Addressing the Importance of The BUILD Act for the Future

The Better Utilization of Investments Leading to Development Act (BUILD) was created to allocate private-sector dollars to assist developing countries. The BUILD Act would create The United States International Development Finance Corporation (USIDFC). The budget would be set at $60 million, which is nearly double Overseas Private Investment Corporation’s (OPIC) current funds. There will be a focus on low income and lower-middle income countries and assistance to turn them into market economies.

The BUILD Act

The importance of the BUILD Act is that it allows the USIDFC the opportunity to: 1) make loans, 2) obtain equity or financial interest in entities, 3) provide reassurance to private sector entities and qualifying countries, 4) provide technical assistance, 5) conduct special projects, 6) crate enterprise funds, 7) issue obligations and 8) charge service fees.

The BUILD Act was passed by the House on 17 July 2018. The vote was spearheaded by Co-Chairs of the Congressional Caucus for Effective Foreign Assistance, Rep. Adam Smith and Rep. Ted Yoho. The importance of The BUILD Act is recognized by both parties because it recommits the United States to be supportive of developing countries.

According to Rep. Adam Smith, the United States must “take an all in approach to our foreign assistance.” Programs like The BUILD Act are essential because they promote “health, peace and stability that are vital to our national security.” Rep. Ted Yoho believes The BUILD Act is a huge step towards the United States becoming more effective with foreign aid. The end goal of the BUILD Act is to take countries that are struggling with extreme poverty from “aid to trade.”

The importance of the BUILD Act for developing countries can be seen in 5 major areas:

1. Building infrastructure
2. Increasing obtainability of electricity
3. Starting businesses
4. Job creation
5. Reducing the need for foreign aid from The United States

Helping Economies Around the World

Developing countries have difficulty attracting the investors that are needed to begin creating economic growth. In order to assist these countries and gain the advantages of helping, The U.S should be encouraging the private sector to invest. That is where The BUILD Act comes into play. This act will allow developing countries the opportunity to get out of poverty and accomplish becoming self-sufficient.  

The act will bring billions of dollars in private-sector investments to fight extreme poverty along with making it easier for American business to work in developing countries. If an American investor would like to have a business in a developing country, but the banks think that could be too risky of an investment, The USIDFC would be available to provide assistance; subsequently, helping Americans while creating more jobs and helping those dealing with extreme poverty.

The BUILD Act is an important piece of legislation that both parties feel will be a benefit to both our economy and that of developing countries in need. Countries facing extreme poverty will now have the capability to become self-sufficient.

– Olivia Hodges
Photo: U.S. Dept. of Defense

Four Important Facts to Know About Infrastructure in the Philippines

Amidst the 7,107 western Pacific islands known as the Philippines, poverty is uniquely endemic. A country of scattered landmass, the Philippines is ranked the third most disaster-prone country in the world, as its close proximity to the equator encourages destructive weather such as earthquakes and storms. Natural disasters disproportionately and recurrently hit the poorest regions of the country, coursing them into higher levels of poverty.

This, along with uncontrolled population growth, exacerbates the reality of poverty within this collection of islands. Fortunately, there are significant plans in the works that focus on kicking such insufficiency to the curb, solutions that include the advancement of infrastructure in the Philippines.

Historically, insufficient infrastructure development has stunted both economic growth and poverty reduction, but there is an active movement toward improvement. Within the past couple of years, proposals have been met with action to pave the way for a change. The following are four important facts regarding infrastructure in the Philippines.

Four Facts About Infrastructure in the Philippines

1. $7.6 billion has recently been approved to establish new infrastructure in the Philippines. President Rodrigo Duterte has plans for robust projects such as bridges, roads and the Metro Manila Subway. Under the national “Build, Build, Build” initiative, the country is looking to spend $180 billion to renovate and build airports, railways, roads and ports over a six-year period.
2. Additional financing for the Rural Development Project for the Philippines was approved January 11, 2018. Costing over $2 million, this project aims to promote job creation, especially within rural development. It seeks to boost rural incomes and enrich both farm and fishery productivity in specified regions, as well as to establish essential pieces of infrastructure, like a network of roads, that allow farmers to sell products at market and connect to the urban areas.
3. The Mindanao Trust Fund-Reconstruction and Development Project Phase II (MTF-RDP2) was approved April 4, 2018. Costing over $3 million, this project focuses on post-conflict reconstruction, improving labor market policy and programs, promoting social inclusion for ethnic minorities and appeasing forced displacement. The objective of the MTF Facility is to advance development in conflict-affected areas in Mindanao by assisting in social and economic recovery within these communities.The MTF-RDP2’s objective focuses on improved access for conflict-affected communities to basic socioeconomic structure and alternative learning systems. According to Xubei Luo, Senior Economist at the World Bank’s Poverty and Equity Global Practice, “Making a difference in Mindanao makes a big difference to the Philippines. Increasing public investment in Mindanao to boost development there would expand opportunities for conflict-affected communities, broaden access to services and create more and better jobs.”
4. From 2006 to 2015, poverty in the Philippines took a dive. A recent report by the World Bank states that economic growth is responsible for poverty levels dropping by five percent. From 26.6 percent in 2006 to 21.6 percent in 2015, such a decrease in numbers is also a result of the expansion of job opportunities outside the agriculture sector.The Filipino government has a goal to reduce poverty from 13 to 15 percent by 2022. According to the World Bank, plans include the Philippine Development Plan 2017–2022 and AmBisyon 2040, a long-term vision to reduce poverty and recover the lives and wellbeing of the most marginalized regions and communities of the nation.The World Bank’s Poverty Assessment report recommends the following policy directions to achieve the proposed targets: “Create more and better jobs; improve productivity in all sectors, especially agriculture; equip Filipinos with skills needed for the 21st century economy; invest in health and nutrition; focus poverty reduction efforts on Mindanao; and manage disaster risks and protect the vulnerable.”

The sizeable collection of Filipino islands has an undying potential to continue reducing poverty through its infrastructure advancement efforts. Although an extremely complex process, both the booming Filipino economy and government project initiatives are projected to gradually alleviate cyclical Filipino poverty. The future of infrastructure in the Philippines is looking bright.

– Mary Grace Miller
Photo: Flickr

Main Reasons Why Development in Saudi Arabia Matters

Saudi Arabia is steadily growing to be a formidable player in the 21st century on the world stage, especially with its massive oil industry, staunch relationship with the United States, and the crucial role it plays in middle eastern geopolitics and international affairs. Yet, at the same time, development in Saudi Arabia has been hindered over the decades due to its conservatism and hidebound ideals.

Saudi Arabia On the Global Stage

Although statistics and figures on the country’s poverty rate remain elusive, it is predicted that a quarter of the population may live under the threat of poverty, which is considered to be about $17 a day, or $530 a month. Income disparities also continue to be on the rise and the unemployment rate currently stands at about 12.7 percent.

Moreover, even though government-run welfare programs and spending systems like Zakat have helped aid development in Saudi Arabia in the past, the country still prioritizes the strength of its oil industry and its own self-image above all else.

Fortunately, Saudi Arabia now experiences a new wave of revolutionary change via the new crown-prince Salman’s reign. The prince’s new policies usher in a new period gradually shifting away from the traditional pivotal ideologies of Wahhabism, pan Arabism and conservatism that Saudi Arabia once stood for. The Saudi economy has great potential and capacity due to the country’s relatively young, and working-age population.

Vision 2030

In its new era of social and economic changes, the Kingdom hopes to achieve its Vision 2030 reform plan and focus on promoting greater social and political stability, sustainability and transparency. Vision 2030 also concentrates on important factors like improving standard of living and education reform so as to make future workers more skilled and competitive for the labor market.

Moreover, Prince Salman’s policies will hopefully lead to greater social progress and development in Saudi Arabia, owing to its focus on anti-corruption measures, gender equality and the empowerment of women.

Anti-Corruption and Empowerment Efforts

There has been a widespread crackdown on problems like the income gap and corruption as the country’s new anti-graft campaign to ‘clean up the economy’ goes into full swing. The anti-corruption campaigns have already yielded more than an estimated $106 billion in financial settlements from many corporates, executives, businesses, and high profile figures from both the government and the royal family.

Furthermore, with the country’s focus on socially and economically empowering women, notable social transformations will take place in Saudi society as women are given more places in the workforce and granted permits and licenses for investment and commercial activities. Consequently, the National Transformation Program 2020 also aims to boost employment opportunities among women and the youth population.

Saudi Arabia’s Continued Progress

The ban on female drivers is steadily being lifted and women will also be given more places in the municipalities in the future. In 2017, Saudi Arabia was given a place at the U.N. Women’s Rights Commission for a four- year term.

Due to recently falling oil prices, it is vital for the country to reduce its over-reliance and dependence on the oil industry. Development in Saudi Arabia can be stimulated by future growth in the country’s non-oil sectors and further economic and industrial diversification.

Fortunately, the country’s competitiveness is improving as is its growing independence and decline in the level of imports. The government also hopes to further open up the economy and interact with global markets.

Although social and economic changes in Saudi society will take time to materialize, the liberalization of the country is imperative for building a foundation for long-term sustainable growth in a fast-paced and dynamically changing world.

– Shivani Ekkanath

Photo: Flickr

The Life-Changing Impact of Solar-Powered Appliances

Electricity is difficult to come by in sub-Saharan Africa, India and other places in the world. In 2016, an estimated 588 million people in sub-Saharan Africa and 239 million people in India were without electricity. Slowly, more people are gaining access to electricity, specifically through solar-powered appliances and lighting.

Current Issues with Electricity

A lot of the rural cities or areas do not have electricity because they are not nearby to an electricity grid. People in Tanzania, like Lusela Murandika, power TV sets with diesel generators and other parts of their homes with charcoal, wood and other biomass.

Using resources like coal, charcoal, dung or wood as a source of electricity pollutes the breathable air that is needed to survive. According to the World Health Organization, 3.8 million people a year die from illnesses that are tied to air pollution.

Kerosene used in lamps is also a dangerous product to use. It produces soot and toxic smoke that “damages lungs and causes other serious health problems,” according to National Geographic. The use of kerosene lamps, especially ones that are homemade, are dangerous because thousands of children and adults die or are burned from them.

How Solar-Powered Appliances Are Changing Things

Technological advancements have made it easy for solar-powered appliances to become more readily available to purchase. Something as simple as a solar bottle light bulb runs around $2-3.

The solar bottle light bulb is “made out of a plastic bottle of purified water and bleach, [that] is sealed into the roof,” according to National Geographic. The water allows for light to be spread out in the room and the chlorine keeps mold from growing. The solar bottle light bulb not only works with the sunlight but it also works when the moonlight is strong as well. It allows for the people in the home to be able to do more within the household, like study, read or work inside.

Connecting people that live in rural areas to an electrical grid sometimes is not possible or it becomes too expensive to be able to afford. Electricity then becomes a luxury that people cannot afford. Sometimes, people wait years for a grid to be built near them, but having solar-powered appliances allows for them to have access to that technology much sooner.

Organizations Assisting the Distribution of Solar Power

In 2016, four U.S. foundations announced an initiative “to support efforts to bring reliable ‘off-grid’ or ‘mini-grid’ power—fueled by solar energy—to people in India who now are without it,” according to Think Progress. The foundations include Hewlett, the David and Lucille Packard Foundation, the Jeremy & Hannelore Grantham Environmental Trust and the John D. and Catherine T. MacArthur Foundation. All four foundations have initiated a $30,000,000 initiative to fund the program and the Indian government is set to match this.

Furthermore, a company by the name of Easy Solar is helping provide electricity to the residents of Sierra Leone. This company is lead by Nthabiseng Mosia, Alexandre Toure and Eric Silverman. Easy Solar began in 2015 as a response to energy accessibility in Sierra Leone. In an interview from Business Report with Nthabiseng Mosia, she stated, “It’s often widely publicized that two-thirds of sub-Saharan Africans lack access to electricity. But in Sierra Leone, 90 percent of people (and 99 percent in rural areas) don’t have any electricity.”

With Easy Solar, appliances are set up so that consumers are on a rent-to-own basis, providing weekly payments. Some of the devices that the business offers are lights and mobile chargers as well as solar lanterns that have the capability of charging phones and offer more than 24 hours of light. The company’s appliances are not just limited to households but are also for businesses as well.

There are many organizations on the ground that are helping individuals obtain the necessary materials to be able to survive that will not cost them their lives. Solar-powered appliances are one solution that is helping eradicate poverty.

– Valeria Flores
Photo: Flickr

How Infrastructure Investments Alleviate Poverty

On Friday, Sept. 25, 2015 the U.N. General Assembly embarked on a milestone in development history. Its new Sustainable Development Goals (SDGs) set an ambitious agenda to work toward ending extreme poverty and boosting prosperity by 2030. The SDGs’ platform consists of a collection of 17 global goals each aimed at addressing economic and social issues in developing countries. One such goal was infrastructure, as it has been proven in many different countries that infrastructure investments alleviate poverty.

How Infrastructure Investments Alleviate Poverty

The Industry, Innovation and Infrastructure goal aims to “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.” Infrastructure is the backbone of any country as it generates jobs, boost economic growth and improves the quality of life for the poor.

Take, for example, a hospital in the Democratic Republic of Congo that needs electricity to ensure the safe and healthy delivery of a newborn. A young, rural Cambodian girl needs to have a safe road to walk to school and Bangladesh needs clean water for the essential livelihoods of its citizens. These are just a few of the myriad of ways that infrastructure investments alleviate poverty.

The Costs of Infrastructure Resistance

However, when governments push back on certain infrastructure plans, it comes at an enormous social and economic cost. Roughly 663 million people lack access to clean water, 2.4 billion people do not have adequate sanitation, one-third of the world’s population is not served by an all-weather road and over 1.1 billion people, or almost 16 percent of the world’s population, still have no access to electricity.

The Industry, Innovation and Infrastructure goal has seen a tremendous impact in diminishing these issues and others in emerging countries. Mobile services have spread rapidly and have allowed people to join the global information age. In 2016, 85 percent of people in the least developed countries were covered by a cellular signal. Transportation services also drive economic development and generate wealth and employment. In 2015, the global economic impact of air transport was an estimated $2.7 trillion, or about 3.5 percent of the global gross domestic product.

Infrastructure to Overcome Debt Cycles

One recessive point in global infrastructure came in the wake of the 2008 Great Recession. The West began exporting debt to emerging markets while also purchasing debt from emerging markets. Western fund managers sold forms of credit to developing markets and the total debt rose to $49 trillion in 2014.

Unfortunately, many fail to realize that selling endless cycles of debt will make it incredibly difficult for emerging countries to service their own dollar-dominated debt at home. They will be unable to pay back these loans and growth ultimately stagnates. Fortunately, multilateral development banks are uniquely placed to assist countries in closing these long-term financing gaps. They can help identify failing market areas and create incentives in for the private sector.

Infrastructure investments alleviate poverty in developing countries through the application of projects such as bridges, roads, communication, sewage and electricity. These projects enable both public and private investors to gain on capital appreciation. While servicing the vital infrastructure needs of billions of people, these countries will, along with their booming populations, generate significant prospects for long-term growth and profit for generations to come.

– Aaron Stein
Photo: Flickr