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Brain Drain with No Gain?

By T. Keyzom Ngodup, co-founder at Ideas sYnergy.  Ideas sYnergy is Iraq’s first multiple bottom line advisory company committed to inclusive economic and social development through market-based solutions that help build and scale youth-driven innovative ideas for social change.

 

An Economist report rightly pointed out that when people in the developed countries worry about migration, they tend to think of low paid incomers who compete for jobs as construction workers, dishwashers, or farmhands. When people in developing countries worry about migration, they are usually concerned at the prospect of their best and brightest decamping to Silicon Valley or to hospitals and universities in the developed world. Indeed, of the 22 Iraqis listed in Arabian Business’ 500 most influential Arabs, only nine are based in Iraq, all in Baghdad.

This ‘brain drain’ has long bothered policymakers in poor countries. They fear it hurts their economies, depriving them of much-needed skilled workers who could have taught at their universities, worked in their hospitals and come up with clever new products for their factories to make. Alternatively, several economists reckon that the brain-drain hypothesis fails to account for the effects of remittances (see table for the relatively ‘low’ Iraq remittance volume albiet important to note that ‘traditional’ money transfer services are far and few between in Iraq and can often terminate service, for example the recent termination of Iraq-US transfer), for the beneficial effects of returning migrants, and for the possibility that being able to migrate to greener pastures induces people to get more education. Some argue that once these factors are taken into account, an exodus of highly skilled people could turn out to be a net benefit to the countries they leave.

 

Iraq Remittances (Source: WDI)

2006

2007

2008

2009

2010

Received/Inward  (USD)

388,899,994

3,100,000

70,900,002

71,000,000

71,000,000

Outward (USD)

781,299,999

17,299,999

31,400,000

32,000,000

32,000,000

 

While most migrants in other countries are unemployed youth, in Iraq, migrants had been generally gainfully employed professionals in the country before seeking global opportunities with a chance to travel hassle-free through a non-Iraqi passport. Speaking to a number of Iraqi professionals who immigrated to the United States after 2003, one finds that most of them are employed in low-paid blue collar jobs, with plans to return to Iraq in the near future, contingent on improvements in security.

Late senator Ted Kennedy said at the time, “America has a fundamental obligation to assist Iraqis whose lives are in danger.” But the special visa programme, called the SIV, under the 2008 Refugee Crisis Act, has stalled, partly due to crippling bureaucratic process, lack of resources and partly due to news such as Iraqi men in Kentucky, USA charged with supporting extremists. Following the withdrawal of American troops in December 2011, the SIV programme is likely to erect new hurdles as the Pentagon closed its last few military bases in Iraq.

However our experience tell us that Iraqis are better off pursuing higher studies abroad and applying themselves in Iraq, where potential opportunities to start new businesses and non-existent services for the population is tremendous. Much will depend upon how the government of Iraq makes Iraq an attractive destination for aspiring Iraqi returnees.

 

By T. Keyzom Ngodup, co-founder at Ideas sYnergy.  Ideas sYnergy is Iraq’s first multiple bottom line advisory company committed to inclusive economic and social development through market-based solutions that help build and scale youth-driven innovative ideas for social change.

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“Iraq infinity”

By T. Keyzom Ngodup, co-founder at Ideas sYnergy.  Ideas sYnergy is Iraq’s first multiple bottom line advisory company committed to inclusive economic and social development through market-based solutions that help build and scale youth-driven innovative ideas for social change.

Hamada Zahawi’s article on Al Jazeera writes about the TEDxBaghdad conference in Baghdad that focused on hope. A hope that Iraqis may pass on a great Iraq to their children. Central to this hope is TEDxBaghdad’s goal to galvanize and re-engage Iraq’s scattered and highly educated diaspora to provide invaluable mentorship, training, opportunities and inspiration to Iraq’s youth. TEDx Baghdad supports ‘ideas worth spreading’ and aims to provide a stage for the ideas to spark deep discussions and foster innovation.

Iraq’s youth do not have a voice in driving their country’s future. Although the youth overcame fear of bomb blasts during the 2011 demonstrations, everyone thought everyone else was a government intelligence agent, inciting paranoia in citizenry. It is thus concluded that Iraq’s youth do not have the avenue/forum through which to participate in Iraq’s future.

Iraqis are inherently entrepreneurial. My last post showcased some of the daring young entrepreneurs. There are others applying for Echoing Green innovation fellowship, a linkage Ideas sYnergy is facilitating. . Many open a coffee shop, a restaurant, a computer servicing company, or a salon while at university or even right after 12th grade. Most of the ideas are not revolutionary but they are an indication that a revolution is brewing at bay. Our success as Iraqis and stakeholders in Iraq will be measured by our ability to create dynamic, supportive and empowering entrepreneurship ecosystems for the Iraqi youth.

 

By T. Keyzom Ngodup, co-founder at Ideas sYnergy.  Ideas sYnergy is Iraq’s first multiple bottom line advisory company committed to inclusive economic and social development through market-based solutions that help build and scale youth-driven innovative ideas for social change.

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Iraqi Entrepreneurs & Novelty: Coming of Age

By T. Keyzom Ngodup, co-founder at Ideas sYnergy.  Ideas sYnergy is Iraq’s first multiple bottom line advisory company committed to inclusive economic and social development through market-based solutions that help build and scale youth-driven innovative ideas for social change.

The youth (ages 18 – 34) constitute over 50% of Iraq’s 32 million population, with over 35% unemployed and underemployed.  Through our experiences and network across Iraq, we have come across excellent youth entrepreneurs who have brilliant ideas but lack seed capital and other operational support critical to their success. Unless people and organizations come together to build supportive ecosystems and mitigate challenges to entrepreneurship in Iraq, the envisaged role of locally driven private sector’s contribution to economic diversification and employment generation will remain underrealized.

A quick round-up of the thus-far successful and daring ideas we have seen led by Iraqis, mostly young entreprenuers.

1. Qi Card, is an Iraqi national credit card developed by International Smart Card, with equity contribution by Rafidain Bank and Rasheed Bank, currently distributing pensions and some government salaries directly into bank accounts. State of the art technology of biometric verification and de-duplication engine used with the Qi card solution is saving the government millions of dollars by identifying potential fraud in government pension and grant distribution. Recently, Qi card initiated a pilot with the General Directorate of Traffic and Rasheed Bank to charge traffic violators directly through withdrawal of fines from their bank accounts, although unless other banks sign-up for such a service and large proportion of Iraqis open bank accounts, the service will be short of success. Qi card has approximately two million users with parallel aim to expand into retail stores through a network of points of sales of about 30,000 units by 2015. www.qicard.com

2. Mredy is one of the most popular commercial websites in Iraq, with 5,503 unique visitors per day. The website founder, a young man, who has no relation to the real/physical Mredy Market (the original Mredy Market is located in the heart of Al Sadr City in Baghdad and is historically known to excel in forging all types of official and unofficial documents) except for the name of his website, says that “thousands of Iraqis, inside and outside Iraq, use the website on a daily basis to buy and sell products or just visit the website”. Buyers can post their advertisement for free. It is example of an evolving internet based transactions in Iraq, although its revenue potential is limited due to lack of online payment platform (An Iraqi man recently told us that although millions of Iraqis want to donate USD 2 or 10 or more to worthwhile causes such as for Palestinian refugees, or for Iraqi widows in Anbar for example, but lack of credit cards and access to online payment systems inhibit their duty to support the less fortunate). www.mredy.com

3. Iraqi Touch, a traditional Iraqi restaurant whose management team promises an extraordinary and unique casual food experience, and is expanding to multiple governorates in the country and other Middle Eastern cities. Their vision is to introduce and market homemade Iraqi food to the world. This is indeed the start of a new revolution in outward franchising for Iraq. www.iraqtouch.com

4. Edicoo recently became a member of Icom, a worldwide network of independent advertising agencies, operating out of Kurdistan Region, is founded by a 34 year old Iraqi man from Mosul. According to him, Iraq is growing in importance because they are a country that is beginning to spend money for goods and services. According to Gary Burandt, executive director of Icom, the business climate in Erbil reminded him of Moscow in the late ’80s when he was opening the first advertising agency for Young & Rubicam in Moscow. Today’s technology means that development of a free consumer marketplace will go much faster now, and that is precisely why Edicoo has been so successful since inception in 2007. www.edicoo.com

 

By T. Keyzom Ngodup, co-founder at Ideas sYnergy.  Ideas sYnergy is Iraq’s first multiple bottom line advisory company committed to inclusive economic and social development through market-based solutions that help build and scale youth-driven innovative ideas for social change.

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“SME and Microfinance in Iraq not well developed”

By T. Keyzom Ngodup, co-founder and Executive Director at Ideas sYnergy www.ideas-sYnergy.net, a local multiple bottom line advisory enterprise, driving innovation for social impact.

According to the recently released World Bank Report The Republic of Iraq: Financial Sector Review, “SME and microfinance is not well developed in Iraq”.

Over 85% of lending to Iraq SMEs is conducted through NGOs: the 12 NGO-MFIs (see www.imfi.org; supported by USAID grants) and Iraq Middle Market Development Foundation (IMMDF). The remaining is facilited through bank lending supported by USAID grants and technical assistance through NBFI vehicles (part funded through USAID start-up grants) Iraqi Company for Financing SMEs (ICF-SME) and Iraqi Company for Bank Guarantee (ICBG).  The above developments were indeed important milestones, but some say have become obsolete, with many aspects leaning towards something resembling ‘oligarchy’ and part of the fault lies with donors’ complacency and not the implementing partners, i.e. contractors or local impementers (they are just carrying out their contractual agreements).

The Report rightly points out that under Banking Law article 4(2), CBI has the power to regulate lending institutions, microfinance institutions and any other non-bank financial institution not otherwise regulated under Iraqi law. Within this context, Iraq Insights October issue had reported that CHF Iraq’s, an NGO MFI, application for an NBFI license was rejected by CBI based on the NGO Office’s ‘discomfort’ with an NGO owning shares in the newly created entity as well as the transfer of NGO assets and loan portfolio to a for-profit company despite the earlier verbal go-ahead received from the NGO Office.

There are two troubling factors that are true for development initiatives addressing access to finance in Iraq:

  1. There is tremendous willingness from GoI to scale-up financing (of different types and through different vehicles) SMEs as a means to support economic diversification, private sector development and employment generation, however weak institutional capacities, minimal exposure to global best practices, and lack of inter-agency coordination/collaboration serve as critical impediments for doing what is in Iraq’s best interest. External and supportive stakeholders are cautioned to address this challenge (both directly and indirectly in the form of one voice and meaningful consensus building) as critical to their goals’ success.
  2. Donor coordination, albeit improving, and support of innovation outside usual methodology of programme implementation warrants review. Ideas sYnergy has spoken to many young entrepreneurs/aspiring entrepreneurs, and over and over again, what we have come to conclude that Iraq’s needs something like an ‘innovation lab’ where innovation can be supported through access to consolidated and strategic resources, replicated, and used as inspiration for the eager youth. Ideas/initiatives such as creating an Iraqi tea brand through direct linkages with Sri Lanka or supporting the successful initiative of a young Iraqi entrepreneur’s start-up business to disburse government pension (and some salaries) through a technology driven ‘key’ card (more about these entrepreneurs in Iraq Insights’ upcoming November issue).

T. Keyzom Ngodup is co-founder and Executive Director at Ideas sYnergy www.ideas-sYnergy.net, an Iraq based multiple bottom line advisory enterprise committed to economic and social development through market-based solutions that help build and scale innovative businesses for sustainable and inclusive private sector development.

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Iraq’s Trading Patterns: Changing Allegiances

Iraq’s Trading Patterns: Changing Allegiances

By T. Keyzom Ngodup, co-founder and Executive Director at Ideas sYnergy www.ideas-sYnergy.net, an Iraq based private sector development consulting company.

IRAQ INSIGHTS, published by Ideas sYnergy aims to consolidate and build intellectual capital on private sector development, empowering stakeholders to address issues of access and structural reforms on a diverse range of topics impacting inclusive economic development.

IRAQ INSIGHTS                  October 2011, Iraq’s Trading Patterns: Changing Allegiances

  • Iraq’s Leading Export and Import Partners: Trends
  • KRG Replacing UAE as Export Terminal to Iran?
  • Third Party Trades: Supply Chain Inefficiencies Demonstrated through Iraq’s Tea Import
  • Shaku Maku: A Brief Glance at Young Iraqi Professionals’ Communication Tool Choices
  • A Roadblock in Transformation of NGO-MFI to Non-Banking Financial Institution: What Next?

Iraq Insights by Ideas sYnergy_October 2011 Issue 5

 

T. Keyzom Ngodup is co-founder and Executive Director at Ideas sYnergy www.ideas-sYnergy.net, an Iraq based development consulting company committed to economic and social development through market-based solutions that help build and scale innovative businesses for sustainable and inclusive private sector development.

Posted in Banking & Finance, Industry & Trade, Keyzom Ngodup, Politics0 Comments

Iraq Tagged: ‘ Middle Income Fragile Country’

By T. Keyzom Ngodup, co-founder and Executive Director at Ideas sYnergy www.ideas-sYnergy.net, an Iraq based private sector development consulting company.

IRAQ INSIGHTS, published by Ideas sYnergy aims to consolidate and build intellectual capital on private sector development, empowering stakeholders to address issues of access and structural reforms on a diverse range of topics impacting inclusive economic development.

IRAQ INSIGHTS                 September 2011, Iraq Tagged: ‘Middle Income Fragile Country’

  • Tagged: Iraq as a ‘Middle Income Fragile State’
  • Poverty, Microfinance and Women
  • Profile of Rural Small Scale Farmers in Kirkuk: Results from Surveying 200 Farmers
  • Focus: Iraq’s Agricultural Sector
  • Relative Stability in Iraq Despite Unrest, Report 2011 Public Opinion Research
  • The Tehran-Baghdad-Damascus Axis, Primer by United States Institute of Peace

Iraq Insights by Ideas sYnergy_September 2011 Issue 4 (Download here)

T. Keyzom Ngodup is co-founder and Executive Director at Ideas sYnergy www.ideas-sYnergy.net, an Iraq based development consulting company committed to economic and social development through market-based solutions that help build and scale innovative businesses for sustainable and inclusive private sector development.

Posted in Agriculture, Banking & Finance, Keyzom Ngodup, Politics0 Comments

Risks in Iraq: Perception and Real

By T. Keyzom Ngodup, co-founder and Executive Director at Ideas sYnergy, an Iraq based private sector development consulting company.

 

IRAQ INSIGHTS, published by Ideas sYnergy aims to consolidate and build intellectual capital on private sector development, empowering stakeholders to address issues of access and structural reforms on a diverse range of topics impacting inclusive economic development.

IRAQ INSIGHTS                 August 2011, Risks: Perception & Real

  • Translating Risks to Bigger Risks
  • Beyond Oil & Gas Investments: Who is Investing in Iraqi Banks and Mobile Network Operators?
  • Business and Religious Tourism in Iraq: Window of Opportunity Closing for Hoteliers?
  • Iraqi Stock Exchange: A Macro Bet Strategy

Iraq Insights by Ideas sYnergy_Aug 2011 Issue 3 (download Iraq Insights August Issue)

 

T. Keyzom Ngodup is co-founder and Executive Director at Ideas sYnergy, an Iraq based development consulting company committed to economic and social development through market-based solutions that help build and scale innovative businesses for sustainable and inclusive private sector development.

Posted in Investment, Keyzom Ngodup, Leisure and Tourism, Security3 Comments

A New Iraq or Perspective Updated?

By T. Keyzom Ngodup, co-founder and Executive Director at Ideas sYnergy, an Iraq based private sector development consulting company.

A New Iraq or Perspective Updated: First Mover Advantage?

Sipping my iced coffee at Costa, a coffee shop in Erbil, I (and everyone else at the coffee house) noticed with insouciance a group of young American soldiers walk in for some caffeine and presumably an outing.  The sighting of American soldiers (dressed in uniform) is rare in Northern Iraq, and especially in Erbil, putatively safe and referred to as the gateway to Iraq.  I pondered on this seemingly mundane event and it occurred to me that this may be my first ‘encounter’ with Americans in Erbil since Ideas sYnergy’s establishment in early 2011.

Through my last couple months in this city as an independent expatriate (as in not living within a walled community/compound with security protocols), I have come across a range of foreign entrepreneurs who have gone ‘local’: Lebanese, Turkish, Italians, Germans, French and British, some restaurateurs, others event managers, traders, company owners etc however I have yet to meet an American who lives and conducts business outside the walls of compounds.  This is not to say there aren’t any, but rather to point to its’ low probability.  In the same vein, recent article pointed out that U.S. companies have been slow to get in on the investment opportunities in Iraq, even lagging behind countries that opposed the war in 2003, such as France. According to the article, U.S. companies tend to be more risk averse than their European counterparts, despite continuous urgings by the U.S. Chamber of Commerce.  The media in the U.S. contributes to this quagmire.  An Iraqi friend living in the U.S. expressed his surprise at a recent National Public Radio (NPR) feature on Iraq’s Kurdistan, to the extent he felt the region under discussion was perhaps wrongly referred to as KRG.

U.S. businesses are asked to shed their heterodox ideas of Iraq and capitalize on the investment opportunities created through its’ government’s blood and treasure. Iraq Insights’ June Issue reported that U.S. commercial activity is touted to increase after the conclusion of the Business Forum: Promoting Economic Opportunities in Iraq held in Washington, D.C. And indeed U.S. commercial interest is growing: Iraq’s commercial attaché office in Washington received 2,251 applications to do business in Iraq in the first half of this year, compared with 1,369 in the same period last year.  Although U.S. commercial activity in Iraq ranked fifth at $1,997 million in 2010 (compared to Turkey’s $14,883 and France’s $4,243) as per a report by Dunia Frontiers, independent American expatriates conducting business in Iraq complain of their government’s lack of support, even of the simplest nature such as business introductions and linkages.  For U.S. businesses to capitalize on opportunities in Iraq, and partake in Iraq’s economic growth as a business partner, its government will have to do much more (the upcoming August issue of Iraq Insights, a flagship monthly publication of Ideas sYnergy, will compare investment promotion strategies of foreign governments in Iraq) .  The recent opening of U.S. Chamber of Commerce in Basra, and soon in Erbil is a welcome respite.

T. Keyzom Ngodup is co-founder and Executive Director at Ideas sYnergy, an Iraq based development consulting company committed to economic and social development through market-based solutions that help build and scale innovative businesses for sustainable and inclusive private sector development.

Posted in Investment, Keyzom Ngodup, Politics1 Comment

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