Nigeria is the sixth largest exporter of oil and possesses the largest oil reserves in Africa. Given such a wealth of natural resources, on the surface, it can be difficult to comprehend how Nigeria’s resource curse exacerbates poverty an also has the largest population of extreme poor in Africa, with 70 million people living on less than $1.90 a day. Nigeria is a prime example of a natural resource-dependent economy having what is known as the “resource curse,” where orienting economies around plentiful natural resources can lead to more poverty, unemployment and corruption over time. The effects of the resource curse are apparent in Nigeria. However, the country can implement policies to end the resource curse and broaden opportunities to reduce poverty and encourage socioeconomic development.
The Resource Curse is a Gravely Inefficient System
A major impact is the lack of economic returns relative to the financial resources invested into the oil sector. In 2020, oil accounted for 90% of Nigeria’s export earnings and consisted of 1/3 of the country’s annual revenue, however, it only contributed to 9% of GDP growth.
Such economic inefficiency, along with the appeal of fast money, underscores how Nigeria’s resource curse leads the government to neglect other economic sectors such as infrastructure, industry, science/technology, services and agriculture. Such neglect of these sectors depresses opportunity and exacerbates poverty, seen in Nigeria’s unemployment rate of 9.8% and per capita income at $2,085 as of 2021.
Nigeria also ranks 150 out of 157 countries in the World Bank’s 2020 Human Capital index, indicating a lack of adequate living standards from poor opportunities in education and healthcare to ensure a productive labor force. These indicators of poverty relate to the neglect of other industries that come from the resource curse and the lack of economic diversification to provide adequate socioeconomic opportunities for Nigerians to escape poverty.
Nigeria’s resource curse has also made it acutely vulnerable to global price fluctuations in the oil market, as seen during the COVID-19 pandemic. Oil prices for Nigerian exports
collapsed by 60% between February and May 2020 alone, threatening half of the government’s revenue source during this period.
The vulnerability to global price fluctuations underscores how reliance on the oil sector alone can make economic growth from it particularly fragile. Also, how relatively small returns in economic growth from huge investments seen in export percentages can create an inefficient economic system.
The Atmosphere of Corruption Encouraged By Resource Curse
Nigeria’s resource curse also encourages rampant government corruption where oil revenues and ownership of reserves are used as a vehicle for patronage to win elections. This denies Nigerians access to oil revenues to develop the economy and create better socioeconomic opportunities, because revenue is not invested back into national development.
Nigeria’s tax revenue to GDP ratio is significantly less at 6% than the average African country at 17%. This lack of financial return from oil revenues is largely due to corruption. Oil revenues become used to entrench patronage and cronyism rather than investing in the development of other economic sectors to reduce poverty for Nigerians.
Other Important Economic Sectors Become Neglected Stifling Development
Another major impact is the lack of economic diversification essential for creating opportunity and reducing poverty. Nigeria ranks 45 out of 76 in the Observatory of Economic Complexity ranking in service exports, a trade data research firm measuring indicators of trade development for services such as financial, business and computer and technology services.
This ranking indicates that in measures of more advanced industries, Nigeria has fallen behind due to dependence on the oil industry. The agricultural industry is another field that Nigeria’s resource curse neglected.
Agriculture
Although 36% of Nigeria’s workforce is employed in agriculture, it accounted for less than 2% of exports in 2019. The neglect of the agricultural sector has had a major impact on poverty in Nigeria. The country, despite such high levels of employment in the industry, imported $689.7 billion more in food than it exported in 2019. This attributes to lack of modern agricultural techniques, poor infrastructure and recent violence from terror groups such as Boko Haram disrupting agricultural production.
The neglect of the agricultural industry and subsequent dependence on imports, place Nigerians at heightened risk of slipping deeper into poverty. This is because skyrocketing demand for food imports in Nigeria has contributed to a rise in food inflation, standing at 18.4% as of May 2022 as domestic agriculture has struggled to satisfy demand.
Infrastructure
The neglect of infrastructure is another example of exacerbating poverty. Poor roads obstructing the transportation of crops from farm to market and dependence on imports have led to 21.4% of Nigerians experiencing food insecurity, while 45% of Nigerians lack access to electricity.
This lack of access to critical infrastructure is due to the vast majority of government resources going to the oil industry, placing Nigeria at a large infrastructure deficit as it accounts for 30% of GDP, well short of the 70% average goal set by the World Bank. This results in serious impediments to commercial activity within the country, stifling economic growth and depressing socioeconomic opportunities for Nigerians.
Such statistics show how Nigeria’s dependency on oil exports have led to overall less economic development in other important economic sectors, contributing to the extent of its poverty.
Nigeria’s resource curse as in other natural resource-dependent economies stems from the lack of economic diversification it causes. Focusing on developing the agricultural and infrastructure sectors could reduce dependence on oil and create more socioeconomic opportunities for Nigerians that could reduce poverty.
Investments in human capital could also go a long way to improving Nigeria’s Human Capital Index ranking and cultivating a workforce equipped with the tools to achieve higher living standards and more socioeconomic prosperity for the benefit of Nigerians and the country as a whole.
Human Trafficking in Malawi’s Dzaleka Refugee Camp
Human Trafficking in the Refugee Camp
Human trafficking in Malawi’s Dzaleka Refugee Camp takes many forms. Traffickers force men into hard labor while women and girls face sexual exploitation inside the camp or traffickers move them to the city or other countries in southern Africa. Traffickers even recruit children for farm labor and domestic work. Oftentimes, traffickers require refugees to pay off a debt accumulated from “being smuggled into Malawi.” Traffickers then force the victims into labor or prostitution to pay off the debt. The UNODC suspects that the camp may even be a transitory point for larger international human trafficking networks.
Why Human Trafficking Persists
Since the discovery of human trafficking in Dzaleka, the UNODC has taken measures to dismantle the organizations, identify and rescue victims as well as prosecute the perpetrators. However, several factors make dismantling human trafficking networks exceptionally difficult.
Anti-Trafficking Measures
Despite the difficulty of dismantling human trafficking in Malawi’s Dzaleka Refugee Camp, the UNODC and UNHCR are determined in their goals. Not only have they implemented new training and anti-trafficking procedures, but they have also coached 28 camp officials who will train their colleagues in turn. Furthermore, with U.N. intervention, victims now reside in safe houses instead of being placed in jail alongside perpetrators. With these steps in place, the UNODC has rescued more than 90 victims from the Dzaleka Refugee Camp as of June 2022.
Numerous NGOs are also working on the ground in Malawi. People Serving Girls at Risk (PSGR), for example, cares for women and girls who have faced trafficking or exploitation and handles more than 200 cases a year.
An undercover policeman trained by the UNODC identified and rescued a 16-year-old Congolese girl from forced prostitution. Trafficked at just 10 years old, she came to the camp in 2009 after leaving the DRC due to conflict and violence. At first, she did not trust the officer, but, eventually, he gained her trust. “That evening, I had been beaten by one of my clients for refusing to have sex due to a cut that was bleeding. I was in pain and it was visible. The officer was friendly and he took me to a safe house,” she said to the U.N. Now, she is taking computer literacy lessons and hopes to reunite with her family.
Looking Ahead
Although the path to eradicating human trafficking in Malawi’s Dzaleka Refugee Camp is complex, progress is visible. Hopefully, with the combined efforts of the U.N. and the government, Malawi can eradicate human trafficking in the refugee camp.
– Emilie Zhang
Photo: Flickr
Fighting Plastic Pollution in the Maldives
An Island Nation
The Maldives, a nation comprising 185 islands, is intimately connected with the ocean that surrounds it. Beaches and oceans form the backbone of the Maldives’ tourism sector. With tourism being the main driver of economic growth and business profits in the Maldives, the well-being of the Maldivian tourism industry is directly linked to the well-being of the Maldivian economy.
In addition to being vital to the popularity of Maldivian tourism, the ocean fuels the fishing industry in the Maldives. Of poor households in the Maldives, 26% make their livings by fishing and nationally, 11% of Maldivians find their employment at fisheries.
Plastic Pollution in the Maldives
Growing plastic pollution in the Maldives, however, threatens both the tourism and fishing industries. The World Bank estimates that the Maldives produces 365,000 tons of solid waste a year, with the bulk of that waste that resort islands generate. As a result of plastic pollution, plastic has been washing up on beaches in the Maldives and destroying coral reefs. These beaches and coral reefs are fundamental to both the tourism and fishing industries in the Maldives. As plastic pollution threatens to damage the Maldives’ beaches and reefs, it threatens to cripple two of the industries most vital to the Maldivian economy.
Plastic waste also endangers the health of those living in or visiting the Maldives. The Maldives lacks sufficient resources to address with the volume of waste there, with people burning much of the plastic waste or dumping it in the sea. When plastic is burning, it releases toxic and carcinogenic gasses, posing a health threat to Maldivians who breathe the polluted air.
The Maldives Authentic Crafts Cooperative Society
Maldivians have been all but complacent when it comes to the problem of plastic pollution. One group tackling the issue is the Maldives Authentic Crafts Cooperative Society (MACCS). MACCS started its journey in 2011 with the original intention of preserving traditional artistic practices. After witnessing the declining practice of traditional artforms as imported counterfeit versions gained popularity among tourists, a group of 10 women created MACCS with the goal of reviving traditional art forms.
One of its first projects was to revitalize marshlands where reed grass grows, grass that is used for traditional mat weaving. Seeing the close connection between traditional Maldivian artforms and the island nation’s environment, MACCS decided to broaden its focus to encompass protecting the Maldives’ natural assets, as well as its cultural artforms.
In 2021, MACCS worked in partnership with the World Bank and other Maldivian organizations to educate households about how to improve waste sorting and reduce waste production. As part of the project, MACCS worked with residents on 20 islands to improve their waste management approaches and divert plastic pollution from the ocean.
To address the root of the Maldives’ plastic pollution, MACCS has been working to reduce the use of plastic grocery bags. With support from the UNDP, MACCS completed a pilot project in June 2022. For the pilot project, participants could scan a chip on their reusable bag each time they used the bag. When participants scanned the chip, they would earn points that they could save up to receive rewards to incentivize the use of reusable bags. The pilot project started with 500 bags, but MACCS is hopeful to expand in the future and further its efforts to reduce plastic pollution in the Maldives.
– Anna Inghram
Photo: Flickr
Fragility and the Rule of Law in Bolivia
Protests in Santa Cruz de la Sierra, Bolivia, threaten to hamper an already struggling economy. A city-wide shutdown occurred on August 8, 2022, over the government’s decision to postpone the 2022 decennial census until 2024. On one hand, Santa Cruz’s legislators believe that delaying the census is an attempt to deny the municipality more political representation as its population has ballooned in the previous three decades. Santa Cruz’s leadership in the battle for the census reinforces the city’s trend of opposition toward the ruling government (Movimiento al Socialismo), but also its power as the economic center of Bolivia.
By strongly opposing itself to the rule of Movimiento al Socialismo, Santa Cruz’s situation shows the fragility of the rule of law in Bolivia. The United Nations highlights that rule of law plays an integral role in the development of countries and the reduction of poverty as poverty often arises from “disempowerment, exclusion and discrimination.” The rule of law upholds the voices of the people, safeguards democracy and ensures the protection of human rights.
A History of Protests
Santa Cruz’s governor Luis Camacho announced that the capital of the municipality could freeze for 48 hours starting August 8 until President Luis Arce agreed to discuss an earlier census date. As the largest city in Bolivia and its economic center, estimates indicate that each day of the shutdown will equate to an economic loss of $33 million, leading to accusations of crippling the economy for political gain. Alongside the economic problems caused by the protest, there have been reports of violence from those in favor and against the shutdown, with mayor Jhonny Fernández’s home coming under attack.
This is not a temporary issue either. Santa Cruz has undergone numerous shutdowns in previous years, dating all the way back to the nationwide shutdown in 2019 over ex-President Evo Morales’ alleged fraudulent election victory. As recently as July 2022, protestors spoke out against Movimiento al Socialismo’s imprisonment of many opposition members. Among the imprisoned is former President Jeanine Añez whose interim presidency was upheld by the Bolivian Constitutional Court prior to her condemnation.
Hope for Resolution
Although these incidents point to the fragility of the rule of law in Bolivia, there is strong hope for a resolution to the conflict. President Arce agreed to revisit the 2023 census’ date with delegates from Santa Cruz, an important step toward reconciliation between Movimiento al Socialismo and Santa Cruz’s opposition government. Another promising feature of the shutdown is that despite sporadic violence, both the central government and Santa Cruz’s mayor have called for a peaceful resolution with dialogue from all sides.
Additionally, foreign nonprofits, governments and organizations form an active part of the efforts to strengthen Bolivia’s fragile political situation. In 2019, the Organization of American States and the European Union reviewed Bolivia’s election results, reporting possible instances of electoral fraud. In 2020, with oversight once again, Bolivia held an election with a fair democratic process in place.
To safeguard democracy and the rule of law, the International Republican Institute works to strengthen “democracy and freedom” and “guide politicians to be responsive to citizens” while “[motivating] people to engage in the political process.” In Bolivia specifically, the IRI aims to “support free and fair elections, democratic institutions and local government, civil society capacity building, and efforts to promote peacebuilding and reconciliation.”
Looking Ahead
In the Declaration of the High-level Meeting on the Rule of Law, states stressed that “the rule of law at the national and international levels is essential for sustained and inclusive economic growth, sustainable development, the eradication of poverty and hunger and the full realization of all human rights and fundamental freedoms, including the right to development, all of which in turn reinforce the rule of law.”
Ultimately, fragility remains a key issue for the rule of law in Bolivia, but both local and federal governments are showing a desire to prevent violence and enforce institutional authority. The rejections of violence by Governor Camacho and President Arce indicate that although there are differences between the states and the Bolivian government, there is also a willingness to bring issues like the census to an amicable resolution to strengthen the rule of law in Bolivia.
– Samuel Bowles
Photo: Flickr
Resource Curse Exacerbates Poverty in Nigeria
The Resource Curse is a Gravely Inefficient System
A major impact is the lack of economic returns relative to the financial resources invested into the oil sector. In 2020, oil accounted for 90% of Nigeria’s export earnings and consisted of 1/3 of the country’s annual revenue, however, it only contributed to 9% of GDP growth.
Such economic inefficiency, along with the appeal of fast money, underscores how Nigeria’s resource curse leads the government to neglect other economic sectors such as infrastructure, industry, science/technology, services and agriculture. Such neglect of these sectors depresses opportunity and exacerbates poverty, seen in Nigeria’s unemployment rate of 9.8% and per capita income at $2,085 as of 2021.
Nigeria also ranks 150 out of 157 countries in the World Bank’s 2020 Human Capital index, indicating a lack of adequate living standards from poor opportunities in education and healthcare to ensure a productive labor force. These indicators of poverty relate to the neglect of other industries that come from the resource curse and the lack of economic diversification to provide adequate socioeconomic opportunities for Nigerians to escape poverty.
The vulnerability to global price fluctuations underscores how reliance on the oil sector alone can make economic growth from it particularly fragile. Also, how relatively small returns in economic growth from huge investments seen in export percentages can create an inefficient economic system.
The Atmosphere of Corruption Encouraged By Resource Curse
Nigeria’s resource curse also encourages rampant government corruption where oil revenues and ownership of reserves are used as a vehicle for patronage to win elections. This denies Nigerians access to oil revenues to develop the economy and create better socioeconomic opportunities, because revenue is not invested back into national development.
Nigeria’s tax revenue to GDP ratio is significantly less at 6% than the average African country at 17%. This lack of financial return from oil revenues is largely due to corruption. Oil revenues become used to entrench patronage and cronyism rather than investing in the development of other economic sectors to reduce poverty for Nigerians.
Other Important Economic Sectors Become Neglected Stifling Development
Another major impact is the lack of economic diversification essential for creating opportunity and reducing poverty. Nigeria ranks 45 out of 76 in the Observatory of Economic Complexity ranking in service exports, a trade data research firm measuring indicators of trade development for services such as financial, business and computer and technology services.
This ranking indicates that in measures of more advanced industries, Nigeria has fallen behind due to dependence on the oil industry. The agricultural industry is another field that Nigeria’s resource curse neglected.
Agriculture
Although 36% of Nigeria’s workforce is employed in agriculture, it accounted for less than 2% of exports in 2019. The neglect of the agricultural sector has had a major impact on poverty in Nigeria. The country, despite such high levels of employment in the industry, imported $689.7 billion more in food than it exported in 2019. This attributes to lack of modern agricultural techniques, poor infrastructure and recent violence from terror groups such as Boko Haram disrupting agricultural production.
The neglect of the agricultural industry and subsequent dependence on imports, place Nigerians at heightened risk of slipping deeper into poverty. This is because skyrocketing demand for food imports in Nigeria has contributed to a rise in food inflation, standing at 18.4% as of May 2022 as domestic agriculture has struggled to satisfy demand.
Infrastructure
The neglect of infrastructure is another example of exacerbating poverty. Poor roads obstructing the transportation of crops from farm to market and dependence on imports have led to 21.4% of Nigerians experiencing food insecurity, while 45% of Nigerians lack access to electricity.
This lack of access to critical infrastructure is due to the vast majority of government resources going to the oil industry, placing Nigeria at a large infrastructure deficit as it accounts for 30% of GDP, well short of the 70% average goal set by the World Bank. This results in serious impediments to commercial activity within the country, stifling economic growth and depressing socioeconomic opportunities for Nigerians.
Such statistics show how Nigeria’s dependency on oil exports have led to overall less economic development in other important economic sectors, contributing to the extent of its poverty.
Nigeria’s resource curse as in other natural resource-dependent economies stems from the lack of economic diversification it causes. Focusing on developing the agricultural and infrastructure sectors could reduce dependence on oil and create more socioeconomic opportunities for Nigerians that could reduce poverty.
Investments in human capital could also go a long way to improving Nigeria’s Human Capital Index ranking and cultivating a workforce equipped with the tools to achieve higher living standards and more socioeconomic prosperity for the benefit of Nigerians and the country as a whole.
Photo: Unsplash
Rising Income in Japan During Hyperinflation
Increasing Minimum Wages
Japan’s Central Minimum Wage Council recently issued a new policy, which is to raise the minimum wage standard across Japan by ¥30 per hour. This is the largest minimum wage increase ever issued by the Japanese government. Rising domestic prices stimulated this policy in Japan due to the sluggish yen and the Russian-Ukrainian war. The policy ensures the rights and purchasing power of ordinary Japanese workers.
Senior officials of the Japanese government have also attached great importance to basic wages and livelihood issues. In an interview with reporters, Deputy chief cabinet secretary Seiji Kihara said that raising the minimum wage is an investment in the people and he hopes that the rising trend of basic wages can keep up with the development of new capitalism.
Rising Total Income in Japan
In addition to setting requirements for basic wages, the Japanese government not long ago encouraged Japan’s major companies to raise workers’ wages on the premise of rising prices. In fact, the government wants companies to raise wages to the same extent as prices rise. This major move came with the support of Japanese Prime Minister Fumio Kishida’s economic policy. In fact, it was he who promised to bring New Capitalism to voters, which requires “a virtuous cycle of growth and redistribution driven by investment into people,” according to Japan Times.
Many Japanese companies have followed suit, including major car companies such as Toyota and Hitachi. They heeded the government’s call, even though their business was hurt by soaring oil and wheat prices as a result of the Russia-Ukraine war. In February 2022, Labor unions of major electronics and car manufacturing industries planned to raise workers’ wages by around ¥3,000.
The rising income in Japan during hyperinflation is the result of the government’s efforts to ensure a virtuous circle of the economy, as well as maintain the normal living standards and purchasing power of the people. Although the world economy in 2022 could cause difficulties for many countries, the Japanese government’s practical actions tell us that every government may have a role in caring for the needs of the people.
– Ella Li
Photo: Flickr
TPO Cambodia: Leading Mental Health Awareness in Cambodia
Poverty in Cambodia
There are several substantial poverty issues in Cambodia needing addressing. According to Asian Development Bank (ADB), 17.8% of Cambodians are living below the poverty line. Additionally, 9.2% of the nation is living on $1.90 or less a day.
This could relate to mental health issues since Cambodia is a country with one of the highest risks of mental health-related issues. It is estimated that 40% of Cambodians suffer from mental health issues. Post Traumatic Stress Disorder (PTSD) and suicide rates are also higher than the worldwide average.
Poverty and Mental Health
Studies have shown that mental health issues among individuals lead to higher rates of impoverishment from struggling to remain employed or find employment. Furthermore, economic conditions are one of the foundations of mental wellness. This means that when one is living in a more deprived area you are more likely to suffer from mental health issues.
According to the BJPsych Bulletin study, 23% of men and 26% of women had mental distress potentially related to a psychological disorder in the most impoverished areas in Scotland, compared with 12% and 16% of men and women on the opposite side of the economic spectrum.
Mental Health in Children
Psychological problems often start at a young age and can have serious consequences as individuals progress through life. This starts people at a social disadvantage lacking stability to keep long-lasting relationships. Additionally, child psychological problems also lead to economic issues. Researchers found family income for those aged 50 who suffered childhood traumas decreased by 25%.
TPO Cambodia
This is an organization directly confronting the issues mental health brings by trying to identify problems Cambodians are experiencing to help them better function in their jobs, families and societies as a whole.
TPO Cambodia works to provide local community-building mental health programs that offer more effective and cost-friendly care than mental hospitals which can lead to dehumanizing patients.
The ultimate goals of their programs are to educate Cambodians on mental health issues and become more aware of previously unseen issues in their own lives. Healing scars and social conflict are also important so that Cambodian citizens feel more invigorated and active to be able to actively participate in society.
Since its establishment in 1995, more than 200,000 Cambodians received mental health care and support.
Mental health is a serious issue in the world today. Traumas often start at young ages and can have serious consequences on the economic and societal well beings of citizens. However, with organizations such as TPO Cambodia tackling this issue, more and more are becoming aware of mental health and its effects and are receiving treatment.
–Alex Havardansky
Photo: Flickr
6 Facts about Mental Health in North Korea
5 Facts About Mental Health in North Korea
Looking Ahead
North Korea’s failure to properly diagnose and treat mental illnesses with psychiatric care has caused the problem to fester over time. Historical traumas dating back to the nation’s strict rule and history of famine have made the problem endemic in North Korean society. However, other issues connected to mental health in North Korea, such as stigmatization of those in need of help, are not necessarily unique to North Korean society, with similar problems occurring in Western countries as well.
– Salvatore Brancato
Photo: Flickr
The Impact of Diamond Mining in DRC
Process of Diamond Mining in the DRC
Miners work in artisanal mines and small-scale mines where the use of machinery is rare and in most cases nonexistent. Miners have to dig through layers of dirt, rock and gravel up to 50 feet deep to find the location of the diamonds. They then have to wash and sift through it to find any remnants of diamonds.
The miners’ bosses then take the diamonds and the Congolese people only receive a small portion back. In 2004, the DRC mined a total of $1 billion in worth, its treasury department only saw $40 million of it.
Impact on People
Because of the harsh conditions of diamond mining and the little pay it provides to the workers, much of the Democratic Republic of Congo is in poverty. According to UNICEF, the DRC contains over 50% of Africa’s water reserves, but 33 million people in rural areas do not have access to potable water.
In the village of Tshikapa, the cost of food is very high because people turn to diamond mining over agricultural farming, leaving the fields with no workers, according to the Time. The roads are unpaved and many can’t even visit a doctor because the price is too high. Hundreds of those miners each year die in drowning or tragic accidents because of the workplace environment that has no safety regulations.
On June 9, 2022, a collapse in one of the artisanal mining wells occurred killing six people in total. Because they often dig these wells by hand and have no safety precautions, people often die mining diamonds. Additionally, last year, a toxic spill from a diamond mine in Angola killed 12 people in the DRC, because of the pollution of the River Congo.
Environmental effects are very common as pollution of water sources and exploitation of water occur because of the mines’ locations and the materials needed to run the mines.
Helping the Miners
While diamond mining in the DRC negatively affects many Congolese people, there are organizations taking steps to stop these blood diamonds. In 2003, Global Witness, an NGO dedicated to ensuring the relationship between natural resources and the environment globally, launched the Kimberly Process, a government-pioneered safety certificate.
Since its launch 75 diamond-producing countries have taken part in this process and are required to establish safe and conflict-free export and import systems. This is one of the first actions taken to stop blood diamonds worldwide.
Diamond mining in the DRC has affected the Congolese people for many years. Many can’t access the resources they need to survive because the mines infect the water sources, environment, and infrastructure of cities in the DRC. Even though many of the miners are suffering in poverty, there are steps in place that are working toward a safer and more sustainable process of mining diamonds in the DRC.
– Janae O’Connell
Photo: Unsplash
Increase in Orphans in Peru Following COVID-19
Influx of Orphanages
Reportedly one out of 100 of Peru’s children’s population lost at least one parent to COVID-19. This large statistic only added to the grand total of 550,000 children who grow up parentless. Many children have lost their grandparents to COVID-19, which leaves devastating results for children in a country where it is common for grandparents to be the primary caregiver of their grandchildren.
Child poverty increased as a result of the pandemic as well, with around 39% of Peruvian children living underneath the poverty line, according to UNICEF. There are even some parents who are choosing to move to orphanages so that their children will have access to food and water.
This rising influx of Peruvian orphans poses a determinant to the mental, physical and economical health of Peru’s future generation. In addition, at least 1,000 Peruvian children have died as a result of COVID-19, The Guardian reports.
Solutions
As a result of the massive uptake of orphans, the Peruvian government introduced the “orphan pension.” Introduced in March 2021, the orphan pension pays $55 monthly to children under 18 who lost a parent as a result of COVID 19. These cash transfer programs intend to address childhood poverty by fostering human capital investments in children. Evidence suggests that children who receive cash transfers receive positive benefits such as reduced poverty, increased food consumption, and increased access to mental health services, according to The World Bank report.
This increase in orphans in Peru is a serious matter. However, spreading awareness and bringing effective sources to the matter is a great stepping stone to fixing the problem at hand.
–Luke Sherrill
Photo: Flickr
Argentina’s Economy Minister Resigns
Guzmán’s Career
On December 6, 2019, Argentine President (then-president-elect) Alberto Fernández designated Guzmán as Argentina’s economy minister. At the start of this career, the newly appointed Brown graduate had his first bill approved by the Senate just 11 days after his first day in office. The bill imposed tax increases in specific areas of the middle and upper class while providing tax benefits to the impoverished.
In early August 2020, the Argentine economy minister struck a deal to restructure $65 billion in foreign bonds. Most notably, the former minister engineered a $45 billion debt deal with the International Monetary Fund (IMF). The agreement aims to “promote growth and protect social programs” to tackle Argentina’s economic crisis.
Before resigning, Guzmán planned to head to France to discuss a $2 billion debt deal with the Paris Club of sovereign lenders.
Argentina’s Economic Crisis
Argentina’s economy has been suffering for decades. In July 2022, many Argentine sovereign bonds were worth as low as 20 cents on the dollar — a stark difference from higher rates in October 2020. Inflation in Argentina is staggeringly high, moving toward 70% by the end of 2022. As of July 2022, one United States dollar is worth about 126 Argentine pesos and this exchange rate is still increasing.
An economic disruptor includes truck drivers’ strikes, which have halted delivery of grain, “one of Argentina’s main imports,” to ports. In addition to the COVID-19 pandemic, the devaluation of the peso and a sizeable foreign debt of more than $323 billion by 2020 have sent Argentina into further economic turmoil.
Alongside these struggles, Argentina’s poverty levels are sharply increasing. Due to the severe inflation, the poverty rate in urban centers stood at 37% in the latter half of 2021 and is expected to increase to 39% after the first six months of 2022. This would equate to 500,000 more impoverished people.
The Economy’s Future
Guzmán’s resignation has raised concerns over the economy’s trajectory, most fearing it will head in an even worse direction. Other concerns regard Guzmán’s IMF deal and whether Argentina can meet these needs without the architect of the deal.
On July 3, 2022, one day after Guzmán’s resignation, President Fernández named Silvina Batakis Argentina’s new economy minister. Batakis previously served as the Secretary of Provinces in the Ministry of the Interior and as economy minister of the Buenos Aires province from 2011 to 2015. This week, she stated her belief in “fiscal balance” and her intention to follow President Fernández’s economic program.
In June 2022, the deal with the IMF that former minister Guzmán crafted underwent its first review. This is a sign that the deal may indeed make progress and ultimately come to fruition. A press release regarding this step stated that the program’s policies “will be critical to support Argentina’s economic recovery.”
There are other solutions and aids to Argentina’s economic crisis besides the appointment of a new economy minister — foreign aid. Amid this instability, at least 48 NGO projects in Argentina aim to improve the lives of the country’s poor. A notable organization is Fundación Integrar (Integrate Foundation). The foundation helps young Buenos Aires and La Pampa citizens living in poverty complete their higher education by providing financial aid and guidance to students. With the help of donations, the foundation has given higher education scholarships to 140 students to date.
In office, Argentina’s new economy minister Batakis will need to address the nation’s high inflation rate and foreign debt along with an increasing poverty rate. Yet, she is not alone in this fight — a deal with the IMF is underway and tens of organizations are serving the country’s poor.
– Sophie Buibas
Photo: Flickr