Page 11 - Print Version Volume 22 - Number 1126
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Fortune Vol. 22 No. 1126 Nov. 28, 2021                                                   C O M M E N TA R Y                            Page 11

The political developments in Ethiopia are concerning but youth unemployment still needs to be addressed. It is at least partly a contributor
      to the political situation in the country, writes Abreham Ketema (abrehamketemawin7@gmail.com), who works as a researcher.

Even with the Current Noise, Youth Unemployment Needs Attention
With the volatile
            political situation           Insurgency armed rebellion and populism        to improve the doing business        industry expands. In principle,
            in Ethiopia, the              are at least partly the result of the lack of  environment, incubate new            the private sector adds to
            psychological                  economic growth and inclusive economic        businesses and put in place          the stock of capital, and the
devastation and depression it                                                            a startup act. Microfinance          quantity of capital available
is causing the youth has been                                 institutions.              institutions are expanding their     to an economy is a crucial
overlooked by the private                                                                services and providing a wide        determinant of employability in
and public sectors. To make          the root cause of unemployment                      range of loans as well. The move     our nation. The private sector
things worse, since the current      has undermined any effort by                        is an effort to bring down rising    also offers wider opportunities
military escalation, a market        any individual concerned body.                      unemployment. It is essential        the better it is regulated and the
for graduates has been rare                                                              to mobilise and coordinate the       more incentives it receives.
and unemployment is likely on        Over the past half a century,                       country's financial institutions
the rise. The military conflict      history suggests that the high                      to realise this. Despite the         To reach a general consensus
between government forces and        rate of unemployment can lead                       country's potential for economic     on how to move forward on
rebel groups in the country has      to political instability, eventually                growth, the solution lies in the     the issue of unemployment, it
added gas to an inflammatory         bringing down the hope                              hands of the demonstrable and        is necessary to get to the root
economic situation already           bestowed upon the improving                         effective policies followed by       cause. Reaching the goal of the
exasperated by the COVID-19          levels of literacy and education.                   the government and financial         Sustainable Development Goals
pandemic.                            Insurgency, armed rebellion                         institutions.                        (SDGs) depends to a large part
                                     and populism are at least partly                                                         on how well unemployment is
The country's economy has            the result of a lack of economic                    Clearly, political stability         tackled. The labour market is
been under pressure, while the       growth and inclusive economic                       resulting from genuine               self-sustaining. The more jobs
double-digit unemployment was        institutions. The effect of the                     discussion around the table          there are, the more people
a sign that job creation is not      current events in Ethiopia is still                 has always been the first step       have to spend. The higher the
matching population growth and       to be seen.                                         to eradicating unemployment.         spending in the economy, the
the rural to urban migration. The                                                        Peace is the key to navigating a     higher the consumption. And
recent political developments in     There are no secrets that the                       strategic policy. All concerned      as consumption rises, the more
Ethiopia are taking matters from     labour markets have always                          bodies need to prioritise this       industries and markets supply,
bad to worse. The international      been distorted. The supply of                       issue. If peace is not restored,     and the bigger a labour force
community might be adding            opportunities in the economy has                    it will be hard to actualise any     they would need, hiring people
fuel to the fire by failing to see   never kept up with the demand,                      policy to bring unemployment         to meet the demand.
the bigger picture, going by         even as new markets and spaces,                     to the low single-digits.
their actions of development                                                                                                  Young graduates aspire to earn
aid suspension. The loss                                                                 Allowing a suitable environment      a better living. Everyone else
                                                                                         for private sector investment is
                                                                                         another key area. Obviously, there
of legitimate strategy and such as digital, have opened up.                              would be higher opportunities should help them make their

coordinated efforts to mitigate There are commendable efforts                            for young graduates as the dreams come true.

 By Ana Palacio                                              VIEWPOINT

How International Institutions Die

In the aftermath of World War II,             China has taken steps to expand            that they have outlived their        their collective record suggests
the victors established a set of              its influence within multilateral          usefulness. For these critics,       that they remain the world’s
institutions that have underpinned         institutions. It now heads four of the        talk of reforming bodies like        best hope for coping with the
the world order ever since. While                                                        the UN Security Council or the       complex challenges ahead. As
those institutions have often been                       15 UN agencies.                 International Monetary Fund          Harvard University’s Joseph
contested, they have proved to be                                                        (IMF) merely distracts from the      S. Nye recently pointed out,
highly resilient. But this does not  withdrew the United States from                     more important task of “figuring     established institutions entrench
mean they are invulnerable. On       the World Health Organisation                       out what a new order should look     “valuable patterns of behaviour,”
the contrary, their effectiveness    (WHO).                                              like.” Should it, for example, rely  as they underpin a “regime
may be gradually eroded –            The multilateral system passed                      more on ad hoc formations, like      of rules, norms, networks,
especially when they are used as     the stress tests of Trump’s attacks                 those that have proliferated in      and expectations that create
geopolitical pawns.                  – but just barely. Moreover,                        recent years?                        social roles, which entail moral
                                     Trump’s departure from the                          The answer to that question          obligations.”
Academic research offers             White House did not bring the                       is plainly no. After all, those      Of course, the mere existence
abundant analysis of the factors     reprieve, let alone revival, for                    formations have so far failed to     of institutions is not enough to
that boost institutional hardiness,  which some hoped. Instead,                          produce anything close to the        deliver solutions to the world’s
and those that tend to hasten        according to the 2021 Edelman                       kinds of multilateral cooperation    problems. As Nye put it, they must
institutional failure. One key       Trust Barometer, global trust                       the world needs.                     be used in ways that “bind others
message – which my own               in institutions has continued to                    To be sure, traditional              to support global public goods”
experience at the World Bank and     decline.                                            governance frameworks have           that advance shared long-term
in the European Union confirms       The COVID-19 pandemic                               indeed fallen short. For example,    interests.
– is that institutions thrive when   is largely to blame. Despite                        as Mark Leonard of the European      That is not what the EU did
there is trust. Small wonder, then,  some successes, multilateral                        Council on Foreign Relations         last week when the debate
that the international order’s       institutions failed to bring about                  recently observed, UN Climate        over the taxonomy of green
institutional arrangements are       the collaboration needed to                         Change Conferences have              investment devolved into an
at risk.                             address the crisis effectively.                     “failed to produce a model of        acerbic exchange between the
                                     The highly uneven distribution of                   global governance that can tame      bloc’s renewable heavyweights
Former US President Donald           vaccine doses is a case in point.                   power politics, let alone forge a    and those who view gas and
Trump’s administration threw         Some have already written off the                   sense of shared destiny among        nuclear as integral to any green
the institutional-trust deficit      post-WWII institutions, arguing                     countries.” The just-concluded       transition. This debate will surely
into sharp relief. In just four                                                          COP26 in Glasgow lent further        dent the EU’s painstakingly built
years, Trump either defunded or                                                          support to this conclusion.          reputation as a global standard-
disengaged from several United                                                           But while post-WWII international
Nations agencies and multilateral                                                        institutions are far from perfect,                         (Continued on PAGE 22)
agreements, paralysed the World
Trade Organisation (WTO), and
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