Archive

Archive for the ‘Economic Development’ Category

Gaza Strip must pursue waste proposal for better economic future

January 29, 2012 Leave a comment

Creating two new landfills to alleviate the Gaza Strip’s three operating dump sites would provide much needed emergency fixes to the territory’s solid waste management program, the World Bank said in a report released this month.  Those long term measures would reduce groundwater contamination and air pollution stemming from the 1,450 tons of solid waste deposited daily in Gaza’s three near capacity landfills in Johr al Deek east of Gaza City, Sofa east of Rafah City and Deir al Balah in the territory’s center, the 23-page report said.

But local governments will need to raise revenue to finance the $9.6 million effort, the report said. That represents a major hurdle for the program considering a majority of residents find fees too high for the current level of service, and most cannot afford to pay them anyway, it noted.

“The three sites are reaching their maximum capacity, in addition to the fact that the expected amount of solid waste is expected to reach a round 3700 tons/day in 2040,” the report said. “Accordingly there is a growing need for establishing an integrated SWM (solid waste management program) that to adequately handle the growing waste generation rates in GS (Gaza Strip) with minimum impacts on public health and the environment.”

The unmonitored waste management program needs revision regardless of cost, the report said. With a growth rate of 3.2 percent in 2011, the Gaza Strip was the world’s seventh-fastest expanding population, according to the CIA World Factbook. At 360 square miles — roughly twice the size of Washington, D.C., for almost three times the people — it is the 205th largest territory in the world.

Such a concentration of people surrounded by faulty waste management yields catastrophic public health problems. Chronic illness and prenatal health risks posed by consuming contaminated water and food will continue to negatively affect citizens’ economic potential and threaten long term development prospects.

Sofa and Johr al Deek would get new landfills under the proposal, with three new transfer stations serving each site, the report said. Sofa would swallow 550 tons of solid waste daily beginning in 2011 and increase to 1,200 daily in 2032. That figure would rise to 3,000 tons daily in 2040, it said.

Uncontrolled dumping mixes harmful health care and hazardous waste, the report noted. Decomposition releases particulate matter and toxins into the air, thus contributing to greenhouse gas emissions and myriad other public health problems.

“The situation at the existing uncontrolled disposal site is associated with resident populations of vermin which are factors for increasing nuisances to humans and the spread of disease, and disrupting the natural ecosystem,” the report said. “The adoption of high standards for the new landfill, through compaction and daily coverage, will limit the potential for the development of resident populations of vermin and pests.”

Erecting borders in the new landfills could help mitigate some health problems the current system exacerbates. Scavengers often infiltrate the currently unprotected landfills, spreading health problems associated with the piles of waste, the report said. The outdated, boundary-free landfills also contribute to soil contamination as rainwater runoff carries toxins into the earth that so many in Gaza depend on for subsistence farming.

The proposed landfills will include base lining to contain toxic materials, the report said. A drainage layer also will divert leachate — the liquid containing solid particles — through a system of underground pipes, where the liquid will be pumped into a “leachate pond.”

Advertisements

Abu Dhabi green city the start of a new Middle East energy vision

November 8, 2011 1 comment

If Abu Dhabi were a canvas, few painters would consider using “green” to paint the skyscraper-clad urban desert oasis. Sure, the rich United Arab Emirates city pumps artificial green into its oven of a climate — tree-lined boulevards, expansive golf courses and other vegetation that could never survive without plundering a tremendous amount of resources give the metropolis a more Western feel.

Maintaining this Middle Eastern fantasy ecosystem comes at a heavy environmental and social price. Environmentalists last year warned, “the country, already reliant on costly desalination plants powered by its lucrative fossil fuels, must cut consumption by its 8.2 million people or risk depleting groundwater resources in 50 years,” according to a Reuters report.

It appears Masdar City, an Abu Dhabi community, took that message seriously. Masdar aspires to be the world’s first zero-carbon community and hopes waste timber will earn it that distinction. Masdar also will use native plants in landscaping, which require one-third the amount of water compared with Abu Dhabi’s penchant for unsustainable, unnatural flora. The city intends to divert 50 percent of all waste from landfills by recycling and reusing timber and other materials in the project’s first phase.

Sustainability practices are the first step in attracting research and business opportunities in other energy fields, especially for a region like the Gulf Coast. With European energy markets already more mature and those economies lacking the capital to initiate expensive, advanced projects, energy firms are looking toward emerging economies in the Middle East, Latin America and Asia Pacific for investment.

Scotland struck a deal with Masdar City on Monday to support  university research and other initiatives. That deal is potentially worth billions of dollars, Scottish First Minister Alex Salmond said:

“I firmly believe this agreement will yield great results for Abu Dhabi, great results for Scotland, and I do believe it will lead to significant advances that will benefit this entire planet. That’s the importance of what’s been talked about.”

As I’ve said in this space many times before, Middle Eastern nations must diversify their energy economies. That will that help avoid dependence on state-owned oil c0mpanies that prone to corruption. It also will provide a place for investment dollars, as energy firms are simply waiting for the next market to pop up so they can do something with all their money. In turn, that will spur research institutions — possibly leading to patents and valuable innovation — in Middle Eastern nations that desperately need to create skilled jobs for its educated, underemployed and young citizens.

The Middle East, with its well-documented dependence on fossil fuel production as a main economic driver, is an embryonic energy market. Energy pioneers there realize the benefits of technologies like PV solar, but too few people in the region have enough understanding of the technology for any sort of renewable energy movement momentum. However, investors will be more than ready when that momentum builds.

The Masdar City project is a good start, as it will get people in the region thinking about renewable energy and sustainability. Already, Masdar Institute, a graduate-level university focusing on renewable energy and sustainability, hosted a meeting with 12 UAE universities about joining the European Union-Gulf Cooperation Council (EU-GCC) Clean Energy Network. That organization strives to “build a functional partnership and extensive new networks relevant to renewable energy sources, energy demand side management and energy efficiency, clean natural gas & related clean technologies, electricity interconnections and market integration; as well as carbon capture and storage.”

The Middle East needs a new energy picture. It’s time to paint the region green.

PA faces future with fewer donations

The Palestinian Authority has long been a political football in the Arab world, and that has never been more apparent than during the Arab Spring. Mahmoud Abbas’ request that wealthier Palestinians donate food from expensive iftar dinners — the meal following the daily Ramadan fast — to the poor exemplifies the drop in funding the PA has received from its Arab friends.

The last paragraph from this short Al Bawaba story is the most telling:

For months, Palestinian Prime Minister Salam Fayyad has warned of financial woes due to a chronic shortfall in financial support pledged by donors, especially Arab countries.

Arab leaders have long used Palestinians as a symbol of Western oppression. However, most of those autocratic Arab leaders held discriminatory views of Palestinians, relegating them to second-class citizens. Only Jordan accepts Palestinians into its borders, where they are treated more as a nuisance than an accepted portion of the population.

But the Arab Spring has made it clear that while the leaders viewed the Palestinian symbol as important, the Arab street has not. The Arab Spring was never about and never will be about Palestinians. Arab oppression occurred at home at the hands of their own government, not the West. That means when and if democratically-elected governments come into power, the Arab street will hold those politicians accountable for domestic problems. Those leaders will not be able to deflect problems on the West if they want to win re-election — the Arab street is no longer uninformed or naive. Communication technology has opened them up to how the Western world lives, and those societies are not built on oppression like the Arab world’s autocrats claim.

All this could reduce financial support for the PA. Arab politicians will realize their citizens care more about the domestic situation than some existential Western campaign of oppression in the Middle East. The fact few Arab protests have invoked the Palestinian cause in this Arab Spring shows how little that issue matters. Arab citizens will likely frown upon sizable donations to the PA if such donations lead to sacrificing domestic issues.

That means the onus is on the PA to develop its own economies. The West Bank has done an admirable job. Gaza, on the other hand, has not been as fortunate. It will be interesting to see what happens if the Rafah crossing at Egypt has any effect — and if the Muslim Brotherhood, which supports the PA, ramps up Egypt’s influence in the PA.

The West Bank has experienced significant economic growth during the past several years. Ramallah’s population doubled between 2000 and 2010, with Israel saying much of that growth came from removing various checkpoints. At the same time, checkpoints and security measures in the Gaza Strip have prevented the free flow of goods and capital needed for economic development. The West Bank, therefore, has grown at a much faster pace while Gaza has stagnated.

Arab countries comprise 20 percent of PA donations. The European Union, which is dealing with a significant monetary and debt crisis, amount to more than half of donations to the PA. Relying on this aid is unsustainable and unlikely to continue at its pre-recession rates.

The West Bank is doing relatively well, given its circumstances. Gaza, however, relies on direct donations because its economy has been stunted by heavy-handed Israeli security. Whether justified or not, there is no doubt Israel’s security apparatus damages Gaza’s economy.  I would argue economic development and opportunity would reduce terrorism’s draw and therefore mitigate Hamas’ role in Gaza, but I’m not going to waste my time, either. Things like the 2005 unilateral withdrawal from Gaza that eventually led to increased terrorist attacks in Israel have given credence to hardliners’ views. But autonomy or lack of foreign military presence does not end terrorism. Only a better standard of living can reduce terrorism. That takes time.

Cutting US foreign assistance bad for economy, Arab democracy

August 2, 2011 1 comment

Everyone knows US foreign assistance is slated for spending cuts, but recent aid authorization bills show the major differences already forming between the House and Senate. Never has there been a better opportunity and greater need for democracy promotion and US aid than the Arab Spring. But if the House gets its way, that will mean a sharply decreased US role abroad — and, as I will argue, to the detriment of the US economy.

First, let’s start with the facts. The foreign assistance fund — which includes food aid, supporting stable democratic institutions and the like — is not in any way related to the defense budget. Politicians usually lump the two together, whether intentionally or not, because our military missions in Iraq and Afghanistan have undertaken the ostensible role of democracy promotion. But when you look at the numbers, foreign assistance accounts for a mere 1 percent of the US budget. That still hasn’t stopped people like Rep. Paul Ryan, R-Wisc., from suggesting cuts of 44 percent by 2016. By comparison defense budget — cuts to which the House has tried to avoid — is the largest spending item in the US budget, comprising 24 percent of total spending this fiscal year.

Many people believe the US should turn inward — some argue the nation cannot project itself abroad when it cannot take care of its economic issues at home. I don’t buy that argument. US-based nongovernmental organizations will continue to do a lot of the heavy lifting overseas when it comes to international aid, but they will need government grants to keep major operations going. Denying those funds could lead to job loss, so keeping foreign assistance at current funding levels will keep Americans at work.

Also, it is in US economic interests to promote healthy governments and citizens because it will lead to economic rewards in the future. Corrupt, undemocratic governments will generally operate at the expense of their own people largely by keeping growing wealth for the government elite. That means people have less money to spend on more expensive American goods, which in turn dampens US overseas profits.

Curbing corruption will also ensure future US investment is not wasted. Billions of dollars of US investment — both from the federal government and private citizens or corporations — get lost among red tape or swindling politicians in corrupt foreign nations. Some of those nations — such as Afghanistan, Mongolia and India — sit on treasures of natural resources the US lacks, so US business interests are more than happy to invest. Cleaning up those states would produce a greater return on that investment.

In terms of the hopeful new Arab democracies, US foreign assistance can help build trust between those governing in Arab nations and the US officials with whom they will be communicating. It’s no secret that Egyptians oppose US meddling, a fear the military there is exploiting. But it’s not the Arab street the US must win over — it’s the new, democratically-elected leaders with whom the US must curry favor. The US already is training potential political leaders in Libya, Syria and Egypt — certainly a good start. The US wants to be the nation those new leaders look toward for guidance, but cutting foreign assistance will imperil the US ability to help guide new Arab democracies through the troubles they will encounter during nascent stages. In turn, that will dampen the ability to do everything from strike bilateral trade agreements to establishing and supporting sound human rights protections.

On top of the general budget malaise, a Foreign Relations Authorization bill currently going through the motions on Capitol Hill makes it more difficult for the US to use international aid in corrupt nations:

The corruption indicator has a range of uncertainly (especially around the median) and can have time lags of up to two years.  Using the control of corruption indicator as a hard hurdle for all U.S. economic and development assistance without addressing the inherent problems in the indicator could prove highly challenging.

That bill, pushed by the House (there also is a less restrictive Senate version) is not likely to pass in the Senate. But the writing is on the wall for US foreign assistance. If this debt ceiling fiasco proved anything, it’s that the House and Senate are beholden to very different interests and views. The House will champion spending cuts abroad because, rhetorically, it sounds good. The House will stomach defense cuts, but it will not digest those cuts easily. Still, it’s the assault on foreign assistance that should induce gagging.

 

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.

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.

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.

%d bloggers like this: