London , Asharq Al-Awsat- As I write this week’s thoughts we are enjoying the first of four days of celebrations to mark the Diamond Jubilee of Majesty Queen Elizabeth II. When you read it, however, we will be about to watch the finale of the weekend of celebrations involving a Service of thanksgiving for Her Majesty’s 60 years of service to this country.
Communities all around the country will be celebrating over an extended bank holiday weekend, and there will be many ways to get involved in local events. There will be sharing and communities will help each other. For many people this will bring a welcome break from the worries of everyday life during a time of economic uncertainty.
In these difficult times it is reassuring to observe the level the good work people do: it is still at a high level and that marks an important characteristic of a civilised society. It is essential for people of influence to do what they can to help create opportunities for young people. All of our futures depend on this.
Britain’s Royal family’s hard work in this respect often goes unnoticed. One charitable organisation that HRH Prince Charles, Prince of Wales, created in 1976 is The Prince’s Trust. The Prince’s Trust will be 35 years old this year. It runs a range of training programmes, provides mentoring support and offers financial grants to build the confidence and motivation of disadvantaged young people. The Prince’s Trust exists to help young people overcome barriers and get their lives working.
Through practical support including training, mentoring and financial assistance, it helps 14 to 30-year-olds realise their potential and transform their lives. The Trust focuses its efforts on young people who have struggled at school, have been in care, are long-term unemployed or have been in trouble with the law: it gives some young people a second chance. The Trust has helped more than 600,000 young people since 1976 and support 100 more each working day. More than three in four young people it helped last year moved into work, education or training. It is great to see such work with those with problems.
Another, founded in 2000, is The Prince’s Youth Business International (YBI). YBI is an international network of programmes that help disadvantaged young people to become entrepreneurs by providing business mentoring and funds. It is vital that young people have the opportunity to start their own business. Young people can build businesses which create jobs and contribute towards economic development. The network is wide. As an example the YBI partner in Saudi Arabia is The Centennial Fund. The Centennial Fund was established in 2004 and was the first Middle Eastern member of YBI. It has national coverage in Saudi Arabia but focuses 70% of its resources in rural areas and the smaller cities. YBI also has partners in Africa, the Americas, Asia and Oceania and in Europe.
Each local programme operates on three common principles: they support young people, typically aged between 18-30, who have a good business idea but who cannot obtain help elsewhere; they provide access to start-up funds in the form of a loan without the need for guarantees or collateral; and they provide the young entrepreneur with a volunteer business mentor and access to business networks. YBI initiatives help young people to start and grow their own business and create employment. HRH The Prince of Wales is its President.
Apart from this being a weekend of celebrations all over Britain why am I mentioning support for young people now? The community spirit in Britain this weekend brings the plight of others to mind. For a long time I have affirmed that small businesses are the engine of economic development. In nearly every country in the world, the vast majority of jobs are created by small businesses. It is essential to enable young aspiring entrepreneurs to create enterprises which can create jobs, bring innovative new products or services to communities and bring trading opportunities to other businesses.
Young people frequently lack the resources to start up their own business. Young people already make up as much as 40% of the world’s total unemployed, and are almost three times as likely to be unemployed as adults. In Europe we are seeing dreadful levels of youth unemployment and we are not alone. The populations of some growing Middle Eat economies have similar problems. Maybe the global debt crisis is telling us that this is the time for a paradigm shift. Perhaps we need to share more of our skills and support the young better.
Another reminder this week of the difficulties that some find themselves in was when Christine Lagarde, the managing director of the IMF was asked whether she worried about the economic and social impact of austerity in Greece. Ms Lagarde said: ‘No, I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education. I have them in my mind all the time. Because I think they need even more help than the people in Athens.’
Now that is a thoughtful argument and a contentious one. This has caused some anger, but then that is mainly from politicians and it is politicians who are the originators of the problems. There is a far more important feature to Ms Lagarde’s point: there is huge inequality in the world and there is too great a sense of entitlement in some nations.
In a time of difficulty we all need to do more for less and for others. I spent the first three days of this week at the Commonwealth Secretariat in Pall Mall in London heavily involved in an international programme that looked at whether PPPs (public private partnerships) are possible in the context of low institutional capacity. The difficulties that some emerging countries have are enormous but that is no reason to hide from them. New ways of investing, of sharing experience and knowledge must be considered if those countries are to create sustainable futures. The solution involves developing a strong and open private sector.
In a fragile international economy where public needs continue to outstrip fiscal capacity it may not be possible to bring about all the institutional changes before development can take place, so it makes sense to examine how the public and private sectors can be joined together in an institutional arrangement designed to draw on the defining characteristics and strengths of each sector; such is the opportunity to adapt the concepts of a PPP to create many new opportunities.
Although we now have a considerable body of experience in a variety of nations and an enlarging body of literature, I suggest that we do not yet have sufficient research to render a definitive judgement about the validity of such arrangements. So we should get on with it!
In addition we must maintain financial discipline in all countries: this was demonstrated in the bond markets this week. As Spain’s borrowing costs increased, Britain saw interest rates fall to record lows, with the yield on 10-year bonds sinking to 1.67%, reflecting the confidence investors have in Britain’s ability to cope with its debts.
Good sense was shown by the people of Ireland this week when they voted to approve the EU fiscal pact. Prime Minister Enda Kenny said Ireland had sent a “powerful signal” that it was committed to overcoming its economic challenges. He said the move would not solve all of the country’s problems, but that it was “one of the many foundation stones” needed to ensure the future stability of Ireland’s economic position. It would enable investment and create jobs, he said, as well as allow Ireland access to funds from the European Stability Mechanism should it require it.
We need more sense, more generosity and more positive foundation stones if we are to successfully defeat the world’s financial problems soon.
John Davie is a visiting professor at London Metropolitan Business School and chairman of Altra Capital