Weekly Review July 4-8

Tomorrow, South Sudan becomes the newest country with their declaration of independence. At ID, the newfound independence sparked a conversation. We discussed social enterprise in post-conflict areas, and found that social enterprise will be and has been effective in South Sudan and throughout other conflicted areas in the world.

Recently, we’ve watched public uprisings unfold in Tunisia, Egypt, and Libya over high unemployment rates, mismanaged public sectors, and outdated political regimes. The common trend in MENA seems to be state-owned enterprises failing to meet the public’s needs and demands, which are as simple as employment and transparency. “A regional reform program for state-owned enterprises is a financial and social enterprise with global relevance.” Such social enterprises will not only development the economy, but give the people what they want: jobs.

Earlier this year, information and communications technologies played an integral role in the Egyptian revolution. Many will recall that Internet and phone services were shut down during the protests to oust President Hosni Mubarak. Despite the highly influential ICT sector in Egypt and obvious success of mobile money transfer services throughout Africa, mobile money operators will find it difficult to penetrate the Egyptian market until the telecoms recover their losses from earlier this year. Social enterprise in the form of mobile wallets will grant financial inclusion to the 90% of the population who do not have access to traditional credit cards.

In an effort to bring economic opportunity to a country still scarred from genocide in 1994,  two non-profits, Blue Marble Dreams and BPeace, teamed up to open Rwanda’s first ever ice cream shop. BPeace believes that “creating jobs creates peace.” The ice cream shop, called Inzozi Nziza or “Sweet Dreams,” is a unique social enterprise with both financial and social goals. Although not a high-tech product or elaborate business model, Inzonzi Nziza exists to foster entrepreneurship and provide employment for Rwandan women who were directly affected by the Rwandan genocide. The women working at Inzozi Nziza received training in all aspects of business and ice cream service.  While there are some struggles for this one-year-old social enterprise, Inzozi Nziza serves as an example of using business to create economic and social change in post-conflict areas.

The private sector has the power to create successful businesses that will also protect the environment, reduce poverty, and promote sustainable agriculture and safe water management. Especially in areas in post-conflict resolution stages, the article reports, the private sector has a significant influence on the development of a devastated area. For some investors, it may seem too risky to invest in post-conflict zones, however the potential for significant social return outweighs the cost of patient capital. In fact, for-profit social enterprise over non-profit philanthropy has a better capacity to develop a post-conflict area. “A study of post-war Bosnia concluded that ‘workplaces… [are] better suited than neighbourhoods or voluntary organisations for building bridges.’”

Kenya has been a key ally in South Sudan’s efforts to gain independence. Now, Kenyan business will play an influential role in the development of the world’s newest country as of July 9, 2011. Many Kenyan enterprises operate in South Sudan and a surge of new businesses is expected in the newly independent country. With the support of North Sudan and a largely anticipated peaceful declaration of independence, impact investors and social entrepreneurs may find new opportunities in South Sudan. An improved business environment means that it will take 15 days to register a business, compared to Kenya’s  30+ days wait time. Additionally, a new South Sudanese currency and Central Bank will build financial independence for the new nation.  All around, South Sudan is a new market for social enterprise and investment for those willing to take on the challenge.

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