Archive

Posts Tagged ‘trade’

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.

Advertisements

Arab Spring is not the same as post-USSR

Washington Post columnist Anne Applebaum, who spent years covering the post-USSR transition to democracy, wrote last week that Arab Spring nations need to rush to the polls in order to seize the democratic moment. She compared her experiences in post-USSR nations to what is occurring in the Arab world. But her basis for comparison is flawed. As I argue below, Arab Spring elections should delay until fledgling political parties form because the democratic conditions regarding the Arab Spring are not similar to post-USSR Central and Eastern European nations.

First, the USSR represented a top-down style of governance that affected a dozens of territories that would later become free and independent nations. That impacted local political organizational structure in the sense that Kazakhstan, Ukraine, etc. did not have local governing bodies with any tangible effect on the economy, welfare, etc. That is simply not the case with Arab Spring nations, which already have developed strong networks of political organization that would not have been possible in the USSR.

Second, the USSR was a centralized economy. The new nations borne out of the USSR’s downfall opened their economies partially because they wanted to become part of an increasingly integrated world, but they were not prepared for the shocks of misplaced resources and productive inefficiency when they opened their borders. The USSR, by being such a large region and keeping commerce within its borders, could subsidize and artificially sustain failing industries. The new nations quickly discovered most of their technology was so old and the cost of production so high that they were not economically viable in the open market.

Arab Spring nations’ products have operated in the free market for years, although much of these nations’ revenues come from oil. Still, even having that resource is something post-USSR nations did not have, and therefore it is up to Arab citizens to democratically elect the representatives they feel will best handle those oil revenues — whether that means setting up a more comprehensive welfare system, using it to create business tax credits or other initiatives. Most Arab Spring nations have at least some semblance of free markets and politicians therefore must make decisions whether to keep those markets open, open them further or close them. All of these are economically philosophical questions that require debate and dialogue between established parties, and it’s a dialogue that did not exist in the nascent post-USSR days.

Third, while Arab nations’ press freedoms are certainly limited by U.S. standards, they are by far and away more developed than the former USSR. Noting this, there is a greater window for press debate of party positions and philosophy prior to voting in democratic elections in Arab Spring nations than there were in post-USSR nations. Arab Spring nations have seized the benefits of social media, and it would be a shame if those nations stopped short of allowing the press to analyze and discuss party platforms prior to these democratic elections.

Fourth, and final for now, post-USSR nations had no existing foreign policy legacy once that nation dissolved whereas Arab nations are entangled in a variety of agreements with other Arab nations, the West (usually over oil and Israel) and emerging economies such as India and China (also for oil). Foreign policy will be an enormously important issue for Arab voters, where doctrines and agreements could be jeopardized, reversed or enhanced based on whichever party wins the majority. This has serious implications for Israel and the shifting geopolitical power structure concerning relations with China and India relative to a somewhat declining U.S.

%d bloggers like this: