People often think of foreign aid as the provision of emergency assistance without many tangible benefits in return. However, providing foreign aid offers numerous benefits to countries such as the U.S. For the U.S., Equatorial Guinea is by far one of the most important potential trading partners in the world, and aid to Equatorial Guinea is one of the surest ways to create such partnerships. The U.S. benefits from foreign aid to Equatorial Guinea, as it gains access to one of the world’s largest energy exporters.
Equatorial Guinea and Its Neighbors
In order to see how the U.S. benefits from providing aid, it is important to first understand the situation in Equatorial Guinea. As a largely underdeveloped country, Equatorial Guinea also suffers from the woes that plague many of its continental neighbors.
Political turmoil and internal corruption have caused sharp drops in foreign development assistance to the country since 1993. For example, in 2013 the government cracked down on freedom of assembly by shutting down protests and arresting political dissenters, sparking international outcry.
In addition, worsening economic conditions have caused the country’s economy to shrink by nearly 25 percent since 2014 despite this trend of reversed growth being rare among African countries. Most African states have managed to maintain positive economic growth rates in spite of rampant poverty.
For example, although Equatorial Guinea’s fall in growth stabilized at -3.2 percent in 2017 from its all-time low of -9 percent in 2015, most of its neighbors have maintained positive growth rates for years.
Cameroon to the north had GDP growth of 3.2 percent for 2017 and hasn’t dipped below zero since 1993. To the south, Gabon had a growth rate of 1.1 percent for 2017. Although Gabon’s growth has steadily declined since 2008, Equatorial Guinea is unique for having a consistently negative rate several years in a row.
Increasing Economic Prosperity
Nonetheless, the country has a strong export-based economy. In 2016 alone, Equatorial Guinea exported around $4 billion worth of goods, while importing a little over $1 billion. Its trading power has made it one of the few countries in the world with a trade surplus, especially one of that magnitude.
Equatorial Guinea’s economic health relies heavily on its natural resources. In 2016, its largest exports consisted of crude oil (which comprised over half of its exports, at $2.79 billion out of $4.06 billion) and petroleum gas (which accounted for approximately $762 million). Increasing global demand for oil, coupled with heavy reliance on this finite energy product, could make Equatorial Guinea one of the most important developing economies in the 21st century.
The Value of Foreign Aid and Investment
Equatorial Guinea’s economic potential suggests that it is a viable potential trading partner for any country, and providing foreign aid to Equatorial Guinea may be a strong gage for determining how robust such potential trade agreements could be. Increased foreign aid could encourage Equatorial Guinea to work with donor countries in opening new supply chains through trade agreements, complementing international development assistance with long-term economic partnerships.
Providing foreign aid will also help Equatorial Guinea grow its economy and reach its full potential. For example, as foreign donors began slashing development funds to Equatorial Guinea between 2010 and 2014 (from $85 million to $520,000 respectively), its economy began to contract several years later, from $22 billion in 2012 to $12 billion in 2017.
However, despite such alarming figures, there has been some help in the form of an increased focus on infrastructure development. In 2015, China agreed to commit $2 billion to Equatoguinean infrastructure. This support has not only helped revitalize Equatorial Guinea’s economic growth but also brought Equatorial Guinea and China closer together diplomatically.
Equatorial Guinea and the U.S.
In contrast, the U.S. has no trade agreements with Equatorial Guinea. In fact, it currently exports more to Equatorial Guinea (at $278 million) than it imports (at $193 million), signaling a large trade imbalance for Equatorial Guinea.
Furthermore, the U.S. does not supply any foreign aid to Equatorial Guinea. However, it does provide a generous amount to Equatorial Guinea’s neighbors; in 2017, Cameroon received approximately $80 million in U.S. foreign aid funds, while Gabon received over $2 million.
Increased foreign aid to Equatorial Guinea is one of the most practical ways to improve trade relations between the two countries. Each nation has something that the other needs. As one of the wealthiest countries in the world, the U.S. has plenty of foreign aid funds available (specifically, a foreign assistance budget of $50 billion in 2015) to improve the economic outlook of Equatorial Guinea.
Additionally, as one of the largest oil harvesters in the world, Equatorial Guinea has a slew of energy reserves available to export to the U.S., at a total of 1.1 billion barrels of oil as of 2012. It is evident that the U.S. benefits from foreign aid to Equatorial Guinea, due to greater access to a growing Equatoguinean hydrocarbon sector.
How the U.S. Benefits from Foreign Aid to Equatorial Guinea
A diversified import sector is critical to the financial well-being of any country. For the U.S., an oil industry with diversified imports creates stable international supply lines and an even stronger economy. Equatorial Guinea’s resources and economic potential suggest that it could be an ideal trading partner.
The U.S. benefits from foreign aid to Equatorial Guinea by improving relations between the two states and opening up new energy markets for American consumers. In addition, robust trade agreements could yield incentives for elevated oil production, thus helping to reverse Equatorial Guinea’s negative economic growth.
– Vincent Giordano
Photo: Flickr
Three Ways Countries Could Make Foreign Aid More Effective
A highly contentious issue, the effectiveness of U.S. foreign aid has long been the subject of debate among congressmen and concerned citizens alike. From how much money is allocated to recipient nations to the impact that aid actually has on issues such as poverty and civil war, advocates and critics of foreign aid point to various criteria to evaluate the merits, or lack thereof, of continued U.S. aid.
The Case for Aid
Proponents of foreign aid insist programs are instrumental in fostering socioeconomic growth, reducing poverty and improving the overall quality of life. There are certainly examples that support this notion. USAID-funded programs have significantly reduced maternal and child mortality, helping at least 4.6 million children and 200,000 mothers, according to agency officials. As of 2015, more than 7.6 million people had received improved access to drinking water and more than 4.3 million people had improved sanitation. Furthermore, 41.6 million children saw improved reading instruction and safer learning environments between 2011 and 2015.
Foreign Aid Skepticism
Yet critics of aid remain steadfast in their opposition, pointing to fraud and corruption, lack of transparency, foreign aid dependency and general ineffectiveness as indicators. Around $1.17 billion in aid that was given to Malawi in 2012 was exploited by corrupt politicians and businessmen. At least $30 million was taken from the treasury and robbed from the 17 million poor and AIDS-ravaged inhabitants. In fact, these sentiments are so strong that, according to ABC News-Washington Post polls, “the only possible federal spending cut a majority favored was for foreign aid.”
Clearly, there are two sides to the story when it comes to foreign aid. When allocated and distributed properly, it can work wonders for the world’s poor and developing countries. However, corruption and misuse still stand in the way of much of its potential. These issues can be addressed by exploring various ways of making foreign aid more effective.
Making Foreign Aid More Effective
There are three important ways that countries around the globe can make foreign aid more effective.
At the end of the day, foreign aid aims to foster social and economic growth in developing countries by enfranchising governments, health care systems, education institutions and infrastructure. Consequently, growth in these developing nations helps developed nations by opening up new markets and increasing stability. When confronted with corruption or misuse or any of the other criticisms of foreign aid, governments should not slash foreign aid budgets, but rather should apply these three crucial ways of making foreign aid more effective.
– McAfee Sheehan
Photo: Flickr
USAID Works to Improve Gender Equality in Pakistan
Throughout the years, U.S. organizations and agencies have worked in cooperation with the government of Pakistan and other development partners to establish gender equality in Pakistan. These efforts work to ensure Pakistani women feel empowered to pursue opportunities just as brazenly as their male counterparts.
History: Relations Between Pakistan and the United States
Since Pakistan gained independence in 1947, the United States has provided considerable support in the overall development of the country. The U.S. was one of the first nations to recognize Pakistan as an independent nation.
For more than 60 years, Pakistan and the U.S. have forged a strong, cooperative relationship that has proven to benefit the people of both countries.
Achieving Gender Equality in Pakistan
In recent years, there have been important advancements in gender equality in Pakistan. Today, Pakistani women are more likely to participate in the labor force and access health and educational services than their mothers and grandmothers would have. Pakistan also has a relatively strong women’s political representation — about a fifth of parliamentary seats held by women.
However, there is still significant progress to be made if Pakistani women are to be full partners in the development of Pakistan. Women comprise more than half of Pakistan’s population and yet only 22.7 percent are part of the labor force. Even those who are part of the labor force belong largely to the informal sector, receiving little pay and few legal protections.
Also, while Pakistan enjoys a high gross enrollment rate of 89 percent of girls in primary schools, that rate drops to about 41 percent of girls who are enrolled in secondary schools.
Female Empowerment
The empowerment of women and girls is a critical aspect of any prosperous, democratic society. Female empowerment in Pakistan will not only safeguard human rights but also further international peace and security while establishing a growing, vibrant market economy.
Through the efforts of a combination of many organizations such as the U.S. Agency of International Development (USAID) and the United Nations Development Programme (UNDP) Pakistan is even closer to achieving gender equality.
USAID: The Gender Equality Program (GEP)
The Gender Equality Program (GEP) actively works to diminish the gender gap in Pakistan by supporting women’s economic, political, and social advancement. The program helps women become full and active members of their own society by providing access to information, resources and public services.
The GEP also works to change the derogatory societal attitudes towards women in Pakistan. This program educates women about their fundamental rights at home, at work and in society.
A staggering 32 percent of all Pakistani women have experienced physical violence; 40 percent of married Pakistani women have experienced spousal abuse. Even more concerning, one in two Pakistani women who have experienced physical abuse never sought help.
Through the support of the GEP, local activities are conducted to expand women’s knowledge of and ability to exercise their rights and obtain justice. The GEP helps women’s shelters provide legal aid, counseling and vocational skills that connect women to potential employers.
Empowering Girls Through Education
USAID also has programs such as the Sindh Basic Education Program and the Improving Education Quality Project to ensure more girls have the opportunity to pursue an education. These programs mobilize communities to increase girls’ school enrollment rates and train more female teachers, which encourages Pakistani families to send their girls to school.
USAID also provides scholarships to women pursuing higher education through the Merit and Needs-Based Scholarship program (MNSBP) and the Fulbright Program. MNSBP gifts university scholarships to academically talented, economically disadvantaged Pakistani students.
Major Accomplishments in Gender Equality in Pakistan
Pakistani women have experienced major improvements in regards to gender equality. The USAID has provided shelter, legal, health and economic support to nearly 40,000 victims of gender-based violence while also committing $70 million to help educate and empower over 200,000 adolescent Pakistani girls.
Although, societal beliefs of traditional gender roles may be difficult to break, raising awareness about women’s rights and supporting pro-women laws is a significant step towards achieving gender equality in Pakistan.
– Lolontika Hoque
Photo: Flickr
Empowered and Efficient: Working Women in India
Women in India are most often confined to social norms that affect their participation in the workforce. Marriage, motherhood, vexed gender relations and patriarchy are the most prevalent norms confining women to the domestic sphere. Working women in India — especially working mothers — subsequently suffer from guilt and social stigma in this restrictive isolation.
Working Women in India
Working women in India are made to feel guilty for choosing work as a priority predominantly by patriarchal prejudice. Even though women make up nearly half of India’s population, their economic potential has been put on the backburner. If women were to join the workforce, India could hold the key to the future growth of Asia’s third-largest economy.
According to the 2015 McKinsey Global Institute Report, Indian women can add $2.9 trillion, or 60 percent, to annual GDP by as early as 2025 if they are allowed to participate in the workforce on an equal basis as men. Another study indicates that 48 percent of women drop out of the workforce before they reach middle management positions due to marriage or motherhood.
Per the 2017 World Bank report, female labor force participation in India fell from 34.8 percent to 27 percent. At present, women contribute a mere 17 percent to the country’s GDP, well below the global average of 37 percent.
Distribution of Value and Gender Equality
Women in power have proved time and again that they make good leaders and put up a tough fight for men in every field. However, only 27 percent of Indian women are currently in the labor force. According to a report, women perform 9.8 times the amount of unpaid work than men in India.
If unpaid work were to be measured similarly to paid work, it would contribute almost $300 billion to India’s economic output; “but the current measure of GDP does not assign a value to housework, therefore it becomes imperative to bring women to the workforce to accelerate economic growth,” say experts to a website called The Wire.
It seems certain that bringing women into the workforce helps in the growth of GDP. Women in the 95 countries analyzed in this research generate 37 percent of global GDP today, despite accounting for 50 percent of the global working-age population. This global average contribution to GDP masks large variations among regions.
Gender parity in India plays a huge role in bringing women back to work. India’s record on the gender parity is so bad that it is even below that of sub-Saharan Africa, one of the poorest regions of the globe. Working women in India have to break away from the social and gender barriers to create a new wave of empowerment.
Only if the gender parity reduces can India be a potential country for economic growth. A study suggests four areas that help reduce gender gaps: education level, financial and digital inclusion, legal production and unpaid care work.
Hurdles Faced When Women Return to Work
Social norms and a patriarchal society hinder women from workforce participation. Women face social taboos and guilt, and mothers are made to feel guilty if they prioritize a career. The society considers that a woman’s first priority is to take care of her child, husband and the house.
Due to such beliefs, women have less confidence and self-doubt to step up into the workforce. Break for their marriage or motherhood leads to less pay, and maternity leave hinders their ability to move up the corporate ladder.
Company and Government Initiatives
Several workforces have women-friendly offices which enable mothers to work while they have children. Several workforces have crèche facility within office premises and work-from-home policies.
India paves the way in maternity leave, though, with its Maternity Benefit Amendment Act which grants paid leave time to 26 weeks.
Organizations Helping Women Rejoin the Workforce
With steps and organizations like these, the future of female empowerment and getting women in the workforce in India is bright indeed. Time and effort will demonstrate how one of the largest nations in the world will work to enter into a new wave of gender equality.
– Preethi Ravi
Photo: Flickr
10 Important Facts About Human Rights in the Philippines
Human rights are the basic rights inherent to all human beings from birth until death. These rights include the right to life and liberty, personal security, freedom from torture, freedom from discrimination and freedom from arbitrary arrest, among others.
Since the election of President Rodrigo Duterte in 2016, it has been widely alleged that these and many other basic human rights have been violated in the Philippines. According to Human Rights Watch, Duterte and his War on Drugs has plunged the Philippines into its worst human rights crisis since the dictatorship years of the 1970s and 1980s.
Here are 10 facts about the current environment of human rights in the Philippines.
10 Facts About Human Rights in the Philippines
Step-By-Step Improvement
Despite the precarious condition of human rights in The Philippines, the Duterte administration enjoys the highest public approval rating on record for a Filipino government dating back to the 1980s. On the other hand, international criticism of the administration’s War on Drugs and human rights record continues to pour in.
It’s encouraging that the international community and numerous Filipinos have refused to stay quiet over the current human rights condition. As a result, the topic of human rights in the Philippines has become a prominent global issue, which in itself is a step in the right direction towards positive change and improvement.
– Taylor Pace
Photo: Flickr
Steps Towards the Promotion of Immunization in Sudan
For the past few years, Sudan has been in the middle of one of the worst measles outbreaks in their country’s history. With 1,730 confirmed cases and over 3,000 suspected cases, measles is spreading like wildfire. This has brought to light the desperate need for a proper system for immunization in Sudan, especially for diseases like measles.
Measles Prevention
Measles is a highly infectious disease that spreads very quickly, but can be easily prevented by vaccine.
After the introduction of the measles vaccine, there was an 84 percent drop in measles deaths between 2000 and 2016 worldwide. It is estimated that the vaccine prevented 20.4 million measles-related deaths during this time period. This statistic delineates the power of the vaccination and the positive effects it can bring to a country like Sudan.
With support from UNICEF, the Ministry of Health launched a country-wide campaign to vaccinate almost 8 million children for measles.
Combatting Poverty and Measles
Children living in poverty are particularly susceptible to catching measles as they are often malnourished. Additionally, children living in conflict zones are difficult to reach in order to immunize. As a result of such conditions, UNICEF has been tirelessly fighting to get humanitarian access to these areas.
Non-governmental organizations (NGOs) have also come to the forefront in the fight against measles. GOAL Global, a nonprofit that focuses on international aid for those in poverty, launched its own campaign for immunization in Sudan. Within the first 7 days, they vaccinated over 20,000 children.
GOAL Global worked in partnership with other major groups like the International Organization for Migration (IOM) to get this campaign off the ground. Thanks to groups such as these, children that would otherwise lack access to healthcare are able to stay safe in the face of the measles epidemic.
Campaigns for immunization in Sudan are not as simple as just bringing the vaccine out to children. They require extensive planning and mapping out of areas, in addition to training healthcare workers to administer the vaccine.
Meningitis and Aid Organizations
Meningitis is another disease that Sudan struggles with. Meningitis affects the spinal cord and brain and in some cases can be life-threatening. Sudan accounts for 15 percent of meningitis cases in the “meningitis belt,” which is a stretch of countries heavily affected by the meningitis infection.
In recent years, WHO in partnership with the Ministry of Health and UNICEF have launched an immunization campaign for meningitis with the goal to vaccinate 720,000 children in Sudan. Campaigns such as these require upkeep in order to keep the outbreak at bay and prevent the return of the disease.
Fostering Impactful Change
Vaccines are also an inexpensive, high-impact solution to disease. The introduction of immunization campaigns to Sudan has the potential to stop the measles epidemic and the meningitis problem dead in their tracks.
Vaccinations are a big step towards evening the playing field for children living in poverty compared to children from more affluent communities. Immunization in Sudan for diseases like the measles and meningitis give all children across the board a better chance at life.
– Amelia Merchant
Photo: Flickr
Child Marriage in Mexico Requires Immediate Attention
Child marriage in Mexico is more common than most people realize. In comparison to Mexico’s regional counterparts — specifically the United States and Canada — child marriage is a large problem that contributes to, and is caused by, Mexico’s poverty crisis.
Ages of Consent
In comparison to other NAFTA countries, the rate of child marriage in the United States — a much more densely populated country — is highest in West Virginia. Between 2000 and 2010, 248,000 children were married in the United States.
Canada’s data on this topic is not comprehensive; however, the government of Canada has taken massive steps to mitigate the problem of child marriage; in fact, most said marriages actually take place and are moved to other countries.
In Mexico, one out of every four girls is married before the age of 18. This is permitted by Mexican law, as the age of consent in Mexico is 14 years old (with parental consent). This is a striking difference compared to the U.S. and Canada, where the age of consent is averaged at 18 years in most parts of both countries.
Child Marriage in Mexico
Child marriage in Mexico is directly related to the pervasive poverty levels in Mexico, both in that the socioeconomic status causes child marriage, and child marriage, in turn, contributes to poverty levels.
The high levels of child marriage in Mexico are highly correlated with teenage pregnancy. Teen pregnancy is a large driver of negative economics and individual poverty.
Teenage pregnancy is highly correlated with not finishing education (which creates a lower likelihood of finding a stable career), a higher likelihood of ending up impoverished and increased healthcare costs.
Poverty’s Power
The main driver of child marriage in Mexico is poverty. The poverty in Mexico has caused unprecedented levels of violence, and many see marriage as a way of fleeing such brutality. Such behavior applies to the girls within the 20 million impoverished children of Mexico, as they often fall into the peculiar consent and marriage laws as a means to flee poverty.
Lack of job stability, education and political omission are all factors that drive the high levels of child marriage in Mexico.
Such a complex topic, which derives from various socioeconomic and cultural baggage, requires complex problem solving, of which the lack thereof perpetuates the moral crisis. Making recommendations to Mexican policymakers cannot just involve raising the age of consent, as various cultural factors also drive the state of affairs.
Methods of Mitigation
Actions to mitigate the problem of child marriage in Mexico started with the Mexican government outlawing the practice in 2014. This alone will not help; women’s empowerment must also go hand-in-hand when such legislation. Mexico’s Ministry of Public Education has joined with the Mexican Academy of Science and the Organization of Economic Cooperation and Development to promote STEM in girls’ education in Mexico.
The University of Texas at San Antonio is working with Mexican Universities to teach various concepts of STEM. The U.S. Mexico foundation has also taken up a program called “Mujeres en STEM” to encourage more women to be involved in the STEM fields.
Girls’ education in Mexico is improving slowly, and will ultimately lead to women’s empowerment and slow down the prevalence of child marriage in Mexico. Women are increasingly enrolling in universities, even with the current levels of insufficient gender equality.
Improvement in Female Education and Employment
Women are also seeking paid employment, and the fact that about 20 percent of senators have been female since 2006 suggests the influence of women in politics is also increasing. If such development continues, these efforts will work to help eliminate child marriage in Mexico.
Policymakers need to also take geography into consideration — poverty occurs in mostly rural areas, therefore most of the resources designed to mitigate the problem must be litigated toward these communities. As the late Christopher Hitchens once said: “The cure for poverty has a name: it’s called the empowerment of women.”
Mexico lacks sufficient women’s empowerment — women are told to drop out of school to assume household duties; rates of violence against women are high; and indeed many of these early marriages are forced. Promoting women’s empowerment will work for, as Hitchens also said: “it works everywhere it has been implemented”.
– Daniel Lehewych
Photo: Flickr
Transforming and Improving Levels of Girls’ Education in Nepal
Important steps are underway towards improving Nepal’s education system for girls, which may help raise Nepal towards becoming a developed nation. Thanks in part to assistance from the United States and United Nations, improving girls’ education in Nepal is now a focus of the Nepali government and educators.
Girls’ Education in Nepal
With only 64 percent of the Nepali people age 15 or older able to read and write, Nepal has one of the lowest literacy rates in the world. Approximately 76 percent of Nepali men are literate, while only around 53 percent of Nepali women are literate.
While educators are careful to not exclude boys in educational improvements, a special focus on academic improvements for girls is being implemented to increase the relatively low literacy rate among girls and equalize opportunities between boys and girls.
WiSTEM’s Promotion of Equality
Binita Shrestha and Pratiksha Pandey, co-founders of Women in Science Technology Engineering Mathematics (WiSTEM), work with the United Nations International Children’s Emergency Fund (UNICEF) to improve girls’ education in Nepal.
Shrestha explains, “Even though we target girls, we welcome everyone because even boys are not receiving STEM education… The biggest reason most children don’t pursue a STEM career is because they don’t start learning from an early age. They tend to underestimate themselves afterwards.”
WiSTEM guides children from an early age towards utilizing STEM education opportunities, which build courage and determination to stay in school and work towards a career. Among the opportunities offered through WiSTEM, students can choose workshops and hands-on experience with electronics, coding and design.
Discouraging Absenteeism
While WiSTEM expands opportunities for girls in school and increases their confidence in themselves, one of the main problems regarding girls’ education in Nepal is absenteeism.
A recent study utilizing data from the 2014 Nepal Multiple Indicator Cluster Survey (MICS) reveals that marriage is the most common reason in Nepal for children quitting school. The study found that dropouts due to marriage range from fifth to tenth grade, and married girls are 10 times more likely to quit school than unmarried girls.
Social norms and security concerns in Nepal commonly prevent married girls from attending school. It is a common view in Nepal that education is unnecessary for girls beyond marriage. Even in areas with free or low-cost school supplies and easily accessible schools, married girls often stay home.
It is also common for husbands and parents-in-law to fear that married girls will be raped or abducted, and thus prevent them from traveling to formal schools.
Zero Tolerance Project
Since Nepali girls’ safety is at greater risk than boys’ of becoming victims of gender-based violence in school, the United States Agency for International Development (USAID) is working with UNICEF on a project for Nepal called “Zero Tolerance, Gender-based Violence-Free Schools.”
This project focuses on increasing the ability of students and educators to report violence and receive assistance in areas where child marriage and violence against girls are most common.
In addition to spreading awareness of gender-based violence at Nepali schools and encouraging witnesses to report incidences, the Zero Tolerance project links together the communication network within and between schools and community service providers.
This stronger reporting network works as an alarm system to prevent violence at school, which helps girls and their families feel safer about sending them to school. This project is active in 200 schools in the central region of Nepal where child marriage is common.
Creating Opportunities
Both boys and girls need assistance in education, yet girls in Nepal face more risks than Nepali boys regarding school and may need more assistance. Hopefully, with continued support from the U.S. and U.N., Nepali government and educators will continue to focus on improving education, with extra effort for ensuring safety and equal opportunities for girls.
Overall, the more literate the men and women of Nepal become, the more Nepal changes towards becoming a developed country. According to the United Nations Educational, Scientific and Cultural Organization (UNESCO), while linking literacy rates definitively to other variables is difficult, studies show it is likely that improving literacy rates increases health, income, political participation, democratic ideals, economic growth and confidence in asserting human rights.
– Emme Leigh
Photo: Flickr
U.S. Benefits from Foreign Aid to Equatorial Guinea
People often think of foreign aid as the provision of emergency assistance without many tangible benefits in return. However, providing foreign aid offers numerous benefits to countries such as the U.S. For the U.S., Equatorial Guinea is by far one of the most important potential trading partners in the world, and aid to Equatorial Guinea is one of the surest ways to create such partnerships. The U.S. benefits from foreign aid to Equatorial Guinea, as it gains access to one of the world’s largest energy exporters.
Equatorial Guinea and Its Neighbors
In order to see how the U.S. benefits from providing aid, it is important to first understand the situation in Equatorial Guinea. As a largely underdeveloped country, Equatorial Guinea also suffers from the woes that plague many of its continental neighbors.
Political turmoil and internal corruption have caused sharp drops in foreign development assistance to the country since 1993. For example, in 2013 the government cracked down on freedom of assembly by shutting down protests and arresting political dissenters, sparking international outcry.
In addition, worsening economic conditions have caused the country’s economy to shrink by nearly 25 percent since 2014 despite this trend of reversed growth being rare among African countries. Most African states have managed to maintain positive economic growth rates in spite of rampant poverty.
For example, although Equatorial Guinea’s fall in growth stabilized at -3.2 percent in 2017 from its all-time low of -9 percent in 2015, most of its neighbors have maintained positive growth rates for years.
Cameroon to the north had GDP growth of 3.2 percent for 2017 and hasn’t dipped below zero since 1993. To the south, Gabon had a growth rate of 1.1 percent for 2017. Although Gabon’s growth has steadily declined since 2008, Equatorial Guinea is unique for having a consistently negative rate several years in a row.
Increasing Economic Prosperity
Nonetheless, the country has a strong export-based economy. In 2016 alone, Equatorial Guinea exported around $4 billion worth of goods, while importing a little over $1 billion. Its trading power has made it one of the few countries in the world with a trade surplus, especially one of that magnitude.
Equatorial Guinea’s economic health relies heavily on its natural resources. In 2016, its largest exports consisted of crude oil (which comprised over half of its exports, at $2.79 billion out of $4.06 billion) and petroleum gas (which accounted for approximately $762 million). Increasing global demand for oil, coupled with heavy reliance on this finite energy product, could make Equatorial Guinea one of the most important developing economies in the 21st century.
The Value of Foreign Aid and Investment
Equatorial Guinea’s economic potential suggests that it is a viable potential trading partner for any country, and providing foreign aid to Equatorial Guinea may be a strong gage for determining how robust such potential trade agreements could be. Increased foreign aid could encourage Equatorial Guinea to work with donor countries in opening new supply chains through trade agreements, complementing international development assistance with long-term economic partnerships.
Providing foreign aid will also help Equatorial Guinea grow its economy and reach its full potential. For example, as foreign donors began slashing development funds to Equatorial Guinea between 2010 and 2014 (from $85 million to $520,000 respectively), its economy began to contract several years later, from $22 billion in 2012 to $12 billion in 2017.
However, despite such alarming figures, there has been some help in the form of an increased focus on infrastructure development. In 2015, China agreed to commit $2 billion to Equatoguinean infrastructure. This support has not only helped revitalize Equatorial Guinea’s economic growth but also brought Equatorial Guinea and China closer together diplomatically.
Equatorial Guinea and the U.S.
In contrast, the U.S. has no trade agreements with Equatorial Guinea. In fact, it currently exports more to Equatorial Guinea (at $278 million) than it imports (at $193 million), signaling a large trade imbalance for Equatorial Guinea.
Furthermore, the U.S. does not supply any foreign aid to Equatorial Guinea. However, it does provide a generous amount to Equatorial Guinea’s neighbors; in 2017, Cameroon received approximately $80 million in U.S. foreign aid funds, while Gabon received over $2 million.
Increased foreign aid to Equatorial Guinea is one of the most practical ways to improve trade relations between the two countries. Each nation has something that the other needs. As one of the wealthiest countries in the world, the U.S. has plenty of foreign aid funds available (specifically, a foreign assistance budget of $50 billion in 2015) to improve the economic outlook of Equatorial Guinea.
Additionally, as one of the largest oil harvesters in the world, Equatorial Guinea has a slew of energy reserves available to export to the U.S., at a total of 1.1 billion barrels of oil as of 2012. It is evident that the U.S. benefits from foreign aid to Equatorial Guinea, due to greater access to a growing Equatoguinean hydrocarbon sector.
How the U.S. Benefits from Foreign Aid to Equatorial Guinea
A diversified import sector is critical to the financial well-being of any country. For the U.S., an oil industry with diversified imports creates stable international supply lines and an even stronger economy. Equatorial Guinea’s resources and economic potential suggest that it could be an ideal trading partner.
The U.S. benefits from foreign aid to Equatorial Guinea by improving relations between the two states and opening up new energy markets for American consumers. In addition, robust trade agreements could yield incentives for elevated oil production, thus helping to reverse Equatorial Guinea’s negative economic growth.
– Vincent Giordano
Photo: Flickr
Education’s Role in Uplifting Women in Fiji
Credit Access in Croatia
Croatia, a quaint European country tucked away in the Adriatic Sea, appears to thrive in the Mediterranean. Tourists flock to its squares, and its people show an optimism and cheery spirit. Economically, however, the country has struggled in the past due to external political factors that have had an impact on several parts of Europe throughout the 20thcentury.
The Croatian Economy
Croatia’s problems started long before it became an independent state. Prior to 1991, Croatia had been a part of Yugoslavia. Its communist-based planned economy was successful at first, but it quickly fell apart due to mismanagement and human error. After the planned economy and communist movement fell apart, Croatia experienced high episodes of hyperinflation and inequality. In the past two decades, however, the situation has gotten better.
Croatia has improved significantly from its earlier days of economic turmoil. Despite having a growing economy, the state struggles with the issue of credit access, especially for small businesses. Recently, this can be attributed in part to the 2010 European financial crisis that had an impact on smaller countries on the continent. Challenging market conditions had made it so that receiving credit was harder than usual. In 2008, only 42 percent of Croatians had access to financial services. Since then, Croatia’s economy has stabilized, but the issue of credit access still remains.
Credit in Croatia
The issue is significant. The term ‘credit access’ encompasses a wide variety of financial institutions not limited to strict agencies providing services. Underdeveloped ATMs and local banks create a roadblock to future growth. In order for progress to be made, there have to be several changes made in the infrastructure to unlock the potential in Croatia’s economy.
Legally, there are several hurdles that make changing credit access in Croatia an issue. First, there is the need to alter the legacy banks and institutions in the area. Historically, Croatia has not had a strong financial history, and a large part of its population has grown accustomed to the lack of resources.
In one report, the authors claimed only 14 percent of Croatians were being properly served by the nation’s financial markets. In order to improve this number, there needs to be an institutional change that starts at the legal level.
Currently, around 30 percent of individuals have stated that they had issues with making ends meet. This comes in the context of job insecurity with 29 percent of workers fearing they could lose their jobs in the next six months. The lack of credit access has compounded this worry since these individuals already find their financial situations to be unstable.
Solutions for Improving Credit in Croatia
In other nations, improving credit access has had tremendous success for the economy. Around the world, it has shown to decrease child labor and diversify assets for the poor. Studies have also linked improving credit access to positive agricultural growth. These improvements, undoubtedly positive in nature, have been accomplished at the small price of involving other nations in national affairs.
Similarly, to instigate change through credit access in Croatia, the state has to look to allied nations in Europe as models. Croatia’s membership in the EU may serve it well. Calling upon partnered countries to aid in this specific problem could actually strengthen The EU as a whole. Helping out with the credit issue in Croatia could lead to more benefits than expected with neighboring countries being able to benefit from a more stable trade partner. With an underserved population, there are also business opportunities for several nations to cash in on.
A Brighter Future
Recently, efforts have been made to improve credit access and the Croatian economy in general. To attract investors, the state has repeatedly made tax payments easier for companies. In 2012, Croatia created a private credit bureau to “collect and distribute information on firms” to improve the system and stimulate credit access. These changes have the potential to spur the economy in Croatia in the coming years.
The movement to focus on the economic situation in Croatia has significant implications. Not only could credit access improve but it could also help stimulate regional economic growth and increase jobs. New financial institutions would improve banks and create positions of skilled labor that could attract immigration as well. Improving the financial stature of Croatia could improve its economy in more ways than one.
– Mrinal Singh
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