Currently, Venezuela is in an economic crisis. According to the International Monetary Fund (IMF), Venezuela’s inflation rate will exceed 10 million percent by the end of 2019. This high inflation has destroyed Venezuela’s economy, causing poverty and unemployment rates to rise. In turn, it has also created mass food and medical supply shortages across the nation. Venezuela was not always in a state of crisis; it was once a thriving country backed by a booming oil-based economy. If one understands the fall of Venezuela’s oil-based economy, they will know how Venezuela’s current crisis came to be.
Fruitful Origins
Back in the 1920s, people found some of the world’s largest deposits of oil in Venezuela. Upon this discovery, Venezuela embarked on the path of a petrostate. As a petrostate, Venezuela’s economy relies almost entirely on oil exports. The government overlooked domestic manufacturing and agriculture, choosing to import basic goods instead of producing them within Venezuela. With strong support for an oil-based economy, Venezuela rode on its economic boom until the end of the worldwide energy crisis of the 1970s.
The 1970s energy crisis involved international oil shortages due to interrupted supplies from the Middle East. In place of the Middle East, Venezuela became one of the top oil suppliers worldwide. Oil prices thus skyrocketed due to limited suppliers and oil production in Venezuela increased to meet rising demand. Venezuela added about $10 billion to its economy during the energy crisis, providing enough wealth to cover the importation of basic goods. It was even able to begin more social welfare programs.
The Fall
Once the energy crisis ended in the early 1980s and oil prices stabilized again, Venezuela’s economy saw its first notable decline. Oil production did not decrease in spite of lowered oil prices and demand, resulting in a capital loss for Venezuela’s economy. The production of oil is an expensive endeavor which requires high capital investment in the hopes of that even higher sales can offset the investment. Therefore, while oil production remained high, Venezuela failed to build off of the investment, losing capital immediately.
This loss of capital marked Venezuela’s oil-based economy’s initial fall, as Venezuela risked its well-being on the unstable oil market. Just prior to the drop in oil prices, Venezuela went into debt from purchasing foreign oil refineries. Without investing in domestic agriculture or manufacturing, the Venezuelan government became economically strapped; it could no longer pay for its imports and programs, and especially not its new refineries.
In order to pay for its expenses, Venezuela had to rely on foreign investors and remaining national bank reserves. Inflation soared as the country drilled itself further into debt. It was not until the early 2000s that oil prices began to rise again and Venezuela could once more become a profitable petrostate — in theory. Under the regime of Hugo Chávez, social welfare programs and suspected embezzlement negated the billions of dollars in revenue from peaked oil exports.
By 2014, when oil prices took another harsh drop worldwide, Venezuela did not reserve enough funds from its brief resurgence of prosperity. Ultimately, the country fell back into a spiral of debt and inflation.
Lasting Effects
The fall of Venezuela’s oil-based economy sent shockwaves throughout its population, affecting poverty and unemployment rates and causing mass food and medical shortages. Estimates determined that in April 2019, Venezuela’s poverty rate reached nearly 90 percent nationwide. A notable factor of its widespread poverty, some suggest that Venezuela’s unemployment rate was 44.3 percent at the start of 2019.
Unemployment is rapidly increasing in Venezuela as both domestic and foreign companies lay off workers — with some companies offering buyouts or pension packages, and others just firing workers without warning. As Venezuela falls further into debt and its inflation rises, there is not enough demand within the country for foreign companies to stay there.
As previously mentioned, the earlier Venezuelan government chose to rely on imports rather than domestic production for its basic goods. Now, in 2019, the country suffers from its past mistakes. Unable to afford its imports, food and medical supply shortages are rampant across Venezuela. According to recent United Nations reports, over a 10th of the nation’s population is suffering from malnourishment. In addition, malaria — which the country virtually eliminated several decades prior — is reappearing as there are more than 400,000 cases nationwide.
A Way Out
While the fall of Venezuela’s oil-based economy may be detrimental to the nation’s overall stability, there is a way out of ruin: the International Monetary Fund, an international agency that exists to financially aid countries in crisis. In the fight against global poverty, the IMF is a vital tool that can prevent countries from reaching an irreparable state.
If Venezuela defaults on its debt and seeks funding from the IMF, Venezuela would be able to invest in domestic agriculture and other infrastructure. Therefore, if the oil industry continues to decline, there will be a fallback for supplies and potential exports. While this is not a panacea to the fall of Venezuela’s oil-based economy, it is a way for the nation to prepare for any future declines in oil prices and begin to work toward prosperity.
– Suzette Shultz
Photo: Flickr
15 Facts About Poverty in Afghanistan
15 Facts About Poverty in Afghanistan
Concluding Thoughts
There are tangible issues that fuel poverty, and these 15 facts about poverty in Afghanistan represent only a part of the complex issues the country’s economy faces. Remember that a country is more than just its politics – it comprises people. Others can help the Afghani people through various actions in order to reduce the suffering of millions of Afghan citizens.
– Melanie Rasmussen
Photo: Flickr
Joe Biden’s Stance on Foreign Policy
Former Vice President Joe Biden recently announced his candidacy for the 2020 Presidential campaign. Biden served as V.P. from 2009 to 2016 under the 47th President of the United States, Barack Obama. His political career in Congress began in 1973 where he served as Senator of Delaware and a member of the Foreign Relations Committee. He has the most foreign affairs experience out of all the candidates for President. Joe Biden’s stance on foreign policy gives insight into how he will act if the American people elect him to the seat of President.
Joe Biden’s stance on foreign policy does not align with traditional principles of the Democratic party. He has been quoted as saying that despite the difficulty and cost, the United States must be the global leader in foreign policy initiatives. He is the standout favorite of the Democratic candidates, not only because of his experience, but also his moderate position on key political issues like foreign policy.
A Question of Priorities
Although Joe Biden’s stance on foreign policy demonstrates that he is willing to address global poverty, it is unclear if it is one of his top priorities. His legislative history includes co-sponsoring a bill to eradicate extreme global poverty for the more than a billion people. The strategy developed by the bill was to halve the number of those living on less than a dollar a day by 2015. This effort points to Biden’s recognition of the immediate need to improve living conditions for the world’s poorest through U.S. intervention.
Global Economics and Trade
In a 2016 speech, Biden touted the immense value of foreign trade to the global economy. He promoted selling more products and services abroad, where the vast majority of the world’s consumers reside. The World Bank estimates that about 82 percent of the world’s population is poor. Although those who live in extreme poverty do not currently have the purchasing power to buy American products and services, the potential is still there, should their economic situation improve. Biden’s stance on foreign policy recognizes that small consumers are still consumers and if the U.S. focuses on improving trading relationships and increasing foreign aid, the American economy will benefit greatly.
Outside of Partisan Politics
Joe Biden’s stance on foreign policy does not directly align with either Democrats or Republicans. He remarked that Republicans lacked strategy and Democrats were not tough enough when it came to foreign policy. Biden is generally dovish on foreign policy and values the importance of dialogue with all countries, prior to the use of military force. Biden is also a strong proponent of supplying foreign aid to countries in need. In 1999, he voted down a bill to cap foreign aid at $12.7 billion and rather sees a need to increase aid spending to developing countries. Among other bills that Biden supported while in Congress was a multi-year commitment in 2001 to supply food and medicine to Africa.
The Big Issues
Overall, Joe Biden’s stance on foreign policy demonstrates that he values peaceful compromises and nonviolent negotiation tactics. He also has a strong record of supporting foreign aid assistance to developing nations. International aid proponents will closely monitor Biden’ statements during his presidential campaign regarding foreign policy and extreme poverty overseas.
– Jessica Haidet
Photo: Flickr
Project Healthy Children in Tanzania
Global hunger is one of the most pressing and visible poverty-related issues in our world today. People can easily recognize the defined ribs, sunken eyes and bone-thin limbs of starvation. However, there is another side to hunger that is not as obvious: micronutrient deficiency.
Micronutrients are vitamins and minerals such as zinc, iron, iodine, vitamin A and folic acid. In developed nations like the United States, most people get these critical nutrients from maintaining a well-rounded diet or taking a daily supplement. But it isn’t always that simple in some other parts of the world. In fact, micronutrient deficiency remains a big problem in Eastern and Southern Africa but often does not get the attention it deserves because the effects are not immediately visible. For this reason, micronutrient deficiency has been nicknamed “hidden hunger.”
Hidden hunger has real and long-lasting consequences. Insufficient amounts of vitamins and minerals can result in learning disabilities, mental retardation, low work capacity, blindness and premature birth. These deficiencies lower overall health and weaken the immune system, thus making it much harder to survive infections like HIV and measles. They can cause extreme birth defects in children and are the leading cause of maternal death during childbirth.
Background
Clearly, micronutrient deficiency is a pressing issue that deserves the attention necessary to mitigate it. An organization called Sanku’s Project Healthy Children (PHC) is doing just that through a process known as food fortification: essentially, they add critical micronutrients to the flour people already consume.
PHC is based in Tanzania and currently supplies almost 2 million people with fortified flour to help them get the vitamins and minerals they need. Flour is a staple food that many people consume regularly; according to the PHC website, “over 50 million Tanzanians eat maize flour every day,” but more than 95 percent of it is produced without added nutrients in small, rural mills. Countries like Tanzania are in desperate need of better access to micronutrients—here, about 35 percent of children under 5 years old have stunted growth due to under-nutrition. Project Healthy Children uses the mills and distribution systems already in place to simply add essential micronutrients to the flour with no additional cost for the consumer. This way, people can get the nutrition they need without changing their eating or purchasing habits.
Why Food Fortification?
The Future of Project Healthy Children
In the past few years, Project Healthy Children has become even more streamlined in its approach to food fortification. A partnership with Vodafone, a mobile network based in the United Kingdom, allows PHC staff to remotely monitor flour mills so that they instantly know when a machine is down or a mill is low on nutrients. The partnership saves money, time and manpower, allowing PHC to run more smoothly.
Project Healthy Children currently helps nourish about 1.7 million people in sub-Saharan Africa but hopes to reach 100 million people by 2025, an ambitious goal that would be instrumental in lifting communities in Southern and Eastern Africa out of extreme poverty.
– Morgan Johnson
Photo: Flickr
Arc’Teryx is Using Tech to Help the World’s Poor
REI shoppers and outdoor lovers are likely familiar with Arc’Teryx. The brand, based in Vancouver, British Colombia, has been selling outdoor survival gear and clothing with top-notch technology for the last few decades. In recent years, the company decided to open some of its profits and expertise to encourage using tech to help the world’s poor.
Solving Problems with Tech
What started as a request for the help of an Arc’Teryx engineer to design insulated shelters for Mongolians has turned into a company-wide passion to apply technological innovations towards helping the poor. Arc’teryx provides significant funding and support to Global Good, a Seattle team of engineers and scientists who travel the world, identify technology gaps that perpetuate poverty and design affordable, situational solutions. The results of their partnership with Global Good has encouraged Arc’teryx to fund similar projects using technology to help the world’s poor; it is currently hosting a Problem Solver tour and campaign to seek out individuals and organizations using technology to help the poor, promising support to these problem-solvers that they deem are really making a maximum difference.
The Borgen Project attended Arc’Teryx’s Problem Solver Tour, where representatives from Arc’Teryx and Global Good discussed projects Arc’Teryx has helped fund in recent years as a way to inspire more activity. Global Good’s goal is to “dedicate energies towards the bottom billion” rather than using technology to develop more “tools and toys for rich people” as Nathan P. Myhrvold, CEO of Intellectual Ventures, explained.
Arc’Teryx Funded Projects
One project is wrapping up the prototype for a one-step, DIY malaria test. Currently, a blood sample is the only means to detect malaria. This innovation by Global Good aims to create something as easy as “a pregnancy test for deadly diseases.” With one drop of blood inserted into the small contraption, the test will alert the user whether the patient has tested positive or negative for malaria. This will save the lives of children whose parents cannot accurately detect whether or not their child is suffering from malaria or a milder infection without having to invest in expensive lab procedures. Researchers in the battle to eliminate malaria will also be able to efficiently and effectively measure malaria’s presence in villages by mass-distributing the tests.
Global Good has been able to make a huge difference in health care in the fight against poverty. Another invention is an insulated thermos, about three feet tall and 1.5 feet in diameter, that is able to keep vaccines for 6,000 people at the required temperature for as long as 40 days in desert climates. The thermos has become essential to inexpensively distributing life-saving vaccines to remote villages. A modification on the thermos has even enabled the provision of Ebola vaccines, which are more difficult to transport due to a lower required temperature.
Arc’Teryx’s Work Continues
The company is always looking for more opportunities to offer its outdoor survival technology to projects working to help people. Alongside that work, it is continuing to fund poverty-fighting organizations and is now conducting a continental search for individuals using tech to help the world’s poor.
– Olivia Heale
Photo: Flickr
10 Pieces of Good News About the Northern Triangle
Many know the Northern Triangle countries of Honduras, Guatemala and El Salvador for their high crime rates and their role in the refugee crisis at the southern border of the U.S. The good news about the Northern Triangle, however, is that crime and murder rates are declining, there has been notable poverty reduction and the economy is growing in the region. The future of the Northern Triangle is not as bleak as news coverage often indicates. These 10 facts provide information on the good news about the Northern Triangle.
10 Pieces of Good News About the Northern Triangle
These countries are building new schools and growing crops, while crime rates are falling and they are taking steps to fight corruption. These examples all spell good news for the Northern Triangle. It it is easy to be ignorant of the progress taking place when the media characterizes the Northern Triangle as a place defined merely by poverty and violence. It is also vital for people to note that the good news about the Northern Triangle links to U.S. aid, which funds programs that create new jobs and new opportunities in the region. If this aid continues along with a commitment to progress, then the dream of a brighter future in the Northern Triangle can become a reality.
– Emelie Fippin
Photo: Flickr
Mental Health Awareness in Honduras
May 2019 marked the 70th anniversary of the first Mental Health Month in the U.S. While 70 years of mental health awareness activism seems like a long time, the Mental Illness Policy Organization estimates that there are 3.5 million adults with untreated schizophrenia or bipolar disorder in the U.S. on any given day. That figure excludes individuals suffering from other mental illnesses such as acute anxiety and depression. Untreated mental illness is a problem at the forefront of the U.S. health care system and improvement seems imminent for suffering Americans. For countries plagued with poverty and violence like Honduras, accessible and affordable health care is scarce. Lack of health care options in Honduras causes more barriers for those living with mental health conditions, which makes raising mental health awareness in Honduras extremely important.
Mental Health Awareness in Honduras
Mental health awareness in Honduras is an uphill battle. In 2006, the government allocated 6.61 percent of the country’s general budget to health care. Less than 2 percent of that amount supported mental health. As social security often lacks resources to treat mental health illnesses, most cannot afford to pay for medication. Unfortunately for those suffering from mental health-related issues, most never receive proper care.
Being one of the poorest and most dangerous countries in the world, Honduras is home to prevalent violence and poverty that specialists point to as key factors in an increase in mental illness in the country. Experts estimate that 10 percent of Hondurans suffer from mental illness or substance abuse.
Visit to a Mental Health Facility in Honduras
In 2018, this author had the opportunity to visit a local mental health treatment facility in a small Honduran town called El Porvenir. The facility was the only public mental health resource within five hours, which meant that many families dropped their relatives off with the prospect of going years before seeing them again. One nurse who came in twice a week monitored the treatment center. Between her visits, however, patients, including some who suffered from severe illnesses like schizophrenia, lived in the three-bedroom house unsupervised. For some patients, it was the only option their families could afford.
Doctors Without Borders
Luckily, change is starting to look imminent and mental health awareness in Honduras is increasing. Since 2011, Doctors Without Borders (DWB) prioritizes treatment for victims of violence and sexual assault, as well as for their family members. “We try to work on the emotions, feelings, and thoughts that people experience as a result of what happened to them,” said DWB mental health supervisor Edgard Boquín. “We use cognitive behavioral therapy to help patients take the detrimental elements and replace them with positive coping tools, such as anxiety control, breathing, and relaxation techniques, or by making small life plans which will allow them to cope with their environment again.”
In 2016, DWB expanded activities in the country’s capital, Tegucigalpa, and its sister city, Comayagüela. The number of patients suffering from mental illness treated by DWB jumped 117 percent from 2015 to 2016. Community Health Partnership Honduras, a nongovernmental organization, also travels to southwestern Honduras twice a year, which is among the poorest regions in the world. The organization partners Honduran and American volunteer medical workers to increase access to mental health care.
With those missions in mind, mental health awareness in Honduras is spreading from the cities to the rural regions. Consequentially, treatment and support are increasing as well.
– Julia King
Photo: Pixabay
Poverty and Antibiotic Resistance in Southeast Asia
In September 2016, the United Nations General Assembly (UNGA) declared antimicrobial resistance (AMR) a major health threat for nations in every part of the world. AMR comes about when bacteria evolve to resist antibiotics used for the treatment of many infectious diseases such as pneumonia, tuberculosis and salmonellosis. According to the Center for Disease Control and Prevention (CDC), AMR can bring harm to people of all types and agriculture, health care and veterinary industries. Antibiotic resistance in Southeast Asia is of particular concern.
Antibiotics have been essential to curing infections ever since Alexander Fleming discovered the first form of antibiotics, penicillin, in 1928. In the developing countries of Southeast Asia, antibiotics often do not have regulation and are available for purchase without a prescription from a physician, which exacerbates the phenomenon of AMR and causes major concern. This is an example of how poverty in Southeast Asia contributes to the antibiotic resistance crisis.
Contributions to Antimicrobial Resistance
AMR is a natural process. With or without the use of antibiotics, bacteria will always evolve to fight for survival by strengthening their resistance or by multiplying. Despite this, humans make AMR worse. A plethora of unnatural issues exaggerates AMR, but there are two that are cause for the greatest concern: unregulated sale of antibiotics and the use of antibiotics not as medicine for humans but as growth promoters and disease treatments in livestock.
Unregulated Antibiotics and Self Medication in Southeast Asia
The World Health Organization Southeast Asia Region (WHO SEAR) includes the countries of Bangladesh, Bhutan, Democratic People’s Republic of Korea, India, Indonesia, Maldives, Myanmar, Nepal, Sri Lanka, Thailand and Timor-Leste. These countries are notorious for selling antibiotics as an unregulated product to the public, a reality of many developing countries around the world. In developing countries, the prevalence of infectious deadly diseases is higher than in more developed nations, making the likelihood of death from these issues higher.
Many consider the countries in Southeast Asia listed above to be hotspots for the spread of AMR. Here, the cost of antibiotics bought over the counter is lower than the cost to visit a physician or health professional. As a result, many self-medicate, making it the leading cause of AMR. Self-medication refers to the use of medication to treat ailments, diseases or infections without the guidance of a medical professional. Without curbing this habit practiced in WHO SEAR, bacteria quickly mutate to resist treatment, leading to more intense illnesses, increased medication prices and death.
The Use of Antibiotics for Livestock in Southeast Asia
In this region, the use of antibiotics in livestock outweighs the use of antibiotics in humans. To keep livestock in countries around the world healthy, farmers commonly use antimicrobials to treat and prevent diseases and decrease mortality in livestock. Though people widely practice this, the countries of WHO SEAR use this technique excessively due to poverty. With weak regulatory laws to govern or survey the effects this has on the AMR crisis, AMR is aggressively growing.
Where previously people ignored it when considering the causes of AMR, livestock antibiotic use has recently become a growing concern across the globe. With recognition came complication: in developing countries, farmers rely on the use of antibiotics to prevent illness or death of their animals so they can continue to make a profit. In Southeast Asia especially, the hard reality is that these issues layer and mix with other issues, such as poverty and food security. Policies regarding antimicrobial consumption in livestock that work for developed nations often do not work in underdeveloped nations, due to the complex differences of cultural differences and locations. It is for these reasons that poverty contributes to antibiotic resistance in Southeast Asia.
Efforts to Slow Antibiotic Resistance in Southeast Asia
Given that this crisis is on a global scale and affecting every nation, some are making efforts to control AMR. Unfortunately, there is no way to stop it completely. There are, however, the WHO’s action plans that can bring light to this topic. WHO has laid out five strategic goals: to increase recognition and understanding of AMR, to increase global monitoring and research, to decrease the prevalence of infectious diseases requiring antibiotic treatment, to improve the use of antibiotic treatment and to create a case for sustainable investment that includes all nations, no matter location or level of development
An example of raising awareness is World Antibiotic Awareness Week. Every year brings the annual World Antibiotic Awareness Week, created by the WHO in 2015. This week in November sets goals to increase awareness and encourage health care providers, policymakers and the public to practice healthy and sustainable techniques to slow the spread of antibiotic resistance in Southeast Asia.
– Anna Giffels
Photo: Flickr
Soccer Without Borders Brings Sports to Impoverished Youth
Soccer without Borders
The nonprofit organization believes that creating meaningful change is more important than the actual sport. They build their programs around the interpersonal element of the sport to meaningfully impact their youth’s physical, social and individual progression by using soccer as an agent of positive change in the development of skills necessary to overcome obstacles.
Impacting nearly 2,000 children on a yearly basis, Soccer Without Borders stretches across 10 countries. In the United States, the organization is stationed in Baltimore, Greely, Seattle and Oakland. Refugees seeking asylum in the United States comprise more than 70 percent of Soccer Without Borders participants. Internationally, Soccer Without Borders has program offices in Uganda and Nicaragua. In the past, Soccer Without Borders has worked in several countries in Latin America and Africa.
Soccer in Nicaragua
As one of the poorest countries in Latin America, more than two million Nicaraguans live in poverty with 20 percent of the population living in extreme poverty. Children are the first to suffer from poverty. Faced with health problems, violence and abuse, children lack the same opportunity. In particular, young girls are often victims of sexual exploitation, child marriage and human trafficking, increasing gender inequalities. Many children, especially girls, do not receive an education because of these disparities.
Founded in 2008, Soccer Without Borders hosts a program in Granada, Nicaragua. The organization works with girls ages 7 to 20 through the league with year-round programs, camps and clinics. In Nicaragua, the participants of Soccer Without Borders are 100 percent girls. The organization also provided education scholarships to 99 girls between 2013 and 2016.
Soccer in Uganda
Soccer Without Borders also founded a program based in Kampala, Uganda in 2008. There, the organization serves male and female youth refugees from Uganda, Rwanda, DR Congo, South Sudan, Somalia and Burundi. Ages range from ages 5-23, and they participate in tournaments, festivals and a variety of community events. Forty-one percent of the participants are female, and most of the coaches are refugees themselves.
A 2016 poverty reduction assessment shows Uganda has reduced poverty from a monetary perspective, but the nation still lags behind in non-monetary areas such as sanitation, health and education. Children often end up living in the streets, victims of child labor, child trafficking and child abuse. Both young girls and boys are forced into harsh situations. Boys become members of the armed forces while girls are forced to prostitute themselves. Young girls are often victims of violence and child marriage.
How Sports Can Help
Soccer and other sports can act as an agent of change. While they cannot eradicate poverty, sports help blur the divisive lives of inequality that poverty creates. Sports focus on building children’s developmental needs to then address the larger needs of the surrounding communities. Education through sports like soccer can provide children with skills such as decision making and taking responsibility that apply both on and off the field. The goal of sports is to help children develop the necessary skills to break the cycle of poverty.
For its efforts, Soccer Without Borders was named the winner of the 2016 Barry & Marie Lipman Family Prize by the Wharton School and the University of Pennsylvania. The organization was also awarded the 2017 Urban Soccer Symposium Impact Award by U.S. Soccer as well as the 2018 Sports Award Winner by the Robert Wood Johnson Foundation. Most notably, Soccer Without Borders earned the FIFA Diversity Award in 2017.
– Gwen Schemm
Photo: Cloudfront
How Hiring Refugees Benefits the Global Economy
The world is currently facing a record-high number of displaced people. Globally, more than 70 million people fled or are fleeing their homes as a result of domestic war, systematic persecution, hunger or any number of other life-threatening conditions. These people are refugees.
Refugees who have fled their home countries rely on other countries to take them in and provide them with the basic necessities for survival, like food, water and shelter. Many of these people, however, have extremely limited access to the job markets of their host countries. Therefore, it is difficult for them to find a source of personal income.
Recent studies show that integrating refugees into the host country’s workforce can be economically beneficial on multiple levels. Some have estimated that closing job and pay gaps for refugees around the world could generate as much as $2.5 trillion globally. Displaced refugees represent a largely under-utilized source of labor, and giving them the opportunity to be part of the workforce could profoundly impact productivity.
Employment Benefits Refugees and Host Countries
Hiring refugees has the potential to benefit all parties involved. The refugees themselves often benefit most directly from integration into the workplace. Having a source of personal income can be extremely liberating for displaced families; it increases financial independence and allows them to rely less on the aid of their host country. It also means that children can go to school and receive an education instead of staying home to help support the family. Essentially, it allows refugees to become more productive members of society.
Contrary to popular rhetoric, the host country also benefits economically from hiring refugees. By having jobs, refugee workers are contributing to the productivity of the country and increasing the gross domestic product. Additionally, most economists found that one cannot substantiate the fear native workers have over refugees and other migrants “stealing” jobs—displaced people generally look for vacant positions that do not require a mastery of the host country’s language.
Refugees and Migrants Create Jobs
Refugees and migrants also tend to have much higher rates of entrepreneurship than the rest of society, meaning that they create jobs. It may be helpful to use the U.S. as an example here. In the U.S., migrants—a larger distinction of people living in a foreign country that encompasses refugees—represent about 15 percent of the population. However, migrants constitute about 25 percent of America’s entrepreneurs, indicating that they have a higher rate of entrepreneurship than the average citizen. In 2015, over 180,000 refugees created $4.6 billion in American income due to entrepreneurial ventures.
Organizations that hire refugees have reported much higher retention rates than the average. For example, manufacturing represents the industry where the highest proportion of refugees find work—about 20 percent. The refugee rate of turnover in this industry is just 4 percent, compared to the 11 percent national average. This means that refugees often make industrious and loyal workers on whom businesses can depend. Overall, refugees generate billions of dollars each year through entrepreneurship, consumer spending and job retention.
Finally, the country of origin can also benefit economically when other countries take in its refugees. Host and origin countries share a relationship that could potentially open up networks of trade and investment that boost the origin country’s economy. Additionally, when people from the origin country integrate into the host country’s workforce, it creates business networks where refugees might learn skills and master technology that they can communicate back home. These networks of trade and business can help update the origin country’s economy and make it more competitive.
Global Companies Hiring Refugees
Below are just a few of the companies hiring refugees and working to better integrate refugee populations into the workforce in a variety of different countries.
– Morgan Johnson
Photo: Flickr
The Fall of Venezuela’s Oil-Based Economy
Currently, Venezuela is in an economic crisis. According to the International Monetary Fund (IMF), Venezuela’s inflation rate will exceed 10 million percent by the end of 2019. This high inflation has destroyed Venezuela’s economy, causing poverty and unemployment rates to rise. In turn, it has also created mass food and medical supply shortages across the nation. Venezuela was not always in a state of crisis; it was once a thriving country backed by a booming oil-based economy. If one understands the fall of Venezuela’s oil-based economy, they will know how Venezuela’s current crisis came to be.
Fruitful Origins
Back in the 1920s, people found some of the world’s largest deposits of oil in Venezuela. Upon this discovery, Venezuela embarked on the path of a petrostate. As a petrostate, Venezuela’s economy relies almost entirely on oil exports. The government overlooked domestic manufacturing and agriculture, choosing to import basic goods instead of producing them within Venezuela. With strong support for an oil-based economy, Venezuela rode on its economic boom until the end of the worldwide energy crisis of the 1970s.
The 1970s energy crisis involved international oil shortages due to interrupted supplies from the Middle East. In place of the Middle East, Venezuela became one of the top oil suppliers worldwide. Oil prices thus skyrocketed due to limited suppliers and oil production in Venezuela increased to meet rising demand. Venezuela added about $10 billion to its economy during the energy crisis, providing enough wealth to cover the importation of basic goods. It was even able to begin more social welfare programs.
The Fall
Once the energy crisis ended in the early 1980s and oil prices stabilized again, Venezuela’s economy saw its first notable decline. Oil production did not decrease in spite of lowered oil prices and demand, resulting in a capital loss for Venezuela’s economy. The production of oil is an expensive endeavor which requires high capital investment in the hopes of that even higher sales can offset the investment. Therefore, while oil production remained high, Venezuela failed to build off of the investment, losing capital immediately.
This loss of capital marked Venezuela’s oil-based economy’s initial fall, as Venezuela risked its well-being on the unstable oil market. Just prior to the drop in oil prices, Venezuela went into debt from purchasing foreign oil refineries. Without investing in domestic agriculture or manufacturing, the Venezuelan government became economically strapped; it could no longer pay for its imports and programs, and especially not its new refineries.
In order to pay for its expenses, Venezuela had to rely on foreign investors and remaining national bank reserves. Inflation soared as the country drilled itself further into debt. It was not until the early 2000s that oil prices began to rise again and Venezuela could once more become a profitable petrostate — in theory. Under the regime of Hugo Chávez, social welfare programs and suspected embezzlement negated the billions of dollars in revenue from peaked oil exports.
By 2014, when oil prices took another harsh drop worldwide, Venezuela did not reserve enough funds from its brief resurgence of prosperity. Ultimately, the country fell back into a spiral of debt and inflation.
Lasting Effects
The fall of Venezuela’s oil-based economy sent shockwaves throughout its population, affecting poverty and unemployment rates and causing mass food and medical shortages. Estimates determined that in April 2019, Venezuela’s poverty rate reached nearly 90 percent nationwide. A notable factor of its widespread poverty, some suggest that Venezuela’s unemployment rate was 44.3 percent at the start of 2019.
Unemployment is rapidly increasing in Venezuela as both domestic and foreign companies lay off workers — with some companies offering buyouts or pension packages, and others just firing workers without warning. As Venezuela falls further into debt and its inflation rises, there is not enough demand within the country for foreign companies to stay there.
As previously mentioned, the earlier Venezuelan government chose to rely on imports rather than domestic production for its basic goods. Now, in 2019, the country suffers from its past mistakes. Unable to afford its imports, food and medical supply shortages are rampant across Venezuela. According to recent United Nations reports, over a 10th of the nation’s population is suffering from malnourishment. In addition, malaria — which the country virtually eliminated several decades prior — is reappearing as there are more than 400,000 cases nationwide.
A Way Out
While the fall of Venezuela’s oil-based economy may be detrimental to the nation’s overall stability, there is a way out of ruin: the International Monetary Fund, an international agency that exists to financially aid countries in crisis. In the fight against global poverty, the IMF is a vital tool that can prevent countries from reaching an irreparable state.
If Venezuela defaults on its debt and seeks funding from the IMF, Venezuela would be able to invest in domestic agriculture and other infrastructure. Therefore, if the oil industry continues to decline, there will be a fallback for supplies and potential exports. While this is not a panacea to the fall of Venezuela’s oil-based economy, it is a way for the nation to prepare for any future declines in oil prices and begin to work toward prosperity.
– Suzette Shultz
Photo: Flickr