Showing posts with label essay. Show all posts
Showing posts with label essay. Show all posts

Friday 1 April 2016

CROSSROADS – AGENDA 2063, SDGs 2030 AND THE PLACE OF A NEW TAX SYSTEM


The African Development Week 2016 as celebrated by the African Development Bank is being highlighted this week, with the start of the 9th Joint Annual Meetings of the African Union Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration and the ECA Conference of African Ministers of Finance, Planning and Economic Development; best captioned as the “Conference of Ministers”.

This year, the theme is “Towards an Integrated and Coherent Approach to Implementation, Monitoring and Evaluation of Agenda 2063 and the 2030 SDGs.” The event will entertain a pose of thirty side meetings and fora. At the heart of the meetings and discussions, will be the topics of infrastructural development, aid funding, conflict, agriculture, climate change, customs and excise, trade and commerce, health and education as well as migration, unemployment, youth bulge, tax, gender and inequality, mining, security and terrorism, etc.

While it is common to have a large delegation of development sector organizations at this now, annual event – cajoling, lobbying and convincing Ministers of Finance & Budget as well as other high level members of governments to commit more to development – last year’s edition was characterized with the inability of governments to reach a consensus on increased funding both internally and externally for aid work and development programmes across the continent amidst a global recession mode triggered by falling oil prices. While Civil Society Organizations and International Aid Organizations look forward to a more positive outcome this year, perhaps there is a need for a collective call for governments to do even better with what is currently obtainable.

Countries in the global North which might have made spending cuts in their budgets for development aid, do so in light of concerns to cater more for the welfare of their citizenry. But for too long, aid money have lined the pockets of public office holders, and even key staff of development organizations working with the poor, marginalized and disadvantaged, with less than 20% of total aid money eventually reaching those who need it – whether through the betterment of livelihoods, or for the provision of relevant amenities and infrastructures which better their quality of life – as a bulk of the funds go in to stupendous travels, lavish meetings, office furniture, etc.

For developing countries – most of which surprisingly have rich deposits of natural resources – alternative sources for funding development projects are hard to come by in the face of development aid cuts, and recession is making it harder to attract investors with foreign direct investment. However, for an entire continent with lax taxation systems across borders, now seem the right time to look at those archaic tax policies and laws, which have for centuries allowed big corporations and multinationals to avoid, evade and dodge their fair share of taxes. Transfer pricing, trade misinvoicing, Double Irish, Dutch Sandwich syndrome and the repatriation of profits before tax and holidays are a few of many means in a highly secretive sector, where the gulf of inequality is influenced.

For example, Nigeria loses $2.9bn annually through tax holidays and waivers granted to these multinationals and big corporations doing business in Nigeria, a country where it is estimated that 6,000MW of power is self-generated via diesel and petrol powered generators, as a decrepit national grid produces a fluctuating 3,200 – 4,500 MW but can only transmit about 4,000MW at a time. And in its true sense, $2.9bn or N585bn (approx.. N201 ~ $1) can build 3,000km of new roads and rehabilitate them at least once. For the giant African crude oil exporter, N175bn (just 30% of $2.9bn or N585bn) will repair all existing refineries to bring them to a maximum capacity of 28m litres of petrol per day, barring other petro-chemical products and the teeming jobs which could kick-start the economy upwards and lift many households above the poverty line.

We live in a food and water insecure world, and while 63.2 million people are said to be without access to safe water options and millions more defecating in the open, N585bn can build 207,000 water pumps that can provide portable water to 60+ million people and improve the national index of people with access to water, sanitation and hygiene options.

Unfortunately, corruption amongst government officials especially agencies which should enforce stringent taxation policies on multinationals and companies, continue to allow for illicit financial flows of funds out of Africa, robbing the continent’s teeming poor and unemployed of state welfare and the provision of human security. This price which corporate entities profiteering in Africa must pay, is now transferred as a burden on citizens through increased tax rates.

Already, the commercial state of Lagos in Nigeria, is considering legislation to begin to tax artisans, domestic staff and street hawkers – a large informal sector, characterized by stigma from lack of opportunities in the formal sector – about 1% of their income. While this strategy is viewed as an innovative idea to increased internally generated revenue, the question remains “what justification there is, for the government to tax the informal sector”. Most domestic staff already pay taxes at toll gates, while commuting to work for the elite and rich living in plush districts of the city of Lagos. Artisans continue to spend at least 33% of operational cost on power (a vital need for production) as erratic and non-existent supply means that they have to settle for alternatives. Street hawkers pay daily rates which allows them to hawk wares, products and services as they can’t afford to pay for stalls at the various markets, and in some instances, there are no provisions.

Across the country, the informal sector doesn’t enjoy health insurance, there is no welfare in place, and there is no retirement provision as well. These injustices coupled with the existing burden of multiple taxation across the three tiers of government continue to exacerbate the inequality gap between the rich and poor. Duty bearers need to do much more for right holders, and the civil society coalition is saddled with this task of bridging the communication divide. As much as citizen-journalism and factivism are encouraged, there is that need to hold governments at all tiers accountable for the taxes that help run government; and for them to make it count for development. Gender responsive public services must begin to cater for the needs of women, as well as other people with special needs.

Above all, governments must do more to ensure that in the global South and global North, concerted efforts are put in to reviewing the global tax system. The opacity of deals and operations must be replaced by a reporting system which is open and transparent; and deals or treaties which continue to encourage the flight of profits to havens at the detriment of citizenry which need it for development must be discouraged. Multinationals and big corporations must pay their fair tax price and not transfer the burden to citizens. We must ensure tax justice for everyone, anywhere. The need for a fairer negotiating table had never been more urgent.

Wednesday 25 November 2015

I'M NOT CHEATING ON YOU

She told me about Chimamanda's book, Americanah that she was reading. The part where the lad traveled to school and left his girl in the care of his friend. We both laughed over skype, knowing fully well what transpired next, even though I had not read the book. In truth, she was talking to me, but I was too dumb to realize the logic. For she was already long gone in to the arms of another man. It was in March. It still froze. My judgment was beclouded with love - that ghost - to realize that the cold would send her into the bed of another. Lucky chap. Maybe a lonely Briton. Perhaps a lout.
Things were still rosy, even though I had raised eyebrows at the Facebook chat she had screengrabed and shared with me. The 'unknown' admirer. And then there was the birthday gift. Little did I know that the gifts were given in December, barely a few months after she had left for Wales. These two were tell-tale signs that Deola had left me. But I was still being stupid. We talked alot about the thickness of her winter jacket, the shop where she could get groceries from Nigeria, her coursework and the laptop I was saving up to get her. I hated for her to go to her friend's place first before we could skype. The privacy was non-existent.
I, Dimka Bernard was still love struck, and tied to the 'faithfulness' stake while she rode day and night by his side to school, then to the opera, the beach and even his bed. We argued over the email I had received from an anonymous person about spotting her and the Briton kissing on Bangor's streets. She chided me that it was a moment for my trust for her to be tested, "I am not cheating on you. People who know you online, see me interact with friends and course mates, and they freak out". I agreed. Though I was going through a rough patch, I was focused on her. She had just one year to spend in Wales and hopefully I will grow up to be that man who was right for her. I had swore, she'll be my last bus stop, so I invested every emotional resource I could muster. I was such a fool for love. A big one indeed.
I have now ended up in a pool of my own tears, with rage, anger, regrets, hate and grief as mates. For Deola riled me up to quarrel with her over my‪#‎WomanCrushWednesday‬ post on instagram of Bolanle Olukanni. Though Bolanle and I were good friends on snapchat, it was only on twitter that we grew our friendship. She was engaged to the father of her two year old son. I was secretly - which Deola hated with everything - in a relationship. And while in angst, she said she was walking away from what we shared.
Such silly jokes I thought. "How can you even break up with me on whatsapp? So I set about lending a car to drive to MMIA2 to pick her up in August when she was returning with her Masters. But she walked out of the "Arrivals" door, arm locked with a lad who had a moustache and an air about him that reeked of moral decline. She saw me and paused in shock. I gathered my now wobbly legs and dashed out into the milling crowd, half lost, half in rage as my chest to the left began to ache

Saturday 18 May 2013

SOCIAL WANTS AND THE UNINTENDED CONSEQUENCES



“As every individual, therefore, endeavour as much as he can both to employ his capital in the support of domestic industry, and so to direct that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of other society as great as he can. He generally, indeed, neither intends to promote the public interest, nor know how much he is promoting it. By preferring the support of domestic to that of foreign industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it” (see footnote 1).

On the 10th of November 2006, mid-term elections in America confirmed a majority victory for the Democratic Party, a result that gave them power again after twelve years, and left a limp Republican President. If for anything that caused this shift, most important on the minds of Americans was the military presence of the U.S. in Iraq.  Donald Rumsfield, the Defense Secretary lost his job, and President Bush was left in office without a voice as unexpected effects of the Republican Party’s policies began to unfold.

In a bid to satisfy “public interest”, the Republicans I guess never did make anything of Alexis de Tocqueville when in 1831 he said, “no sooner do you set foot upon American ground than you are stunned by a kind of tumult; a confused clamor is heard on every side and a thousand simultaneous voices demand the satisfaction of their social wants”. Certainly, politicians and policy makers propose new legislations designed to make society a better place and make us better people. But, all policies have consequences, which they are hoped to achieve. However, in many cases, legislation brings other consequences that were neither intended nor desired by those who supported the law. And sometimes, laws don’t even achieve the goals they were meant to bring about.

For example, everyday, global consumers receive offers that just sound too good to be true. In the past, these offers came through the mail, or by telephone. Now, the con artists and swindler have found a new avenue to pitch their frauds – the internet. The on-line scams know no national borders or boundaries; they respect no investigative jurisdictions. But, as with all scammers, they have one objective – to separate you from your money! In several cases, even your life. Legislators are crying “there oughta be a law!” Laws to protect public interest from these thieves and fraudsters. But, how do these enacted laws affect our behaviour in both predictable and unexpected ways in a society where order is existent in human affairs.

In what many are calling America’s (or rather the world’s) fastest growing type of robbery, crooks are working without the usual tools of the trade. Forget sawn-off shot guns and ski masks: your name and Pension Number (see footnote 2) will do the trick, or that blank, pre-approved credit application you tossed out with the coffee grounds. Even talking on your phone or surfing the internet can allow someone you may never meet to rob you of the one thing you may have though safe from attack: your identity.

Identity theft is a criminal offense. It occurs when a person knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit or to aid or abet any unlawful activity that constitutes violation of federal law or that constitutes a felony under any applicable state or law. Identify fraud is digging into a consumer's pockets – around $221 billion by the end of 200, tripling to an incredible $2 trillion by the end of 2005 (see footnote 3). The British economy alone, suffers a loss of £1.3 billion per year. The knock-on effects are not limited to financial loss – it can take victims up to 300 hours of effort to regain their credibility with banks and credit reference agencies. Terrorist attacks could also be on the offing.

The number of identity theft victims and their total losses are probably much higher than reported. It’s hard to pin down, because law enforcement agencies may classify identity theft differently – it can involve credit card fraud, internet fraud or mail fraud, among other crimes. The perpetrator may use a variety of tactics to obtain your personal information and drain your finances: posing as a loan officer and ordering you credit report (which lists lines of credit); “shoulder surfing” at the ATM or phone booth to get your PIN code, “dumpster diving” in trash bins behind businesses or apartments for unshredded credit applications, cancelled checks, bank records or any documents containing personal information; or, stealing mail right out of your own mailbox.

An interesting point about theft is that it is a crime in which you decide whether to participate. Hanging up the phone or not responding to shady mailings or e-mails makes it difficult for the scammer to commit theft. But con artists are very persuasive using all types of excuses, explanations, and offers to lead you – and your money – away from common sense.

If producing, smuggling and peddling drugs were the crime of the 20th century, identity theft is the crime of the 21st century. While fighting the trade is now high on the agenda of most governments, identity theft is still to get the importance it deserves. In many countries around the world, it is yet to become even a cognizable offense. In some, the laws that exist to fight identity theft are hardly adequate. Even in the U.S., identity theft remains low on the agenda of lawmakers although the FBI has identified it as number 3 among its top 10 priorities. But, what is really galling is that while the internet is today teeming with criminals of various sizes, shapes and colors only a mere 5% of these co artists are caught and prosecuted. While the U.S. remains the country with the highest incidence of identity theft, - quite likely given that internet usage is highest in this country – Europe is not left behind. Despite such low legislative action, the laws in place and those in the process of gaining ground are continuing to push for prevention, by enhancing the penalties for any individual who steal an identity and uses that false identity to commit any one of a number of serious crimes. Furthermore, laws such as the Data Accountability and Trust Act (DATA) move for stricter security measures to protect consumer information; and the Fair and Accurate Credit Transactions Act of 2003 (FACT) make room for consumes to order free credit report (consumer pull). However, the Identity Theft Prevention Act of 2001 and Identity Theft Prevention Act of 2002, does not only help victims of identity theft correct their records but increase penalties by as much as five years for identity theft for the purpose of committing a terrorist act.

This became clearer when Nigerian born Jide Komolafe, 31, became one of the first people in the U.S. to be convicted under the Identity Theft Prevention Enhancement Act of 2004, which created the new offense of aggravated identity theft and added to years to the normal sentence. Justice caught up with him when he was sentenced February 2, 2006 to five and half years of prison (see footnote 4).

On the contrary, the “imperious immediacy of interest” (see footnote 5) attached to thee laws result to profiling, unexpected protests against these legislations, strain to hi-tech security and further injury to, and complication of victims’ and would-be victims’ plight. While terrorists like Ahmed Ressam are caught because like him, they would be ‘hinky’ (see footnote 6), others like the alleged “American Taliban” John Walker Lindh and British “shoe bomber” Richard Reid would have committed their intended crime before being caught. This is because profiling fails. To profile, is to generalize. It is taking the characteristics of a population and applying them to an individual. Profiling works better if the characteristics profiled are accurate. But ethics aside, profiling fails because most real fraudsters are overlooked. Active failures will be much more common than passive failures. Timothy McVeigh eluded arrest while law enforcement searched for Arab suspects, and DC snipers John Muhammad and Lee Boyd Malvo continued on a killing spree while officials looked for “a white man in a white van.” The greater majority of people who fit the profiles will be innocent. Brazilian electrician Jean Charles de Menezes, killed by the British police on July 22, 2005 was no more armed than the police officers themselves (see footnote 7). At the same time, some real fraudsters are going to deliberately try to sneak past the profile.

Although “consumer pull” from credit bureaux has no effect on credit, and consumers entitled to “freezing” their credits and fraud “alerts”, these measures deal with identify theft only after it has happened and not before – a case of bolting the stable door after the horse has been stolen. Freezers can interfere with the credit-issuing process, can be technically difficult to implement and can carry a cost that may be passed on to consumers. And although these credit monitoring options are available at no-out-of-pocket expenses (some customers could still see it. As another way for the bureaux to enrich themselves more), it can’t prevent identify theft but can reduce only the impact.

Strains in hi-tech used for the latest encryption, consumers screening and data security technologies, is more likely certain than expected. This is because however the hi-tech security measure, humans will still beat computers at ‘hinkiness-detection’ for many decades to come. Even institutionalized profiling is bound to fail – these fraudsters would have done their homework in identity faking.

Taxpayers also face a risk of identity theft, in legislations that allow tax preparers sell personal information of taxpayers with permission (see footnote 8) making room for tax preparers to produce a separate piece of paper of webpage requesting permission to describe personal information, is only going to make room for identity theft under the nose of identify owners and credit bureaux. Protesters are also going to stand on the fact that some legislations would fail to correct possible privacy and technical loop holes in attempts to save would-be victims from theft.

But however the consequences of legislations, the law is still one key institution that makes the co-ordination of a (free) society possible. It is a code that has evolved not at the hands of politicians but in the decision of judges. According to Tocqueville, “the spirit of the law which is produced in the schools and courts of justice gradually penetrates beyond their walls into the bosom of society, where it descends to the lowest classes, so that at least the whole people contract the habits and tastes of the judicial magistrate”. The law is respected because it is based on rules that have been tested in real life, and because the values and the spirit of the law are closely connected to the moral values of civilization.

The moral framework for human society is not set in stone neither is it in the self-interest of legislators, which have become a “basic value” for the enactment of these laws, but rather is constantly changing as new rules are discovered that allow the social order to function better. Life can be hard because it forces individuals to adjust to the needs of others. The society works because it coordinates conflicting desires by creating incentives for people to satisfy their own wants by satisfying those of others. And the hum of commerce eases the path of social cooperation, in part because it offers man opportunities that are simply not available when acting alone. Incentives allow us to cooperate with others even though our views on political issues or our religions beliefs may differ.

“It is not from the benevolence of the butcher, or the baker, that we expect our dinner, but from regard to their own self-interest”.

FOOTNOTES
1.                   A quote from notable economist Adam Smith in his book, The Wealth of Nations. In an article entitled “Unintended Consequences”, Rob Norton makes reference, to Smith’s understanding of unintended consequences in economic reality that people do act in their own self-interest and not public interest; while he did not argue that self-interest is always good, he has beneficial effects on the community.

2.                   Known as Social Security Number in the U.S. , Sweden and some countries; National Insurance in the U.K. or just Pension Number in some other countries, a pension is a steady income given to a person, made in the form of a guaranteed annuity to a retired or disabled employee. The program name could differ and vary but, it still focuses on the same aim.

3.                   According to the Analyst house, Aberdeen Group, this is only an estimate of loss, in global terms. This shows that possible financial loss greater than reported, is being suffered by victims to identity thieves.

4.                   Komolafe opened accounts at both Citizens and Charter One banks in the name of other people, made fake deposits and then withdrew money with a debit card. He was also convicted of bank fraud and identity theft. When he was arrested on 2nd August, 2004, Komolafe had his possession, identifying information including social security numbers of 68 people.

5.                   According to Rob Norton in his “Unintended Consequences”, Robert K. Merton referred to instances in which an individual wants the intended consequence of an action so much that he purposefully chooses of ignore any unintended effects. That type of willful ignorance is very different from true ignorance.

6.                   On 14th December, 1999, Ahmed Ressam tried to enter the U.S. by ferryboat from Victoria Island, British Columbia. In the trunk of his car, he had a suitcase bombs. His plans were to drive, to Los Angeles International Airport, put his suitcase on a luggage cart in the terminal, set the timer, and then leave. The plan would have worked had someone not been vigilant. Ressam had to clear customs before boarding the ferry. He had take ID, in the name of Benni Antoine Norris, and the computer cleared him based on this ID. He was wanted by the Canadian Police, on the other side of the Strait of Juan de Fuca, at Port Angeles, Washington. Ressam was approached by U.S. Customs agent Diana Dean, who asked some, routine questions and then decided that he looked suspicious. He was fidgeting, sweaty and jittery. He avoided eye contact. In Dean’s own words, he was acting ‘hinky’. More questioning ensued then there was no one else crossing the border, so two other agents got involved and more hinky behavior. Ressam’s car was eventually searched, and he was finally discovered and arrested.

7.                   Jean Charles de Menezes, 27, was a Brazilian electrician living in Tulse Hill, in South London. Menezes was shot and killed a Stockwell Tube Station on the London Underground by unnamed Metropolitan Police officers. Police later issued an apology, saying that they had mistaken him for a suspect in the previous day’s failed bombings and explosions, and was unconnected with the attempted bombings.



8.                   In December 2005, proposed changes on tax laws were announced in the U.S. The plan proposes to allow tax preparers to sell personal information of taxpayers with permission. While lawyers, consumer advocacy groups, and a few members of congress are raising a live and cry about the proposal, arguing that it will amount to identify theft. Proponents of the plan including the Internal Revenue Service (IRS) are defending it saying that it is part of larger process aimed at updating tax rules for the internet and electronic files.

Monday 23 April 2012

Up, Close and Personal – Leveraging On Young Entrepreneurs.


No one is born a good citizen; no nation is born a democracy. Rather, both are processes that continue to evolve over a lifetime. Young people must be included from birth. A society that cuts itself off from its youth severs its lifeline; it is condemned to bleed to death[1]. Young people should never be seen as a burden on any society, but as its most precious asset.”[2]
Abraham is still smarting from his bruises. Last night, he got waylaid in some alley by a gang of urchins, and refused to give up his wallet. The much they punched and kicked, the more he clung to his wallet that contained only enough to bring him to school today. Until the police showed up, he had continued only, to yell for help. It was his last bucks, and had to save them for school the next day. He had no option but to walk the three kilometers from the beachside to the makeshift shack he shares with his two brothers and a sister, and expect to be mobbed.
Today, he had gone to see his marketing lecturer who had agreed to censor the tourism marketing product that had taken him five months to draft, and another two, to assemble. He held the one sheet of paper containing his plan in his right hand, and looked poised as he approached the lecturer’s office. He managed to keep a straight face, as his bruises still stung. Minutes later, Abraham exits the office, looking disparaged. For the umpteenth time, he’d been told that his toils can’t get him anywhere near breaking the jinx of poverty that so looms over his family. His plan once again, is declared not good enough.
Abraham is trying to get above the poverty line in which he was born in. His eldest brother could not finish secondary education due to lack of funds, and now works with a local vehicle mechanic. Kunle his other brother had finished from the state polytechnic four years earlier through a government scholarship, but still wander the streets of Lagos, seeking for the Golden Fleece. He had once been close to landing a job, but was turned down at the last minute, for the inability of drawing up a simple cash flow plan for a startup. Abraham like Kunle, was benefitting from the ambivalence of the Local Authorities, and he had gone ahead to the state owned university.
Now wanting to break away from the clutches of poverty, he intends to start some venture on his own, control his flow of income and just be his own boss. However, he had failed again today, in setting off his aspirations in a good start. The lecturer had told him how the product has failed in basic requirements including a business plan, a financial projection, and its unique selling point. These terms seem vague and indistinct to Abraham whom like many other million youngsters in the developing world, get their bright business ideas turned into the dustbin, for lack of basic business knowledge. It is common sight in Nigeria find youngsters who have bright business ideas but can not start-off due to lack of funds, but principally due to the absence of basic entrepreneurial knowledge. These ideas most often seem to be driven by the need to escape the ever looming glare of poverty.
Unlike his peers who are doing well, living in caring and cohesive societies which provide them excellent education and an unprecedented knowledge of the world around them[3], Abraham and many others in Nigeria, are consigned to the hard facts of instability that has rocked his country for decades unending. Analogous to numerous countries in the third world, the crumble of colonialism, caused decomposed ethnic lines and City-State allegiances to bear cracks of insecurity and ill-preparedness to the glory and worship of urbanization, independence and civilization, which have resulted in weaknesses in the State-centric concept of security − regarding development, human rights, peace and good governance. Thus, whether it concerned civil wars with their dramatic consequences, natural disasters and accidents, social dissatisfaction, or yet, health crises and major pandemics, populations face life threatening dangers − paramount above others, poverty.
Ending poverty, the aspiration of the Millennium Development Goals, is the overriding developmental objective of the 21st century. Despite great progress in the past 50 years, 1.2 billion people—one-fifth of the people on Earth—live on less than US $1 a day, without access to many of the social services basic to a decent human life. Their plight requires a global response making full use of all the financial, intellectual and organizational resources that we can muster.[4] Poverty however, cannot be analyzed without taking into account the effects of the growing interconnectedness and interaction within and between countries and regions. Some have clearly benefited from the increased interdependence.
Despite great progress in some countries and regions, deep poverty remains a stubborn and intractable problem across much of the world. Substantial gains in some countries have been accompanied by deep losses in others, suffer from hunger and lack access to water, sanitation and energy. To cap it all, young people account for most persons suffering from the effects of poverty and wanton lack of opportunities. This group of people, aged between 15 and 24 total almost 1.1 billion and constitute 18 per cent of the global population. Youth and children together, including all those aged 24 years and below, account for nearly 40 per cent of the world’s population.[5] In general, therefore, the definition of youth as the period of transition from dependence to independence relates to all societies and could serve as one of the fundamental principles of the United Nations global agenda. Independence, in the sense of representing personal autonomy, is part of the Western process of individualization[6] and, as such, is an example of a culturally conditioned relationship between an individual and society.
Youth are an increasingly compelling subject for study, entering into political space in highly complex ways. To pay attention to youth is to pay close attention to the topology of the social landscape – to power and agency; public, national and domestic spaces and identities, and their articulation and disjunctures; memory, history, and sense of change; globalization and governance; gender and class. Youth as a historically constructed social category, as a relational concept, and youth as a group of actors, form an especially sharp lens through which social forces are focused. Through this lens, relations and constructions of power are refracted, recombined, and reproduced, as people make claims on each other based on age – claims that are reciprocal but asymmetrical.[7]
Young people have an ambiguous economic and cultural relationship with the globalizing world. They are relatively adaptable and therefore perhaps best able to make use of the new opportunities presented; they are the best-educated generation, particularly in areas relating to new information and communication technology (ICT); they benefit from economic growth; many travel around the globe for work, studies, exchange projects and vacations; and the telephone and Internet enable them to stay in touch with friends and relatives all over the world.[8] There are still many young people, however, especially in developing countries, who lack the economic power to benefit from the opportunities globalization offers. They have been left out of the modernization process and remain on the other side of the digital divide, but are simultaneously finding their cultural identity and local traditions threatened.
However, to succeed in today’s competitive global economy, they must be equipped with advanced skills beyond literacy; to secure employment, or some lifeline out of poverty. Young people who start new enterprises are creating jobs for themselves and reaching their personal goals. Nonetheless, lack of experience and resources mean that a high percentage of these efforts fail during the first few months of operation. Starting a business requires courage in the best of times; courage to take the risk of putting your own money into an idea; courage to take on the competition; and courage to take a leap into an unknown future. But there is much to opening a business than having the right idea and willing to take a risk.[9]
For an entrepreneur to succeed, he or she needs to have basic entrepreneurial skills, such as knowing how to communicate well, make a budget andl. The need for effective training is even more profound in countries where traditional educational systems rarely provide it even on the basic level. In such environments like the one in Nigeria, there is a need to foster an entrepreneurial culture, introducing entrepreneurial principles not only within the general population,[10] but most especially, amongst the youth who are termed “the leaders of tomorrow”. Dexterity in book keeping and accounting is necessary in drafting a business plan, making a financial projection, making a budget and the understanding of financial statements; the ability to negotiate prices and contracts; excellent external relations and brand positioning; and a skill in marketing is also important.
Conversely, as these skills are needed for entrepreneurship, there exist a few youngsters who against all odds, have tried to expand their ideas into money-making ventures that could be integrated into the private sector. But integration have not been possible, due to the lack of sufficient funds to sustain the venture in its formative years, the lack of support management expertise to advise the startup, unavailability of skilled and competent labour, and indeed, certain government policies that seem hostile to startups.
One great barrier preventing young people from setting up businesses and assuming leadership positions even as it concerns management is the systematic exclusion and marginalization of youth from decision-making and political processes at national and local levels world over, most especially in developing countries. A vivid example, is a study carried out by The Conflict, Security and Development Group (CSDG) in Nigeria which identified that, “the minimum age for becoming a lawmaker at the state level and the Lower Chamber (House of Representatives) at the national level has been raised from 21 and 25 in 1979 and 1989, to 30 years in 2005, while that of a Senator (Upper Chamber at National Law-making Chamber) has been raised from 25 to 35 years. Unsurprisingly, there is no single member of the Senate who is under 35 years of age, and the average structure of Senators (2003-2007) shows that people aged 45-55 years form the core with 44% of the 109-member Chamber, followed by those between 36 and 40 years (17.2)%. Similarly, in the National House of Representatives, of the total 360 members, only five are under 35 years of age (all male), and people aged 41 to 51 years form the core (59%), followed by those under 40 years of age – 23% (but mostly within age 35-40 years) and those aged 52 years and above (15%). The average age in the House of Representatives is 45 years. The current state of affairs reflects deterioration in youth participation over time given that in 1993, 52.4% of members were between age 30 and 40 years, and this dropped to 46% in 1999 and 23% in 2005.”[11]
The implications of the continued exclusion of youth from decision-making processes, both social and political portends ominous consequences as has been starkly displayed in countries like Cambodia, Liberia, Columbia, Angola, Nigeria, Haiti et cetera. Large groups are being excluded from the benefits of production and decision making. For example, there are very few cases in which the youth ministry and the youth budget have been administered by youth themselves. This neglect has also been translated in to a recurring cycle of unemployment, unemployability and underemployment.
To reduce the failure rate of youth enterprises and address critical issues during the start-up process, the public and private sectors need to increase their efforts to support young people by providing training, technical assistance and small credits. Government must show commitment towards catering for its youth populace through developing a national employment strategy targeting youth , and An example of the attempt at linking education and training is the Nigeria’s National Open Apprenticeship Scheme in Nigeria under the Ministry of Labor and Productivity’s National Directorate of Employment. Under the scheme vocational education and training in more than 100 occupations are provided to unemployed young people. The programme uses production facilities such as workshops and technical instructors of private industries, government institutions and, by way of a subcontracting arrangement, wayside craftspeople and tradespeople (informal sector operators). Unemployed young people and school-leavers can train for six months to three years under reputable master craftspeople. To enhance trainees’ theoretical understanding of the trade in which they are involved, theory classes are organized every Saturday to complement the practical training received. Since the scheme’s inception in 1987 nearly 600,000 unemployed young people have received training, and 400,000 of them have started their own microenterprises.[12]
Internship programmes and entry wages that are below average wages are another way to give young people a chance to work. Many employers are reluctant to employ young people without experience. Working for a period with lower wages could give young people a chance to demonstrate their competencies and acquire new skills through learning-by-doing. The introduction of apprenticeships in Kenya, Nigeria and South Africa has proven successful and could be replicated in other countries. Social entrepreneurs can also be of great use, if they refuse to hoard information and experience, but are willing to share expertise and advice to young and upcoming entrepreneurs.
Young people are growing up in a world of globalization and inequality, taking part in a development process that is simultaneously bringing people closer together and widening the divisions between them. They are in the process of establishing a sense of identity in what is essentially an insecure world, and this underlying instability may serve to magnify the tensions and lack of control they experience on a daily basis. They ought to be provided with the enabling environment where their entrepreneurial abilities can be leveraged on, towards achieving the Millennium Development Goal on poverty, and provide a stream for the growth of GDPs of nations.


[1] Kofi Annan
[2] UNDESA, “World Youth Report 2003.” (New York, 2004).
[3] UN, “World Youth Report 2003”. (New York, 2004).
[4] UNDP, “Unleashing Entrepreneurship Making Business Work for the Poor”. (New York, 2004).
[5] ILO, “Youth and Global Trends.” (Geneva, 2001).
[6] Rose, N., “Powers of Freedom: Reframing Political Thought” (Cambridge, Cambridge University Press, (1999). The process of modernization involved the breakdown of some of the more important institutions of traditional society such as the larger family, the fixed clan and agrarian village life to make way for urbanization and the beginnings of the wage-based industrial labour movement.
[7] Durham, D., “Youth and the Social Imagination in Africa: Introduction to Parts 1 & 2.” Anthropological Quarterly. Volume 73 Number 3. pp113-120. (2000).
[8] Boswell, C., and J. Crisp, “Poverty, International Migration and Asylum.” Helsinki: United Nations University/World Institute for Development Economics Research. (2004).
[9] CIPE, “The Prosperity Papers #1: Entrepreneurship.” Economic Reform Issue Paper, No. 0401. (Washington, 2004).
[10] Ibid.
[11] Ismail, O. and Alao, A., “Youths in the Interface of Development and Security.” Conflict, Security and Development. Volume 7 Number 1. pp3-25. (Routledge, 2007).
[12] Kanyenze, G., Mhone, G. and Sparreboom, T., “Strategies to Combat Youth Unemployment and Marginalization in Anglophone Africa.” Discussion Paper 14. Harare: International Labour Office, Southern Africa Multidisciplinary Advisory Team. (Harare, 2000).

Wednesday 5 March 2008

Economics and Freedom in Islamic Societies

“Men persist only with the help, of property. The only way to property is through cultivation. The only way to cultivation is through justice.”[1] “Injustice brings about the ruin of civilization.”[2]

The streets of Iran get festooned in the second week of February with revolutionary bunting. Black and green banners commemorating the martyrdom of the third shi’a imam, Huseyn, flutter from lamp-posts, even though the mournful Ashura rites of late January should have been over. The banners will hang beside national flags looking forward to February 11th, when Iranians mark the anniversary of Ruhollah Khomeini’s Islamic revolution of 1979.
The emotional outpouring that characterize religious festivals in particular, the martyrdom days of important shi’ah saints, are in part convectional, but they are also massive. Men and women weep and moan, smite their foreheads, and in rhythmical unison, beat their chests.[3] Some observers think that these expressions of emotion have social psychological importance, that they are releases of frustrated and pessimistic feelings that are continually engendered by the ethos of insecurity.
The Shi’ite abandon that have flourished most especially in the Persian state for centuries as are other sectarian practices in other parts of the Moslem world, denotes the irreparable divide of the Moslem world over the political question of the caliphate which illustrates a characteristic of Islam, that every Moslem thinks of himself as living in a theocracy, although Islam itself a nomocracy, denounces in strong terms the premises upon which theocracy now reigns in the Moslem world.
The Qur’an recognizes man as a being at once rational, volitional, acquisitive, and ethical – a man completely living in liberty, acting to provide for his existence without sacrificing his moral sensibilities.[4] Thus the Qur’an insists on the harmony of man’s spiritual (liberty) and material (economic) interests, embedded in the most important and comprehensive concept of Islam at the practical level, the shari’ah.
However, because of the diversion from strict Islamic injunctions foretold by the prophet Mohammed (SAW)[5], the gradual devolution of Islamic economic and spiritual practice away from the shari’ah may as well account for why the Moslem world declined in to intellectual darkness and economic stagnation.
Today, economies are blossoming in the UAE, Saudi Arabia and Qatar to mention a few. But the circumstances that lead to the emergence of these economies and the continued deadlock in other Islamic nations to device a means to economic boom, is readily found in their mix of freedom and economic policies.
In ancient Moslem world, freedom denotes property. Ibn Khaldoun surmises, that “whoever takes someone’s property, or uses him for forced labor…does injustice to that particular person.”[6] Thus two aspects of the ethos of insecurity, fatalism and evasive deference to authority as characterized in Iranian culture many denote the lack of freedom either from the state or some external powers, which are identified as inconducive to individual and institutional innovations[7].
There is only one effective method for government to increase its revenues, and that is “through equitable treatment of people and regard for them”[8] so that “they have the incentive to make their capital bear fruit and grow.”[9] When the equitable treatment lacks, the state is certainly tilted towards feudalism, one way or the other. The misconception of this, tarnished the efforts of Iran’s last Shah,[10] crumbled every system (except the military) in Iraq[11] and caused massive bitterness in Lebanon[12] and Syria[13].
Societies are complex orders[14]. They require freedom because the information and knowledge that make them work can never be amassed by a central authority. Freedom to the process of achieving spontaneous order (in this case, stable economies) in society because we do not know in advance which rules will work, because liberty is essential to the trial-and-error process, and because the creative powers of man can only be expressed in a society in which power and knowledge are widely dispersed[15] When knowledge is determined by the existence of power, a feudalist regime would subsequently crush the aims of the Qur’an, principled in the Shari’ah.[16]
The hum of commerce eases the path of social cooperation in a free society, in part because it offers man opportunities that are simply not available when acting alone or in a state of war of all against all. Security and prosperity are interdependent and in free societies far surpasses those of nations where conflict marks difference of faith.[17]
Such celebrations like the anniversary of Ruhollah Khomeini’s Islamic revolution of 1979 usually go unnoticed in nations like Americas. But not of recent. The strong political power play amongst conservatives, clerics and liberals have continued to generate growing concerns from outside, owing to the fact the Iran produces 9% of the world’s total supply of oil, and is a key meddler cum player in issues surrounding the ‘heat’ in the Middle East. Its provocative president, Mahmoud Ahmadinejad denies the holocaust and calls for Israel’s destruction – a complete wipe out form the map.
Iran and America are presently moving rapidly towards a face-off, both over Iraq – where Iran is again meddling – and over Iran’s nuclear programme. Having removed UN seals from its Natanz reactor in January 2006, it resumed uranium enrichment and president Ahmadinejad says his country is “fiddling with uranium and plutonium to produce more electricity.”[18] But America and many other western countries suspect it is building a bomb.
Iran’s problem however, remains its foreign policies that have remained cold, rater towards the countries that seem to have the will power to help it out of its economic shambles, that have brought the whole system to near collapse since the revolution of 1979. One thing remains that Iran continues to see itself as a regional power in the Middle East and must therefore rubbish the efforts of any other, trying to meddle.[19] However stiff Iran’s policies might be to western civilization and freedom at home yoked with strings of limitations, it is pertinent that the slow journey of Iranians out of isolation and in to modern, westernized world is gathering pace. With two thirds of the population under the age of 30[20], Arab tribalism beyond urban fringes is easily broken than idols.
At night in the city of Esfahan, ancient capital of Persia, by the river an on the boulevards, giggling teenage girls dart out to shove scraps of paper in to the hands of loitering boys. On each is scrawled a mobile phone number – “message me, if you like me too”, as the meaning. Surfing internet chatrooms, watching satellite TV from the illegal dish that everyone seems to have and using your mobile to set up a blind date are just a few ways to meet members of the opposite sex and sample the ways of the world outside.
All these despite the restriction of Iran’s powerful clerics and however much they may rail against the cultural invasion of the US and its acolytes – they say – on curbing the spread of Islam, the prime worry remains economic. Prior to the stiffer sanctions in October this year, the investment pinch from earlier sanctions is greatly being felt across the country: the government now offers cash for priority jobs, such as building oil refineries. All dollar exchanges, including small transfers for private individuals have become extremely complicated and it is very hard to use a credit card to buy online from inside Iran.[21]
Iran may seem defiant, but a recent poll showed that a staggering 70% or more think dialogue with America is a good idea. Outraged conservatives might have instantly clapped the pollster in jail, but that won’t change street attitudes, but reformed policies would.[22] Aside that, decentralization of ownership of the resources down to the level of the individual, protected by a system of well defined property rights including the internalization of costs incurred by environmental impact must be the first concern of Iran, and indeed an Islamic government towards an economically successful society. Besides, sound monetary policies are a pre-requisite for sustainable comprehensive development, although it is disturbing that modern Moslem economies have overlooked the fact that a sound money is an indispensable pre-requisite.
The immunity of Mecca’s sanctuary against outlawry and outrage had promoted this city’s commercial importance. The prophet Mohammed (SAW) made Ka’bah, the sanctuary of a monotheistic faith whose sacred writings were impregnated with the injunctions and prohibitions needed by a business community for secure and stable trading. If only successive generations would not drift farther from the principles of the religion.



© 2008 Atlas Economic Research Foundation
My entry for the Ibn Khaldoun Essay Contest for 2007.


[1] Ibn Khaldoun 1967, v. I, p. 64.
[2] Ibn Khaldoun 1967, v. II, p. 103
[3] Iran: Daily life and social customs. Encyclopædia Britannica Online. http://www.britannica.com/eb/article-230063/Iran.
[4] Ahmad I. A. 1996, An Islamic Perspective on the Wealth of Nations. Minaret of Freedom Preprint Series 96-4.
[5] Prophet Mohammed is said to have foretold, that the first generation of Moslems adhere most closely to the principles of the religion and each successive generation drifts farther from it.
[6] Ibn Khaldoun 1967, v. II, p. 107.
[7] The Islamic idea that property is a consequence of development does not differ from – and anticipates – Locke’s notion that use establishes the right of property. Thus, when lands are conquered, shared and used, it automatically becomes the property of the occupant. Thus property is strictly viewed in terms of individual, communal and state basis. Only through zealous protection of the property rights of the people (both their private property and the environment) can society spontaneously productive economies.
[8] Ibid., p. 103.
[9] Ibid.
[10] Iran: Protest and failure. Encyclopædia Britannica Online. http://www.britannica.com/eb/article-230078/Iran
[11] Iraq: Iraq under Saddam Hussein. Encyclopædia Britannica Online. http://www.britannica.com/eb/article-232292/Iraq
[12] Lebanon: Consequences of the war. Encyclopædia Britannica Online. http://www.britannica.com/eb/article-23382/Lebanon
[13] Syria Ba'thist Syria after 1963. Encyclopædia Britannica Online. http://www.britannica.com/eb/article-29927/Syria
[14] Nigel Ashford. The Freeman: Ideas on Liberty - July 1999. Vol. 49 No. 7. Foundation for Economic Education.
[15] Ibid.
[16] Life in a free society can then be hard because it will force individuals to adjust to the needs of others. The free society works because it coordinates conflicting desires by creating incentives for people to satisfy those of others. This is the opposite of a state in which one can only achieve one’s aims at the expense of others.
[17] Ibid.
[18] The Economist. Volume 382 Number 8515. p.25
[19] It opposes the United State and Israel, the former as a military power that threatens it in the Persian Gulf, and the latter as part of its stance and support for Palestine. Iran thus stands to eliminate outside influence in the region, as seen in its sponsored Taleban government in Afghanistan before the ouster and war.
[20] A birth boom was encouraged during the first years of the Islamic revolution to provide a steady flow of young martyrs for the eight year war with Iraq.
[21] As a result, Iran is finding it increasingly expensive to borrow money. Foreign government-backed credits are getting harder to come by, even legitimate businesses are suffering, as foreign banks find it hard to be certain that the transactions they handle are not being diverted for nefarious purposes, through Iran’s network of front companies. Already, capital is fleeing the country, much of it reportedly ending up in Dubai.
[22] Ibn Khaldoun in his magnum opus – the Muqaddimah, says “in the attempt to earn the increase of capital that constitutes profit, it is unavoidable that one’s capital gets in to the hands of traders” and “all this causes the merchant a great deal of trouble… if he is not afraid of quarrels, knows how to settle an account, and is always willing to enter in to a dispute…he stands a better chance of being treated fairly…” Ibn Khaldoun, Wali ad-Din 1967, The Muqaddimah: An Introduction to History, Franz Rosenthal, trans. (Princeton: Princeton Univ. Press).