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Remittances to Tajikistan and COVID-19


Tajikistan is a landlocked country within Central Asia and the poorest Central Asian country to emerge from the collapse of the Soviet Union. In 2019, Tajikistan had a national poverty rate of more than 26% and an extreme poverty rate of 11%. To reduce poverty at home, young Tajik men in particular travel abroad to countries such as Russia to work and send their earnings home to their families. In 30%-40% of households in Tajikistan, at least one member works abroad and sends funds home. As a result, the country’s economy has become heavily dependent on the money its migrant workers bring in. Remittances to Tajikistan in 2017 were equivalent to nearly 35% of the country’s gross domestic product (GDP). Now, with the spread of COVID-19, the economy is struggling to recover from restricted travel abroad.

Remittances in the Short Term

Remittances to Tajikistan are a major source of revenue for the country. Yet, they have both positive and negative economic implications. Remittances are often beneficial in the short term as a lifeline to the poor. They essentially provide the means by which the poor can purchase basic goods and services to lift themselves out of poverty. Moreover, more than 80% of remittances to Tajikistan go toward essentials like food, clothing and shelter. Still, the lack of economic opportunity at home leaves little room for the Tajik people, particularly those in rural areas, to thrive independently.

Remittances in the Long Term

Economic dependence on remittances to Tajikistan opens up the country to risk in the long term. Tajikistan’s economy so heavily intertwines with Russia’s that it leaves itself at the mercy and political goodwill of Russia. Additionally, the dependency also exposes Tajikistan’s economy to external shocks from Russia’s economy. While Russia may recover from these shocks, Tajikistan itself may not. Furthermore, Tajikistan’s dependence on remittances reduces the incentive for the Tajik government to create programs that help develop the country’s own domestic economy.

Remittances in the Pandemic

During the peak of the COVID-19 pandemic, the Russian imposed lockdown caused the Tajik economy to suffer. Now, Tajikistan is slowly trying to recover from those economic damages. Russia’s lockdown meant that Tajik laborers in Russia suffered a decrease in work opportunities and thus, a fall in income. In addition, it also restricted Tajik migrants from traveling to Russia to work and earn the money they need to support their families. In the spring of 2020, President Emomali sought financial aid from the International Monetary Fund (IMF) because remittances to Tajikistan from Russia declined by 50%.

The faltering economy hit the poor in Tajikistan especially hard. The World Bank has reported that around 40% of Tajikistan’s population reduced the consumption of food during the peak of the pandemic and that the fall in the value of remittances could push the poverty rate even higher. However, the international community and the Tajik government are working to mitigate the impact of COVID-19 on the state of migrant workers.

Solutions

USAID and the World Bank are a few organizations working to help get Tajikistan’s economy back on track. USAID began providing assistance to Tajikistan in 1992, and its work continues today. To help build Tajikistan’s domestic economy and decrease its dependence on remittances, USAID is supporting the expansion of the private sector in a variety of ways. For example, USAID supplied technical assistance to 7,906 individuals and generated 2,409 jobs in the dairy and horticulture practices.

In April 2020, the World Bank also approved a grant of $11.3 million for the Tajikistan Emergency COVID-19 Project to provide aid. This will go toward providing emergency cash assistance to poor households and strengthening the country’s healthcare capacity.

The Tajik government is also working to ameliorate the economic fallout from COVID-19. For example, the government offered a number of targeted social assistance programs, deferred tax collections and relaxed monetary policy. Deferring tax payments provided households and firms with the additional support they needed to finance temporary disruptions in cash flow. Additionally, the government’s targeted social assistance programs increased public sector wages and pensions by 10%-15%. Still, the government is doing little to diversify the Tajik economy to avoid economic disaster in the future. It needs to implement domestic economic policies that encourage private sector development. Additionally, policies that help maintain a stable environment for that private sector activity are necessary. These solutions would help businesses thrive in Tajikistan and decrease their dependence on remittances.

Looking Forward

The COVID-19 pandemic changed Tajikistan’s economy and the lives of the Tajik poor. However, the country should still be able to rebound. The Asian Development Bank predicts that Tajikistan’s GDP growth rate may reach 5% by the end of 2021 from a pre-pandemic growth rate of 7.5%. Thus, Tajikistan may still reach the target it set in its National Development Strategy up to 2030. The strategy sets a target of increasing domestic incomes by up to 3.5 times by 2030 and reducing poverty in half. Should the Tajik government grant the private sector more opportunities to invest, create jobs, and thus, contribute to the economy, it may very well attain this goal.

– Savannah Algu
Photo: Unsplash

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Impact of COVID-19 on Self-Employed Women in India

Self-Employed Women in IndiaIn early April 2021, India experienced a surge of COVID-19 cases that has left devastating impacts on the economy. According to ReliefWeb, on May 19, 2021, “India set a global record of 4,529 COVID-19 deaths in 24 hours.” The economic consequences of COVID-19 disproportionately impact vulnerable populations such as self-employed women in India. On June 10, 2021, in a desperate call for help, the Self-Employed Women’s Association (SEWA) expressed to the Georgetown Institute for Women, Peace and Security the financial hardship that its members are facing.

The Impact of COVID-19 on Informal Workers

The COVID-19 pandemic has been harmful to the entire Indian economy, but female informal workers are bearing the brunt of it. These workers rely on public transportation to commute to work, such as buses and trains, but these modes of transport were shut down during the pandemic. Additionally, many self-employed workers are street vendors, a form of work that has also been barred. The May 2021 Cyclone Tauktae in Gujarat, India, exacerbated all these issues. About 8,000 female workers “in the salt farming industry lost the opportunity to sell 600-700 tons of harvested salt because it was swept away when Cyclone Tauktae struck.”

Due to these compounded issues, already impoverished women are unable to work, a consequence that comes with serious financial repercussions. SEWA surveyed many members who must now cut back on their food consumption and medicinal needs because they simply cannot afford it. These are issues that members of SEWA face along with most other self-employed workers across India.

However, the situation is particularly difficult for female workers due to a long-standing culture of gender bias in India. Women are far more likely to have lower-paying and less secure jobs than men. When India first started recovering from the pandemic in late 2020, the return to employment of males took first priority. Thus, self-employed women in India experience a disproportionate rate of pandemic-induced poverty in comparison to their male counterparts.

SEWA Takes Action

According to SEWA leaders, India is grappling with widespread misinformation and fear surrounding the COVID-19 pandemic and vaccines, especially in the rural regions of India. Currently, the organization is taking four main steps to combat COVID-19 in India:

  1. Encouraging people with symptoms to test for COVID-19.
  2. Urging community members to wear masks and educating people on other public health guidelines.
  3. Advocating for COVID-19 vaccination by building community trust.
  4. Prioritizing emergency support to women whose livelihoods took a hit due to “COVID-19 restrictions and the destruction of Cyclone Tauktae.”

In late June and early July 2021, SEWA distributed 1.2 million masks in urban regions and 1.5 million masks in rural regions of India. SEWA aims to provide “health kits, food packets, medicine and financial relief to workers who have lost all sources of income as a result of lockdowns or natural disaster.” Further, SEWA is transforming its offices into temporary “COVID-19 patient care centers” to ease the strain on India’s healthcare system.

One major success for women in India overall is the election of Mamata Banerjee as the chief minister of the West Bengal state government. Banerjee’s commitments “include 250 welfare programs,” many of which will support women and mothers specifically. For instance, Banerjee will mobilize “conditional cash transfers to mothers for their daughters’ education.”

A Call for Action

In order to provide ongoing assistance to self-employed women in India, SEWA requires national and international support. SEWA appeals for support in the form of donations of masks, sanitizers, personal protective equipment and medical supplies as well as monetary donations.

SEWA also welcomes support for the alternative markets that have risen in popularity during the pandemic, such as making face masks, producing sanitizer and selling pre-packaged meals for deliveries. The World Economic Forum puts forth further suggestions, such as providing digital tools and training to help informal workers succeed in changing times. For example, “connecting farmers with consumers of their vegetables in local cities via WhatsApp.”

With support from organizations and the public, during unprecedented times like these, self-employed women in India will be able to rise out of poverty with the ability to thrive and not simply just survive.

– Jessica Li
Photo: Flickr

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COVID-19’s Impact on Poverty in India

covid-19s-impact-on-poverty-in-indiaAreas like North America are seeing growth and recovery from the COVID-19 pandemic. However, there are still places in the world suffering from what came with living through the pandemic, especially the rise in poverty and economic struggles. COVID-19’s impact on poverty in India is especially concerning. In India, estimates determined that about 150 million to 199 million people have fallen into poverty in 2021 alone. That makes up about half of the country’s overall population.

Within just a year of fighting COVID-19 in India, the virus has infected more than 30 million people and killed about 400,000. In that time, only 4% of the population have received both vaccinations. People are continuing to struggle to get things like medicine and food, and the crisis does not stop there.

COVID-19’s Impact on Poverty in India

The COVID-19 pandemic has led to widespread economic failure, loss of jobs and homelessness. These effects have made their way to India. One year after the start of the pandemic, there had been a record 7 million jobs lost. Indian households have lost about 7% of their income.

“We’re talking about a decade of lost opportunities and setbacks, unless there are some big reforms and fundamental changes in the way that economic policy is done, you’re not going to be anywhere close to what we saw in the boom years. A lot needs to happen in order to get back to the 7%, 8% growth that we desperately need,” said Brown University Fellow Arvind Subramanian in an interview with Bloomberg.

Unemployment has historically peaked in India thanks to the pandemic, and GDP could continue dropping. Even before the pandemic, India was having trouble with its economy. The Indian government was taking steps to bring the country’s economy up significantly by the year 2025. COVID-19 in India has caused many setbacks to this plan.

New Efforts in Asia

A new initiative called The China-South Asian Countries Poverty Alleviation and Cooperative Development Centre emerged to combat and control the spread of poverty that the COVID-19 pandemic caused. Operated by China, it will also increase the livelihood and economy of the countries involved. This initiative has included several countries, such as Afghanistan, Pakistan and Sri Lanka. The initiative did not include India in the new initiative, but China has asked it to join. 

“I think South Asian countries can tremendously benefit from this Initiative. Regarding India, I’m not aware of the detailed arrangements but I think India should join this group and benefit from China’s learnings. If India wishes in my mind the group should be flexible and accommodate to involve India in the initiative,” said former Nepal ambassador to China Leela Mani Paudyal in an interview with WION.

Efforts From India

While not part of the South Asian Initiative, the Indian government has taken steps to ensure growth in the country’s economy. Projections have projected economic growth at 22.1%, and roughly 377 million people have received vaccinations. With these changes, the government hopes to see significant changes in the state of COVID-19’s impact on poverty in India.

– Demetrous Nobles
Photo: Flickr

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COVID-19 and the Impoverished in El Salvador

impoverished in El SalvadorEl Salvador implemented a strong response to the COVID-19 pandemic. Now, it has one of the lowest rates of COVID-19 contractions in Central America. Still, there have been several economic depressions globally during this pandemic that have affected the impoverished in El Salvador.

The COVID-19 Pandemic

As of July 23, 2021, El Salvador has had 84,000 confirmed COVID-19 cases and more than 2,500 deaths. On April 1, 2020, President Nayib Bukele confirmed the first COVID-related death over Twitter. The victim was a 60-year-old woman who had recently returned from the United States.

This lockdown has had major ramifications for the impoverished in El Salvador. In an interview with The Borgen Project, San Salvador resident Wendy Michelle Valladares-Hernandez discussed the economic implications for the poor. “I think [the pandemic] has affected…people with entry-level [salaries] which is the majority of El Salvador,” she said. “Entry-level salaries are $300 and things can be as expensive as the U.S. so it’s like telling someone in the U.S. to live with $300 a month. It can be a lot cheaper, like housing but when it comes to food it’s very similar [to] the States.”

Despite this, Valladares-Hernandez described the pandemic procedures positively. “I think that as a country we responded very well,” she said. “The fact that we are all trying to help each other in the sense that we, you know, take care of ourselves, to take care of everyone else around us. I think that’s the reason everyone wears masks when they go out and everyone’s okay by having your temperature checked every single place you go in and cleaning yourself with alcohol every single time you go in.”

El Salvador’s Economy

The U.N. Economic Commission for Latin America and the Caribbean (ECLAC) estimates that the Salvadoran economy contracted 8.6% in 2020, compared to an expansion of 2.6% in 2019. The country has not seen such a loss since 1981 during a civil war. Additionally, El Salvador was the first country to introduce Bitcoin as legal tender. While it is a notable milestone, there are uncertain benefits for the impoverished in El Salvador. The country has a mostly cash-based economy and more than 70% of its citizens do not have bank accounts. It has sparked protests and a poll found that 77% of Salvadorans think Bitcoin is a poor idea.

El Salvador’s Healthcare Services

The organization Doctors Without Borders has recorded an increase in patients dying before ambulances reach their homes. The COVID-19 pandemic has overloaded the ambulance and hospital systems and there is a lack of access to primary healthcare services. Many patients with chronic illnesses do not have full access to medical assistance because coronavirus patients have received medicinal priority.

This has especially affected the impoverished in El Salvador. The U.S. embassy in El Salvador has found that the use of state-of-the-art technology can require medical evacuation to the United States, but even general hospitalization can cost thousands of dollars, often in cash payments. This leaves medical assistance often unaffordable to many, considering the country’s minimum wage is around $270 per month.

The Solutions

El Salvador’s government has already approved a minimum wage increase that went into effect on August 1, 2021. The minimum wage increased by 20%, bringing the entry-level wage from $300 to $365 a month per month. On top of that, the government has announced the Trust for the Economic Recovery of Companies. This Trust has offered to provide $100 million towards small- and medium-scale businesses to subsidize wages and promote the economy. The ECLAC has estimated that El Salvador will see economic growth of 3.5% in 2021 due to private and public investment.

Bukele, in response to the overwhelmed healthcare system, converted the International Center for Fairs and Conventions (CIFCO) into a hospital designed specifically for COVID-19 treatment. The hospital is now the largest hospital in Central America, costing more than $75 million to produce. Originally, the transformed center was to be temporary, however, it will now be a permanent fixture.

The hospital has the capacity to treat more than 400 individuals with COVID-19. The economy hit those who are impoverished in El Salvador hard. Additionally, they often cannot afford to pay or seek medical assistance. The Ministry of Health (MSPAS) offers a free public healthcare system that covers up to 79.5% of Salvadorans in their time of need.

Looking Forward

On July 21, 2021, Bradley A. Freden, the Interim Permanent Representative of the United States, attended an OAS Permanent Council Special Session on equitable COVID-19 vaccine distribution. There, he reiterated President Joe Biden’s announcement to contribute $2 billion in support of COVAX. Soon, 24 million vaccinations will undergo distribution across the Western Hemisphere, including to El Salvador. This contribution will greatly help the vaccination goals of El Salvador, which should be able to vaccinate 4.5 million citizens.

“Importantly, our shots don’t come with strings attached,” said Freden. “We are sharing vaccines with the world and leading in a global vaccine strategy because it’s the right thing to do: the right thing morally, the right thing from a global public health perspective and the right thing for our collective security and well-being.”

Citizens of El Salvador look forward to returning to normal, though some believe that those who are sick should continue to use masks. Valladares-Hernandez remarked, “I think that there’s gonna be things that are gonna get stuck with us. For example, even if someone has a small flu, people are still going to be wearing masks. I think that’s something we are going to do once this goes away.”

– Camdyn Knox
Photo: Pixabay

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The Impact of COVID-19 on Poverty in Bulgaria

Impact of COVID-19 on Poverty in BulgariaThe impact of COVID-19 globally is undeniable. From Canada to Ukraine, every nation is fighting the virus. Bulgaria is facing a similar battle against the COVID-19 pandemic and poverty. Organizations are fighting to keep both under control while implementing solutions to address the impact of COVID-19 on poverty in Bulgaria and around the world.

The Fight Against COVID-19

Bulgaria’s first COVID-19 case occurred on May 8, 2020, which was later than many of its neighbors. The Bulgarian parliament quickly went into a state of emergency on May 13, 2020, due partially to the weak healthcare system. Discussions about how to balance the economy and COVID-19 precautions soon started. Despite the government’s best efforts, the impact of COVID-19 on poverty in Bulgaria was significant.

The Past Against the Present

Bulgaria’s past has contributed to its present state. Bulgaria became its own independent country in 1908, with the occurrence of World War I six years later. The defeat of Bulgaria in World War I saw the loss of 100,000 people. Twenty years afterward, World War II started, resulting in an eventual Soviet invasion. Communism ruled for the next five years.

These events led to economic unrest for several years. Bulgarians boycotted and protested the crisis several times throughout the years, most recently in 2013. The first protests led to Bulgaria joining the European Union but the transition was rough on living standards. Structural reforms in the late 1990s led to faster growth and better living for Bulgarians, with some economic issues in 2008, 2013 and 2014, despite overall improvement. The impact of COVID-19 on Bulgarian poverty has many experts concerned about a possible relapse into economic decline.

The Virus Against the Economy

The negative impact of COVID-19 on poverty in Bulgaria began when the country’s economy was doing well. COVID-19 dragged the economy into a recession throughout 2020 and 2021. As a result, poverty in Bulgaria in 2021 could increase before it declines. Job losses and poverty have hit young people especially hard. Bulgaria will take time to recover from the economic shock of COVID-19, according to many experts. Alongside high productivity, experts have emphasized several components that Bulgaria must prioritize for its economic recovery:

  • Optimal use of EU money
  • Reopening of businesses
  • Reducing crime rates
  • More job prospects
  • More educational opportunities

Solutions in the Present

Bulgaria’s long-term recovery will take years, but organizations are currently attempting to lessen the impact of COVID-19 on Bulgarian poverty. SOS Children’s Villages prioritizes the well-being of young people who have suffered the most from poverty in Bulgaria.

SOS Children’s Villages dedicates itself to helping lift children and teenagers out of poverty all over the world. The organization has two bases in Bulgaria — the cities of Sofia and Trjavna. Its focus is on strengthening families, improving care in families and providing support for young people. The organization also promotes advocacy and improves emergency programs for unaccompanied refugee children. Reducing the child poverty rate is the overall goal of SOS Children’s Villages in Bulgaria.

Despite the significant impact of COVID-19 on poverty in Bulgaria, organizations like SOS Children’s Villages are providing substantial aid. With the continued commitment of organizations, poverty in Bulgaria will reduce and Bulgaria will find its way to economic recovery,

– Audrey Burran
Photo: Flickr

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How Migration in India can Mitigate Poverty

Migration in India
The migrant population is a large driver of India’s economy. India has one of the largest migrant economies in the world. Many Indian workers travel hundreds of miles to work in certain areas of the country to support their families back home. GDP growth rose by over 8% between 2005-2012. In addition, over 137 million people escaped poverty as a result of large-scale migration. There is tremendous potential in using migration in India as a poverty alleviation tool based on past numbers. The Mahatma Gandhi Employment Guarantee Act of 2005 (MGNREGA) is the primary national legislation of the nation geared towards solving its poverty crisis. However, it stagnated as of late due to COVID-19. Migration is a tool towards recovery from the consequences of COVID-19 and it offers a long-lasting solution to poverty in India.

About MGNREGA

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is a poverty alleviation legislation. It went into effect in August 2005. The act guarantees a hundred days of wage employment in any given financial year to rural households who have adults willing to volunteer for unskilled manual labor. The MGNREGA focuses on empowering women both socially and economically. The act also focuses on providing green and decent work by conserving natural resources. Although the MGNREGA is successful to some extent, greater poverty alleviation demands the use of migration as well.

Many Indian policymakers fail to recognize the potential benefits of migration. They often view it as a response to tragedy instead of those seeking greater economic freedom and opportunity. The MGNREGA originally intended to provide 100 days of work, now only providing  50 days of work in the majority of Indian states. Migrants can find higher-paying and more stable work within large urban areas and cities. MGNREGA reform is necessary along with the implementation of new migration legislation in order to further mitigate poverty in India.

The Benefits of Large Scale Indian Migration

Based on the same rate of migrant increase in the 2010s, over 56 million individual migrants would have traveled in 2020. Those benefiting back home in rural villages would have totaled 224 million, had COVID-19 not occurred and MGNREGA not reduced Indian migration. In comparison, 37 million families will benefit from MGNREGA during the fiscal year 2020-2021 according to the rural development ministry. Migration benefits a much higher percentage of the Indian population in poverty than MGNREGA does.

Migrants additionally have an easier time assimilating to their destination once their financial situation improves with higher quality work and wages. Women working in agriculture in the Eastern Indian state of Bihar can more than double their daily wages by moving to Patna, the capital of Bihar. Men from Bihar can increase their earnings even more at an increase of approximately 66% by relocating to Punjab and can have an even higher earning potential if they decide to move to major cities such as Ahmedabad, Surat, Delhi or Mumbai.

The Impact of COVID-19 on Migration in India

India’s lockdown period due to the COVID-19 virus lasted over a year, beginning on March 25, 2020. As a result, migration throughout the country came to a standstill as trains and planes stopped operating leaving many Indians trapped. Many migrants lost their jobs due to the toll the virus took on major Indian industries and were far from their homes without any options to get back.

Reducing poverty in India is no small task as it possesses the second largest population in the world. Passing anti-poverty legislation that provides migrants in India more options to travel within Indian borders for work could create millions of new jobs and greatly benefit both the Indian economy and people.

– Curtis McGonigle
Photo: Flickr

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Vodafone Ghana and the IIA Empower Local Ghanaian Businesses

Ghanaian local businessesOn June 26, 2021, the 22nd annual Vodafone Ghana Music Awards (VGMAs) crowned Diana Hamilton Artist of the Year. This honor makes her the first female gospel singer to ever win the trophy and comes on the heels of year-long praise for her song “Adom,” which also won Gospel Song of the Year. While Vodafone Ghana sponsors the VGMAs to support the celebration of Ghanaian musicians like Hamilton, the company also recently partnered with Invest in Africa to aid local Ghanaian businesses and ignite growth in Ghana’s economy.

A Promising Partnership

Created in 2012, Invest in Africa (IIA) operates in five African nations: Ghana, Kenya, Senegal, Zambia and Mauritania. According to Carol Annang, IIA’s Ghana country director, IIA strives to create jobs and attract investment opportunities for local businesses. By uniting small and medium-sized enterprises (SMEs) with large corporations, Annang says that these types of partnerships can help corporations “use their local buying power as a force for good.”

Since Vodafone Ghana has expressed its dedication to Ghana’s economic and social growth, the partnership with the IIA gives Vodafone Ghana the opportunity to utilize its resources in accordance with the company’s mission. Additionally, because Vodafone Ghana has served small businesses for years, the company can provide IIA with additional experience in “network-based IT and communication solutions.”

Specific Solutions

The IIA and Vodafone Ghana will focus on two solutions to propel the growth of Ghanaian local businesses:

  1. Red Trader: This mobile application and web portal assists traders in overseeing their inventory. Additionally, the application features tools that allow traders to track and collect payments.
  2. Your Business Online: This proposal helps SMEs expand their businesses online with the assistance of Vodafone Ghana’s team. The company’s experts help businesses create an online presence through professional site designs, “e-commerce integration and social media marketing.”

Through these measures, IIA and Vodafone Ghana hope to expand the digital presence of local Ghanaian businesses and boost the economic growth of these businesses. These solutions are set to begin implementation on April 1 for at least two years.

COVID-19 Setbacks and Steps Forward

As Ghana continues to recover from the COVID-19 pandemic, this plan for Ghanaian business growth comes at an opportune time. While coronavirus infections rose throughout the country and businesses permanently closed, by the third quarter of 2020, Ghana entered a recession for the first time since 1982. Additionally, Ghana’s GDP grew only 1.1% in 2020 compared to a growth of 6.5% before the pandemic began.

Because of this low GDP increase and Ghana’s high population growth, the real per capita income of Ghana was “1% lower [in 2020] than in 2019.” Moreover, according to the World Bank Group, additional impacts of the pandemic will include decreases in “foreign direct investment and tourism receipts.” Consequently, many families in Ghana have become impoverished and the country’s poverty rate has increased since the start of the pandemic.

However, one of the principal objectives of the collaboration between IIA and Vodafone Ghana is to help businesses recover from COVID-19 setbacks. In fact, William Pollen, the CEO of IIA, expressed how necessary it is to support SMEs because these enterprises employ the majority of people living in sub-Saharan Africa and constitute roughly 80% of business activity in the region.

The Road Ahead

On the whole, despite the past year’s struggles and the hurdles that arise on the road to economic recovery, the partnership between IIA and Vodafone Ghana presents a positive outlook for the future of local Ghanaian businesses. In the words of Tawa Bolarin, the director of Vodafone Business, “these are indeed exciting times for us and the entrepreneurial community in Ghana.”

– Madeline Murphy
Photo: Flickr

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Serbia’s Cash Incentives Encourage Vaccinations

Serbia’s cash incentivesIn May 2021, Serbian President Aleksandar Vučić announced a new incentive for Serbians to get their COVID-19 inoculations: cash payments. Each fully vaccinated person would receive 3,000 Serbian dinars, equivalent to about $30 in the United States. The policy, aimed at incentivizing Serbs to get vaccinated, may also play a major role in reducing poverty in Serbia. Serbia’s cash incentives to encourage vaccinations have inspired other countries to follow suit with similar strategies.

Poverty in Serbia

Serbia is one of Europe’s most impoverished countries. In 2017, the poverty rate stood at 19.30%. In 2020, the unemployment rate was around 9%, a drastic decline from its peak of 24% in 2012. Poverty rates are particularly high in the rural and southern regions of the country. In an environment of widespread poverty, $30 is a significant incentive that “equates to around 5% of the country’s average monthly salary.”

How Cash Incentives Can Reduce Poverty

Serbia’s cash incentives could be an effective way of reducing poverty. A 2019 study in Kenya showed that cash transfers to impoverished families had a significant impact not only on the recipients but on the entire local community. The study found that each dollar of aid increased economic activity in the region by $2.60. President Aleksandar Vučić’s cash incentives might provide a similar economic boost in Serbia’s cash-poor economy.

Cash Payments Boost Vaccination Rates

The advantages of Serbia’s cash incentives are far-reaching. By providing a strong monetary incentive, the Serbian government increased the number of people who chose to get vaccinated. The public health benefits of a vaccinated country are obvious, but a vaccinated county will also boost Serbia’s economy. Economists universally agree that vaccination programs will add billions of dollars to the global economy within the next few years.

The World Economic Forum states that by ending the pandemic, “10 major economies could be $466 billion better off by 2025.” With vaccinations, workers will be able to resume their everyday jobs, businesses can reopen and the economy can flourish. Greater wages will mean greater prosperity for everyone. Due to these economic benefits, Serbia’s vaccination program will likely pay for itself many times over.

Cash Payment Successes

Serbia’s cash incentive strategy may already be paying off. As of August 4, 2021, almost 40% of Serbia’s population is fully vaccinated, significantly more than the majority of Serbia’s Balkan neighbors. Neighboring Bosnia and Herzegovina has only a 7% vaccination rate, and Bulgaria, only 15%. Perhaps these countries, both of which have their own poverty problems, would benefit from Serbia’s vaccination strategy.

Serbia is not the only country to offer rewards for COVID-19 inoculations. In neighboring Romania, Bran Castle offered visitors free admission if they came to receive their shots. Additionally, the U.S. state of West Virginia offered $100 awards to anyone getting a vaccine. Vaccination will allow an individual entry into lotteries where participants will have the chance to win cars, scholarships and even a million-dollar grand prize.

Serbia’s program, however, is one of the first and most ambitious programs to encourage COVID-19 vaccinations. With a cash incentive strategy, Serbia demonstrates how a single action can provide several benefits, reducing poverty at the same time.

– Thomas Brodey
Photo: Flickr

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Resilience During COVID-19 in Iran

Resilience During COVID-19 in IranJust south of the Iranian capital Tehran lies the metropolitan city of Qom. In late February, citizens in Qom became ill with COVID-19. Within weeks of the global spread, Iran became one of the first global hotspots outside East Asia, alongside Italy. The socioeconomic consequences of the pandemic created a dual crisis that threatened to exacerbate COVID-19’s impact on Iran. In 2018, the Trump Administration announced its intent to withdraw from the Iran Nuclear Deal, following the successful negotiation of the agreement by the prior Obama White House. The unilateral U.S. withdrawal led to the reimposition of sanctions on Iran, crushing the economy and sending unemployment skyrocketing. In 2018 and 2019, the Iranian economy experienced annual contractions of more than 6%.

Against this backdrop, ordinary citizens took to the streets demanding sweeping change to the government in the biggest protests since the founding of modern Iran. The government responded with force. Hundreds of protestors were killed and the entire nation underwent a total internet blackout that lasted days.

With the country already wobbling from economic and political pressure, the pandemic hit at the worst possible time. As a result, many expected COVID-19’s impact on Iran to be outsized. Instead, the nation showed a shocking level of resilience that befuddled experts.

Economic Rebound

At first, COVID-19’s impact on Iran appeared to be nothing more than an accelerant to the generally negative undercurrents impacting the economy. A widely cited report by the Iranian Parliament Research Center foresaw a dramatic increase in poverty in 2020. By the end of the year, 57 million Iranians were expected to be below the poverty line. Moreover, as major economies across the world experienced sharp contractions, IMF analysts saw a similar fate in store for Iran. According to predictions, the Iranian economy would shed 5% of its size in 2020.

However, the opposite occurred. The Iranian economy actually expanded for the first time in years. Despite the crippling blow of U.S. sanctions and a global economic calamity, Iran posted a GDP growth of 1.5%. In many ways, this turnaround resembled a unique occurrence in China. In 2020, China also registered positive GDP growth, the only large economy to do so. But China had controlled COVID-19, whereas Iran was still struggling with its outbreak. The ability of the capital Tehran to manage its economy relatively well amid greater uncertainty was impressive.

But all was not well in Iran. Deaths from COVID-19 spiked across the country and satellite images confirmed the construction of massive buriel pits. By mid-July, almost 90,000 deaths were recorded in Iran. However, this is believed to be an underestimation. Data from the University of Washington confirms more than 200,000 excess deaths for the same period.

Vaccines Requested and Delivered

To get out of its current situation, Iran needs vaccines. In this arena too, recovery promises to be much faster than initially predicted. The refinement of COVID-19 vaccines, which was expected to take years, was released in months. The current challenge is the rollout of COVID-19 vaccines. As of mid-July, only 5% of the Iranian population have received one dose of the COVID-19 jab and just 3% are fully vaccinated. But philanthropy is coming to the rescue. In the United States, a group of philanthropists is planning to send 150,000 Pfizer doses to Iran. Abroad, countries like Russia and China have promised to donate vaccines as well.

The road to normalcy will be difficult for Iran. But a strong global recovery has the potential to bring Iran to success.

– Zachary Lee
Photo: Flickr

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3 Innovations Reducing Food Insecurity in Kenya

Food insecurity in Kenya
One of the most devastating effects of the COVID-19 pandemic in Kenya has been the significant increase in food insecurity. Food insecurity in Kenya was already a notable problem prior to the pandemic. In February 2020, 1.3 million people were classified as in crisis, emergency or catastrophe, according to the Integrated Food Security Phase Classification (IPC). A year later, in the midst of the pandemic, that number rose by 15% to an estimated 1.4 million people. Furthermore, 542,000 children aged between six to 59 months are acutely malnourished to the extent that they need treatment.

With the number of people experiencing food insecurity in Kenya continuing to increase, it is more imperative than ever that solutions are implemented. Fortunately, major nonprofit organizations and agencies have enacted policies to significantly reduce food insecurity in Kenya. Here are three innovations that are having a positive impact on the country.

UNICEF Cash Transfers

In coordination with the governments of Finland, Italy, Sweden and the U.K., UNICEF has instituted a cash transfer program for 12,500 families across Kenya. The program grants these families 2,000 shillings bimonthly. This is on top of the 2,000 shillings they receive every month from the national safety net program. The program identified recipient families as the most vulnerable based on existing beneficiary lists for COVID-19 stimulus recovery. The lump-sum transfers have been pivotal in improving food security and child malnourishment. For many families impacted by the pandemic, food security would not be possible without this direct support.

PlantVillage

PlantVillage is a project consisting of a website, mobile app and on-the-ground team helping African farmers diagnose crop diseases, monitor pests and crowdsource answers to crop questions. The project has been instrumental in improving food security in Kenya. It helped manage Kenya’s worst locust swarm in 75 years, which exacerbated the nation’s food insecurity problem that was originally ignited by the COVID-19 pandemic. The main goal of the project is to help farmers by providing them with affordable technology and agricultural knowledge. Additionally, the project encourages citizen reporting of the locust situation and food insecurity in general.

The widespread impact of PlantVillage has been immense. According to the Food and Agriculture Organization (FAO), the project protected the food security of 36.6 million people. The project also helped avoid a $1.56 billion loss in cereal and milk production. Melodine Jeptoo, a field coordinator in Kenya for PlantVillage, stated that the organization’s efforts “saved Kenya in terms of food security.”

Agricultural Technology

Another solution that is instrumental in improving food insecurity in Kenya is the innovative agricultural technology initiatives from major organizations and small startups. The two most significant organizations involved are the U.N. Commission on Science and Technology for Development (CSTD) and the World Bank.

CSTD has coordinated with the U.N. Conference on Trade and Development and the CropWatch Program to create an online workshop for Kenyans. The workshop helps farmers understand and utilize an improved crop monitoring system with better agricultural productivity. Meanwhile, the World Bank is in ongoing partnerships with 15 AgTech startups to utilize digital technologies to improve the delivery of inputs, soil testing and crop insurance to enable farmers to overcome restrictions related to COVID-19. In addition, farmers will have better targeted and more effective service delivery, particularly within remote areas.

During the same period of time, two notable startup companies have also been pivotal in mitigating food insecurity in Kenya. The first is Taimba, which is an online platform that has connected rural small-scale farmers to urban retailers. This enables farmers to access markets more easily in the midst of constraints related to COVID-19. The other startup is Solar Freeze, which provides smallholder farmers solar-powered cold storage to store temperature-sensitive fresh agricultural produce in a simpler manner.

Proposed Recommendations for Further Action

The IPC, in cooperation with the European Commission, has proposed numerous recommendations for what could be done to improve food insecurity in Kenya in the long run. In response to acute food insecurity, the IPC has recommended the following:

  • Utilize farm inputs and pest and disease control to ensure long-term post-harvest management.
  • Ensure the extension and maintenance of water structures and systems and promote further rain harvesting.
  • Improve infrastructure in existing schools and expand school meals programs.

By taking these actions, Kenya can hopefully reduce its high levels of food insecurity. Moving forward, it is essential that humanitarian organizations continue to make this issue a priority, coming up with new innovations that have the potential to improve the lives of millions.

– Gabriel Sylvan
Photo: Flickr

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