US Investments Strengthening Education in Tunisia
The United States has invested $100 million in strengthening education in Tunisia, Africa. The project, known as Strengthening Foundations for Learning, is designed to support the government in addressing major challenges in primary education.

What Will the Project Do?

The main goal is to direct resources toward key areas for a transformative impact on student learning. The project will focus on expanding access to quality early childhood education, strengthening literacy and numeracy in the early grades, improving teacher skills and improving school management, accountability and student assessment.

Investment in high-quality early childhood education is one of the most cost-efficient investments in human capital. These investments have been linked to significant improvement in primary education grade promotion, reduction in repetition and dropout rates.

“By investing in education, Tunisia is investing in the future,” says Marie Francoise Marie-Nelly, World Bank Country Director for the Maghreb. “Quality basic education is a way of giving children the opportunity to become active participants in the transformation of the societies in which they live, and to contribute to future growth and prosperity.”

Who Will the Project Benefit?

The Strengthening Foundations for Learning Project will improve learning conditions in public preschools and primary schools. Increasing access to public preschool education in selected districts will be a main focus as well as strengthening management practices in education. The project aims to empower school leaders and instructional staff to work collaboratively to raise student achievement by strengthening education in Tunisia.

The direct project beneficiaries include an estimated 1,144,000 students attending public preschools and primary schools. Another 64,000 primary school teachers will benefit from improved opportunities for professional development. Furthermore, 5,360 primary school directors and deputy directors, 615 pedagogical inspectors and 850 pedagogical counselors will benefit from this project.

Tunisia has successfully addressed issues of access to schooling, having achieved universal primary education and gender parity more than two decades ago, but the quality of education has suffered and students need to be supported in developing strong foundational skills,” says Michael Drabble, World Bank Senior Education Specialist and co-Task Team Leader.

What Does Strengthening Education in Tunisia Mean?

There are four core components attached to this project investment for strengthening education in Tunisia:

  1. Improving quality and increasing supply of public preschool education at an estimated total cost of $19.6 million.
  2. Improving learning conditions in public primary schools at an estimated total cost of $46.6 million.
  3. Strengthening management practices in the education sector at an estimated total cost of $32.5 million.
  4. Project Management Support at an estimated total cost of $1.3 million.

“Teachers need access to relevant and well-designed professional development programs to help them adapt new instructional methods to boost learning in the classroom. Well-prepared and committed school leaders are needed to turn around poor performing schools,” says Samira Halabi, World Bank Senior Education Specialist and co-Task Team Leader of the project.

This type of investment will provide unprecedented strengthening of education in Tunisia benefiting thousands of primary education students. Tunisia has a total of 2,199,000 students enrolled in primary and secondary education. Of these students, about 1,047,000, or 48 percent, are enrolled in primary education.

In Tunisia, the primary net enrollment rate is 99 percent and the primary completion rate is 102 percent. Both of these indicators provide a sense of the progress the country is making toward universal primary education.

The United States investment in Strengthening Foundations for Learning is a generous one with only beneficial outcomes. Continuously strengthening education in Tunisia is only going to provide better education and more access so that the country can grow and improve.

– Richard Zarrilli
Photo: Flickr

Why US Businesses Should Invest in AfricaThe continent of Africa is home to seven of the fastest-growing economies in the world. Seen as the “final frontier” for investors, Europe and China have pioneered these investments. Consequently, China has become Africa’s number one trading partner and job creator. American businesses, on the other hand, have been slow to invest in Africa and lag behind. As Josh Becker, the CEO of Impele Consulting Group, said, “We are seeing tremendous growth in interest in Africa [from the U.S.], but not the same growth in action”.

Africa is in a position that many envy. Different from the rest of the world, Africa is a frontier with the capability to build on lessons learned from other countries. Without the fuss of resistance and a lengthy trial-and-error period, they can establish institutions and infrastructure with the most effective methods that have been tested by others.

Africa is a clean slate. It has the capacity to lead sustainability continent-wide without having to change an existing framework. American businesses specializing in these areas have the opportunity to invest in Africa to assist in its development.

  • Agriculture
    Much of Africa’s landmass has been largely untouched agriculturally and has the potential to become a big name in world food production, and possibly a sustainable one.
  • Transportation
    Much of sub-Saharan Africa lacks well-built airports, railroads and highways. Africa can implement efficient, modern and sustainable transportation methods that other countries wish they could execute on a mass-scale. Once transportation hubs are built, markets will be connected and Africa can expect impressive gains in production.
  • Electricity
    Sub-Saharan Africa faces repetitive power outages, leaving households and businesses without electricity. This curbs production and ultimately threatens economic growth. If this problem is fixed, a higher standard of living and economic gains will result.
  • Mobile Connectivity
    Currently, Africa is the leader in mobile adoption. Cell phones have linked African countries to each other and with the outside world. In a 2014 pilot program in Ethiopia, a telephone hotline was established, allowing farmers to discuss agricultural techniques with agronomists. In the first couple of months of the program, 30 million calls were made. Communication flow is so vital in production, and investors can encourage this elsewhere by building telephone lines and bringing mobile companies to Africa.

The World Bank predicts that Africa has just started growing, and will only flourish more with investment. However, current Chinese investment is damaging and will eventually stunt Africa’s growth. The George W. Bush Presidential Institute stated that China does not help Africa fight corruption, encourage gender inclusion, promote sustainability or connect its regions. The United States needs to step in and be the source of positive encouragement Africa needs. By competing with China, American businesses can ensure they will benefit from investment and Africa will exceed its potential.

In 2017, President Trump expressed desires to enhance trade and partnership with Africa. One can hope these desires will be implemented and inspire businesses to invest in Africa. If so, vast economic advancements await Africa and lucky American businesses.

– Mary McCarthy

Photo: Flickr

Causes of Poverty in Congo

Despite its vast material wealth, the Democratic Republic of the Congo has long been a very poor nation. Beneath its surface lies about $24 trillion in minerals, but this treasure has so far done nothing to alleviate poverty in this country. Half of the country’s population lives below the poverty line, living on less than $1 a day, especially those in rural communities. There is no single reason, but there are several causes of poverty in Congo that can be identified.

In rural areas, there has often been a lack of investment in basic infrastructure, such as roads, making transportation costs high. Farming methods are often antiquated and inefficient. Finally, there is a general lack of investment on the part of the government and the private sector in rural Congo.

Disease has always been one of the biggest causes of poverty in Congo. There were about 6.7 million reported cases of malaria in 2009, which is especially deadly to children. Cholera outbreaks are frequent. HIV/AIDS affects 5.3 percent of Congolese. Congo’s healthcare system is anemic, with hospitals often understaffed and underequipped.

The mining industry in Congo is particularly corrupt and is one of the largest causes of poverty in Congo. The precious metals mined in the Congo are necessary for a lot of technology taken for granted in the west: smartphones, computers, etc. Many foreign investors in the mining sector end up signing billion-dollar contracts with parties funding armed paramilitary groups, who siphoned some $185 million in 2008 from mining deals. The Congolese army is also dependent on funding from valuable minerals.

There has been some recent pushback against corruption in the Congolese mining industry. #Standwithcongo was launched by activist JD Steir with Robin Wright of House of Cards fame to get mining companies to disclose owners of the offshore shell companies involved with these mining deals.

Additionally, the Congolese army has been successful in pushing back the rebel M23 faction, creating peace in the region and eliminating at least one of the factions that profits from the corrupt mining industry.
The United States has not been silent on the matter either  The U.S. Financial Reform Act, also known as Dodd-Frank, requires companies whose products contain certain minerals to disclose whether or not those minerals came from the Congo, and show what steps they took to ensure such trade was not financing armed groups.  The Department of State has cooperated with Congo’s government and mining sector to establish supply chains for conflict-free minerals being mined in the eastern part of the country.
The causes of poverty in Congo are myriad, but there have been signs of improvement, thanks in part to the actions of the United States, unlikely activists and Congo’s own desire to see a new day.

Andrew Revord
Photo: Flickr

Investment in New Markets70 years ago, President Harry Truman’s Secretary of State, George C. Marshall, gave a speech to announce the Marshall Plan, an initiative giving $13 billion in foreign aid to help rebuild Western European economies after World War II. The administration knew it would be a heavy lift, convincing Americans to accept the probability of higher taxes in place of tax cuts they had been promised. Now, it is just as important for leaders to make their case for foreign aid and investment in new markets to the American people, highlighting the twin benefits of security and sustainability for all parties involved.

The Pitch

So how did Secretary Marshall sell his plan?

“Your Eighty Dollars” is one of many short videos designed to explain how the funds spent on the plan, equaling $80 per American taxpayer, would bring positive returns to taxpayers themselves. Marshall had the political savvy to appeal to the self-interest of his countrymen, recognizing that a nation weary from the costs of war would not automatically be eager to shell out more money. The administration also understood the value in emphasizing the relatively small sum—$80—each individual taxpayer would be paying, rather than the much larger $13 billion ($132 billion in 2017 dollars) the United States would spend in total.

The video emphasizes the United States’ myriad strategic advantages in helping rebuild Europe as well as the dire consequences of failing to do so. It asserts the debt of cultural heritage the U.S. owed to Europe, the benefit of having allies in the most populated and pivotal theatre when it came to waging war and the danger of debtor democracies in the West becoming easy prey for dictators and demagogues, both foreign and home-grown.

“Your Eighty Dollars” succeeded in part because it showcased results, not just fuzzy goals, far off in the distance. The narrator introduces the video’s purpose as “presenting documentary evidence of the progress the free world is making toward strength through mutual security,” and evidence of what U.S. dollars had already accomplished would prove to be a powerful motivator.

The video included scenes of the United States helping clear Sardinia, an Italian island in the Mediterranean Sea, of malaria so its fields could be ready for farming. Other scenes which showed Europeans rebuilding and improving their factories with U.S. assistance and techniques, helped make the humanitarian and economic case.

Europe’s Gains — America’s Returns

The Marshall Plan’s greatest success was its stimulation of private investment in new markets. The plan itself was not large in scope: the $13 billion spread across Western Europe did not amount to a huge investment in new markets. Much of that money was spent on imports of American industrial materials, semi-finished products and agricultural goods. American investment had started to pay dividends.

More importantly for Europe, the plan encouraged European governments and privately-held companies to invest more. Research by De Long and Eichengreen shows that countries receiving aid under the Marshall Plan saw more national investment and grew far faster than other wealthy economies (e.g., Argentina) that benefitted from the new post-war economic order under Bretton Woods but did not receive aid. Those examples of powerhouse growth became even more reliable markets for American products—as well as American allies. These countries avoided the fate of much of Europe after the First World War: plagued by crushing debt without relief and, thus, vulnerable to voices of prejudice and division.

Global Poverty and the Road Ahead

In the quest for security and sustainability in the developing world, many themes from post-World War II repeat themselves. As was true in the 1940s and 50s, other world powers—some of which do not share the U.S.’ values of freedom, democracy and open markets—are looking to assert their influence and control over poverty-stricken countries in the developing world.

Chuck Hasenauer

Photo: Flickr

Arguments for and Against the Overseas Private Investment CorporationSince the Trump administration has taken office, the International Affairs budget has come under attack. Among the many potential items to be cut, the Overseas Private Investment Corporation (OPIC) has been singled out by the administration as a particularly unnecessary agency.

As a result, a slew of arguments for and against the Overseas Private Investment Corporation have been published in recent months. This article is an attempt to provide clarity about the role of OPIC and suggest that its overall benefits outweigh its costs.

Established by President Nixon in 1971, OPIC provides loans and political risk insurance to private American companies seeking to invest in developing countries. Developmental financing was conceived as a complement to governmental aid insofar as it facilitated the transference of private capital to developing economies.

Critics of OPIC often argue that, as a public institution, the agency crowds out private banks that should, in theory, be more efficient financiers of international development.

The truth is that, although a robust private market for developmental finance exists, private capital oftentimes averts especially risky and poor countries due to the inevitably high premiums and interest rates.

OPIC, on the other hand, is in a unique position to support investments in these countries.

With the backing of the U.S. government, OPIC has been able to recover over 90 percent of its political risk claims. This fact has allowed the agency to offer affordable loans and political risk insurance in countries deemed too risky by private finance institutions.

Other critics of OPIC claim that it represents a form of “corporate welfare,” citing the fact that the agency gives loans to some of the largest U.S. firms, like J.P. Morgan, Citibank, and Wells Fargo.

Although all American firms are welcome to apply for financing, year after year, more than half of OPIC’s commitments go to small- and medium-sized businesses.

Even if one remains unconvinced about the benefits of OPIC, it is important to recognize that the agency imposes virtually no cost on the U.S. government. While OPIC does require federal backing to insure its $20 billion worth of outstanding loans, the agency has been self-sustaining for almost four decades. In fact, it has used its interest receipts to contribute nearly $4 billion to U.S. deficit reduction.

In the end, while there are many arguments for and against the Overseas Private Investment Corporation, the truth is that the agency has a net positive effect on American firms and developing economies alike.

Nathaniel Sher

Photo: Flickr

On August 3, 2017, the U.S. announced a $169 million investment in Ethiopia and Kenya for those experiencing severe drought. Emergency food assistance will provide safe drinking water and health services, as well as specialized nutrition supplies to treat malnourished children.

In Kenya, about 2.6 million people are food-insecure, and malnutrition rises as droughts continue. Funding for Kenya will support refugees fleeing conflict and drought. The U.S.’s assistance for Ethiopia will support 111,000 metric tons of relief food aid for approximately three million people. The U.S.’s investment in Ethiopia and Kenya supports the countries and helps prevent more serious catastrophes.

According to the USAID-funded Famine Early Warning Systems Network, without immediate and sustained assistance, food insecurity could reach catastrophic levels in the worst areas of Ethiopia.

“It is not a famine but it is rising up to the levels of getting close to famine,” says Matt Nims, acting director of Food for Peace at USAID. Acting now, during the drought, may ease or prevent the possibility of famine.

In 2015 and 2016, about 10 million Ethiopians, 10 percent of the country’s population, required emergency food aid. Ethiopia imported 1.6 million tons of wheat and lifesaving supplements. Even without the crisis of drought, 22 million Ethiopians live in extreme poverty. With international assistance and taking preventative action, Ethiopia can focus on supporting its civilians and their basic needs with the appropriate resources.

With the U.S.’s investment in Ethiopia and Kenya, the countries gain increased food security and services to prevent malnutrition. The countries are in dire need of international donors to support them and help prevent greater crises. International aid, especially during droughts, is crucial to helping families out of poverty and creating national stability.

According to the United Nations, 795 million people worldwide are undernourished, mostly in developing countries. As wealthier countries partner with developing countries and provide needed resources, poverty can be alleviated and create economic sustainability.

Sarah Dunlap

Photo: Flickr

Local Cambodian millers will be able to boost rice production through increased storage capacity. The progress is possible through the investment of two Chinese investors in a proposed rice storage facility.

The Phnom Penh Post reported on July 3 that two Chinese investors are interested in building a large rice storage facility. The investors, Jilin Province Investment Group Co. Ltd. and Jilin Ianzhong Agricultural Development Co. Ltd., are from the northern Chinese province of Jilin.

The Jilin province is a major food producer, specializing in rice, corn, grain sorghum, millet and beans. Unlike Cambodia, the region is also very industrialized.

According to the World Bank, the agricultural industry in Cambodia is experiencing a deceleration from its prior growth, decreasing from 5.3 percent between 2004 and 2012 to less than two percent between 2013 and 2014. At the same time, poverty rates in the country also decreased, at least partly fueled by positive developments in agriculture. The World Bank reported it at 18 percent in 2012.

With 14 percent of the population living below the poverty line, Cambodia has a higher poverty rate than some of its neighbors. For example, in Indonesia only 10.9 percent of the population lives below the national poverty line, and in Vietnam the percentage is seven.

The Asian Development Bank emphasized the importance of the agricultural industry in sustaining the economy in Cambodia.

The World Bank reported that “since 2013, Cambodia’s rice production has flattened. This was due to the deceleration in land expansion, bad weather, failing global rice prices, and the tightening of completion among rice partners.”

The World Bank also recommended a policy of developing the agricultural business and agro-processing industry in Cambodia. Structural innovations like a rice storage facility in Cambodia would be able to contribute to a boost in the country’s economy.

In addition to boosting Cambodia’s rice exports, the new rice storage facility also has the potential to allow local millers to operate year-round. With safe, dry storage, the rice will also be less likely to absorb water from the humid environment.

By increasing the number of rice storage facilities, rice farmers will be able to protect their harvested rice from the weather and increase their crop production to offset lower global rice prices.

Hannah Pickering

Photo: Google

Despite India’s growing economic success, a recent study by Oxford University found that over half of India’s youth lives in acute poverty. Of the staggering 528 million impoverished Indians, almost half are under the age of 18. The study looked at their access to health care, nutrition, clean water, education and other standards of living when assessing poverty in India.

According to the study, of the 689 million impoverished children in the world, 87 percent live in South Asia or sub-Saharan Africa. This study was designed in accordance with the United Nation’s primary Sustainable Development Goal of eradicating poverty in all forms. By addressing youth poverty in highly-populated areas such as India, global poverty could be greatly reduced.

There are many possible explanations for why so many of India’s impoverished are those under the age of 18, including policy issues, general values and the mindsets of India’s citizenry. Rural areas, in particular, are vulnerable to cultural issues such as early marriage and pregnancy, as well as a lack of educational access for girls. These issues are more complex than simple economic reform.

Additionally, author and former Indian Administrative Officer, Anirudh Krishna, addressed three overarching explanations for this phenomenon: healthcare deficiency, insufficient state support of citizens and the upper class’s prejudices towards those in poverty in India. These issues are attributed to India’s particular value system and a lack of opportunity for families living in rural slums. Children from these families lack access to the same opportunities as higher-income children, depriving India of potential economic resources.

The results of this study are particularly astonishing in the context of India’s economic boom. In recent months, India’s GDP grew at seven percent and is set to continue growing to about eight percent in upcoming years — primarily due to its digital boom and healthy startup economy. Despite this growing GDP, India’s rural youth population remains in a state of economic strife.

However, young professionals are beginning to look at the problem as fellows trained to study issues of poverty in India. These fellows study rural areas to understand which resources they lack most and which issues affect children the greatest. Their work focuses on how higher standards of health care and education, as well as access to electricity and technology, are achievable in rural India.

Investing in education is of high importance; it equips children with skills to enter the workforce and might effectively challenge potentially harmful values in rural communities. By addressing this lack of basic needs in rural areas, India can cultivate a generation of healthy, educated and productive citizens. Investing in modern education, technology and opportunities for rural youth could provide India with a great economic return.

Julia Morrison

Photo: Flickr

Touirism in Kenya
An international hotel chain is investing in tourism in Kenya. Tune Hotels, based in Malaysia, opened a hotel in Nairobi, Kenya last July. The hotel chain is focused on giving travelers the bare necessities in exchange for a reasonable price, similar to low-cost airlines such as Spirit Airlines.

Nairobi, in particular, has become an attractive site for foreign direct investment as opposed to simply development aid. Tune Hotel is just one example of foreign direct investment, another of which is China’s investment in infrastructure in Kenya.

The target market for this hotel chain is business travelers since they normally do not use all the services they pay for at a normal hotel. Business travelers, both local and foreign, make up about 70 percent of Tune Hotel’s guests.

In addition, business travelers comprise about 95 percent of hotel bookings in Kenya. Business travel spending accounted for 37.5 percent of all tourism spending in Kenya in 2015 and is expected to rise due to increased flights between Nairobi, China and the Middle East.

Kenya has a growing middle class, which has led to a rise in domestic tourism. Kenyan tourists make up around 60 percent of the guests at Tune Hotels, and about a third of Africans have entered the middle class over the last 10 years. The Kenyan Tourism Board launched a campaign in 2013 called “Tembea Kenya” or “Tour Kenya,” which is a campaign targeted at the nation’s own middle class.

The tourism industry, which consists of hotel jobs, travel agents and leisure activities, is expected to create around 275,000 jobs in Kenya by 2025. Tourism in Kenya makes up about four percent of the gross domestic product. Thus, foreign investment in this sector is crucial to its growth.

Jennifer Taggart

Photo: Flickr

In the preface to their annual letter to investment magnate Warren Buffet, Bill and Melinda Gates wrote, “The best investment any of us can ever make is in the lives of others.” Unlike the Gateses and Buffet, the average person does not have billions of dollars at his/her disposal to invest in the betterment of mankind. However, with the rise of impact investing, more people can invest their money in ways that are financially and socially beneficial.

The term “impact investing” first arose less than a decade ago and has been defined by the Global Impact Investing Network as “[investing] made into companies, organizations, and funds with the intention to generate measurable social and environmental impact alongside a financial return.” While the social good targeted by impact investors can be varied, several social venture capital firms are focused on the world’s poor. Among them are the Acumen Fund, Gray Ghost Ventures and Root Capital.

The Acumen Fund invests in companies with the potential for social impact in Africa, India and Pakistan. In India, Acumen successfully partnered with WaterHealth International to bring clean water to rural areas. Acumen helped WHI expand from two water systems to over 500 all over the globe. WaterHealth International’s systems now provide safe drinking water to over five million people.

Gray Ghost Ventures began with a focus on microfinancing but has since become a pioneer in impact investing. GGV aims to improve the lives of the underserved in emerging markets by investing in technology and financial services companies. Since 2003, it has invested more than $125 million in businesses that have helped to alleviate poverty and expand access to quality education. To improve access to education, Gray Ghost ventures established the Indian School Finance Company in Hyderabad, India. The company provides loans to credit-worthy private schools in order to improve infrastructure and increase enrollment.

Root Capital was established with a mission to grow rural prosperity by investing in agricultural businesses. Since 1999, it has distributed over $1 billion dollars in loans and reached more than five million household members. The businesses that have benefited from Root Capital’s impact investing have generated $6 billion in revenue.

While every investment in the lives of others is worthwhile, impact investing provides financial returns for altruism. Rather than simply providing handouts, impact investors can empower the global poor to positively influence their communities.

Rebecca Yu

Photo: Flickr