For one of my last projects with CARE Social Ventures, I was asked to research the country context for a number of Middle East and North African countries with active social ventures within CARE. Country context includes the economic, regional and political status of each country as well as a snapshot of entrepreneurship opportunities and involvement. This information is meant to be interpreted alongside the active goals of the social ventures in each country to help come up with timely recommendations for next steps within the projects.
Social and economic development, livelihood resilience, safety, for school children and families of refugees.
Context
Jordan has begun its recovery from the COVID‑19 shock — real GDP grew by 2.2% in 2021 following a 1.6% contraction in 2020. (World Bank n.d.). However, the COVID‑19 crisis has exacerbated Jordan’s jobs challenge: high unemployment rates, the lowest women’s labor force participation in the world, widening external imbalances, elevated debt levels and weak investment highlight sizable challenges to a robust recovery. Jordan also faces significant temperature increases, precipitation decreases, and increased incidents of drought. Jordan is heavily dependent on fossil‑fuel imports, with limited natural resources. It is among the most water-poor countries in the world. Jordan’s fiscal situation demands that it finds private sector solutions to climate challenges and that it incentivizes these solutions from a climate lens as part of its development model. (World Bank n.d.).
Even prior to the COVID‑19 crisis, Jordan’s economy had been struggling with persistently sluggish growth dynamics and structural challenges. Part of this weak growth performance traces back to regional conflicts and the influx of nearly 1.3 million Syrian refugees. Sitting at the center of a volatile region, Jordan continues to play a role as an anchor for regional stability and for the global public goods it provides by hosting refugees and promoting cross‑border regional cooperation and trade. (World Bank n.d.).
Entrepreneurship Dynamic
The report finds that Total early-stage Entrepreneurial Activity (TEA) has decreased over time; from 18.3% in 2004, 10.2% in 2009, and down to 9.11% in 2019. A worrying finding is a high discontinuation of business rate - for every five individuals currently starting or running a new business, there is one individual who has discontinued a business in the past year. Jordanian men are far more likely to start-up than their female counterparts, with a female TEA rate of 3.3% versus a male rate of 12.8%. (GEM Report 2018/19).
Housing and employability for refugee families, economic and social resilience for women and girls
Context
Türkiye’s economy grew 11 percent in 2021, the fastest among the G20 countries. Interest rate cuts and spillovers from the Ukraine-Russia war will lower 2022 growth to 1.4 percent. (World Bank n.d.). Rising energy and food price inflation will hurt the poor the most, compromising a gradual employment-driven, post-pandemic poverty recovery. High private sector debt, persistent current account deficits financed by short-term portfolio flows, high inflation, and high unemployment have been intensified by macro-financial instability since August 2018. Moreover, the economy’s high energy and carbon intensity make it vulnerable to global energy supply and price volatility and pose a challenge for Türkiye’s exporters in the context of global and regional decarbonization policies.
Given Türkiye’s close economic ties to both Russia and Ukraine, the war is expected to disrupt Türkiye’s energy and agricultural trade, tourist arrivals, and overseas construction activities. Price spikes of essential commodity imports will directly affect households and industry and adversely impact the current account balance and inflation. Low-income households in Türkiye are especially affected as they spend nearly twice as much of their budget as the wealthiest on food and housing. (World Bank n.d.).
Entrepreneurship Dynamic
The challenges faced by Türkiye have likely played a role in reducing business confidence among the general population. For example, in 2021, only 31.9% said they saw good opportunities to start a business where they lived, down from 44% in 2018. This is despite the fact that 59.3% claim to have skills and experience to start a business. Turkish entrepreneurs also sense diminishing opportunities. In 2021, 62.4% of TEA respondents said it was more difficult to start a business than in the previous year. Yet, despite this assessment, 55.2% of TEA respondents and 50.7% of EBO respondents said they planned to use more digital technology to grow their business in the next six months. This suggests a desire to shift business strategy to meet new consumer demands, particularly stemming from new realities generated by COVID-19. With such willingness to invest in their business, there is significant potential to grow entrepreneurial impact. (GEM Report 2018).
Economic autonomy for women in rural communities, integration of migrants to urban zones, creation of professional opportunities for vulnerable youth
Context
Moroccan GDP growth rebounded to 7.4% in 2021 after contracting by 6.3% in 2020. (World Bank n.d.). This rebound was driven by an exceptional cereal crop after two consecutive years of drought, supportive macro-economic policies, solid manufacturing exports, a surge in remittances, and progress on COVID-19 vaccination. However, the Moroccan economy is currently undergoing a double shock: a severe drought plus the impact of the war in Ukraine and its impact on commodity and energy prices. As a result, growth is projected to decelerate to 1.1% in 2022 and the current account deficit to widen to 5.5% of GDP as energy and food import bills rise. (World Bank n.d.).
The government is also moving ahead with the reforms that were announced in the economic recovery plan that launched in July 2020 and featured prominently in the New Development Model (NDM), unveiled in May 2021. These included the reform of State-Owned Enterprises and the universalization of access to public health insurance and to family allowances, which is a cash transfer program. In addition, the Mohammed VI Fund has been created to catalyze private investments through: (i) equity investments in viable Small- and Medium-Sized Enterprises (SMEs) operating in strategic sectors (agriculture, tourism, manufacturing, innovation, and growth); (ii) Public Private Partnerships to finance commercial infrastructure projects. (World Bank n.d.).
Entrepreneurship Dynamic
According to GEM data, the Moroccan entrepreneurial sector is currently under stress. However, the conditions necessary for starting a new business are improving. The Morocco entrepreneurial sector may have shrunk during the pandemic, but it should improve in the future due to the Moroccan finance bill signed in November 2021 which allocated $331 million to entrepreneurship initiatives. Yet, unfortunately, both TEA rates and EBO rates declined in 2021. TEA fell from 7.1% in 2020 to 6.1% in 2021, while EBO declined to 4.9% in 2021 from 6.8% in 2020. Macroeconomic conditions in Morocco can explain part of the entrepreneurial slump. The number of Moroccan households reporting that their income either strongly or somewhat decreased in 2021 was higher than in 2020, meaning more households lost income. (GEM Report 2021).
Socioeconomic development of rural populations, diversification of rural economy (mostly agriculture), poverty reduction, improved financial literacy
Context
Georgia has had a successful development record, underpinned by prudent economic management over the past decade. Growth averaged 4 percent per annum between 2011 and 2021. The poverty rate measured by the international upper-middle-income line (US$5.50 per capita per day, 2011 purchasing power parity [PPP]) declined from 59 percent in 2011 to 42 percent in 2021. Nevertheless, critical structural challenges remain, particularly weak productivity and the need to create high-quality jobs. Many Georgians remain in rural areas engaged in low productivity agriculture. Measures of human capital continue to be weak, with poor learning outcomes and a lack of linkages between education and private sector needs. In addition, Georgia’s trade openness and reliance on income from tourism make it vulnerable to external and global shocks. High dollarization and persistent reliance on external savings further amplify risks. Still, the swift post-pandemic rebound has demonstrated the growing maturity and resilience of Georgia’s economic institutions. (World Bank n.d.).
Entrepreneurship Dynamic
As of 2016, the TEA in Georgia sat at 8.58%, 2.43 percentage points behind the regional average of 11.1%. The perceived opportunities rate in Georgia is decreasing over time. In 2016 the rate was 29.51%, lower than Georgia’s 2014 rate at 36.58%. Only 12.76% of the population declared entrepreneurial intentions in 2016, down from 15.58% in 2014 and the regional average of 24.34%. The male-female opportunity rate has remained stable from 0.85 in 2014 to 0.86 in 2016 and the high job creation rate has increased from 18.47% in 2014 to 20.60% in 2016. Finally, the entrepreneurship as a good career choice rate is above the regional average of 65.21% at 71.4% in 2016. (GEM Report 2016).
Strengthen social services for marginalized populations
Context
The political system in BiH is complex, reflecting the provisions of the country’s constitution developed to end ethnic conflict, as well as subsequent changes to the system introduced under the guidance of the international community through the Office of the High Representative.
A reform agenda adopted by the Council of Ministers and the Government of the Federation in 2015 presents a rare window of opportunity for structural reforms in BiH, underpinned by a broad national consensus on the country’s critical challenges and priorities and the sustained support of key development partners. BiH’s key economic challenge is the imbalance of its economic model: public policies and incentives are skewed toward the public rather than the private sector, consumption rather than investment, and imports rather than exports. (World Bank n.d.).
The country needs to shift to a business environment conducive to private investment that supports both vibrant small and medium-sized enterprises and the growth of larger companies, facilitates export performance and productivity improvements, and generates much-needed private sector employment. At the same time as addressing these imbalances in the economic model, the country must also ensure the sustainability and inclusiveness of future growth. (World Bank n.d.).
Entrepreneurship Dynamic
As of 2017, the TEA in BiH sat at 3.95%, 4.86 percentage points behind the regional average of 8.81%. The perceived opportunities rate in BiH is decreasing over time. In 2017 the rate was 13.42%, lower than BiH’s 2014 rate at 19.59%. Only 4.55% of the population declared entrepreneurial intentions in 2017, down from 20.45% in 2014 and the regional average of 11.6%. The male-female opportunity rate has grown from 0.4 in 2014 to 0.53 in 2017 and the high job creation rate has drastically decreased from 28.74% in 2014 to 1.73% in 2017. Finally, the entrepreneurship as a good career choice rate is above the regional average of 59.44% at 62.66% in 2017. (GEM Report 2017).