Full Employment

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Full Employment Decent WorkSub-Saharan
Africa

• Yaw NyarkoNew York UniversityOct 3rd, 2007

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Some Ideas

• Education
• Migration and the Brain Drain
• Knowledge Economy
• Pro-Growth Policies?
• Capital/FDI?
• Micro-Credit?

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Education Is Key

• Africans already understand the key role of
  Education
  
• Rapid recent expansion 1.5 million students in
  1980 to 3.8 million in 1995
  
• Six universities in Sub-Saharan Africa in 1960 to
  more than 120 now.

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Education Is Key

• Africans already understand the key role of
  Education
  
• Rapid recent expansion 1.5 million students in
  1980 to 3.8 million in 1995
  
• Six universities in Sub-Saharan Africa in 1960 to
  more than 120 now.

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• Education Levels still low comparatively in
  Africa, especially in comparison to comparison
  nations in Asia.
  

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Africas Private Universities

• Rapid Recent Increase in for and not for profit
  private Universities.
  
• In Sub-Saharan African countries the number of
  private institutions grew from 30 in 1990 to more
  than 85 in 1999.
  
• Main countries where increase took place Kenya
  (21), Tanzania (14), Ghana (12), Uganda (11)
  
• Many specialize in ICT
• How do we encourage this growth?

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• Primary, Secondary or Tertiary Education?
• Psacharopoulos (1995) , Bill Saint, World Bank
  and others.

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Quality of Education
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Quality of Education

• 1000 students in a Lecture Hall

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Quality of Education

• 1000 students in a Lecture Hall
• Computer Science depts with no computers.

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Quality of Education

• 1000 students in a Lecture Hall
• Computer Science depts with no computers.
• Science High Schools with no computers and no
  internet
  

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Quality of Education

• 1000 students in a Lecture Hall
• Computer Science depts with no computers.
• Science High Schools with no computers and no
  internet
  
• Private Universities with vocational level IT
  classes
  

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Quality of Education

• 1000 students in a Lecture Hall
• Computer Science depts with no computers.
• Science High Schools with no computers and no
  internet
  
• Private Universities with vocational level IT
  classes
  
• No electricity to run computer

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Quality of Education

• 1000 students in a Lecture Hall
• Computer Science depts with no computers.
• Science High Schools with no computers and no
  internet
  
• Private Universities with vocational level IT
  classes
  
• No electricity to run computers
• Chew, Pour, Pass, Forget.

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Some Ideas

• Education
• Migration and the Brain Drain
• Knowledge Economy
• Pro-Growth Policies?
• Capital/FDI?
• Micro-Credit?

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• Migration

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• Skilled Migration or the Brain Drain

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• Carrington-Detragiache (1998) Docquier and
  Marfouk
  
• Africans to the US are among the highest educated
  of immigrant groups

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• The Cost of Producing Brains
• Hinchliffe, K (1987) using data for 1979 -
  1984, shows unit costs of tertiary education as
  a multiple of per capita GNP as averaging 8.6 for
  Africa, with highs of 30 for Tanzania, 13 for
  Upper Volta and Zimbabwe, 14.2 and 6 for Ghana.
  The averages for Asia, Latin America and the
  developed countries are 1.2, 0.9 and 0.5
  respectively.

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Our numbers UNDP (2004) Human Development
Report, World Development Indicators and UNESCO
(2005).
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Remittances
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Remittances

• Slow Rising Houses
• Gated Communities
• Remittances Example with Ghana 1bn
  estimate by Bank of Ghana makes this 10 of GDP
  and bigger than total aid flows of 650M, and
  largest foreign exchange earner. Official Stats
  44M.
• Example set by Mexico.

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Easterly and Nyarko (2007)

• Y f(Roads, Education) f(G-e,(1-d)?)
• Payoffs
• w - R who are educated and drain
• cy who are educated and stay
• y receive no education

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• Utility of Young
• ?d(W-R) ?(1-d)cy (1-?)y
• Utility of Old y ?dR

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Rough Calculation(Ghana)

• Cost of one E is 6 units GDP per capita?
• X is annual remittance per capita
• 20X is present value at 5
• Set 20X6 so X6/200.3 or 150
• Average Remittance?
• 44million /100,000 440

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• Incentives to Form Human Capital
• (Oded Stark (2003) et. Al, and
• Easterly and Nyarko (2006).

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Brain Circulation

• Private Universities Ashesi
• Investment Banks Databank
• Academic Exchanges NYU in Ghana
• Return Rate of 50 of Ph.D.s
• (SSRC Study)

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Some Ideas

• Education
• Migration and the Brain Drain
• Knowledge Economy
• Pro-Growth Policies?
• Capital/FDI?
• Micro-Credit?

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The Knowledge Economy

• My Favorite Examples
• NYC Parking Tickets processed in Ghana
• US East Coast Webcams monitored in Cape Verde
• Call Centers (KenCall in Kenya???)
• Phone Cards business -Ashesi Disabled student
• Nollywood

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Is KE an African Engine of Growth?

• Entrepreneurial Spirit
• The Local Markets and haggling
• Migration Efforts
• Garage Industries Image.
• Tetteh Quarshie
• Love of Education

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Is KE an African Engine of Growth?CONCERNS

• Education is key.
• Diaspora and Brain circulation
• Physical Infrastructure
• Financial Infrastructure
• Competitive Landscape

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Brain Circulation

• "Look at India, the Diaspora made it happen.
• Source Comment found on a web page.

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CHINDIA

• INDIA
• More Indians given Ph.D.s in Engineering in US
  than Americans in US?
  
• CHINA
• 400,000 Chinese students have gone abroad since
  China's opening to the world in 1978 .
  
• Engine for both IT sector and Education reform

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The African Brain Drain/Circulation

• 406 doctorates in science and engineering awarded
  to African citizens in the US in 2005 and 3646
  accumulated during 1996-2005

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The African Brain Drain/Circulation

• 406 doctorates in science and engineering awarded
  to African citizens in the US in 2005 and 3646
  accumulated during 1996-2005

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The Competitive Landscape

• The Competition is Intense (Chindia, BRIC,
  Eastern Bloc, rest of Asia)
  
• However
• The World is Flat
• The Landscape will Change
• Preparing for the Next Technologies

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Strategies for the African KE?
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Strategies for the African KE?

• Low Hanging Fruit
• Cape Verde Webcams KenCall Nollywood.

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Strategies for the African KE?

• Low Hanging Fruit
• Cape Verde Webcams KenCall Nollywood.
• The African ICT Backbone
• African Broadband most expensive
• SAT Cables, Fibre Optics, etc.

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. And Venture Capital

• Chinese Regional Governments?
• US FCC Auctions of Spectra for Mobile Phones
• Are African Banks up to the task of financing the
  KE?

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Foreign Aid?

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Foreign Aid?

• NO!

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Employment and Poverty Reduction
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Employment and Poverty Reduction?

• Gini Coefficients
• Tetteh Quarshie Revolution

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Employment and Poverty Reduction

• Gini Coefficients
• Tetteh Quarshie Revolution

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• "We paid the price of not taking part in the
  Industrial Revolution of the late eighteenth
  century because we did not have the opportunity
  to see what was taking place in Europe. Now we
  see that information and communication technology
  has become an indispensable tool. This time, we
  should not miss out on this technological
  revolution."
• Professor F.K.A. Allotey

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Some Ideas

• Education
• Migration and the Brain Drain
• Knowledge Economy
• Pro-Growth Policies?
• Capital/FDI?
• Micro-Credit?

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• Pro-Growth Policies?

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• Capital Flows and FDI?

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Micro-Credit?

• Microcredit seems to help the customers
  themselves, but are effects only localized?  
  
• few places with any serious levels of
  penetration.  
  
• Village-wide spillovers in Bangladesh?
• The lack of multiplier effects is pushing some
  donors to look up-market

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CONCLUSION

• Education
• Migration and the Brain Drain
• Knowledge Economy
• Pro-Growth Policies?
• Capital/FDI?
• Micro-Credit?