Countries that are part of the Organization of Economic Co-operation and Development (OECD) have been the dominant force in foreign aid to developing countries in Africa. But in recent years, China has emerged as a game changer, reshaping the global aid landscape and becoming Africa’s biggest donor. Here is a breakdown of the Chinese foreign aid package to Africa and what it means to China.
Chinese investment in Africa rocketed from a mere $210 million in 2000 to more than $3 billion in 2011 and has continued to grow. As a matter of fact, Africa is the largest recipient of Chinese foreign aid, accepting 45.7 percent of China’s ¥256.29 billion total foreign aid by the end of 2009.
The aid is divided into eight categories: complete projects, goods and materials, technical cooperation, human resource development cooperation, medical teams sent abroad, emergency humanitarian aid, volunteer programs in foreign countries and debt relief. By the end of 2009, China had sponsored more than 2,000 development projects in African countries.
Unlike OECD countries, China does not officially disclose its aid information on a regular basis. Data about Chinese foreign aid often comes from media reports and governmental documents. Research labs like AidData are scrutinizing streams of sources and have constructed a fairly solid picture of Chinese foreign aid.
According to AidData, between 2000 and 2013, the largest sector of Chinese aid to Africa was transport and storage, summing to $29 billion distributed to 36 countries. South Africa received $5.2 billion and Kenya accepted $4.8 billion. Sudan, Mozambique and Angola received $3 billion, $2.6 billion and $2.5 billion worth of aid in this sector, respectively.
The second-largest sector was energy generation and supply. Among the $25 billion aid package, Sudan got the largest amount of aid at $4.6 billion. Ethiopia received $3.9 billion and Nigeria, Zambia and Angola each received about $2 billion.
Other multisector and unallocated/unspecified sectors were the third and fourth largest sectors in Chinese aid to Africa. The former sector comprised $20 billion worth of aid and the latter $8.7 billion. Due to China’s non-disclosure policy, the specific items that these budgets financed are difficult to pinpoint. What is worth noting is that Angola received $4.1 billion, the second-most amount of aid in the other multisector category, making Angola the largest recipient in the top three categories.
A total of $6.9 billion was devoted to projects in the communications sector. Nigeria, Ethiopia and Tanzania were the top three recipients, receiving $1.7 billion, $1.2 billion and $676 million respectively.
Chinese foreign aid projects in Africa focus on infrastructure, with transportation, energy and communication dominating almost half of the total aid package. China is also very careful in selecting recipient countries for its aid. Most of the African countries that are endowed with generous aid are very rich in terms of natural resources.
For example, Angola, being the top recipient of more than $12 billion over the thirteen-year span, has important reserves of oil, gas and minerals. Chinese aid to Angola focuses on infrastructure development that will make the export of this wealth accessible. Other leading recipient countries like Ethiopia, Nigeria and Sudan are also rich in natural resources.
Currently, Angola is one of the largest trading partners of China. The Chinese foreign aid agenda seems to indicate an intention to establish trade with the recipient countries, which is an understandably important reason for giving out foreign aid by any country in the world.
One issue that has been hotly debated over the past several years is that, as a non-OECD member, China constantly blurs the line between development finance and foreign aid. Chinese aid does not follow the definition of official development aid set by the OECD. As a result, many of China’s activities are deemed “evil” as they demonstrate a quest for the return of natural resources or trade partnership.
Nevertheless, trading opportunity is a fundamental benefit of foreign assistance that every aid donor is concerned with. In addition, according to Brookings Institution, in reality, China’s investment in and trade with Africa only accounts for a “tiny percentage”–less than five percent–of its global investment and trade. This disproportional aid-to-trade ratio proves China’s foreign aid to Africa agenda is not so selfish.
– Chaorong Wang
Photo: Pixabay
Facts and Figures Towards Rising Above Poverty in Malawi
With severe poverty automatically comes hardships and struggles, and Malawians are no strangers to this reality. A largely agricultural country located in southeastern Africa, poverty in Malawi is widespread among the population of more than 18 million. Landlocked by Tanzania, Zambia and Mozambique, Malawi is faced with 50.7 percent of the population living below the poverty line, and a staggering 25 percent living in what is considered to be extreme poverty.
The Southern African Regional Poverty Network (SARPN), gives insight to the widespread poverty among Malawians by defining poverty: “…as a state of continuous deprivation or a lack of the basics of life.”
Similar to most poverty-stricken areas, their government lacks the means to expand the economy, meaning Malawians oftentimes do not receive adequate healthcare, environmental protection or education. Below is a list of five pertinent facts that illuminate the poverty that Malawians face on a daily basis.
5 Facts About Poverty in Malawi:
Although the majority of the people in Malawi live in destitute conditions, it is deservingly known as the “Warm Heart of Africa” because the residents are known to be among the friendliest and hospitable to tourists.
It is important to note that among the struggles and inconveniences, Malawians are increasing their quality of life more and more as the years go on. Listed below are five facts delineating the efforts being made to combat poverty in Malawi, according to the Malawi Vision 2020 Statement:
5 Facts About Combating Poverty in Malawi:
Efforts being made by works such as the Malawi Vision 2020 Statement set the tone of a less impoverished nation for millions of individuals. The people of Malawi are taking strides and uniting together to generate a more sound and prosperous country.
– Angelina Gillespie
Photo: Flickr
Developing STEM Education for Women in Vietnam
At the beginning of 2016 in Vietnam, the United States Agency for International Development (USAID) and Arizona State University created and implemented the Building University-Industry Learning and Development through Innovation and Technology (BUILD-IT) project.
BUILD-IT
BUILD-IT exercises the goal of connecting science, technology, engineering and math (STEM) instruction in Vietnamese higher education institutions to students, who then can advance inclusive, technology-based growth. The project works mainly to promote STEM Education for women in Vietnam.
To increase educational innovation in STEM, BUILD-IT hosts semi-annual solutions councils and meetings to discuss problems and potential solutions. Additionally, the project funds innovation labs to develop ideas through technology. To assist in tracking educational innovation, the Higher Education Learning and Innovation Exchange acts as a database for all innovations.
One main priority of the initiative is to facilitate collaboration between universities and the private sector by providing students experiential opportunities in preparation for STEM careers. The project hosts leadership forums to develop academic initiatives, scholarships and networking opportunities for women in STEM.
Women in STEM Leadership Forum
The first leadership forum for the Women in STEM Leadership Program was held at the University of Danang in Vietnam in August 2016 and attracted over several hundred participants. The forum featured female role models, inspired the transfer of knowledge and established paths to entrepreneurship through STEM Education for women in Vietnam.
Katy Wigal, BUILD-IT project director and associate director for Curricular Innovation at Arizona State University, stated “the Forum enabled open discussions on the roles of women in the high demand professions of math, engineering, technology and science. The insights they (female speakers) offered about their personal journeys were inspiring to a new generation of women.”
The USAID Vietnam Mission Director Michael Green also said that “increasing opportunities for women in these fields are critically important in realizing greater economic success and equality for women across the board.”
Report on Women-Owned Enterprises in Vietnam
In a recent report of a market study on women-owned enterprises in Vietnam, the IFC Asia Manager for Financial Institutions Group Advisory Services, Rachel Freeman, concluded that social and traditional expectations can sustain prejudices against female business owners and, in particular, young women.
Businesses traditionally can involve women, but these prejudices can have negative impacts against women and their businesses. From STEM to the business field, social and traditional expectations can infiltrate all aspects of society in Vietnam.
Women in STEM: Sustainable Development
For sustainable development and participatory citizenship, STEM education is innovative and essential for every citizen, especially in regard to women. Women’s involvement in the STEM field benefits social engagement and domestic work in addition to sustaining technological innovation.
Vietnam has successfully increased enrollment rate of female students at the university level from 30 to 52 percent between the 2012-2013 and 2013-2014 academic years. The STEM Education for Women in Vietnam initiative is one main priority of the BUILD-IT project because of the importance of inspiring women to modify the status quo and facilitate a global revolution.
– Andrea Quade
Photo: Wikimedia Commons
The Effects of Child Brides on Poverty & the Benefits of Abolishment
The “Economic Impacts of Child Marriage” project (funded by the Bill & Melinda Gates Foundation), the Children’s Investment Fund Foundation, and the Global Partnership for Education are a few of many projects whose goals were to abolish child marriages. These movements were apart of a three-year research project led by the World Bank and the International Center for Research on Women.
A Global Research Project
The research project explored the impacts of child marriage in fertility and population growth, educational attainment and learning, labor force participation, decision-making and investments, health, nutrition and violence. Through this project’s research, the organization concluded that ending the practice of child marriage could save the global economy trillions of dollars between now and 2030.
Poverty-ridden families offering their daughters as child brides is a common means at eliminating certain living costs. Once a daughter is sent away for marriage, there is one less person to feed, clothe and educate; moreover, a dowry or “bride price” is often welcome income for these poor families. However, younger girls are often the chosen demographic for this practice since the older a girl gets, the more expensive the dowry becomes.
Issues with the Practice of Child Brides
One of the main problems with this practice is its invocation of an endless cycle of poverty. Younger girls married away for money often do not get the chance to continue their education; this occurrence severely limits the opportunities of economic growth for both her immediate and newly extended family.
Child brides also have to perform a great deal of unpaid work in the home, such as cleaning, cooking and caring for their husbands, in-laws and children. However, not marrying early and staying in school often leads to a girl becoming healthier and wealthier. In fact, an extra year of primary education for girls also can boost their future earnings by 15 percent.
Consequences of Premature Marriage for Child Brides
There are several severe consequences of child brides who are married off prematurely. Girls who get married early often have to break off previous relationships after marriage and cannot maintain connections with people outside of their families. Isolation can cause severe psychological consequences for both mothers and their babies.
There are also the strains the life of a wife can take on such a young girl’s body. Specifically, early child-bearing is a common incident that risks both young girls’ and their babies’ lives. According to the World Health Organization, the most frequent cause of death in young women aged 15 to 18 is complications during pregnancy and birth.
The non-governmental organization Girls Not Brides has also found “when a mother is under 20, her child is 50 percent more likely to be stillborn or die within its first weeks of life than a baby born to an older mother.”
The International Costs of Child Brides
The World Bank and the International Center for Research on Women has estimated that by 2030 child marriage will ironically cost developing countries trillions in dollars. These organizations push for an end of child brides as a means to alleviate immediate poverty and produce long-lasting economic growth.
The World Bank notes that ending child marriages would have a strong positive effect on the educational levels of girls and their children as well as increase women’s expected earnings. In addition, household welfare, substantial reductions in population growth over time and reduction in rates of under-five mortality and delayed physical development were found.
All in all, the marriage of child brides is a practice that should be abandoned for it numerous economic, personal and societal costs.
– Richard Zarrilli
Photo: Flickr
How the Media Misrepresents Jamaica
The media misrepresents Jamaica in a variety of ways. It portrays Jamaica as a population full of recreational drug users and criminals. It also depicts a land full of tourist scams and impoverished people struggling to survive.
Misrepresentation #1: Everyone in Jamaica smokes marijuana
The TNI Drugs and Democracy Programme reported in a survey taken by the National Council on Drug Abuse (NCDA), 60 percent of the Jamaican population smokes marijuana and uses tobacco and alcohol. The Jamaica Constabulary Force stated only nine percent of Jamaican’s use cannabis.
Marijuana use in Jamaica has been tied to the Rastafarian religion. Most Rastafarians consume it as part of spiritual rituals. However, not everyone in Jamaica is a Rastafarian and not everyone in Jamaica smokes or participates in the sale of marijuana. In fact, up until 2015 when lawmakers in Jamaica decriminalized it, selling and using marijuana was illegal for over 100 years.
Influenced by the U.S., Jamaica is set to become part of the legalized marijuana market, which will create income for its local farmers and change how the media misrepresents Jamaica.
Misrepresentation #2: Locals and tourists don’t mix
While tourist scams are real in Jamaica, tourism in the country is still at an all-time high. Tourism brought in earnings of more than $2.5 billion in 2016 from nearly 4 million visitors. The booming tourism industry can benefit both the locals and the tourists.
Jamaicans can set up shops for dining and shopping near tourist-heavy areas and the visitors can experience the local culture and interact with the locals. There is even a program in place called Meet the People that matches locals with tourists to spend time together based on similar interests.
Misrepresentation #3: Poverty is crippling Jamaica
More than 400,000 people in Jamaica live in poverty and 14,000 live in extreme poverty. That’s close to 15 percent of the country’s population who don’t have access to a decent way of survival. Although the percentage is not uplifting, it is far from the worst across all countries. Out of 164 countries, Jamaica ranks 119th on a scale of the percent of the population living below the poverty line. In comparison, the U.S. is ranked 126th.
Jamaica’s poverty concerns have to do with the country’s struggle to keep a consistent gross domestic product (GDP) growth rate. Jamaica’s GDP growth rate has fluctuated between .5 percent to 1.4 percent within the last few years, creating challenges for the poor. However, the growth rate is expected to rise significantly in 2018, creating a steady decline in the poverty rate through 2020.
Although some facts about Jamaica can’t be overlooked, grave information attached to those facts and how the media misrepresents Jamaica are skewed. Jamaica has grown into a thriving, middle-income country.
– Naomi C. Kellogg
Photo: Flickr
Access to Credit in Madagascar Needs Improvement
According to a report from the University of Göttingen, “agricultural firms with flexible microfinance loans have significantly higher credit access probabilities than non-agricultural firms and agricultural firms with standard microfinance loans.” Access to credit in Madagascar can be greatly improved by supplying the population with particular loans that allow them to enhance their financial stabilities.
Access to microcredit has a profound impact on Malagasy people. As The Guardian writes, “Microfinance is seen as a vehicle to help Madagascar attain some of its millennium development goals, particularly on eradicating extreme poverty.” Approximately 85 percent of the nation’s population lives on less than $1.25 a day. Credit availability in Madagascar has been able to create severe advancements for small businesses and provide a higher income for the average Malagasy family.
Since most individuals are without access to credit in Madagascar due to their financial status, providing goods for the family and bringing in a steady income can be very difficult. Many rely on informal moneylenders who charge annual interest rates anywhere from 120 to 400 percent for unsecured loans. These numbers are astronomical compared with the MFI’s average rate of 36 percent for the same period, equating to two to four percent a month.
Extremely high interest rates can be very dangerous for people who do not make enough money to continually make payments every month. Supplying the Malagasy citizens with microfinance loans would give them the opportunity to discontinue their relationships with informal moneylenders and ultimately save additional money for other necessary goods.
However, a country that mainly relies on farming can be slightly strenuous for the MFI. It can provide the people with loans to help supply their agricultural needs, but when the weather does not cooperate with the proper farming conditions, these loans can then be used for other purposes. This is what the institutions do not want to happen. According to Serge Rajaonarison, Chief Executive Officer of the Caisse d’Epargne et de Crédit Agricole Mutuels de Madagascar, by accurately determining the “areas and farmers affected by hailstorms, for example, we can subsequently compensate according to the losses caused.”
The prime concern for the MFI is for its loans to be paid back by the people of Madagascar. Even after the country is devastated by severe weather events, the MFI continues to obtain its money back from those who were given loans. Continued payments by the people and being able to provide a better life and workplace for the community will allow the MFI to implement a strategy that will give everyone access to credit in Madagascar.
– Matthew McGee
Photo: Flickr
The Effects of Poverty Are Widespread But Can Be Reduced
Poverty can have lasting impacts on both the people and communities in which it is present. The effects of poverty are often detrimental to both the health and education of people that are affected by it, and can lead to higher crime and mortality rates in neighborhoods and countries where the poverty level is high.
More than 10,000 children die every day because they live in poor housing. The effects of poverty on children are even more dangerous than for adults, because children are still developing. While in their developing stages, without access to healthy living conditions or secure access to food and water, children easily succumb to both disease and death. Living in a house that does not have adequate ventilation or proper heating can cause lasting damage to a child’s health, if they survive at all.
Poverty also affects education for people of all ages. Younger students will not be able to afford school supplies or clothes for school. As students get older, without a scholarship, secondary education and college are out of the question. Sometimes, even with a scholarship, they are not able to attend, because they have a family to support at home and need to work. Without adequate education, many people end up working for minimal pay, which keeps them impoverished for the duration of their lives and continues the cycle of poverty within the home.
The effects of poverty include high crime rates in affected communities. People without the proper resources to survive often resort to theft and violence in order to survive. Oftentimes, in high poverty areas there are also high unemployment rates, and because people are unable to obtain jobs, they resort to crime because they feel they have no other options.
The cycle of continued poverty also has a significant negative effect on the health of citizens. Substance abuse is often higher in areas with high poverty rates. This only continues to drive families deeper into poverty and continues the vicious cycle of poverty in the community. There are also more crippling accidents, because people in poverty tend to take jobs in unsafe working conditions to make money.
Poverty also has the power to divide society. The lower class is pitted against the higher class and vice-versa. This allows the gap between the two to become even larger without a chance to rectify the problem. In countries with large gaps between the two classes, the middle class is often small or nonexistent, which is an important stepping stone for people in a lower class to earn better wages. As that class disappears, the amount of impoverished citizens will continue to grow.
The effects of poverty are plentiful and widespread. The amount of crime, violence and death that run rampant in communities with high poverty rates are no coincidence, and are a direct result of the amount of poverty in that area. In order to diminish crime and violence in these areas, poverty has to be diminished first.
– Simone Williams
Photo: Flickr
Understanding the Top Sectors for Chinese Foreign Aid to Africa
Countries that are part of the Organization of Economic Co-operation and Development (OECD) have been the dominant force in foreign aid to developing countries in Africa. But in recent years, China has emerged as a game changer, reshaping the global aid landscape and becoming Africa’s biggest donor. Here is a breakdown of the Chinese foreign aid package to Africa and what it means to China.
Chinese investment in Africa rocketed from a mere $210 million in 2000 to more than $3 billion in 2011 and has continued to grow. As a matter of fact, Africa is the largest recipient of Chinese foreign aid, accepting 45.7 percent of China’s ¥256.29 billion total foreign aid by the end of 2009.
The aid is divided into eight categories: complete projects, goods and materials, technical cooperation, human resource development cooperation, medical teams sent abroad, emergency humanitarian aid, volunteer programs in foreign countries and debt relief. By the end of 2009, China had sponsored more than 2,000 development projects in African countries.
Unlike OECD countries, China does not officially disclose its aid information on a regular basis. Data about Chinese foreign aid often comes from media reports and governmental documents. Research labs like AidData are scrutinizing streams of sources and have constructed a fairly solid picture of Chinese foreign aid.
According to AidData, between 2000 and 2013, the largest sector of Chinese aid to Africa was transport and storage, summing to $29 billion distributed to 36 countries. South Africa received $5.2 billion and Kenya accepted $4.8 billion. Sudan, Mozambique and Angola received $3 billion, $2.6 billion and $2.5 billion worth of aid in this sector, respectively.
The second-largest sector was energy generation and supply. Among the $25 billion aid package, Sudan got the largest amount of aid at $4.6 billion. Ethiopia received $3.9 billion and Nigeria, Zambia and Angola each received about $2 billion.
Other multisector and unallocated/unspecified sectors were the third and fourth largest sectors in Chinese aid to Africa. The former sector comprised $20 billion worth of aid and the latter $8.7 billion. Due to China’s non-disclosure policy, the specific items that these budgets financed are difficult to pinpoint. What is worth noting is that Angola received $4.1 billion, the second-most amount of aid in the other multisector category, making Angola the largest recipient in the top three categories.
A total of $6.9 billion was devoted to projects in the communications sector. Nigeria, Ethiopia and Tanzania were the top three recipients, receiving $1.7 billion, $1.2 billion and $676 million respectively.
Chinese foreign aid projects in Africa focus on infrastructure, with transportation, energy and communication dominating almost half of the total aid package. China is also very careful in selecting recipient countries for its aid. Most of the African countries that are endowed with generous aid are very rich in terms of natural resources.
For example, Angola, being the top recipient of more than $12 billion over the thirteen-year span, has important reserves of oil, gas and minerals. Chinese aid to Angola focuses on infrastructure development that will make the export of this wealth accessible. Other leading recipient countries like Ethiopia, Nigeria and Sudan are also rich in natural resources.
Currently, Angola is one of the largest trading partners of China. The Chinese foreign aid agenda seems to indicate an intention to establish trade with the recipient countries, which is an understandably important reason for giving out foreign aid by any country in the world.
One issue that has been hotly debated over the past several years is that, as a non-OECD member, China constantly blurs the line between development finance and foreign aid. Chinese aid does not follow the definition of official development aid set by the OECD. As a result, many of China’s activities are deemed “evil” as they demonstrate a quest for the return of natural resources or trade partnership.
Nevertheless, trading opportunity is a fundamental benefit of foreign assistance that every aid donor is concerned with. In addition, according to Brookings Institution, in reality, China’s investment in and trade with Africa only accounts for a “tiny percentage”–less than five percent–of its global investment and trade. This disproportional aid-to-trade ratio proves China’s foreign aid to Africa agenda is not so selfish.
– Chaorong Wang
Photo: Pixabay
Top 10 Croatian War Facts
Although the Croatian War has been over for more than twenty years, the aftermath is still present within the region. Lack of economic and political stability are current problems that Croatia faces. Professor Daliborka Uljarevic, a leader in the Centre for Citizens’ Education, says “political rhetoric and lack of profound economic recovery keep people stuck in recent past, with poor view on better future.” Here are the top 10 Croatian war facts that provide a better understanding of what happened during the war and how Croatia remains affected.
Top 10 Croatian War Facts:
These 10 Croatian war facts do not demonstrate the full monstrosity that ensued during 1991-1995. Victims are still suffering to this day and many families still have not found their missing loved ones.
– Mary McCarthy
Photo: Flickr
What Are the Biggest Global Issues?
What are the biggest global issues that the world is facing right now? All around the world, countries are facing new issues every single day on their own, but despite its borders, the world is constantly facing issues as a whole. What are the biggest global issues that the world is facing together? There are many that affect everybody and require attention from not just one country, but every country.
One of the top global issues today is the continent of Africa. Africa needs support both economically and socially in order to develop and protect human rights, as well as build solid governments and better the lives of the people living there. African countries also need support to promote democratic institutions in order for there to be peace among the nations.
AIDS is another top global issue in the world today. Although new HIV infections have decreased significantly, the global response to HIV/AIDS has to continue to be powerful in order to wipe out the epidemic completely.
The rights of children are another top global issue throughout many different countries. Millions of children do not have access to education, health or protection. Every country should be expanding the opportunities for children and allowing them to exercise the rights that all humans should be allowed.
Climate change is a significant issue that shifts weather patterns. This causes a threat to food production, rising sea levels and many more negative impacts on nature. Climate change is a global issue that directly affects not only humans throughout the world, but animals and the ecosystem itself.
Food insecurity is one of the biggest global issues the world is facing right now. About 795 million people in the world were malnourished between 2014 and 2016. Hunger is known to be the number one risk to human health worldwide, even greater than disease.
Another global issue is inadequate access to clean water and the lack of sanitation and hygiene that goes along with it. This is typically due to bad economics and infrastructure, and often leads to deaths, especially in children, caused by diseases that are spread by unsanitary water.
There are many more problems that the world is facing today, but these are the biggest global issues that the world needs to address now. Some of the issues listed affect not only the human race but animals and nature as well. From diseases to government, the world is facing global issues together every day.
– Chloe Turner
Photo: Flickr
The State of Technology Out of India
India’s reputation for outsourcing has grown over the last 30 years. However, India’s market has dropped due to the recent change in the U.S. political climate and the development of artificial intelligence and automation systems. While things look uncertain now, there is still a strong case for the technology out of India.
Opportunity for Growth
India has been called the “new China” for many companies looking to expand consumer bases. Corporations like Google, Facebook and Twitter have largely been banned from China’s market, which is why India provides an important opportunity. The technology out of India would have been unheard of ten years ago, but now with the ballooning smartphone users (hitting 168 million Indian users in 2015) and internet users (around 277 million Indian users as of 2017), an environment for phone applications, mobile payments, social media sites and more are growing.
The big corporations have moved in despite challenges. One such hurdle was the Indian government requesting more than any other country that Facebook remove information (10,792 times in 2014). This change in technological circumstances has opened channels for local Indian companies to develop as well. A 2016 National Association of Software and Services Companies reported India ranked 3rd largest for startups. While there is still some gender inequality with less than 10 percent of Indian entrepreneurs and engineers being women, there is an awareness of the inequality, thus creating an opportunity for change.
Replacing IT Jobs
The IT sector brings in almost 10 percent of India’s gross domestic product (GDP) and all trajectories showed growth, but recent layoffs in the industry have caused some question of India’s ability to create a job market and grow. The wave of recent layoffs, estimated to be around 56,000 over the last year, is assumed to be due to automation in a lot of the industry along with U.S. President Trump’s campaign of focussing jobs in the U.S. and cutting back H-1B visas.
Around 60 to 70 percent of jobs in the IT and call center industry are expected to be replaced by automation systems. The layoffs are expected to hit a high of 480,000 by 2021. This makes it difficult as 12 million Indians enter the workforce every year, but only about 135,000 jobs were created by India’s eight biggest sectors, including IT, in 2015. Pankaj Bansal, a chief executive with People Strong, believes the IT sector will hit a net of zero hires in the future unless something changes.
Returning Home
Even with layoffs, many Indian engineers and entrepreneurs are leaving the U.S. to return home and pursue careers in India. Experts estimate the migration home to be in the tens of thousands. Indians are returning home to pursue opportunities closer to family and where their salaries will go farther than in the U.S. The migration back to India shows the job market is still open and available for more technology out of India. Although India’s average GDP has slowed recently, it has still grown tremendously in the past compared to other countries, like the U.S. India’s GDP grew 7.3 percent from 2010 to 2014 while the U.S. GDP only saw a 2.2 percent increase.
Electronic Payment
A particular segment of the IT sector worth noting is electronic payments. The use of electronic payment is growing in Asia as a whole and many are trying to bring India to a place of acceptance for mobile payment applications. Paytm (an Indian mobile payment technology out of India) in particular plans to invest $1.9 billion over the next two years to make this the electronic payment method the future of India. Only about one-third of citizens have access to the internet, and of those who do, only about 14 percent are making an average of one electronic payment a week. Plus, there is a trust issue from reports of hackers stealing money from Paytm accounts.
Two years ago India was all over the news for being the next China, but many have decreased their expectations and predictions after recently reduced job opportunities. While India is currently facing challenges, if it can find growth prospects, particularly locally, there should be no reason to be unable to turn layoffs into job possibilities.
– Natasha Komen
Photo: Flickr