The French Development Agency (AFD) announced a $100 million concessional credit line to the Bank of Investment and Development in Vietnam (BDIV) and technical assistance to help establish green financing in Vietnam. As Vietnam continues its rapid development while disproportionately dealing with the adverse effects of environmental challenges, it is searching to develop green financing to underpin a sustainable, efficient renewable energy system. The BDIV plays a crucial role in that transition and the assistance from the AFD is a significant first step in the transition to green financing in Vietnam.
Development in Vietnam
In 1986, a set of economic reforms would fundamentally shift the role of markets in Vietnam. By encouraging private ownership, overturning its policy on forced collective farming and recognizing private land rights, the Doi Moi reforms provided a central role for markets as the primary resource allocation mechanism.
The results have been astounding for economic development and poverty reduction in Vietnam. In the last three decades, the poverty rate reduced from 70% to 6%, and the GDP per capita increased by 2.7 times. In total, more than 45 million people were able to leave poverty. Today, Vietnam is the fastest-growing economy in Southeast Asia.
A component of this development was a shift away from an agriculture-based economy to a more industrial economy. In 1988, agriculture constituted 46% of the GDP. Fast forward to 2014, and agriculture as a share of the GDP had contracted to only 17%, while the service sector and industrial sector accounted for 44% and 39%, respectively.
Economic Consequences
Nevertheless, similar to other nations with experienced industrialization and remarkable growth and in a truncated period, Vietnam struggles to manage the environmental consequences. It logically flows as the more dynamic an economy becomes, the more energy it requires to power it. Likewise, the quicker the development, the more demand for energy will outpace the supply. Vietnam is no exception; on average, its energy demands increase by 10% every year.
Naturally, when demand rapidly outpaces supply, countries search for cheap, quick options to increase supply. Therefore, fossil fuels, a historically abundant and cheap energy source, have primarily fueled Vietnamese development. As of 2019, 84.7% of Vietnam’s energy came from fossil fuels, primarily in the form of coal (50.25%) but also in oil (25.92%) and gas (8.61%).
This Faustian pact with the cheaper, more abundant resources – along with other trappings of middle-income status – comes with environmental consequences. In 1989, Vietnam contributed 0.26 tons of carbon emissions per capita to the globe. By 2017, this number jumped to 1.93 tons. As a result of the severe air pollution, 50,000 people a year die. Although significant inroads have occurred, access to clean water in Vietnam remains a problem as 9,000 people die a year from polluted water.
Environmental Consequences
In addition to medical costs, environmental deterioration has a profound economic cost. Air pollution causes a financial cost of around 5% of GDP per year.
As with most unintended consequences, the most impoverished bear the brunt of it. The most poverty-stricken members of society are the most exposed, susceptible and resource-poor to adapt to the deteriorating environment. However, as the U.N. noted that it also creates a “…vicious cycle, whereby initial inequality makes disadvantaged groups suffer disproportionate loss of their income and assets, resulting in greater subsequent inequality” that threatens the economic development Vietnam has achieved over the last three decades.
On the flip side then, the poor benefit the most from green financing. For example, some researchers investigated this connection by studying 25 Chinese provinces over 13 years and found a high correlation between the two variables. The group argues that through a strong absorption capacity, long industrial chains and a high degree of relevance, green financing has a “pulling effect on economic development and can effectively alleviate poverty.”
Green Financing
Vietnam has recognized this dynamic and has set out to reverse the trend. The government has made significant inroads in providing cleaner development through creating cleaner transportation infrastructure, safer water and shifting to renewables. However, Vietnam achieved these inroads through government financing. According to the Asian Development Bank Institute, to supply energy demand with renewable energy, 50% of total investment in renewable energy development must come from private green financing. Yet, due to a lack of capacity and infrastructure, Vietnam banks cannot get near the 50% number.
Nevertheless, the AFD concessional loan is a significant first step in establishing green financing in Vietnam. As noted, the AFD provided a $100 million concessional loan to BDIV. BDIV is one of the leading financial institutions in Vietnam. It has over 1,100 banks worldwide and assets totaling VND1.56 quadrillion to promote green financing. The credit line will also mark the first green finance fund AFD has set up in Vietnam. Notably, AFD and BDIV earmarked $366,000 of the loan for technical assistance to support the transition.
AFD is valuable and experienced. It has more than 90 projects worldwide worth over 2.3 billion Euros. In addition, it has experience supporting green development in various sectors such as transport, infrastructure, agriculture and energy.
Taking Action
The CEO of BDIV, Le Ngoc Lam, hinted at three critical takeaways for Vietnam and BDIV in particular. First, it will assist BDIV in improving its operational efficiency in financing Vietnam’s green development. Second, it will establish a partnership between BDIV and AFD for future green development loans or projects. Finally, it signals to international partners Vietnam’s willingness to participate in green development projects or financial partnerships.
Put another way, the loan provides significant financing, technical assistance and establishes a partnership that can lead to other green financing opportunities. Therefore, it is essential to establish green financing in Vietnam and, accordingly, sustaining its development and further alleviating poverty.
– Vincenzo Caporale
Photo: Wikipedia Commons
Germany Invests Millions of ODA in Vietnam
Deal Specifics
The memorandum was signed by Pham Hoang Mai, Director General of the Department of Foreign Service, and Gisela Hammerschmidt, Director for Asia of the German Federal Ministry for Economic Cooperation and Development. In total, the amount agreed upon is over €113.5 ($131.9 million), and it will be split and categorized in two ways. A total of $58.8 million will be given out as ODA loans, while the governments earmarked $74.57 million non-refundable ODA for 14 technical assistance and investment projects.
Both governments will focus on one of the 14 projects for pandemic prevention and relief. The Vietnamese will use $17.6 million to construct a center that will act as a focal point for epidemic forecasting and management. The $17.6 million is non-refundable ODA that the Ministry of Health first proposed to respond to Vietnam’s deteriorating Covid-19 situation.
Supporting Germany’s BMZ 2030 Strategy
Although the Vietnamese government has yet to announce most of the projects, they will support green growth. Specifically, this includes training and sustainable growth, responsibility for climate and energy, life protection and natural resources under Germany’s BMZ 2030 reform strategy.
Germany’s BMZ 2030 strategy is a comprehensive set of reforms that focuses on more efficient development assistance and investment. Specifically, it seeks to reduce inequality, environmental degradation and unsafe working conditions within the timeframe of 2030. BMZ 2030 sets the tone for future aid investments by the German Federal Ministry for Economic Cooperation and Development. A cooperative project at its core, Vietnam joins the BMZ’s long list of bilateral, reform, transformation, global and peace partners.
German-Vietnamese Relations
As Germany invests millions of ODA in Vietnam, both the Germans and the Vietnamese hope the deal is a harbinger of more cooperation to come. In identifying Vietnam as a BMZ global partner, the German government hopes to together address environmental protection and global economic security.
If the past is any indication, there exists good reason to be optimistic about future cooperation between the two countries. Over the last three decades, Germany has provided over $2 billion in ODA to Vietnam. More than money, Germany assisted in sharing its experience with sustainable and environmentally conscious growth. This bilateral relationship remains secure along with a diverse spread across other areas. In 1975, the two countries established diplomatic relations. In 2011, they promoted their bilateral relationship to a “Strategic Partnership.” The relationship centers around the shared support of the rules-based international order and free trade.
Economically, Germany is Vietnam’s largest trading partner in Europe. Since 2010, trade between the two countries has increased by over 10% every year. The trend in trade will continue to grow given the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investor Protection Agreement (EVIPA), both of which came into effect on August 1, 2020. As an investor, Germany is Vietnam’s eighteenth largest. Over 300 German businesses have invested around $2 billion in 361 Vietnamese projects. Meanwhile, Vietnamese businesses are investors in 35 projects in Germany totaling nearly $250 million.
Vietnamese Unsustainable Development
Germany’s ODA investment is essential for Vietnam at this stage in its development. Vietnam’s development in the last 30 years has been incredible. In 1986 the Communist Party of Vietnam initiated the Doi Moi Reforms, rolling back the centralized economic system to allow the market a more decisive role in the economy. The results have been particularly impressive in regards to poverty reduction. According to the Asian Development Bank, the poverty rate declined from 70% to 6% between 2002 and 2018. The reforms catapulted Vietnam from one of the world’s poorest countries into a lower-middle-income country.
Nevertheless, this development has not come without an environmental cost. The rapid growth resulted in an energy demand that outpaces supply, pushing the Vietnamese government to search out the cheapest and most available options. Overall, its electricity demand increased by an average of 10% per year for the last five years. However, due to the quickened pace, Vietnam has increasingly relied on coal. In 2019, coal was 36% of Vietnam’s energy mix and is expected to remain such during the new National Power Development Plan, 2021-2030. Nevertheless, the Vietnamese government has sought cleaner sources of energy to power their developing economy. Hydropower already makes up a significant proportion of its energy mix (26%). Wind and solar energy increased from less than 1% in 2014 to 10% in 2019. In the new ten-year National Power Development Plan, 2021-2030, the government has committed to increasing renewable energy supply to 15-20% by 2030.
An Exciting Step Forward
As Vietnam struggles to transition into a middle-income country, affording a transition from coal to renewables is critical. Given the quick increase in demand and coal’s cheap and available nature, this transition is difficult. Yet, Germany’s ODA, which focuses on sustainable development, is key to Vietnam’s struggle to secure a clean economy. It is a crucial first step. But, given the enduring partnership of the two, we can expect more cooperation to come. As Germany invests millions of ODA in Vietnam, Vietnam will use it to pursue sustainable development.
– Vincenzo Caporale
Photo: Flickr
How the Term “Third World” Perpetuates Poverty
First, Second and Third World
The terms “First World,” “Second World” and “Third World” originate from the Cold War era. During this time of tension, the phrase “First World” was a description for industrialized capitalist countries such as the United States, various Western European countries and their allies. “Second World” described socialist countries still under the influence of the Soviet Union. “Third World” referred to those countries not allied with the Warsaw Pact or NATO. While these accepted definitions contain no quantifiable content to explain the designated numerical naming system, the choice of rhetoric certainly implies rank.
Negative Framing
The implied ranking system enacts what is known in psychology as the framing effect. The American Psychological Association defines the framing effect as “the process of defining the context or issues surrounding a question, problem or event in a way that serves to influence how the context or issues are perceived and evaluated.” In short, the way an idea is presented has a large effect on how the idea is perceived. For many years, many candidly used the term “Third World” to refer to developing countries around the globe, leading to growing unconscious biases.
Priming Negativity
Biases and heuristics play an important role in perception, judgment and decision making. Depending on how one frames a subject, different biases may form. Another important psychological concept at play when talking about biases is priming. In cognitive psychology, priming is “the effect in which recent experience of a stimulus facilitates or inhibits later processing of the same or similar stimulus.”
For instance, the emblematic hierarchy would therefore rank “Third World” countries third out of three, effectively pigeonholing these countries as inferior regions. The connotation primes an individual to think these countries belong in last place, making extreme poverty a normalized concept in these regions when it should be anything but normal. As a doom and gloom term, referring to developing countries as “Third World” countries is harmful because it perpetuates cycles of poverty in certain regions of the world.
The Power of Rhetoric
More than three billion people around the world survive on less than $2.50 per day. When such a tremendous amount of people are living in extreme poverty, there is an ethical obligation to care. Meeting this obligation with something as simple as a change in rhetoric is a small task that could potentially have a large impact. It is important to call developing countries what they are — developing. The term developing country has an undertone of hope, and while extreme poverty is common in these regions, further developments are on track to reduce poverty and improve quality of life. Framing developing countries in such a negative light has the potential to cause irreparable damage to the fight against poverty. Poverty anywhere in the world is not normal and it is important to avoid treating it as such.
– Michelle M. Schwab
Photo: Flickr
Central American Women and Children Protection Act Reintroduced
The Context Behind the Act
The act focuses on Guatemala, Honduras and El Salvador; as it explains, the three countries have some of the “highest rates of femicide” within “the Latin America and Caribbean region.” El Salvador and Honduras also have some of the highest child murder rates in the world. In April 2021, a Deutsche Welle article reported that there had been 161 femicides in Guatemala since the year began. In March 2021, women gathered to protest in Guatemala City, carrying signs with messages ranging from “I’m marching because I’m alive and I don’t know until when” to “This isn’t a country, it’s a cemetery.”
Lubia Sasvin Pérez, who spoke with the New York Times in 2019 about her experiences in Guatemala, left her abusive boyfriend to stay with her parents. The boyfriend, Gehovany Ramirez, tracked her down and murdered her mother in front of her. His brother said that Ramirez was “right to go back and try to claim [Pérez].” Ramirez was sentenced to an unusually short term of “only four years in prison,” the New York Times explained, and was entitled to visitation with his and Pérez’s son “upon release.” Meanwhile, Pérez has faced “blame” and “stigma” from the people around her. “There’s no justice here,” she stated.
The Act’s Goals
If passed, the Central American Women and Children Protection Act would allow the U.S. to form “compacts,” or agreements, with the governments of Guatemala, Honduras and El Salvador to fight violence against women and children. More specifically, the compacts’ goals would include expanding supportive resources for survivors, establishing safe environments in schools and communities and improving the justice system’s responses to these crimes. Each compact would set out a “3- to 6-year […] strategy” to accomplish the goals and would list actions the government of the country concerned would take, along with methods for “[measuring] progress.”
In addition, the House version of the Central American Women and Children Protection Act allocates $25 million each year for fiscal years 2022 and 2023. The Senate version allocates $15 million each year for those two years and the money would be given to support the prevention of violence against women and children in Guatemala, Honduras and El Salvador. However, the U.S. would retain the right to stop the funding if the countries failed to make “sufficient progress” or went against U.S. “national security interests.”
Supporting Women for Many Reasons
Correcting injustices and promoting equality for women has economic benefits as well. According to an Atlantic Council article, Latin America has been hit hard by the pandemic economically, but “reducing gender inequalities will ignite productivity, boost economic growth, and reduce poverty” in the region. According to a World Bank report, women’s increasing presence in the labor force helped reduce poverty in Latin America and the Caribbean between 2000 and 2010. The report also found that women’s earnings were “crucial to reducing the pressures on the poorest of the poor” by helping families stay afloat in the “2009 crisis.”
Over the past several years, the U.S. has been criticized for deserting Central American women and children in violent situations. The U.S. has slashed aid to Guatemala, Honduras and El Salvador while excluding survivors of domestic violence from asylum. The Central American Women and Children Protection Act, if passed, would mark a turn toward aiding rather than abandoning survivors of violence.
– Victoria Albert
Photo: Flickr
The Haiti-United States Relationship
Contemporary Haiti-US Economic Relations
Following the 2010 earthquake that paralyzed Haiti, the United States provided more than $5 billion worth of aid aimed at supporting “longer-term recover, reconstruction and development programs,” according to the U.S. State Department. In the aftermath of the earthquake, U.S. economic efforts have allowed for:
As “Haiti’s largest trading partner,” the U.S. is involved in Haitian sectors such as “banks, airlines, oil and agribusiness companies” as well as “U.S.-owned assembly plants,” according to the U.S. State Department. Tourism, medical supplies and equipment, modernization of Haitian infrastructure and clothing production are areas of opportunity for U.S. businesses.
Despite the successes of the Haiti-United States relationship, the World Bank estimates that, in 2020, almost 60% of the Haitian population lived in poverty. These statistics make Haiti the most impoverished nation in the Latin America and Caribbean region.
Political Unrest in Haiti
A shift from communism to democracy in Haiti has the ability to strengthen the Haiti-United States relationship and provide economic stability. Political and civil unrest has been ongoing since July 2018 and “violent protests” in the nation exacerbate Haiti’s plethora of issues. Among other issues, a growing unemployment rate, inflation rising to 20% and the Haitian currency depreciating by 30%, contribute to an ailing nation. Furthermore, the nation experiences regular fuel shortages and businesses struggle to keep their doors open. Due to the high poverty rate, about 33% of the population faces “crisis- or emergency-level food insecurity.”
While Haiti showed signs of promise when it held a democratic presidential election in 2017, its “local and parliamentary elections” that were scheduled for October 2019 did not occur. Because democracy in Haiti is not consistent, this leads to nationwide instability and unrest.
The Assassination of President Jovenel Moïse
On July 7, 2021, Haitian President Jovenel Moïse and his wife, Martine, were attacked in their residence in the country’s capital, Port-au-Prince. The president was killed in the attack and his wife was severely injured but did not suffer any fatal wounds.
Moïse’s presidency, which began in February 2017 after winning an annulled 2015 election and a second election in 2016, “was marked by controversy.” His appointment sparked protests throughout the country, with citizens citing “economic underperformance and corruption” as the reason. Since the beginning of 2020, Moïse ruled by decree and allegedly attempted to grant himself and close confidants “immunity from prosecution” on several occasions. In 2020, human rights abuses connected to gang violence caused two members of Moïse’s government to be sanctioned by the U.S. government.
US Solidarity and Support
U.S. President Joe Biden has spoken on the future of the Haiti-United States relationship following Moïse’s assassination. Recently, Biden released a statement of mourning over Moïse’s assassination and uncertainty about the future of Haiti. “We condemn this heinous act and I am sending my sincere wishes for First Lady Moïse’s recovery. The United States offers condolences to the people of Haiti and we stand ready to assist as we continue to work for a safe and secure Haiti,” says Biden.
The instability in the aftermath of Moïse’s assassination leaves the future of the Haiti-United States relationship in question. However, by committing to democracy, the Haitian government can work toward a stronger economic partnership between the two nations.
International Aid to Haiti
UNICEF is working to provide aid to more than 1.5 million Haitian people experiencing “constrained access to clean water, health and nutrition, disrupted education and protection services” amid the political instability and the ongoing COVID-19 pandemic. In July 2021, UNICEF reported that “Haiti is the only country in the Western Hemisphere where not a single dose of the COVID-19 vaccine has been received.”
To address this, “UNICEF will support the distribution, transportation and storage of COVID-19 vaccines” to improve the vaccine rollout. Starting three years ago, UNICEF has provided 920 solar-operated fridges in Haiti, “to strengthen the cold chain, mainly in remote areas where electricity is unreliable.” Today, 96% of Haiti’s health centers possess solar fridges for medicinal cold storage.
By mitigating Haiti’s domestic hardships, there is greater hope for a stronger Haiti-United States relationship in the future. The efforts of global humanitarian organizations provide a glimmer of hope in a tumultuous political landscape.
– Jessica Umbro
Photo: Flickr
The IMF’s Assistance in Costa Rica’s Economic Recovery
In 2021, the International Monetary Fund (IMF) agreed to provide Costa Rica with a $1.7 billion loan “to support Costa Rica’s recovery and stabilization from the economic damage caused by the COVID-19 pandemic.” Although the Costa Rican government’s response to the COVID-19 pandemic was effective, economic improvements are stagnant. Costa Rica’s economy relies heavily on tourism and the COVID-19 pandemic created a significant halt in this sector. The IMF’s assistance in Costa Rica would help create jobs in high-demand areas and improve the resiliency of businesses.
Economic Challenges During COVID-19
The World Bank indicates that Costa Rica’s economy expanded over the last quarter of a century, with poverty rates lower than other Latin American countries. However, the COVID-19 pandemic caused the economy to decline by 4.6% in 2020. As a result, “one out of five workers” experienced unemployment by the last quarter of 2020 and the poverty rate in Costa Rica increased to 13%. As the situation improves, the economy expects to grow by 2.6% in 2021 and 3.3% in 2022.
The Organization for Economic Cooperation and Development (OECD) reports that besides the pandemic, Costa Rica’s increased budget deficits and debt could have played a role in the recent economic destruction. Since the Costa Rican government had to provide additional funding for social and health programs, the budget deficits would grow further. Therefore, a strong recovery plan is necessary to lower deficits and improve Costa Rica’s economic situation.
Tourism: A Struggling Industry
According to Reuters, Costa Rica’s economy struggled since “hotel and trade shrank by 40% last year.” The pandemic and tourism produced 8.5% of its gross domestic product. At the beginning of 2021, fewer tourists visited than in previous years, indicating that economic recovery could take a while. However, officials in the tourism industry remain optimistic for more tourists in the future since many attractions are outdoors and there are fewer concerns about the virus spreading in open areas.
However, the amount of COVID-19 cases in Costa Rica was at its highest point from the end of April 2021 into early May 2021, leading to decreased levels of tourism. The U.S. even issued a travel advisory warning for citizens planning to visit Costa Rica. The Costa Rican government attempted to help the tourism sector by indicating that industries such as tourism did not need to impose new COVID-19 restrictions. Nevertheless, several groups of international tourists canceled their plans to visit.
Officials aim to improve economic conditions by expanding sustainable tourism. This would benefit the environment and help small businesses. The Minister of Tourism explained that expanding this industry would increase employees’ incomes and allow tourists to see different attractions. Officials introduced this plan to the national bank to see if it could consider using additional recovery strategies such as credits or implementing changes in rates.
Overcoming the Economic Challenges
So far, the Costa Rican government has made several efforts to assist those most impacted by the pandemic. It distributed grants to at least 700,000 citizens who suffered the most during the pandemic. It also had businesses impose strict health precautions, preventing a massive spread of the virus and further economic downturn.
Al Jazeera states that the Costa Rican government began working with the IMF to obtain a loan that would go toward tax reform and selling assets. The IMF’s assistance would also help Costa Rica pay off part of the significant debt accumulated within the past few decades.
The IMF’s assistance expects to cover a three-year time frame to improve economic conditions and reduce poverty rates. The Costa Rican government also plans to put the loan toward strategies that could boost employment. The IMF reports that the majority of those facing unemployment are women and youths. Various career fields in Costa Rica need employees and many companies are struggling to hire due to the pandemic.
The Costa Rican government thinks increased spending on social services would allow more women to enter the workforce since these programs will ease the burden of many familial caretaking responsibilities often resting on the shoulders of women. In addition, the government wants to pass legislation that aims to improve the education system to increase the possibility of employment opportunities in higher-paying jobs.
Moving Forward
The IMF’s assistance in Costa Rica would mitigate the current economic situation by addressing the root causes of high unemployment rates and income inequality. This effort would contribute to further development and potentially allow Costa Rica’s economy to reach pre-pandemic rates of growth.
– Cristina Velaz
Photo: Pixabay
Global Gender Equality and the Gates Foundation
A Generous Donation
At the 2021 Generation Equality Forum, the Gates Foundation announced it would donate more than $2 billion to help improve gender equality worldwide. Over the next five years, the foundation plans to use the money to advance gender equality in three main areas: economic support, family planning and placing women in leadership roles. The Gates Foundation’s goal behind this decision is to specifically focus on gender-related issues that have worsened due to the COVID-19 pandemic. For example, the International Labor Organization found that unemployment for women increased by nine million from 2019 to 2020. Since the foundation has dedicated itself to supporting gender equality for many years, this monetary commitment will accelerate its progress.
Actions From the Foundation
Besides its billion-dollar donation, the Gates Foundation has been dedicating its work to create solutions for the lack of women’s equality for many years. In addition to several other million-dollar donations, in 2020, the foundation formally established the Gender Equality Division to prioritize its commitment to improving the lives of women and girls. From family health to economic empowerment, the foundation is working on expanding access to a variety of social, medical and educational services. This includes analyzing factors that help or hinder women and advising international governments on how to better support gender equality.
Solutions From Other Organizations
Aside from the Gates Foundation’s various efforts, other projects can improve circumstances relevant to global gender equality. One vital step to this process is looking at data from around the world. Data2X created a campaign that draws attention to issues associated with gender and proposes possible improvements. Similarly, another organization, Equality Now, uses legal and systemic advocacy to help improve global gender equality. Furthermore, after donating more than $400 million, the Ford Foundation has also committed to helping fix various gender-related issues. These issues include inequality in the economy and workforce.
The Gates Foundation’s donation of more than $2 billion is one significant step in eliminating global gender inequality. With initiatives worldwide, women and girls are gaining the equality and respect they should have always had. In addition, the Gates Foundation is supported by Data2X, Equality Now and the Ford Foundation. Together, people everywhere are working to understand and improve global gender equality.
– Chloe Moody
Photo: Wikimedia
The Love Is Project Reduces Poverty
The Love Is Project
Chrissie Lam is the founder and CEO of the Love Is Project. Harnessing her background in the corporate fashion industry, Lam taught women from Kenya, Indonesia and Ecuador how to create and market a product that will resonate with people worldwide. She worked with artisans to “design a bracelet emblazoned with one powerful word: LOVE.” The Love Is Project website explains the reasoning behind the initiative’s name: love is “the single common thread that connects us all.” The goal of the project is to uplift “thousands of female artisans in developing countries around the world through fair wages, healthcare, education and more.” The project now covers 10 countries, empowering more than 2,000 women in Kenya, Indonesia, India, Guatemala, Bhutan, Ecuador, Vietnam, Columbia, Mexico and the Philippines to enter the workforce by becoming entrepreneurs.
How Making Bracelets Reduces Poverty
Poverty disproportionately impacts women, with women more likely to live in persistent poverty than men. About 22% of women have a persistent low income, compared with about 14% of men. As a result, it is harder for women to accrue “rainy day savings” and assets. In this way, women are at an economic disadvantage in comparison to their male counterparts.
During her trip to Kenya, Lam realized that “true empowerment is about job creation. Women need to be able to support themselves and their families.” Because of this “pay it forward” ideology, the Love Is Project has impacted thousands of lives through employment opportunities and financial freedom.
Showing solidarity during COVID-19, in 2020, the Love Is Project began the LOVE Grows Program. The program is a sustainable initiative “to empower locals to grow their own farming practices and skills so families can thrive — physically and economically.” The business also supports food gardens in Bhutan and provided a monetary donation to the ACCESS Development Services organization in India. Furthermore, the business “donated masks, sewing machines, supplies and food” to its partners in Uttar Pradesh, India.
Impact of the Love Is Project
A 28-year-old Love Is Project Kenyan artisan, Nantiyon Letaapo, started beading bracelets for the project in 2019. The income she earns allows her to support her family, enroll her four children in school and accumulate financial savings.
The Love Is Project is a business created, sustained and supported by women. It not only upholds the symbolic custom of beadwork in various countries around the world but also teaches women and girls that if they lead with love, they can achieve success.
– Sara Jordan Ruttert
Photo: Flickr
5 Ways Connecticut Senators Fight for Foreign Aid
5 Ways Connecticut Senators Fight for Foreign Aid
Committing to a Progressive Foreign Policy
Actively solving issues like hunger and infectious diseases tie directly into fighting global hunger. Hence, Connecticut Senators Murphy and Blumenthal remain committed to a progressive foreign policy. They have shown their commitment through public statements, letters to other senators and legislation like the Global Health Security Act. Ultimately, the Connecticut Senators want the U.S. to be an active member of a global community. The country would, accordingly, use its power to alleviate global inequalities and stem poverty.
– Samuel Weinmann
Photo: Flickr
Green Financing in Vietnam – Help From France
The French Development Agency (AFD) announced a $100 million concessional credit line to the Bank of Investment and Development in Vietnam (BDIV) and technical assistance to help establish green financing in Vietnam. As Vietnam continues its rapid development while disproportionately dealing with the adverse effects of environmental challenges, it is searching to develop green financing to underpin a sustainable, efficient renewable energy system. The BDIV plays a crucial role in that transition and the assistance from the AFD is a significant first step in the transition to green financing in Vietnam.
Development in Vietnam
In 1986, a set of economic reforms would fundamentally shift the role of markets in Vietnam. By encouraging private ownership, overturning its policy on forced collective farming and recognizing private land rights, the Doi Moi reforms provided a central role for markets as the primary resource allocation mechanism.
The results have been astounding for economic development and poverty reduction in Vietnam. In the last three decades, the poverty rate reduced from 70% to 6%, and the GDP per capita increased by 2.7 times. In total, more than 45 million people were able to leave poverty. Today, Vietnam is the fastest-growing economy in Southeast Asia.
A component of this development was a shift away from an agriculture-based economy to a more industrial economy. In 1988, agriculture constituted 46% of the GDP. Fast forward to 2014, and agriculture as a share of the GDP had contracted to only 17%, while the service sector and industrial sector accounted for 44% and 39%, respectively.
Economic Consequences
Nevertheless, similar to other nations with experienced industrialization and remarkable growth and in a truncated period, Vietnam struggles to manage the environmental consequences. It logically flows as the more dynamic an economy becomes, the more energy it requires to power it. Likewise, the quicker the development, the more demand for energy will outpace the supply. Vietnam is no exception; on average, its energy demands increase by 10% every year.
Naturally, when demand rapidly outpaces supply, countries search for cheap, quick options to increase supply. Therefore, fossil fuels, a historically abundant and cheap energy source, have primarily fueled Vietnamese development. As of 2019, 84.7% of Vietnam’s energy came from fossil fuels, primarily in the form of coal (50.25%) but also in oil (25.92%) and gas (8.61%).
This Faustian pact with the cheaper, more abundant resources – along with other trappings of middle-income status – comes with environmental consequences. In 1989, Vietnam contributed 0.26 tons of carbon emissions per capita to the globe. By 2017, this number jumped to 1.93 tons. As a result of the severe air pollution, 50,000 people a year die. Although significant inroads have occurred, access to clean water in Vietnam remains a problem as 9,000 people die a year from polluted water.
Environmental Consequences
In addition to medical costs, environmental deterioration has a profound economic cost. Air pollution causes a financial cost of around 5% of GDP per year.
As with most unintended consequences, the most impoverished bear the brunt of it. The most poverty-stricken members of society are the most exposed, susceptible and resource-poor to adapt to the deteriorating environment. However, as the U.N. noted that it also creates a “…vicious cycle, whereby initial inequality makes disadvantaged groups suffer disproportionate loss of their income and assets, resulting in greater subsequent inequality” that threatens the economic development Vietnam has achieved over the last three decades.
On the flip side then, the poor benefit the most from green financing. For example, some researchers investigated this connection by studying 25 Chinese provinces over 13 years and found a high correlation between the two variables. The group argues that through a strong absorption capacity, long industrial chains and a high degree of relevance, green financing has a “pulling effect on economic development and can effectively alleviate poverty.”
Green Financing
Vietnam has recognized this dynamic and has set out to reverse the trend. The government has made significant inroads in providing cleaner development through creating cleaner transportation infrastructure, safer water and shifting to renewables. However, Vietnam achieved these inroads through government financing. According to the Asian Development Bank Institute, to supply energy demand with renewable energy, 50% of total investment in renewable energy development must come from private green financing. Yet, due to a lack of capacity and infrastructure, Vietnam banks cannot get near the 50% number.
Nevertheless, the AFD concessional loan is a significant first step in establishing green financing in Vietnam. As noted, the AFD provided a $100 million concessional loan to BDIV. BDIV is one of the leading financial institutions in Vietnam. It has over 1,100 banks worldwide and assets totaling VND1.56 quadrillion to promote green financing. The credit line will also mark the first green finance fund AFD has set up in Vietnam. Notably, AFD and BDIV earmarked $366,000 of the loan for technical assistance to support the transition.
AFD is valuable and experienced. It has more than 90 projects worldwide worth over 2.3 billion Euros. In addition, it has experience supporting green development in various sectors such as transport, infrastructure, agriculture and energy.
Taking Action
The CEO of BDIV, Le Ngoc Lam, hinted at three critical takeaways for Vietnam and BDIV in particular. First, it will assist BDIV in improving its operational efficiency in financing Vietnam’s green development. Second, it will establish a partnership between BDIV and AFD for future green development loans or projects. Finally, it signals to international partners Vietnam’s willingness to participate in green development projects or financial partnerships.
Put another way, the loan provides significant financing, technical assistance and establishes a partnership that can lead to other green financing opportunities. Therefore, it is essential to establish green financing in Vietnam and, accordingly, sustaining its development and further alleviating poverty.
– Vincenzo Caporale
Photo: Wikipedia Commons
Advancements in Indigenous Fashion
History Behind the Pattern
Indigenous people, specifically the indigenous people of Guatemala, have a specific reason for choosing their patterns and distinctive colors. Color and design are deeply integrated into their everlasting culture and history. According to an ancient Mayan myth, the Mayan goddess Ixchel first developed this type of design, called loom weaving. People know her as the goddess of love, the moon, medicine and textile arts. Loom weavers utilize her practices to create fashionable crossbody bags. Whether they work with a company or by themselves, weavers are benefitting from the popularity of their culture’s patterns.
Weaving has henceforth become more than just a means for indigenous women to provide for their families. These women have important roles in their communities and these skills are teaching them to push for more self-reliance within themselves.
Mama Tierra
Indigenous Guatemalans are not the only ones taking advantage of this development in indigenous fashion. A nonprofit organization called Mama Tierra (which translates to “Mother Earth” in Spanish) is helping advance self-reliance in the Wayuu community through fashion. Founded in 2014, Mama Tierra assists the Wayuu community of La Guajira in several ways. It works to:
The Wayuu community greatly needs and appreciates Mama Tierra’s work. Consisting of 600,000 people, many in the Wayuu community do not have electricity or running water. Environmental changes make their land less suitable for growing food. Additionally, 50 Wayuu children younger than 5 die each month in La Guajira due to malnutrition and related causes. These families display their humanity through the bags they produce: each bag comes with a tag with a picture of the maker and their children. With the help of organizations like Mama Tierra, the Wayuu people are improving their lives and changing their futures.
Moving Forward
Indigenous women are now turning their skills and culture into something that will pay off in the long run. Apart from providing for their families, the women are making something of themselves, putting their names on something that they created. Organizations like Mama Tierra have also created trading routes for this community, displaying their artistic skills to the fashion world. By doing this, indigenous communities’ work is becoming commercialized for a broader market to see. With skillful weaving and vivid colors, the women make their own indigenous fashion and show the larger industry they are here to stay.
– Maria Garcia
Photo: Flickr