At a workshop on innovation I attended a while ago, one of the most revealing moments came when participants were asked to answer the following question: “If you were to advise a 23-year-old to work in a start-up, which one would you recommend?”

To my surprise (and, it has to be said, horror) it transpired that among the 40 or so people who replied, less than a handful referred to genuine start-ups, with the majority citing companies such as Google, SAP or Facebook. This said two things to me: firstly, there is a distinct lack of knowledge and awareness of the start-up environment (especially in Europe); and secondly, many of the older generation in industry are reluctant to encourage young people to join start-ups, often viewing them as more risky and less beneficial for their development or career.

The opportunities within the start-up scene in Europe cannot be underestimated. More and more people every year are choosing to begin their own ventures rather than joining a company (according to a recent government report, there are now 3.6 million sole traders in the UK alone), and numbers are ever growing.

At the same time, the new generation of job-seekers – growing up in an economy where big money is no longer the most pressing objective – are increasingly disengaged from (not to mention disillusioned with) the idea of working the same 9-5 routine, year after year. Instead, they are a generation who favour a portfolio of careers, of many different projects, of ever growing skillsets, with passion at the forefront. For these people, an internship or job in a dynamic and fluid start-up is perfect, as their cultures mesh beautifully. What the older generation may see as risk, the new generation of entrepreneurs sees as endless opportunity.

The World Economic Forum’s new “Fostering Innovation-driven Entrepreneurship in Europe” initiative (within which I am leading a “Promotion of Entrepreneurship” workstream) is an opportunity to raise awareness of the paths available within start-ups and small businesses. Through this we intend not only to help showcase entrepreneurship as a career path in its own right, but also to highlight more entrepreneurial career options – in particular the opportunities which exist for young people to work within start-ups and small and medium enterprises.

The problem, as far as I can see it, is simply awareness. These students and graduates see the bigger companies and corporations attend their fairs and universities, and assume they are the only career options for business-minded youth. This is simply not the case, and it’s up to us to highlight the wealth of other opportunities on offer. With more and more innovations coming out of Tech City, of Silicon Valley, of small businesses containing passionate, brilliant people, I believe that we are gradually beginning to showcase the potential power of the small team. By being present at universities, by continuing to champion the good these companies are doing and by encouraging our start-ups to take a “risk” on bright, passionate graduates, we can show young people that the most exciting, fulfilling careers don’t necessarily lie where tradition might dictate.

This blog post is part of a series written by delegates that recently attended World Economic Forum workshops on innovation, entrepreneurship and global growth in Europe. The next workshop will be held in Berlin on July 3. For more information please contact thorsten.jelinek@weforum.org

Author: Rajeeb Dey is the CEO and Founder of Enternships.

Image: A businesswoman is seen walking in the financial district west of Paris REUTERS/Christian Hartmann

Poised to take over as Chair of ASEAN in 2014, Myanmar would be well served to address the region’s growing illegal wildlife trade. This is not only an environmental issue, but one with significant economic, security and health implications.

Myanmar has some of the world’s greatest biodiversity. Its Northern Forest Complex is home to elephants, bears, leopards and hundreds of species of birds. And at the core of the forest lies the Hukaung Valley Wildlife Sanctuary – the world’s largest tiger reserve.

Despite conservation efforts, reports suggest that a significant trade in wildlife exists, especially with Myanmar’s neighbours – China, Bangladesh, India, Lao PDR and Thailand – where animal parts are often trafficked and sold to be used in traditional Chinese medicine and decorative pieces. One study by TRAFFIC, an international non-government organization dedicated to monitoring the illegal wildlife trade, found that widespread distribution of big cat and bear parts are being openly traded in Myanmar border markets near China and Thailand.

Why is this a problem? From other countries, we know that wildlife crime destroys biodiversity and the services that healthy ecosystems provide. Illegal wildlife trade deprives governments of direct revenue from sales of state-managed natural resources and avoids indirect revenue from taxes on private sector exports. It prevents local communities obtaining sustainable livelihoods, with small-scale poachers receiving but a fraction of the value end-users pay. It can undermine national security because insurgent groups often support their activities via sales of contraband that includes wildlife. It also poses serious threats to health as the transport of wildlife products can spread disease.

The challenges are not unique to Myanmar, but occur across South-East Asia. Thailand and Vietnam, for example, came under scrutiny in March this year at a meeting of the Conference of the Parties of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Thailand was criticized for failing to properly regulate its national ivory trade, with legal loopholes allowing imported foreign ivory to be passed off as a legal domestic product. Vietnam was told that rhino horn smuggling was increasing across its borders.

These issues are of serious international importance. African countries spend millions of dollars annually on protection efforts, while clashes with heavily armed militant groups cost dozens of rangers their lives each year. As a result, Thailand and Vietnam are now taking strong measures to address the crisis.

With greater openness, escalating regional demand from China and other ASEAN countries, the situation is likely to accelerate. With moves towards an ASEAN Economic Community, any inconsistencies in national laws or enforcement will see wildlife criminals moving to exploit the weakest nations in the bloc. The European Union established a common CITES framework when it was first formed that encompasses all its member states. ASEAN would benefit by adopting a similarly consistent approach to wildlife laws and enforcement.

As Myanmar assumes the ASEAN chairmanship in 2014 and plays a key role in leading the 10-member group towards economic integration, it should steer ASEAN to adopt a strong framework to stop the illegal wildlife trade.

Young Global Leaders Class of 2013

Authors: Kala Mulqueeny is Principal Counsel at the Asian Development Bank and a World Economic Forum Young Global Leader. William Schaedla is Regional Director of TRAFFIC South-East Asia.

 Image: A Burmese star tortoise climbing out of its shell REUTERS/STR New

Abenomics is all the rage.

• Japan grew at 3.5% in the first quarter;
• The stock market is up; and
• Sentiments, consumption, and exports are all picking up – even if recent stock-market performance has created some uncertainties.

But negative inflation is still present.

• March 2013 CPI inflation was -0.9% (year on year), down from -0.6% in February.
• Survey-based inflation expectations are flat.

Although the market inflation expectation (break-even inflation rate) had increased from 1.3% in April to 1.9% in mid-May, it recently declined to 1.4% (as of June 6) (Figure 1).

Figure 1. Headline inflation in Japan (% change year-on-year)

Source: Bank of Japan, Statistics Bureau of Japan.

Why is the CPI still falling? The answer crucially hinges upon the implementation of structural reforms, especially in the labour market.

Labour-market reform is the key

According to a survey by Reuters in February, 85% of responding firms said they would maintain current wage levels or make further cuts this year. Japanese companies typically resort to wage cuts for workers with so-called life-long employment contracts rather than lay-offs to adjust for cyclical downturns or due to tougher price competition from abroad. As a result, the unemployment rate has been low, but wages continue to decline. Due to the strong protection of permanent workers, firms typically have redundant permanent workers, thus have no incentive to increase their wages.
Worse yet, only a third of the Japanese labour force (typically older and male labour) has a permanent contract. The majority of the young and female labour force is working under a temporary contract with much lower salary and practically no job security, which creates a kind of caste system in the labour market.

A permanent contract is especially hard to come-by for the younger generation and female workers. The youth unemployment rate in Japan is 8% (the total unemployment rate is 4.8%) as of 2011 according to the OECD, and the wage gap between male and female is the second worst among OECD economies.

Three pillars

Abenomics is comprised of three pillars:

• Aggressive monetary policy easing (Figure 2).
• Fiscal stimulus.
• Structural reforms.

Figure 2. Expanding balance sheet of the Bank of Japan

Source: Bank of Japan, Statistics Bureau of Japan.

The last piece of the three pillars – structural reforms – will not be fully implemented until late summer or fall, because the Upper-House is still dominated by the opposition party, the Social Democratic Party of Japan, making it difficult to pass reform bills.

Presently, Mr Abe’s structural reform plan is still at a conceptual level and lacks a clear strategy to achieve the intended goal. Given the extraordinarily high (by Japan’s standard) approval rating of Prime Minister Abe (exceeding 70%), it is expected that the Liberal Democratic Party of Japan will win a landslide victory in the July election. Only after will most of the details of the structural reforms be clearly spelled out and (possibly) implemented.

A few details are already known, including entering trade talks known as the Trans-Pacific Strategic Economic Partnership and deregulations of certain sectors, such as agriculture and medical care. These supply-side reforms can push up Japan’s potential output in the long run, but some of them can cause deflationary pressures in the short run.

The most urgent reform to reflate the economy and enhance growth needs to occur in the labour market. Despite impressive GDP growth in Q1, the unemployment rate and the job-to-applicant ratio has remained largely unchanged since Mr Abe took office. Breaking the labour-market rigidities, and allowing females and young people to be properly trained and enter the job market with a decent wage and job security will be pivotal to achieve sustainable growth without causing deflation. Also, from this perspective, the proposed tax reform for 2013 – which allows companies to claim a 10% tax credit when they raise wages by 5% or more from the base year – is a welcome development.

True, consumption went up in Q1, but a large part of it has been spent on luxurious goods and/or durable products, supported by capital gains from the stock market surge – thus, it may not be sustainable. With capital gains, many (rich) consumers are spending money on luxury products from abroad, such as European cars and high-end apparel. This partly explains why the trade deficit in April worsened despite the country’s strong export growth.

True, the stock market is bullish amid some recent volatility, but only a handful of Japanese households park their money in stock markets – most of them still prefer a conventional bank deposit which earns little interest. In Japan, cash and deposits represent half of the total household financial assets, whereas the equivalent figure for the US and Europe is 16% and 30%, respectively (Nakawaga and Yasui 2009).

Wages are the most important component of a disposable income by far. Thus, inflation without wage increases will only hurt the poor, or inflation might not happen at all without wage increases as normal households hold back on spending. This further underlines the need for labour-market reforms.

Don’t forget the public debt

Many have been ringing an alarm about Japan’s looming public debt. So far, Japan managed to defy gravity (Figures 3a and 3b). Ito and Hoshi (2012) claimed that this is because investors know that there is still ample room left for revenue increases – the tax burden is still low in Japan compared to the OECD average, and the scope for increasing the tax base is sizeable. However, this does not justify complacency. The administration should come up with a credible medium-term fiscal consolidation plan that walks a tight rope between growth and fiscal consolidation. Especially, the planned consumption tax raise in the coming two years should be implemented without delay. Given the large uncertainty and anxiety over Japan’s fiscal sustainability, a credible fiscal consolidation plan can be growth-enhancing. Fiscal consolidation in Denmark (1982-86), Ireland (1987-1990), Finland (1992-98) and Sweden (1993-98) were associated with economic expansion. While expansions in Ireland and Finland were driven by exchange rate-based stabilisation, in Denmark expansion was driven by internal demand (Perrotti 2011).

The poor fiscal outlook also affects consumer confidence. Japanese citizens have been, and increasingly are, worried about the country’s pension system. With public debt ballooning, the younger generation is sceptical about whether they can actually receive pension benefits when their retirement comes. As a result, instead of contributing to the national pension system, they save money to prepare for their own retirement.  As of January 2013, the payment rate of national pension premiums is just 58%,creating a vicious cycle that affects the sustainability of the national pension system.

Figure 3a. Basic indicators of government debt

Source: Author’s calculation based on data from IMF-IFS and Reuters. The yield is as of June 6, 2013.

Figure 3b. Government debt-to-GDP ratio and ten-year government bond yield of advanced economies

Source: Author’s calculation based on data from IMF-IFS and Reuters. The yield is as of June 6, 2013.

Conclusion

Abenomics appears to be thriving so far, and now could be the time for Japan to emerge of its long-lasting economic stagnation. While the bold policy shift of the Bank of Japan received some credit, monetary policy alone will not bring growth and 2% inflation. Moreover, inflation alone does not bring sustainable growth without proper structural reforms in place.

The success of Abenomics crucially hinges upon the last pillar of ‘three pillars’ – namely, structural reform. It is yet to be revealed how Mr Abe will turn his talk of structural reforms into actual implementation.

Needless to say, political continuity is a crucial factor for structural reform. Japan has had seven prime ministers since 2006, and Mr Abe’s last term lasted for just a little less than a year. In addition, while the previous structural reforms implemented by Mr Koizumi (Prime Minister from 2001 to 2006) produced some benefits, its focus on deregulation also came with high costs due to a larger income disparity and the creation of the working poor, who hold low-wage (less than ¥2 million (approx. $19,000 per year), temporary jobs with few benefits. It is estimated that 20% of Japanese workforce falls under this category.

According to the OECD, Japan’s in-work poverty is fifth worst among the OECD economies. Mr Abe’s structural reforms should specifically focus on the labour market, including removing labour-market rigidities, fostering equal job access for the youth and the female labour force, and providing improved job security for the ‘working poor’.

Note: The opinions expressed here are solely the ones of the author’s and do not necessarily reflect the view of De Nederlandsche Bank. The author thanks Peter van Els and Hiro Ito for their valuable comments.

This article originally appeared in voxeu.org

Author: Ayako Saiki Economist, De Nederlandsche Bank

Image: A japanese flag is seen atop the Bank of Japan building in Tokyo REUTERS/Toru Hanai

Unemployment matters. It is a major source of unhappiness, mental ill-health, and lost income. Yet after a century of economic research the determinants of unemployment are still imperfectly understood, and jobless levels in the industrialised nations are currently around 10%, with some over 20%.

If you search for ‘unemployment’ in the Web of Science, within the Social Science Citation Index a list of around 21,000 articles appears. For economics journals alone, there are approximately 10,000. The most prominent among these are:

• The Shapiro-Stiglitz model of unemployment as a worker discipline device.
• The Harris-Todaro paper on migration and unemployment.
• The original Phillips curve article.

Newer literatures such as from the models created by Mortensen and Pissarides and empirical work on the unhappiness from unemployment – are also strongly represented in the list.

A paradox emerges from this bibliometric search:

• Economics articles presenting clear empirical evidence on the causes of our high unemployment are less prominent than might be expected.

One intellectual strand that does stand out is are articles such as Nickell 1997 and Meyer 1990, both of which boil down to the same broad notion: the key to an understanding of the causes of unemployment is to think about labour-market ‘rigidities’ and the generosity of unemployment benefits.

Deeper causes?

Let’s consider a different way of thinking about unemployment. Remembering that an economy is a general-equilibrium system, say we imagine the possibility that, as in the case of certain illnesses of the human body (which is another general equilibrium system), a symptom can be the result of a deeper problem – one that lies far away from the source of the observed symptom. Perhaps other markets matter more than unemployment and labour researchers have appreciated.

My colleague David G Blanchflower and I provide evidence in a new paper that the high rate of home ownership in the western world may be an important reason for the high unemployment that we all see around us (2013).

• We begin by pointing out that an elementary scatter plot for the industrialised nations reveals a strong correlation between home ownership and unemployment.

Famously, Switzerland has 3% unemployment and 30% home ownership, while Spain has 25% unemployment and 80% home ownership.

Simple correlations of this kind do not count as (remotely) persuasive causal evidence. They are open to the objection, in particular, that they do not difference out country fixed effects.

So, in our paper we take many decades of data from US states, which as a federally organised nation state, offers a useful spatial mini-laboratory for econometric work on unemployment rates, and we then estimate state panel unemployment equations. We adjust for state fixed effects, for year dummies, and for the demographic and educational composition of the people who live in the different states.

The effect estimated on US state data

When this is done, we find that the lagged home-ownership rate acts as a strong predictor of the unemployment rate. The size of the estimated effect is startling:

• A doubling of home ownership is associated with more than a doubling of the long-run unemployment rate.

As a check, we show that this result is holds up against splitting the data set into different sub-periods and into different areas (such as North and South) within the US. We also show that the patterns are – very probably – not because home owners themselves are disproportionately unemployed. Our work chimes with forthcoming recent research by Jani-Petri Laamanen, who studies a natural experiment in Finland (2013).

We are not sure what explains our correlation. But we show, using various micro data sets, that higher home ownership leads to lower labour mobility, greater commute-to-work times, and a lower rate of business formation. Our hunch, on which further work will be needed, is that the housing market exerts powerful externalities upon the labour market. This would not have surprised Milton Friedman, who, in his writings on the natural rate of unemployment, emphasised the need for labour mobility in an efficient economy.

Conclusions

For those unaware of it, the previous century saw a huge rise in home ownership across the world. Tax breaks offered by many governments acted to destroy large parts of the early 20th century private rental housing market. If we are right, these kind of tax breaks have worrying consequences.

We believe these issues merit more attention from economists.

Figure 1. 50-year changes (1950-2000) in home-ownership rates and 60-year changes in unemployment rates (1950-2010)

This article first appeared in voxeu.org

Author: Andrew J. Oswald is Professor of Economics at Warwick University

Image: A “sold” sign is seen in front of a recently built house in Maryland REUTERS/Gary Cameron

There’s been a lot of buzz about eye tracking lately, with some of the world’s leaders such as Fujitsu and Samsung making headlines with eye-tracking-based product features or rumours about future vision-driven gadgets. The consumer reaction has been overwhelmingly positive, and eye tracking has been touted as one of the big “hot new things” emerging in consumer technology.

But beyond this cool factor, and the hype that comes with each new announcement, what can eye tracking really do for you?

The answer is simple – a lot. In fact, we predict it will change your life. And, for many, it already has.

Today, eye-tracking technology can help people all over the world access computers through systems that use gaze control. For people with disabilities, it is a gateway to communication, personal expression and inclusion in society.

For mainstream consumers, they will experience eye tracking as it’s integrated into phones, laptops, PCs, gaming systems, automobiles and more. Our main benefit from eye tracking is not access, but rather, extreme speed, increased productivity and intuitiveness. We love our spell check and any other feature of convenience that can help us process our work or play faster and easier.

When integrated with other computer user controls such as keyboards, touch pads,  a mouse or a joystick on gaming systems, eye-tracking systems create entirely new, richer, more natural and intuitive  user experiences. Having to move a cursor with our hand on a mouse or keyboard to get the computer to go where we want was an artificial but necessary step in creating the beginning of the computer era. Now, with eye tracking, we can replace that awkward, often painful step with one of our natural senses – our sight. By using our natural gaze point as part of our user controls, we tear down a barrier between ourselves and computers.

For example, consider the time and energy saved by having the text on your screen scroll as your eye advances down the page? Beyond simple consumer enjoyment when reviewing websites, reading books or long documents, the benefits of gaze scroll become even more dramatic when applied to situations that require hands-free actions, such as during surgical procedures, in-car safety and entertainment systems, and manufacturing production. Think about how much better computer games will be when you can direct your movement with your gaze, just as you do in real life.

In education, eye tracking is becoming a commonly used tool to help provide insight into attention patterns of students in the classroom. These insights can help develop effective teaching techniques, according to the findings of a research study using Tobii Glasses, from David Rosengrant, professor of physics education at Kennesaw State University. However, perhaps one of the most important efforts right now is advancing eye-tracking knowledge for the next generation – those who will live with it in their daily lives at home, work and play.

The potential for eye-tracking technology is virtually endless. New products, new markets and new uses of eye tracking will surely be discovered, and we look forward to it.

Author: John Elvesjö is Chief Technology Officer and Deputy Chief Executive Officer of Tobii Technology and is a World Economic Forum Technology Pioneer 2013

The rain was pouring on the rooftop of the conference room in Myanmar. It made a rushing, pounding, deafening noise. Maybe that’s what it feels like when a government is preventing its people from exercising free expression, like a constant murmur of white noise that extinguishes each beginning of constructive dialogue.

But in this case, our workshop participants, especially those who were aspiring young political leaders of Myanmar, did not let the crashing rain intimidate them. Instead, their voices rose high above the noise of the rain, projecting across the room, using dialogue to build bridges as they brainstormed together how they might take concrete action to change their country.

The reality we witnessed through listening to these young people, and through engaging with them directly, showed that leaders are emerging in each different ethnic group. These young leaders are eager and willing to collaborate and build change together because they feel that they share similar concerns. We had among us representatives of several divergent political parties, including the military.

The discussion on ethnic groups kicked off with statistics showing that there are in fact seven majority ethnic groups in Myanmar, including the Burmese, but then many additional minorities. The different groups, spread across different states, are actually facing a similar challenge which is that the wealth of the country’s natural resources are not lifting them out of poverty, but instead are being channelled straight to the government, where budget allocation lacks transparency. This emerged as the central problem, shared by ethnic groups throughout the nation. However diverse the country’s demographics, the needs and objectives of the people are in fact the same.

Other topics that came up included the question of how to incentivise teachers to improve the quality of education, the need to decentralize local government structures in order to give a voice to the different regions, and the need for infrastructure investment – especially in health and IT. Two Young Global Leaders shared their experiences of their own countries in transition, Turkey and South Africa, to identify similarities and divergences compared to Myanmar’s situation. All participants spoke passionately about one shared vision: positive change.

By opening its doors to freedom in the 21st century, Myanmar has the advantage of being able to look back on the history of industrialization across the world, identify the mistakes made, and avoid repeating them. The window of opportunity is now ajar – but will it be thrust open?

Author: Melisande Middleton is the Founder and Director of the Center for International Media Ethics (CIME) and is a 2013 Young Global Leader

Image: Passengers are seen taking a ferry in Yangon REUTERS/Damir Sagolj

Debates are raging on what should replace the Millennium Development Goals (MDGs) after 2015 and the future of development in general.

Adding their voices to the debate, 35 World Economic Forum Young Global Leaders  recently met with leaders of organizations in Washington, DC – ranging from the World Bank and IMF to USAID and the US Congress – to address the challenges that lie ahead. The realization is sinking in that policy dialogue needs to ensure inclusive conversations on:

1. The changing poverty map

Huge numbers of people have been lifted out of poverty, especially in large emerging countries; however, there are a number of countries where many people remain trapped in poverty. The MDG goal of ending extreme poverty by 2030 will not be met unless poverty in countries afflicted by conflict and instability is addressed.

2. Private sector catalysts

While tools exist to encourage private sector investment, such as impact investing and risk mitigation instruments, it is clear that more tools must be created to bring the private sector to the table in the right way.

3. The power of technology

Technology is changing how consensus on economic reforms should be built; technology enhances accountability, coordination and creativity, and enables citizens, experts and officials to collaborate in new ways to identify solutions.

4. Demography and climate change

Demography and climate change are changing the human and physical landscape, presenting both a challenge and an opportunity for poverty reduction. In many countries, the majority of the population is under 25; a clear requirement is tackling youth disenfranchisement with pathways to jobs and skills.

5. Politics and reform

Changing how development actors do business is a widespread concern. Perceived failings include weakness in implementation and excessive reliance on multiple chains of contracting. Solutions include greater transparency, engaging with a broader spectrum of actors, including local civil society, and innovative companies breaking new ground, and shifting to new financing models.

Author: Clare Lockhart is Director and Co-Founder of the Institute for State Effectiveness (ISE) and is a 2011 Young Global Leader. With the collaboration of Nilmini Rubin is Senior Adviser to the US House of Representatives Committee on Foreign Affairs and is a 2006 Young Global Leader.

Image: White puzzle pieces REUTERS/Yuriko Nakao

The annual meeting of the G8 traditionally aims to address some of the world’s most pressing challenges. In the past, the small gathering of world leaders has centred on issues such as poverty reduction, international aid, peace and security, and climate change. The agenda of this year’s meeting in Lough Erne, Northern Ireland, includes strengthening international tax standards; reducing investment barriers and advancing free trade agreements; facilitating greater transparency in land deals and extractive industries; and working to promote more open and readily available data. However, the greatest challenge, according to UK Prime Minister David Cameron, host of the meeting, is to “restore strong and sustainable growth to the world economy.”

Prime Minister Cameron is right to acknowledge the importance of restoring growth, as the IMF revised downward its global forecast for 2013, suggesting that “an uneven recovery is also a dangerous one.” Developing economies are still projected to account for the majority of global growth over the coming years and, while many emerging markets managed to get through the financial crisis relatively unscathed, some of the key players are experiencing a slowdown that could put additional pressure on what has already been a protracted recovery.

In 2012, for instance, Brazil and South Africa grew by only 0.9% and 2.5%, respectively. India has also experienced a slowdown and growth has fallen to a decade low. Russia has, thus far, been unsuccessful in diversifying its economy, and growth continues to be determined by the whims of commodity price fluctuations. Despite their size and strategic importance, these countries are clearly underperforming relative to their potential.

While growth across the BRICS, excluding China, has somewhat faltered, there are a number of developing economies that have picked up the slack. Indonesia, Thailand, the Philippines, Peru and Nigeria are just a few of the star economies that grew more than 6% in 2012. Still, for these and other emerging markets to carry this momentum over the medium and long term, they will need to further develop their financial systems.

So, what does financial development have to do with promoting economic growth? According to the World Economic Forum’s annual Financial Development Report, which measures and analyses the factors enabling the development of financial systems in more than 60 economies around the world, “the performance and long-term economic growth and welfare of a country are related to its degree of financial development.” The reasons for this, the report suggests, are twofold. First, a more developed financial system is able to efficiently mobilize savings and allocate capital to the highest-return investment projects. Second, “by allocating capital to the right investment projects and promoting sound corporate governance, financial development increases the rate of technological innovation and productivity growth, further enhancing economic growth and welfare.”

Restoring strong and sustainable growth is undeniably one of the most pressing issues facing the global economy. However, the path forward is neither clear nor straightforward as the factors that contribute to growth will vary across countries based on their level of development. Nevertheless, maintaining or boosting growth across emerging economies will depend, in part, on their ability to create more advanced financial systems.

Todd Glass is a Project Associate on the Financial Services Industries Team at the World Economic Forum USA and co-author of the Financial Development Report.

Image: The Lough Erne Golf Resort in County Fermanagh, venue of the G8 summit. REUTERS/Cathal McNaughton

Visiting a bottling plant in Myanmar last week, the impression I got was certainly not of a country that got its freedom from military rule only two years ago. The staff and management seemed motivated, efficient and committed. During the visit, though, as well as hearing about the opportunities for a country on the cusp of profound change, we also heard about the challenges of doing business there.

Our group of Young Global Leaders was told that business is mainly done in cash, logistics are not easy and immigration laws do not allow companies to bring in the skills they need. Added to this is a major problem of inflation, power costs due to generator usage and other hurdles to growth.

Despite these issues, the company has experienced tremendous growth and has done all the right things to bring in the appropriate expertise, get the right certifications and ensure that the staff are motivated.

Our group included people from countries that had gone through similar problems. Three suggestions were clear. In order to really create a sustainable engine of growth, it was necessary to cut down red tape.

This includes things like making it easier to register a company, tackling corruption and making sure the country does not have an environment where only the rich can thrive.

The second is to create an atmosphere of trust, after years when people felt unable to trust a government worker or neighbour, for example.

The third important thing is to make national directives more transparent and allow for decentralization, so that decision-making doesn’t paralyze growth.

In spite of the rocky development road ahead, there was a great optimism that manufacturing companies can thrive and help to build the Myanmar of the future.

Author: Anu Acharya is a Young Global Leader of the World Economic Forum. She is the Founder and Chief Executive Officer of mapmygenome.

Image: Newly produced bottles are seen on a production line REUTERS/Ivan Milutinovic

Chinese Premier Li Keqiang made the case for more free trade when he met Professor Klaus Schwab, Executive Chairman of the World Economic Forum, in China last week.

“Trade protectionism is a blind alley, while the creation of an open, free and fair trading environment is the right path toward an economic recovery,” Premier Li said.

Premier Li was meeting Professor Klaus Schwab ahead of the Annual Meeting of the New Champions in September.

Image: Chinese Premier Li Keqiang (R) meets with World Economic Forum Chairman Klaus Schwab in Beijing, June 14, 2013. Photo: China Daily

Over the past few years, a political transition has been under way in Myanmar. Throughout this transition, and as recently as last week at the Young Global Leaders (YGLs) annual summit in that country, both President Thein Sein and the opposition leader Aung San Suu Kyi have spoken of the rule of law, inclusion and reconciliation. What, then, is the place of justice in Myanmar’s transition?

This question is difficult to answer even among local civil society leaders because justice can take different forms. No doubt, the answer will emerge over time, through examination and debate at all levels of society. Nonetheless, at this early stage of reform, we can examine other countries’ experiences in transitional justice. During the YGL summit in Myanmar, a group of YGLs and civil society leaders met at the Local Resource Centre (LRC) to do just that. Together, we discovered that countries’ experiences are diverse. But we also discovered that there are common forms or mechanisms of transitional justice throughout the world: special rapporteurs; truth and reconciliation commissions; and court proceedings.

These diverse global experiences, for which the term “transitional justice” has gained broad acceptance in the international community, but only over the past decade, have, in fact, been occurring for many years. Nevertheless, there remains as yet no widely accepted mechanism for delivering transitional justice. Instead, mechanisms have been limited to specific countries or regions and to the transitions that were taking place in them. In other words, each country has adopted the form of transitional justice that it deemed appropriate to its own context. The people of Myanmar must also adopt a form suited to their country and, in so doing, must decide whether the mechanism they choose needs to be transitional. But whether transitional or otherwise, justice is always about time and place, and, more importantly still, about people. Our LRC journey reminded us all of this.

Because transitional justice is amorphous, it presents opportunities for action at all levels: national, regional and local. It may take time to develop national programmes, given the greater will and co-ordination required, but it may be possible in less time for civil society to develop local or regional programmes in advocacy, investigation and other assistance. For example, civil society could advocate for the establishment of a transitional justice mechanism and, if one is established, monitor it; investigate, document and archive any human rights abuses or issues; and provide legal or other assistance to victims, as well as counselling. This list of programmes or tasks is not exhaustive: transitional justice mechanisms are diverse, but so are the important tasks for civil society.

Whatever tasks civil society assumes, its role is indeed important, as is the international community’s role of supporting Myanmar’s people. The YGLs hope that we have done so during our LRC journey, and we remain committed to continuing our support for civil society in the months and years ahead. As Myanmar’s transition continues, so will our journey together.

Author: Renée Maria Tremblay, recent Visiting Professional at the International Criminal Court, and Legal Counsel to the Supreme Court of Canada; 2013 Young Global Leader

Image: A man sits in a window in Yangon REUTERS/Soe Zeya Tun

Art is often seen as a luxury, a frivolity and not relevant to serious issues within society. From the discussions with multiple artists and visits to different artistic spaces in Yangon over the course of one day, it quickly became evident how wrong this impression is.

What immediately became clear was the sheer will and bravery of many of these artists to carve out a space for expression during some of the darkest years of censorship in Myanmar. Pioneers like Aung Myint, born in 1946, looked to constantly push the boundaries with his work and gallery, the Inya Gallery of Art, where artists gathered and could find mutual support.

Performance art emerged as a dominant form, in part because of exchanges with international artists that were able to come to Myanmar, and because of the flexibility of this form to dodge the censors and applications for licenses needed to stage an exhibition. As restrictions on holding an exhibition loosen up, it will be interesting to see whether performance art stays a relevant and urgent a form.

With the removal of the ban on freedom of the press, there is a sense of hope among the art community for not only being able to push the boundaries of artistic experimentation, but also the realization that much needed work for building what is necessary for a healthy arts infrastructure can begin. And it’s a daunting task.

The list of lacks is long – general education of art in school, resources for study, written material on the history of art from Myanmar, training, public spaces (be it alternative or museums), etc. And while there are a number of commercial galleries that have been successfully operating and providing a means of support for many artists, private collectors are few and far between. Even if you want to buy a work of art from inside or outside the country, it is almost impossible to pay with a credit card or transfer money in to the country.

While the transactional side of the art market will most likely be solved with relative ease over time as businesses move into Myanmar, what is likely to take a back seat is the formation of a cultural policy or support for the arts by the government. This is where the private sector and international experts and institutions can not only help, but make a crucial difference.

Some of the first steps to be taken should include the establishment of a physical and digital resource documenting 20th and 21st century local art, the commissioning of texts on art, developing curatorial and art criticism programmes, establishing local and international residencies, and providing fellowships and mentorship.

In the long run, offering arts will undoubtedly attract tourist dollars, but ultimately, the arts are essential for creating a dynamic, free-thinking and inclusive society in Myanmar. And that is priceless.

Authors: Claire Hsu is Co-Founder and Executive Director of Asia Art Archive (AAA). Yana Peel is, Chief Executive Officer of Intelligence Squared.

Image: Performers dance during a celebration in Yangon REUTERS/Soe Zeya Tun