They say that the only certainties in life are death and taxes. However, for developing countries, the latter might not be such a sure thing. In fact, effective tax policies, often referred to as domestic resource mobilization (DRM), are one of the biggest development issues facing poorer nations.
Without it, they may remain dependent on aid and unable to adequately meet the needs of their citizens, trapped in a cycle of poorly funded, haphazard social programs partially administrated by foreign donors. If the goal of aid is to create a world in which no one needs it, domestic resource mobilization may represent poor countries’ golden ticket to financial independence.
Domestic resource mobilization is essentially both a strategy and development outcome, in which a country becomes capable of funding its own social programs. Aid strategies variously focus on different indicators of development, such as improved health, education, or business opportunity. However, the purpose of domestic resource mobilization is to empower a developing country to improve these indicators using its own financial and administrative resources.
Obviously, this can be a huge challenge. Taxes in some countries can be unenforceable, insupportable, poorly allocated, or dissipated due to corruption. In much of sub-Saharan Africa, for example, simply reaching a large rural population is a barrier in and of itself, not to mention negotiating a socially sustainable level of taxation for those living off the grid in poverty.
In countries such as Nigeria, which has one of the worst levels of inequality and corruption, a great deal of tax income is squandered by shady officials, rather than redistributed to those living in extreme poverty.
According to the 2011 report by African Economic Outlook, revenue sources in sub-Saharan Africa grew from $100 billion in 2000 to about $513 billion in 2011. To put those numbers in perspective, official development assistance (ODA) grew from only $20 billion to $60 billion in the same time period.
Simply put, the amount of potential tax revenue far outweighs foreign funding of development programs. And those figures represent only known sources; many businesses and potential revenue streams lie outside the formal economy.
A lack of domestic resource mobilization fosters dependency on aid, which is why this technique has been acquiring greater importance for international donors in recent years. In April of 2014, developing countries and international policy-makers met in Mexico City to address, among other things, effective domestic resource mobilization.
There was a general consensus on the importance of DRM, with developing countries’ ministers calling for an increase in support from aid donors towards that end. For those at the conference, DRM represented a win-win; aid donors benefit from a potential scale-down of funding, while developing countries increase their governance capabilities while independently enhancing their own development goals.
More recently, at the Financing for Development conference in the Ethiopian capital of Addis Ababa, DRM was clearly a priority. Around 120 of 151 speeches by the foreign ministers in attendance at least mentioned domestic resource mobilization.
The United States Agency for International Development (USAID), as well as their foreign counterparts from Germany, the U.K. and elsewhere, even composed a policy initiative to advance the goal of achieving domestic resource mobilization in aid-recipient countries.
The initiative, dubbed Addis Tax Initiative, initially drew 30 members which agreed to a set of policy outcomes. Among those outcomes was a commitment that aid donors would double financial support to develop DRM, that members would compose a set of key DRM goals, and that countries would institute DRM policies which are harmonious with those of other developing countries.
The potential for DRM to transform a developing country’s condition can be neatly illustrated by the relationship between USAID and the country of Georgia. USAID began, in the early 2000s, to target border and customs tax compliance practices in the country.
The program was designed to increase a legitimate tax base, cut down on corruption, and improve collection efficiency. Over the nine-year duration of the program, the country managed to increase its tax base to 12 percent of its GDP, as well as reduce the rate of corruption (in the form of collected bribes) by about 30 percent.
While improving domestic resource mobilization is not the be-all, end-all of development and poverty reduction, it certainly should be the focus of a comprehensive development portfolio. Enhancing aid recipients’ ability to manage its own financial resources as well as improve the strength of its governance is essential to reducing the need for aid and lifting people out of poverty finally and sustainably.
– Derek Marion
Sources: CSIS, Devex, African Economic Outlook
Photo: Flickr
Transitioning from Aid to Domestic Resource Mobilization
They say that the only certainties in life are death and taxes. However, for developing countries, the latter might not be such a sure thing. In fact, effective tax policies, often referred to as domestic resource mobilization (DRM), are one of the biggest development issues facing poorer nations.
Without it, they may remain dependent on aid and unable to adequately meet the needs of their citizens, trapped in a cycle of poorly funded, haphazard social programs partially administrated by foreign donors. If the goal of aid is to create a world in which no one needs it, domestic resource mobilization may represent poor countries’ golden ticket to financial independence.
Domestic resource mobilization is essentially both a strategy and development outcome, in which a country becomes capable of funding its own social programs. Aid strategies variously focus on different indicators of development, such as improved health, education, or business opportunity. However, the purpose of domestic resource mobilization is to empower a developing country to improve these indicators using its own financial and administrative resources.
Obviously, this can be a huge challenge. Taxes in some countries can be unenforceable, insupportable, poorly allocated, or dissipated due to corruption. In much of sub-Saharan Africa, for example, simply reaching a large rural population is a barrier in and of itself, not to mention negotiating a socially sustainable level of taxation for those living off the grid in poverty.
In countries such as Nigeria, which has one of the worst levels of inequality and corruption, a great deal of tax income is squandered by shady officials, rather than redistributed to those living in extreme poverty.
According to the 2011 report by African Economic Outlook, revenue sources in sub-Saharan Africa grew from $100 billion in 2000 to about $513 billion in 2011. To put those numbers in perspective, official development assistance (ODA) grew from only $20 billion to $60 billion in the same time period.
Simply put, the amount of potential tax revenue far outweighs foreign funding of development programs. And those figures represent only known sources; many businesses and potential revenue streams lie outside the formal economy.
A lack of domestic resource mobilization fosters dependency on aid, which is why this technique has been acquiring greater importance for international donors in recent years. In April of 2014, developing countries and international policy-makers met in Mexico City to address, among other things, effective domestic resource mobilization.
There was a general consensus on the importance of DRM, with developing countries’ ministers calling for an increase in support from aid donors towards that end. For those at the conference, DRM represented a win-win; aid donors benefit from a potential scale-down of funding, while developing countries increase their governance capabilities while independently enhancing their own development goals.
More recently, at the Financing for Development conference in the Ethiopian capital of Addis Ababa, DRM was clearly a priority. Around 120 of 151 speeches by the foreign ministers in attendance at least mentioned domestic resource mobilization.
The United States Agency for International Development (USAID), as well as their foreign counterparts from Germany, the U.K. and elsewhere, even composed a policy initiative to advance the goal of achieving domestic resource mobilization in aid-recipient countries.
The initiative, dubbed Addis Tax Initiative, initially drew 30 members which agreed to a set of policy outcomes. Among those outcomes was a commitment that aid donors would double financial support to develop DRM, that members would compose a set of key DRM goals, and that countries would institute DRM policies which are harmonious with those of other developing countries.
The potential for DRM to transform a developing country’s condition can be neatly illustrated by the relationship between USAID and the country of Georgia. USAID began, in the early 2000s, to target border and customs tax compliance practices in the country.
The program was designed to increase a legitimate tax base, cut down on corruption, and improve collection efficiency. Over the nine-year duration of the program, the country managed to increase its tax base to 12 percent of its GDP, as well as reduce the rate of corruption (in the form of collected bribes) by about 30 percent.
While improving domestic resource mobilization is not the be-all, end-all of development and poverty reduction, it certainly should be the focus of a comprehensive development portfolio. Enhancing aid recipients’ ability to manage its own financial resources as well as improve the strength of its governance is essential to reducing the need for aid and lifting people out of poverty finally and sustainably.
– Derek Marion
Sources: CSIS, Devex, African Economic Outlook
Photo: Flickr
Syrian Brain Freeze: An Uneducated Generation
The Syrian refugee crisis is one of the largest humanitarian crises of our time. Since the conflict began almost five years ago, more than seven million Syrians have been displaced and four million are living in refugee camps in neighboring countries. Among those four million, one million are children.
Syria had one of the best education rates in all of the Middle East before conflict erupted during the Arab Spring. Almost all of Syrian children were enrolled in primary school, and literacy rates were above 94 percent. That all changed once violence consumed the nation.
Basic education enrollment in Syria went from 100 percent to an average of 50 percent, but heavy conflict zones such as Aleppo have seen enrollment rates as low as 6 percent.
Syria is a vortex of intertwining complex problems, such as war and violence, that has leading nations and nongovernment organizations preoccupied with exerting their most valuable resources into their main objective: preserving human life and dignity.
The consequence of this is that other important issues such as education, sanitation and economic development are being neglected. Together, they will have dire consequences on the future of Syria.
An entire generation of Syrians may go uneducated. According to Save the Children, three million Syrian children overall are out of school. That means three million youth are deprived of economic opportunities, and more are susceptible to be recruited by radical and extremist groups that promise them a future of prosperity.
The violence has decimated educational facilities around Syria as well. It is estimated that to repair or replace damaged facilities, it would cost an estimated 2 billion GBP. More importantly, the resulting uneducated population will impact the future Syrian economy in a large way.
It is estimated that the future economy will lose 5.4 percent of its GDP because of the lack of skilled workers. This equates to almost 1.5 billion GBP.
There is hope, though. The United Nations had called for $224 million to ensure that the Syrian youth receive education. The United Nations also passed two resolutions to help aid reach its destination faster: resolution 2165 and 2191, which, among other things, authorized United Nations aid operations into Syria from neighboring countries without requiring the consent of the Syrian government.
Private companies such as Pearson, one of the largest publishers of education books in the world, are donating money to help educate the children. Pearson is planning to spend 1 million euros to help find solutions for Syria’s refugee education crisis and another 500,000 euros to support two education centers in Amman, Jordan.
With so many parents attempting to send their children to school, private schools with their subsidized programs are attempting to fill the void. While some may question the ethics behind building private institutions to provide humanitarian aid, Rob Williams, Chief Executive of War Child U.K.—a campaign that works to protect children in war—believes they might help.
He says that “there is evidence that private solutions can be quicker and the cost per pupil lower than with government solutions.” A combination of public and private projects will help quickly address a huge growing problem.
It may not be a permanent solution, but at the moment all resources available must be allocated to providing the necessary aid to end the conflict. The United States must also contribute and urge other nations to end the conflict and protect the children. An educated Syria will be better equipped to deal with the uncertain future.
– Adnan Khalid
Sources: The Guardian, Save the Children 1, Save the Children 2, Save the Children 3, United Nations
Photo: Flickr
Developing Countries Need to Raise Enrollment of Disabled Children
A new report released last week by Human Rights Watch (HRW) has detailed how an estimated 500,000 children with physical and mental disabilities are not enrolled within South Africa’s primary education system.
The monitoring group underscores within their report the growing trend worldwide of children with disabilities failing to become enrolled in primary education programs, specifically in developing countries and regions grappling with conflict.
The report was compiled based on individual interviews with 70 parents across South Africa; researchers traveled throughout KwaZulu-Natal, Limpopo, Gauteng and the Northern and Western Capes in late 2014.
In reference to South Africa, the report asserts, “Although the government claims it has achieved the MDG of enrolling all children in primary schools by 2015, HRW found that in reality, across South Africa many children with disabilities are not in school.”
The report also details the failure of many primary schools to accommodate disabled students and provide adequate educational services, as well as inherent discrimination against certain students through the application of additional fees.
Hannah Kuper, the co-director of the International Centre for Evidence in Disability at the London School of Hygiene and Tropical Medicine, argued in a recent interview, “Many, if not most, of disabled children are not enrolled in schools in developing countries. We need to raise awareness that disabled children have the right to attend school, and that including them often involves only small changes in the school or teaching methods, or even just in attitudes.”
She offered potential solutions for this problem in detail — “The first thing that we need is more data in order to know how to enroll children with disabilities in school. We need to know which children are most excluded and why, in order to see how to overcome these barriers. And we need to know what works best to address the needs of disabled children when they are in school, so that they can have the best education possible.”
The Malawian Ministry of Education announced that they had successfully mainstreamed over 90,000 disabled children into their primary school systems as part of their Inclusive Education Program. The program has also offered funding for structural modifications to schools, including the installation of ramps and handicap restrooms compatible with disabled students.
The author of the HRW report, Elin Martínez, questioned the complacency of the South African government in discriminating against education opportunities for disabled children. “The South African government needs to admit that it is not providing quality education to all of its children – in fact, no schooling at all to many who have disabilities.”
Qinisela, a South African mother of an eight-year-old with Down’s Syndrome, told HRW researchers, “We tried to put him in a [mainstream] school but they said they couldn’t put him in that school because he has disabilities […] because of Down’s Syndrome he isn’t like other children so they [said they] can’t teach him. At the therapy, they promised to phone if there’s a space in a special school. I’ve been waiting since last year.”
The Sustainable Development Goals (SDGs), which were designed by the United Nations to replace the near completed Millennium Development Goals (MDGs), will be put into place next year and include several regulations intended to improve the lives of disabled children, specifically within primary education and employment.
South Africa has attempted to remain active in the push disability advocacy, as they adopted policies to prohibit the exclusion of disabled children from primary education in 2001 and were one of the first countries to ratify the United Nations Disability Rights Convention in 2007. Despite these significant policy advancements, many officials have expressed concerns about disabled children’s access to primary education not just in South Africa, but across the developing world.
Jo Bourne, the Chief of Education for UNICEF, warned in a press statement, “Despite recent progress, there are still some 59 million primary-age children and 65 million adolescents out of school—often children living in poverty, girls, children with disabilities, children from ethnic minorities, children living in conflict or those engaged in child labour. These children and young people are among the most disadvantaged citizens from across the developing world and are not only excluded from the opportunity of education and learning for their own individual development, they are missing out on the opportunity to contribute to their communities and economies when they reach adulthood.”
– James Thornton
Sources: Malawi Nyasa Times, The Guardian
Photo: The Guardian
Debates Over Deworming
Although multiple studies have found that worm infections in developing countries should be treated with deworming pills, there is some debate within health organizations as to who qualifies for treatment. Currently there are 280 million children that are being treated for worms worldwide, but some experts believe that this is excessive.
When people are infected by worms, they suffer multiple ailments, primarily internal bleeding, which can lead to a loss of iron and anemia. Worms also cause diarrhea and malabsorption of nutrients. Compounding the problem, people also suffer a loss of appetite, which means they ingest less food overall. People most at risk are children and women of childbearing age.
Deworming people, especially children of a young age, has shown to be an effective measure to ensure that they stay in school for longer periods of time. A study conducted in Kenya after a deworming program showed that school absenteeism decreased by 25 percent. Even improved attendance in schools in which no children were treated within a three kilometer radius was remarked.
However, diagnosis is relatively expensive in developing countries because it involves a lab analysis of fecal matter, costing four to ten times the price of treatment. Some experts therefore recommend that mass deworming programs be carried out where a large number have been found to be infected.
This is currently the World Health Organization’s policy. Some scientists have challenged this practice, claiming that the available evidence is not enough to assure the safety or necessity of mass treatments. They believe that a lack of teachers, rather than absent children, are the cause of most problems in education in developing countries.
The deworming medication itself is extremely cheap, at just 30 to 40 cents per child. Many studies have suggested that this is a cost effective way of getting kids to go to school. These children also performed better at academic tests eight year later and at cognitive tests ten years later. In the southern United States, a deworming campaign in the early 1900’s had the same effects.
– Radhika Singh
Sources: The Conversation, Harvard University, Voxeu, WHO
Photo: Answers
Life Stinks Without a Toilet: How to Help
In 2013, studies showed that more people on earth had cell phones than access to toilets. Today, 4.5 billion people still do not have access to bathroom facilities.
Without proper toilets, approximately 946 million people are forced to relieve themselves outside. By doing this, people pollute water sources, jeopardize public health, and impact the lives of others. According to World Health Organization (WHO), 700,000 child deaths are linked to diarrhea, which is a result of unclean or unavailable toilet facilities.
Dr. Maria Neira, WHO’s public health department director says, “Until everyone has access to adequate sanitation facilities, the quality of water supplies will be undermined and too many people will continue to die from waterborne and water-related diseases.”
Countries all around the world have issues with toilet accessibility. India, however, struggles the most, with 640 million of the population using the restroom outdoors.
Lacking proper toilets is a global crisis that many people do not speak about. “There is a kind of a feeling among politicians that if we ignore the problem it will go away,” says Nitya Jacobs, policy leader for the Indian branch of the international charity WaterAid.
However, this problem cannot be solved with silence.
Bill Gates, co-founder of Microsoft and founder of the Gates Foundation, launched the “Reinvent the Toilet” campaign in 2012, which aimed to improve sanitation conditions in developing countries. The event hosted researchers, designers, investors, and advocates, all of whom participated in discussions on how to invent a sustainable toilet that reduces the spread of diseases.
At the event, researchers and universities showcased toilets that would manage human waste and improve the lives of others. The Gates Foundation awarded the most promising designs with money to further their research.
California Institute of Technology in the U.S. received $100,000 to continue developing a solar-powered toilet that generates hydrogen and electricity. Loughborough University in the United Kingdom received $60,000 to further develop a toilet that produces minerals, clean water, and biological chemicals. The University of Toronto in Canada received $40,000 to further improve a toilet that sanitizes feces and urine and replenishes clean water.
Bill Gates says, “Innovative solutions change people’s lives for the better. If we apply creative thinking to everyday challenges, such as dealing with human waste, we can fix some of the world’s toughest problems.”
So how can others help those who don’t have access to toilets?
Gates says, “Imagine what’s possible if we continue to collaborate, stimulate new investment in this sector, and apply our ingenuity in the years ahead. Many of these innovations will not only revolutionize sanitation in the developing world, but also help transform our dependence on traditional flush toilets in wealthy nations.”
Simply put, innovative thinking has the potential to change and improve the lives of others.
As universities and researchers continue to develop sustainable toilets, building latrines can decrease the spread of disease. In 2015, a thriving and technological time, every person should have access to a clean and working toilet.
– Kelsey Parrotte
Sources: Gates Foundation, The Guardian, Take Part, Time, U.S. News, World Health Organization,
Photo: Flickr
USAID: Interview with International Development Worker
Since 2009, USAID’s budget has gone down by about 16 percent. The United States’ foreign aid organization is already underfunded, making up less than one percent of the federal budget. Yet, USAID has 1,920 projects across almost every continent in the world.
With so little funding, it is impressive how much the organization can accomplish. Given the funding cuts, I talked to an active international development specialist and visiting professor at Colorado College.
Dr. Joseph Derdzinski had much experience with law and security forces in foreign countries during his time in the U.S. Air Force. Since then, he has conducted research on the democratic consolidation processes of post-authoritarian states as well as serving on election observation missions in Afghanistan and Egypt.
Q: Why do you think that USAID’s funding has gone down so significantly since 2009?
A: USAID was a main focal point of building infrastructure in Iraq and Afghanistan, so USAID funding was contingent on Afghanistan and Iraq. The reduction in USAID’s funding and budget is largely due to a reduction of foreign military personnel as well as development agencies from Afghanistan and Iraq.
Q: Why is the organization so underfunded?
A: It would make sense to fund more fully the agency, but there’s very little will from taxpayers or incentive for elected officials to increase USAID’s funding. In the annual federal budget, foreign aid doesn’t get the same level of attention as other budget items or priorities. This is due in part to the low level of understanding of how little funding foreign aid programs actually receive.
During or in the immediate wake of a war, foreign development funding is easier to justify, but it’s harder for a lawmaker to make a case for aid once the war is over. Moreover, everything to do with the war in Iraq, including development projects, was never part of the annual budgets. They were a supplement to the annual budget.
Q: Can you give me an example of how foreign aid helps the United States?
A: What’s happening in Greece in terms of migrations of people into Greece is a good example. The great majority who aren’t from Syria are fleeing authoritarian regimes and economic woes. And that’s the same as what’s happening at the U.S. border. Migrants to the US are fleeing social unrest and oppressive regimes.
And so, if the goal is to keep people in their home countries, one potential impact of international development is to allow people the option to remain in their home countries.
Q: Would you say that the budget cuts make working in international development difficult?
A: Yes, now more than ever it is more challenging to work in international development.
Conclusion: USAID is an important and undervalued organization in the United States. While at first glance, the work that USAID is doing may appear to primarily benefit the countries that are receiving assistance, it is in fact work that is beneficial to the United States as a whole. International development creates jobs for Americans, protects national security, and as Dr. Derdzinski described, can assist with the United States’ immigration dilemma.
With all of these factors kept in mind, foreign development assistance should no longer be something that is difficult for lawmakers to justify, but rather should be an integral part of policymaking.
– Clare Holtzman
Sources: Colorado College, Foreign Policy, USAID 1, USAID 2
Photo: United States Air Force Academy
Youth Employment Solutions Come with Ambitious New Goals
A world in which every youth has access to employment may sound a little far-fetched, but this is just what global organization Solutions for Youth Employment (S4YE) strives to achieve.
Acknowledging International Youth Day, which comes around every August 12, the S4YE coalition is initiating a five-year strategy which will focus on the specific challenges that youth face in receiving employment across the world.
S4YE is a global coalition made up of civil society actors, government officials, foundations, private sector entities, international organizations and young people endeavoring to help the 600 million youth who are unemployed and simultaneously not receiving education or any kind of additional training across the globe.
“In 2014 nearly 500 million young people around the world are unemployed, inactive, underemployed, or engaged in insecure employment,” states the S4YE.
Tackling such an issue will not be easy, but strides are being taken to make a difference. Over the course of a 15-year initiative, the organization’s first ambitious strategy is to support 150 million youth worldwide by 2030.
Although unemployment is an issue affecting an astronomical amount of people, S4YE is specifically focusing on areas where it is a national priority including the Middle East, North Africa, sub-Saharan Africa, Latin America, the Caribbean and Asia.
According to an article by the World Bank, the addition of a billion more people entering the workforce in the coming decade means that at least five million more jobs will need to be created each month to meet the demands. If this cannot be done, youth will find themselves in a place of inopportunity, which will only lead to social and political instability.
The magnitude of the problem is grave; if nothing changes for the unemployed youth—with 1 million more youth in Africa and India turning 15 each year—the poorest 40 percent of the world’s population will fall into poverty.
S4YE identifies some of the challenges of accomplishing total youth employment, which include developing a skilled workforce, creating well-functioning markets and ensuring a stable middle-class consumer base. Essentially, traditional models of engagement may be abandoned to guarantee that millions will have the opportunity to escape poverty.
Despite the inherent obstacles, it is S4YE’s vision to see a world where all youth have access to job opportunities that empower them, so they are able to share their prosperity with the world.
Potential solutions for these challenges have also been identified and include leveraging public and private investments for job creation, research and evaluation to design an education based training, and finally, leadership is needed to identify what strategies are and aren’t working, implementing them into the design of future policies and investments.
As our world population continues to climb, it is up to organizations like S4YE to generate creative solutions to keep pace with a rapidly expanding presence and ensure that every human has an opportunity for a life well lived.
– Nikki Schaffer
Sources: S4YE, World Bank
Photo: Twitter
Hash-Tagging to Raise Awareness for The Global Goals
Trending hashtags can sometimes be confusing and pointless. Usually, hashtags accompany a picture on Instagram or a tweet on Twitter and sometimes they are associated with different challenges. But, every once in a while, a hashtag will emerge and correlate with a worthy cause, and using it on social media will raise awareness for that cause.
The hashtag, #DizzyGoals, is raising awareness for The Global Goals one video at a time. #DizzyGoals requires a person to spin as quickly as possible around a soccer ball 13 times and then attempt a penalty shot. Many professional soccer players have accepted the challenge, including Gareth Bale of Real Madrid, whose video featured some of his friends and teammates.
Less than a month away, the Global Goals launch on September 25 in New York City with 193 world leaders in attendance, and the campaign is doing everything in its power to raise international awareness and support of the goals. The Global Goals are dedicated to ending global poverty, fighting injustice and correcting climate change through a set of 17 initiatives for the next 15 years.
Before world leaders commit themselves to the goals, however, citizens around the world must know about them. World leaders listen to citizens to understand what needs to be done; the more people that know about the goals, the more likely the world leaders are to support them.
Therefore, it is imperative that the Global Goals become famous amongst world citizens and #DizzyGoals is one entertaining way to do that.
Many of the videos that accompany the hashtag feature professional soccer players spinning rapidly around a soccer ball, and then stumbling to kick the next ball, where the inevitable dizziness usually results in an epic fall to the grass. Nonetheless, the stars of the challenge are sure to mention their support for the Global Goals and provide links to goals’ website.
The Global Goals have the power to positively change the world. Share a #DizzyGoals video to inform more people about the Global Goals, or grab a soccer ball and take the challenge!
– Sarah Sheppard
Sources: Global Citizen, Global Goals, Twitter,
Photo: Express
Innovative Policies that Spur Growth and Reduce Poverty
A handful of standard policies have been used throughout the world over many decades to attempt to decrease poverty. However, poverty is still a massive problem worldwide. It is also known that healthy economic growth is vital to reducing poverty. What are some new, innovative policies that can be used more widely in conjunction with existing policies to maximize poverty reduction and spur economic growth?
One of the most well-known innovative systems of reducing poverty has been the microcredit or microfinance system that has been perpetuated throughout areas with high densities of impoverished people. Bill Gates has said that he believes that providing more access to mobile banking (an extension of the ideas behind microfinance), will have huge impacts on the way the poor deal with money and will help reduce poverty.
Many innovative new policies are aimed at specific demographics in order to fully leverage the investment in a way that affects the poor best. For example, many of the poor live in rural areas and are involved in agriculture.
Due to the large role of agriculture in many impoverished people’s lives, one organization named Katalyst gives out small packets of high-quality seeds to farmers in Bangladesh. The result? Incomes for these farmers increased on the whole by over 300 million dollars.
The United Nations Development Programme (UNDP) has begun to fund proven methods of development. Two programs, one from Colombia and one from Haiti are being funded by the UNDP. Both programs focused on job training and development for people in vulnerable areas of the respective countries.
A third program was aimed at helping the government of Laos address the infrastructure concerns and problems in local areas, which eventually helped over 300,000 people to get better goods and services as well as local infrastructure.
Another idea which is incredibly simple is now being more widely accepted as a method that would prove valuable. Give poor people money. Giving unrestricted cash transfers to the poor has not been a popular policy in the past because many fear that the money would be wasted on nonessential goods or illegal activities.
However, a study based on a model like this was done in Uganda and resulted in a 38 percent increase in wages by the end of the study in the group that was given the unrestricted cash transfers. In addition, hours worked and business assets both increased significantly. The myth that the money would simply be wasted via this simplistic approach seems to be being dispelled.
Most of these ideas are not based on some new understanding of poverty. The existing rationale behind each one is held in commonly held knowledge about the different attributes of poverty and those in poverty.
The innovations are creative ways of tackling the most basic traits of the impoverished, unemployment (specific job training centers), lack of money (unrestricted cash transfers), and giving high quality seed packets (agriculture as a means of income).
By addressing these known factors in new ways, these policies have proven to be of use in the instances they were used, and should be more widely spread across the globe to help increase the rate of poverty reduction.
– Martin Yim
Sources: OCED Insights, United Nations, Social Science Research Network
Photo: CNN
UN Report Focused on Ending Global Hunger by 2030
A recent U.N. report focused on ending global hunger highlighted the additional international financing needed to do so.
According to the report, “Achieving Zero Hunger,” countries need to invest an extra $267 billion per year to make the goal of eliminating hunger a reality within the next 15 years.
This is an average of $160 a year for each poor person until 2030.
While that may not seem like a lot, it still gives people living in extreme poverty access to more food and better living.
The report emphasizes the need for a new approach to achieving zero hunger, such as the public and private sectors teaming up and combining investments and efforts. The hope is that, in doing so, those living in extreme poverty will see increases in productivity, which will in turn lead to rises in income.
There are currently 836 million people living in extreme poverty worldwide, half of what the number was in the 1990s. This year, it is estimated that 175 million people will break free of extreme poverty.
Specifically, Asia and Africa are home to some of the world’s poorest people. In the Asia Pacific region, 490 million people are suffering from hunger, around two-thirds of the total number of people globally who don’t have access to enough food.
Extreme poverty is defined as living on less than $1.25 a year. While that amount may be enough to cover the essentials, it doesn’t allow for any savings, meaning it is not sustainable in the long run.
– Matt Wotus
Sources: Rappler 1, Rappler 2
Photo: Al Jazeera