovation that changed the course of their lives. But in the top-down, authoritative Arab society, few dreamers receive the leeway to pursue such innovations. Responsibilities remain with putting food on the table for large families. Arab families also push their children into becoming engineers or doctors — recently, lawyers have become somewhat acceptable — simply because those professions represented stability and status. Entrepreneurship is just now rinsing off a dirty label in the United States, and the Arab world lags far behind cleaning up the term.

This influx of capital will only help push Arab innovators to go at it alone. Ultimately, it will merely pull people who already have the entrepreneurial spirit into the fold — this program won’t immediately attract the 22-year-old busboy with five siblings. But this program could very well set the groundwork for the entrepreneurial spirit in the Arab world. Eventually, busboys could innovate in their spare time, thinking of the next big business idea or technology.

Sidenote: Apologies for my self-imposed, week-long hiatus. It’s somewhat taxing to write 1,000 words daily for the job that pays my bills and then do another 600-1,000 on top of it each day for this blog. I’m sure you all had no idea what to do with yourselves this past week. Hopefully you read a book, or something.

Turkey’s influence could emphasize women in new Arab democracies

Women now comprise 14 percent of Turkey’s parliament and could grow to 25 percent by 2015, which could have some effect on possible Middle East democracies and their inclusion of women.

Turkey appears to view itself as a progressive, modern Islamic nation and a leader for the region. It is very likely that Turkey will assist emerging Middle East democracies in establishing institutions. And Middle East nations may look to Turkey for advice before it invites United States meddling.

If Turkey lends a hand in designing Middle East democratic institutions, its female parliament presence could show nations like Egypt and Tunisia that women need a voice in the legislature. Turkey is a model Egypt and Tunisia wish to emulate, and including women in parliament is one way to appear more progressive, at least at a surface level.

Of course, Turkey didn’t become this way overnight. From the Washington Institute on Near East Policy:

This was a slow process, with the ratio rising from 0.88-1.34 percent in the 1980s, to 2-4 percent in the 1990s.

Since the late 1990s, however, women’s demands have accelerated the rate: In each election, the ration of women legislators has nearly doubled, reaching 14 percent on June 12. If this current trend holds, at least a quarter of all deputies in the 2014-15 legislature will be women.

Turkey, still lukewarm on its European Union aspirations, has moved toward a more Islamic-oriented nation under Prime Minister Tayyip Erdogan. Previously, it harbored strong ties with Syria, although those are now waning.

The Arab Spring is about human rights and democracy. Women are part of that mix. Having Turkey as a guiding hand will help show more conservative Muslims who support democracy that women have a place in making important political decisions.

Jordan workforce training initiative disappoints World Bank

Jordan must improve its joint public and private sector workforce development initiative, according to a sub-par World Bank report.

Since adopting a national plan to improve workforce training and preparedness in an increasingly globalized Jordanian economy, “the past two years have not seen effective coordinated implementation” of outlined initiatives, the World Bank said.

The review evaluates a 2002 plan to better integrate the private sector into the public sector’s efforts in preparing Jordanian workers for the competitive globalized market. That plan said, chiefly:

The absence of employers in the participation and decision making of most aspects of workforce development is the current dominating characteristic of the system. For example, none of the 5 private sector representatives of the 11 Board members of the VTC’s Board of Directors hold leadership positions or represent priority sectors. Over the last 30 years of VTC’s history, the attitude of the private sector toward VTC has been symbolic at best.

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The quality of private sector training providers varies in both cost and quality and will have to be improved over time by developing certification and accreditation activities.

Jordan’s government has failed to set policies encouraging this partnership, the World Bank report released this week said. Ultimately, workforce training has to start with heavy government lifting. It must set the agenda and have a direction before it instructs the private sector on how to train and develop its workforce. Until the government knows what it wants, the private sector will remain distant.

The truly innovative and society-benefiting businesses follow talented minds and skilled labor, which Jordan certainly could have if it coordinated its efforts. The average Jordanian goes to school for 13 years, which means there are plenty who go to college. Workforce training starts with the government because it must set the agenda.

Private sector was not engaged in workforce training because, historically, Jordan generated most of its revenues from high tariffs, effectively closing off the economy and reducing its need for productive efficiency and a trained workforce. But the financial crisis that hit the nation in 1988 provoked serious trade liberalization discussion. In essence, government can take the blame for the private sector’s unwillingness or inability to train workers — the government had never given the private sector a reason to prioritize this.

Jordan had been maligned by unemployment and poverty, relying on at least five International Monetary Fund programs between 1992 and 2002. As a result, the Hashemite Kingdom had to follow the standard IMF prescription of lowering trade barriers, cutting public benefits and privatizing business, among other things. During the time of those IMF programs, Jordan joined the World Trade Organization, the EU partnership agreement, the Arab Free Trade Area and a free trade pact with the US. That all meant Jordan needed a better trained workforce to compete with its new, freer economic borders, which has lead to rapidly increasing exports and GDP.

But increasing exports is easy when you change from a drastically protectionist trade policy and have low wages — Jordan’s GDP per capita is $5,400, ranking 144th in the world according to the CIA World Factbook. The key now for Jordan is value creation. More than 77 percent of its workforce is in services, which are low-paying and do little to generate societal benefit.

The median age in Jordan is 22, which means there’s an overwhelming amount of young people in the country. It will not survive based on an almost entirely service-based economy. The government needs the private sector to help train workers in order to attract capital and investment. Until the government gets its act together, that won’t happen.

Saudi women earn inheritance rights

The Saudi Justice Ministry says people who deprive women of inheritance may face imprisonment, an important shift that conflicts with the religiously rigid, patriarchal majority Salafi society.

According to ArabNews.com, denying women inheritance was more common among tribes. But in the Wahhabi-influence nation, the more fundamentalist customary rather than textual implementation of Islam prevails. Therefore, there is reason to believe this dynamic is more widespread than what ArabNews is letting on, even if it occurs discreetly.

The measure in part addresses a 2008 United Nations Committee on the Elimination of Discrimination Against Women report, which suggested codifying into law equal gender rights for inheritance and a host of other issues.

From the report:

concept of male guardianship over women (mehrem), although it may not be legally prescribed, seems to be widely accepted; it severely limits women’s exercise of their rights under the Convention, in particular with regard to their legal capacity and in relation to issues of personal status, including marriage, divorce, child custody, inheritance, property ownership and decision-making in the family, and the choice of residency, education and employment.

In the section of the Qur’an that discusses mahram, there is no mention of male supremacy over women. This is the crux of the fundamentalist interpretation of Islam — much of it is founded on customs that existed during the time of Mohammed. For comparison, and as I have said before, the United States would be considered a backwards place if this majority Christian nation based civil society on the customs at the time Jesus walked the earth.

In fact, the Qur’an precedes a section on mahram for women with equally moralistic instruction for men in their dealings with the opposite sex.

Say to the believing men that they should lower their gaze and guard their modesty: that will make for greater purity for them: And Allah is well acquainted with all that they do. (24:30)

And say to the believing women that they should lower their gaze and guard their modesty; that they should not display their beauty and ornaments except what (must ordinarily) appear thereof; that they should draw their veils over their bosoms and not display their beauty except to their husbands, their fathers, their husband’s fathers, their sons, their husbands’ sons, their brothers or their brothers’ sons, or their sisters’ sons, or their women, or the slaves whom their right hands possess, or male servants free of physical needs, or small children who have no sense of the shame of sex; and that they should not strike their feet in order to draw attention to their hidden ornaments. And O ye Believers! turn ye all together towards Allah, that ye may attain Bliss. (24:31)

Clearly, the verse regarding women is more restrictive — such was society at the time. But nowhere does it mention that men have supremacy over women. So where does this interpretation come from? Fundamentalism, whether it’s Christian or Islamic, is rooted not in text but in an idea that the people interpreting that text today know what the prophets wanted better than anyone else does. And because of their immovable devotion to the faith, they are willing to be loud and use whatever force or tactics necessary to impress their views.

There is a sense of male supremacy in the Qur’an, that is for sure. But that’s only because it was written during a time when women were largely considered temptresses and second-class citizens. Those times need to change — 1,400 years is too long.

Oil-rich nations spend more at home, but it’s not sustainable

Oil-rich Arab nations spent more at home this year as autocrats dished out one-time benefits to quell civil unrest. While it’s a good sign that such rulers responded to protesters, it falls short of a real policy change in how oil-rich states disburse revenue.

The fact protesters pushed autocrats to realize they needed to spend more domestically shows the effect the threat of losing power has on those rulers. So what then would create long lasting reforms in government spending on domestic programs and businesses? Democracy. Human rights. Better institutions. Anything that allows citizens to hold officials accountable, and one way of doing that is through an enforced electoral process.

In essence, this spending merely aimed to pacify those with only a lukewarm revolutionary fever and increase support among regime backers. These are not long term, sustainable spending programs.

From ArabianBusiness.com:

Following popular revolts in the Middle East and North Africa, countries like Bahrain, Libya and Kuwait increased domestic spending or handed cash outright to their citizens in packages totalling as much as four percent of gross domestic product. Saudi Arabia alone is spending $130bn, or a staggering 30 percent of its GDP.

These countries can more than afford to do so, if Goldman Sachs’ estimate for petrodollar savings flows are anything to go by: the bank forecasts imply $840bn over the coming year, based on Brent oil at $126.50 a barrel by mid-2012.

Saudi Arabia, for example, doled $130 billion to its citizens this spring. But much of this came in the form of housing credits and other cosmetic fixes to superficially enhance quality of life without actually changing anything.

Institutions are rarely built from the top-down in such societies. Protesters coaxed benefits from tight-fisted rulers through their voices and actions. Imagine what would happen if they could do that every two or four years at the polls.

 

The Joe Camel technique, al Qaeda style

Will McCants at Jihadica pointed out that Al Qaeda may be creating a cartoon to recruit youth. McCants questions the authenticity of the cartoon, but if it’s real it certainly shows the terrorist organization is trying to innovate.

The tactic might be necessary for Al Qaeda. After suffering the loss of its figurehead and leader, Osama bin Laden, the terrorist organization’s power definitely took a hit in the international conscience. It is no longer considered an untraceable, indefatigable network — even the very top is vulnerable, as bin Laden’s death proved. Bin Laden’s death was just as much a symbolic contribution to Al Qaeda’s hopeful demise as it was strategic.

Bin Laden’s death will damage Al Qaeda’s fundraising ability, and it already has turned to kidnapping people for ransom to fund operations. Bin Laden was the son of a Saudi billionaire and well connected with very important friends. With that link now severed, less money will flow into the organization’s coffers. Additionally, bin Laden’s death likely spooked well-to-do “investors” from renewing their commitment to al Qaeda, as the US now has troves of information regarding al Qaeda’s operations and likely some leads as to who has donated.

With the al Qaeda becoming a less attractive destination for the world’s most misguided philanthropists, it will now have to turn to grassroots recruiting based on a message rather than providing luxuries.

For children, terrorist organizations are seen as providers, not unlike down-on-their-luck urban American youth who get swallowed into drug trafficking because they see it as an option that pays. Terrorist organizations, being well funded by various benefactors, can often lure youth by giving the

m things the traditional system or government cannot, such as food. Terrorism itself exists because of dissatisfaction with the status quo, and in many of the countries where terrorism flourishes the status quo means hunger, lack of education, poverty, high unemployment, corruption, religious animosity, ethnic divisions and severe income inequality.

Governments will get a boost in fighting al Qaeda as its ability to provide for young people depreciates. But governments must still step up and fill the void. The Arab protesters demanding reform should first call for a developed welfare system that redistributes wealth throughout society. The income inequality in many Arab countries differs from the United States in that Arab countries simply lack the institutions and accountability to force governments to spend that money on the people rather than keep it for themselves. Privatizing industries — especially oil — would be a good first step, as that would reduce government control over valued resources in economies that tend to lack diversity.

Until governments can provide basic necessities, terrorist networks will be a draw — and it won’t take an al Qaeda Joe Camel to attract new recruits.

Is this al Qaeda's Joe Camel?

I present to you: Arabs dancing to Michael Jackson (short video)

 

Ah, the side benefits of globalization!

Yemeni banks cease some operation

Growing tribal violence has pushed Yemenis to withdraw large amounts from banks that have crippled their ability to perform basic activities.

The withdrawals represent a bigger problem — tribal conflict is getting so dire that Yemenis are either fleeing the country with cash in hand or there is a real fear that whatever government comes to power could exert force over banks. With President Ali Abdullah Saleh in Saudi Arabia receiving medical treatment, there’s a sizable power vacuum that needs filling.  Saleh’s tribal allies already had turned against him. Yemen’s tribes are more than willing to vie for his former position atop the government.

This banking problem is more acute for the long term future than short term. Without any reserves, it cannot offer loans to businesses — and if it does, it risks default in an incredibly unstable economy. That means it cannot promote business in its own borders.

Additionally, it likely will not attract foreign investment (not that it was particularly successful in that regard before the Arab Spring) with financially tapped banks. The volatile political landscape will probably continue in Yemen much longer than any other Arab Spring nation, even after a new government comes to power. It appears some militant tribal faction will assume the presidency if Saleh steps down or is forcibly removed. Saleh has vowed to return to Yemen, which has made the country even more uneasy as Saleh will undoubtedly try to regain power from the tribes that now run the country. All of this sends bad signals to foreign investors.

Taiz is the city to watch. It’s considered the intellectu­al capital of Yemen, but it is growing increasing­ly militarize­d. People there never would have dreamed of seeing citizens carrying guns through the street, but it is now a daily occurrence­.

The longer Saleh stays in Saudi Arabia, the greater chance tribal violence breaks out in effort to establish control and supremacy over Yemen. I’m beginning to doubt that any change in government would lead to a peaceful, democratic one. Saleh certainly has not been a good leader — hardly anyone entrenched in power for 30+ years is — but there doesn’t appear to be a civil group ready to wrest power from the well establishe­d tribes.

From Al Bawaba:

Aeriqi confirms that banks suffering from large withdrawals may collapse and notes that liquidity is scarce. Dozens of banks are carrying out measures to ease monetary withdrawals such as reducing official working hours and initiating electricity interruptions.

Economic experts note the current crisis in Yemen has greatly impacted the Yemeni economy, especially the banking organizations which provide loans and credit to organizations and individual borrowers in order to meet their financial needs.