I read about the Imbonerakure yesterday, who are the youth wing of the ruling party in Burundi. There are some more details here. I am not sure of the accuracy of the information.
Hopefully, the next time they make the news they will be cheering Burundian athletes at the Olympics.
Thursday, 30 April 2015
Tuesday, 28 April 2015
Demonstrations against the President's third term in Burundi
I don't usually write directly about politics, which isn't my area. But the current political situation in Burundi, and what follows it, will have a major effect on the economy and people's lives in general.
The background is that the Burundian constitution says a president can only have two terms in office. President Pierre Nkurunziza wants a third term, which he says is constitutional because he was not directly elected by the population in his first term, but instead chosen by legislators. Many people, including senior members of his own political party (here and here), disagree. There have been demonstrations throughout Burundi.
My opinion is that a president who overruns the limits of their terms is liable to damage the country and their own reputation. Many former leaders who have stood down have gone on to distinguished roles within African diplomacy (Buyoya, Kabbah, Mandela, Nyerere, and Rawlings are famous ones, I think).
Burundian police officers occupy the offices of Radio Publique Africaine (picture from www.rpa.bi; used without explicit permission in advance, given the rapidly changing events in Burundi).
I also think that the institutions run by the state, including the army and police, should serve the state and not any individuals in it. They should act if there are illegal riots or a violent attempt to overthrow a government against the general will of the people. But these conditions do not seem to apply in Burundi today. It is reasonable and admirable that they could refuse orders - from either side - when these conditions are not met. The order to occupy the private Radio Publique Africaine by police, pictured above, could have been ignored by senior officers, as government officials do not have the power to issue the order.
The background is that the Burundian constitution says a president can only have two terms in office. President Pierre Nkurunziza wants a third term, which he says is constitutional because he was not directly elected by the population in his first term, but instead chosen by legislators. Many people, including senior members of his own political party (here and here), disagree. There have been demonstrations throughout Burundi.
My opinion is that a president who overruns the limits of their terms is liable to damage the country and their own reputation. Many former leaders who have stood down have gone on to distinguished roles within African diplomacy (Buyoya, Kabbah, Mandela, Nyerere, and Rawlings are famous ones, I think).
I also think that the institutions run by the state, including the army and police, should serve the state and not any individuals in it. They should act if there are illegal riots or a violent attempt to overthrow a government against the general will of the people. But these conditions do not seem to apply in Burundi today. It is reasonable and admirable that they could refuse orders - from either side - when these conditions are not met. The order to occupy the private Radio Publique Africaine by police, pictured above, could have been ignored by senior officers, as government officials do not have the power to issue the order.
Sunday, 26 April 2015
Competition and changes in prices and sales in Burundi
When there is more competition in a market, companies may expect to see falling sales or at least slower increases in sales, as rivals take some of their business over. Burundian businesses reported in a 2006 survey the number of competitors for their main product. They also stated whether they had seen the sales of the product increase, remain the same, or decrease. We summarise their reports in the table:
When there were no competitors, many companies (67 percent of them) had increased sales but a significant minority also had reduced sales. I think that if a company has a monopoly, they won't want to make too many changes to their market (since things are good for them already), so they won't change things dramatically on average.
When there was one competitor, sales were generally up. This is believable; two competitors were competing for a market and could divide it up between them. As the number of competitors increased, the sales growth became less frequent, which is also believable - the competitors were dividing up a market into many shares.
Companies also reported how the prices of their main good had changed, with the summary shown in the table.
The monopolists didn't show much change, as expected. The companies with one rival often increased their prices, but a relatively large proportion decreased their prices. The story here could be that there can be fierce price competition between two oligopolists. When there were two to five rivals, prices often increased, and frequently stayed the same. When there were six or more competitors, prices usually increased. I find it surprising that when there were more competitors, the company often increased its prices. What may be happening is that the company stopped competing for the general market, and started focussing on a niche where it had more monopolistic power and could increase prices. I'm not sure, and will check out company behaviour in Africa more generally.
When there were no competitors, many companies (67 percent of them) had increased sales but a significant minority also had reduced sales. I think that if a company has a monopoly, they won't want to make too many changes to their market (since things are good for them already), so they won't change things dramatically on average.
When there was one competitor, sales were generally up. This is believable; two competitors were competing for a market and could divide it up between them. As the number of competitors increased, the sales growth became less frequent, which is also believable - the competitors were dividing up a market into many shares.
Companies also reported how the prices of their main good had changed, with the summary shown in the table.
The monopolists didn't show much change, as expected. The companies with one rival often increased their prices, but a relatively large proportion decreased their prices. The story here could be that there can be fierce price competition between two oligopolists. When there were two to five rivals, prices often increased, and frequently stayed the same. When there were six or more competitors, prices usually increased. I find it surprising that when there were more competitors, the company often increased its prices. What may be happening is that the company stopped competing for the general market, and started focussing on a niche where it had more monopolistic power and could increase prices. I'm not sure, and will check out company behaviour in Africa more generally.
Friday, 24 April 2015
Rwanda NGO jobs have high pay, but the private sector offers long term prospects
There are lots of non-governmental organisations (NGOs) working in the Great Lakes region, offering lots of jobs. Some of these jobs pay well and offer benefits that are not available in other positions in the region. For example, in Rwanda the World Food Program "offers a competitive compensation package which will be determined by the contract type and selected candidate’s qualifications and experience", while the International Organization for Migration (IOM) is offering a salary to a driver of "G2/1 (UN Salary Scale for GS staff)", which I think is worth Rwandan Franc 6,885,000 per year, or about 10,000 US dollars or EU Euros. As the rewards of NGO work seem appealing, people who might otherwise go into the private or government sector may instead prefer to work in NGOs. The One Acre Fund, an agricultural NGO, claims to be Rwanda's fastest growing professional organisation.
There's some evidence that people are showing more interest in the relatively high paying NGO jobs. The site www.jobinrwanda.com lists job advertisements in Rwanda from NGOs, the private sector, and the state sector. It also says how many times people have looked at each job advertisement. For the IOM position, which was posted on 17 April, there have been 2438 views at the time of writing. By comparison the views for private and government jobs have been generally, but not always, lower: numeracy materials developer (22 April, 360 views), bush camp host (1 April, 610 views), network engineer (21 April, 1579 views), receptionist (14 April, 2481 views), and monitoring officer (22 April, 465 views). Other recent NGO advertisements have attracted many views: Africa Humanitarian Action (3262 views), World Food Program (1826 views), and One Acre Fund (1171 views).
There are many different ways of looking at the attraction of NGO jobs from an economic viewpoint. People are diverted from non-NGO occupations where they may have higher economic output or output growth, particularly in the private sector where there is greater competition to please consumers directly. NGOs may be productive and contribute to economic growth, but these outcomes are not usually their prime goal, and not generally enforced by the threat of closure.
Foreign NGO wages increase the amount of money in the Rwandan economy. They act as an injection into the economy, in the dominant Keynesian macroeconomic model: much of the wages gets spent in Rwanda, making other people and companies richer, who spend much of their money in Rwanda, and the circle continues. So the wages can increase the national income by an amount exceeding their initial level.
NGO wages probably don't have the potential for growth that private sector jobs do. Rwanda - capitalist, fairly free of corruption, growing rapidly, integrated in the wider East African economy - will offer an increasing number of private sector opportunities to become very rich through skill, persistence, and luck. The NGO sector offers immediate rewards, but probably far fewer growth prospects.
If I was ambitious in Rwanda and without too many family or personal responsibilities, it would be the private sector that would attract me, with its possibly lower wages and harder work in the short run.
There's some evidence that people are showing more interest in the relatively high paying NGO jobs. The site www.jobinrwanda.com lists job advertisements in Rwanda from NGOs, the private sector, and the state sector. It also says how many times people have looked at each job advertisement. For the IOM position, which was posted on 17 April, there have been 2438 views at the time of writing. By comparison the views for private and government jobs have been generally, but not always, lower: numeracy materials developer (22 April, 360 views), bush camp host (1 April, 610 views), network engineer (21 April, 1579 views), receptionist (14 April, 2481 views), and monitoring officer (22 April, 465 views). Other recent NGO advertisements have attracted many views: Africa Humanitarian Action (3262 views), World Food Program (1826 views), and One Acre Fund (1171 views).
There are many different ways of looking at the attraction of NGO jobs from an economic viewpoint. People are diverted from non-NGO occupations where they may have higher economic output or output growth, particularly in the private sector where there is greater competition to please consumers directly. NGOs may be productive and contribute to economic growth, but these outcomes are not usually their prime goal, and not generally enforced by the threat of closure.
Foreign NGO wages increase the amount of money in the Rwandan economy. They act as an injection into the economy, in the dominant Keynesian macroeconomic model: much of the wages gets spent in Rwanda, making other people and companies richer, who spend much of their money in Rwanda, and the circle continues. So the wages can increase the national income by an amount exceeding their initial level.
NGO wages probably don't have the potential for growth that private sector jobs do. Rwanda - capitalist, fairly free of corruption, growing rapidly, integrated in the wider East African economy - will offer an increasing number of private sector opportunities to become very rich through skill, persistence, and luck. The NGO sector offers immediate rewards, but probably far fewer growth prospects.
If I was ambitious in Rwanda and without too many family or personal responsibilities, it would be the private sector that would attract me, with its possibly lower wages and harder work in the short run.
Sunday, 19 April 2015
Economic values and the value of lives
There's an article in the Rwandan New Times entitled "Is the life of an African of no value in this day and age?". The article describes how Africa's economy is improving but the value of African lives isn't. The author mentions deaths of African migrants drowning in the Mediterranean Sea, election-linked violence in Burundi, and violence against foreigners in South Africa.
The article's topic is one seen in development theory. Approaches to development that are based mainly on growth in national or personal income have been criticised because they do not necessarily imply that people will get happier or that the extra income will be worthwhile in some sense or other. While people often acknowledge the theoretical validity of the criticism, in practice the economic growth approach seems to be broadly preferred among many Africans in positions of leadership.
The article identifies the violence in South Africa as being of particular note, and it is in South Africa where the "money isn't happiness" claim seems to have most evidence. South Africa is quite rich, in many ways successful, and the government doesn't actively try to hurt its own or neighbouring citizens, but it is socially and economically divided; it is a plausible future for some African countries in twenty or thirty years. The people and leaders in these countries could nudge their development course towards slightly greater social and economic inclusion.
Rest in peace to the 700 African migrants who died yesterday trying to get to Europe.
The article's topic is one seen in development theory. Approaches to development that are based mainly on growth in national or personal income have been criticised because they do not necessarily imply that people will get happier or that the extra income will be worthwhile in some sense or other. While people often acknowledge the theoretical validity of the criticism, in practice the economic growth approach seems to be broadly preferred among many Africans in positions of leadership.
The article identifies the violence in South Africa as being of particular note, and it is in South Africa where the "money isn't happiness" claim seems to have most evidence. South Africa is quite rich, in many ways successful, and the government doesn't actively try to hurt its own or neighbouring citizens, but it is socially and economically divided; it is a plausible future for some African countries in twenty or thirty years. The people and leaders in these countries could nudge their development course towards slightly greater social and economic inclusion.
Rest in peace to the 700 African migrants who died yesterday trying to get to Europe.
More on the differences between small, medium, and large companies in the Great Lakes
I mentioned in my last post that medium sized companies in the Great Lakes often have characteristics that lie between those of small and large sized companies. Occasionally, their characteristics are very close to one or the other of them. For example, the average managerial experience of the top manager at small firms is 11.5 years, while in medium firms it is 15.4 years and in large firms it is 15.7 years (source). For use of a technology licensed from abroad, the percentages used are 4%, 16%, and 12%, so medium firms actually use more foreign licensed technology than large firms.
The reasons why medium firms are not just an average of small and large firms varies, but a common theme is that different influences act on different sized firms. For example, small firms may exist only temporarily while their owners are unemployed. Medium and large firms are much more likely to be permanent, professionally run organisations, with managers required to have more experience.
The reasons why medium firms are not just an average of small and large firms varies, but a common theme is that different influences act on different sized firms. For example, small firms may exist only temporarily while their owners are unemployed. Medium and large firms are much more likely to be permanent, professionally run organisations, with managers required to have more experience.
Thursday, 16 April 2015
The characteristics of medium sized companies in the Great Lakes region
Small and medium sized enterprises (SMEs) are often grouped together in analyses. It's actually not a perfect way of grouping companies. A small company may consist of a few people or a family acting together to earn subsistence incomes while there is no other employment available. The company may not do much in the way of good company practice. A medium sized company has done something well at some point in the past, otherwise it wouldn't have reached medium size. It has been at least quite good at being a company.
SMEs don't form a flawless group for contrast with large companies, either. A medium sized company may have some characteristics in common with small companies, but also some in common with large companies. For example, the investment rates of medium sized companies may lie between the rates of small and large companies. Here are some corporate statistics from the Great Lakes region, averaged over all companies split by company size:
Source: www.enterprisesurveys.org
The table shows that medium sized companies often have characteristics that lie between small and large companies. The percentage of the companies owned by private domestic owners is close for small and medium companies. On the other hand, the percentage of the companies owned by the largest owner is close for medium and large companies. So while talking about SMEs can sometimes be sensible, at other times it may be better to talk about Medium and Large Enterprises, and at other times to talk about just medium sized companies.
SMEs don't form a flawless group for contrast with large companies, either. A medium sized company may have some characteristics in common with small companies, but also some in common with large companies. For example, the investment rates of medium sized companies may lie between the rates of small and large companies. Here are some corporate statistics from the Great Lakes region, averaged over all companies split by company size:
The table shows that medium sized companies often have characteristics that lie between small and large companies. The percentage of the companies owned by private domestic owners is close for small and medium companies. On the other hand, the percentage of the companies owned by the largest owner is close for medium and large companies. So while talking about SMEs can sometimes be sensible, at other times it may be better to talk about Medium and Large Enterprises, and at other times to talk about just medium sized companies.
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