Posts Tagged North Africa
An entire generation of Egyptians grew up under strongman Hosni Mubarak, and few could ever see an alternative to his rule, often quietly joking he was the ‘pharaoh for life.’ Journalist Randa Fouad says she was among the skeptics when protestors first gathered at Tahrir Square.
But the swift end to Mubarak’s military regime, she says, emboldened her countrymen to rethink Egypt’s future. Despite the country’s ongoing political and social turmoil, Fouad is optimistic, telling Arabic Knowledge@Wharton that whatever develops, “Egypt belongs to the Egyptians now. It does not belong to any regime.”
Read the full interview here: http://t.co/kusukHKz
Even before the fall of Tunisian President Zine el-Abidine Ben Ali, Mondher Ben Ayed, president and CEO of the Tunis-based technology firm TMI, left the United States to return to his native country.
He did not see the risk in such a move. Instead he joined the fledgling TMI, which then had six workers and US$500,000 in turnover. Ben Ayed gradually acquired and expanded TMI to its current 70 employees and US$20 million turnover. In addition, he also created two other successful engineering companies.
Now that the revolution has brought change to Tunisia and elsewhere in the region, Ben Ayed is allowing himself to be hopeful for more equitable growth and better governance. More importantly, he says, the Arab Spring will spark regional innovation.
“These revolutions will unleash the potential of all the young women and men in this region, and they will show their capacity to produce and innovate, and not just rely on natural resources,” he says.
Read the full story here: http://bit.ly/yRwo0t
The Arab Spring has shown regional leaders the dangers of ignoring unemployment and poverty – since the 1990s the unemployment rate in the Arab world has been among the highest in the world, with an overall rate of 10.3% and a staggering 23.7% for those under age 25, according to the International Labour Organization.
One of the surest, quickest ways to provide relief, according to a new paper done by students with the Lauder Institute of Management & International Studies at Wharton, is through regional governments organizing and reforming vocational education training (VET) which would prepare trainees for mid-level jobs based on manual or practical activities, such as carpentry or hospitality.
There are stigmas that need to be overcome — VET is traditionally seen as last-chance education for underperforming students — but if implemented effectively, the students argue VET could become a key component for solving the prevailing quandary of human capital development in the Middle East.
Read the full article here: http://bit.ly/wgLaDI
The sudden, bloody end to Colonel Muammar Qaddafi’s 42-year rule of Libya has observers concerned about the risk of a power struggle in the North African country. But for the moment, the world’s focus is on Libya’s oil economy.
Libya has primarily relied on its oil resources — according to 2010 figures from the CIA world factbook, before its civil war, the country’s petroleum industry produced 1.789 barrels per day, and its oil exports accounted for 25% of its GDP.
That production fell to less than 400,000 barrels a day during the conflict. The most optimistic suggest full production capacity could be restored by early next year. The country has roughly 46 billion barrels of oil reserves — ninth largest in the world — and nearly 55 trillion cubic feet of natural gas reserves.
“Libya is fortunate in having a small population of a bit over 6 million and valuable oil resources; it has the potential to derive a large income from oil after an initial period of reconstructing the infrastructure,” says Ann E. Mayer, Associate Professor of Legal Studies and Business Ethics at Wharton. “But, the oil sector cannot offer enough jobs to satisfy all Libyans demanding employment.”
Mayer notes under Qaddafi, “the unemployment rate among Libyan citizens was high, in part because of the distaste that Libyans felt for accepting work in low status jobs that were seen to be demeaning, which were left for migrants to handle.” Most migrant laborers fled the country when civil war broke out.
The International Energy Agency (IEA) advised caution on expectations of renewed oil production in Libya. “If [Qaddafi’s death] leads to greater political clarity within Libya, and to a more stable operating and investment environment, then it may result in a more rapid restoration of the Libyan oil sector,” stated David Fyfe, head of the IEA’s oil industry and markets division.
“However, many logistical, operational, and security-related challenges remain in that country, so we are not changing our underlying assumptions on Libyan production recovery for now. We still believe it could take many months for production to regain pre-crisis levels.”
The thorny question of who takes control of Libya’s oil exports was first raised while fighting still raged in the country. Speaking with Reuters, the head of the country’s National Oil Company speculated that he would not remain in a potential reshuffle. Divisions between the Western and Eastern parts of the country also loom large in future control of the country’s oil resources.
Most analysts suggest that little stability will exist while a transitional government in forms, hindering any plans to get Libya’s oil flowing again. “The death of Qaddafi changes very little in the underlying dynamics of the oil picture on the ground,” said Barclays Capital analysts.
Juan Cole, a Middle East expert at the University of Michigan, told Reuters that strife in Libya between its tribes could be avoided through egalitarian economic policy. “A more or less democratic government that spreads around [Libya’s] oil largesse more equitably could easily overcome this divide, which is contingent and not structural,” Cole said.
Mayer says Libyan economic planners will also have to figure out how to address unemployment concerns, “which will include deciding whether or not to revive the former system of extensive reliance on a vast underclass of migrant workers, a system that is typical in oil-rich countries but that naturally creates social tensions and imbalances.
“Do they want to invite back the same diverse population of migrants? Do they prefer to try to integrate their economy with the economies of Egypt and Tunisia by favoring their nationals? Do they want to try to alter Libyans’ attitudes so that they will accept to work in jobs that were previously left for migrants? A lot will hinge on the answers to these questions.”
Dubai-based Abraaj Capital is one of the Middle East’s largest private equity firms, with around US$6 billion of assets under management. A principal at Abraaj, Purshotam Ramchandani has been helping the firm launch new funds and set up offices in Saudi Arabia. He recently spoke to Arabic Knowledge@Wharton about what happened to the Middle East’s private equity market during the financial crisis, what strategies Abraaj Capital is taking as a result and the market outlook for Middle Eastern private equity in 2011.
Read the article: http://bit.ly/hJnHab
The total value of funds raised by private equity players in the Middle East and North Africa in 2009 plummeted 80% to US$1.1 billion from US$5.4 billion the previous year. The number of deals struck also fell over that period, to 19, and were worth US$561 million, compared with 55 deals worth US$2.7 billion in 2008. Now, there’s little agreement about where the region’s private equity market goes from here.
Read the article: http://bit.ly/hlIXT3