Information and news about economic crisis

Impact of COVID-19 on Poverty in Iran
The impact of COVID-19 on poverty in Iran is severe. The pandemic accelerated the decline of Iran’s Gross Domestic Product (GDP) and the rise of unemployment. Despite the economic crisis, Tehran’s massive natural resources allow the country to effectively recover economically if the newly elected Ebrahim Raisi is willing to end the country’s decades-long hostility with the United States.

The US Sanctions and Economic Crisis Before COVID-19

Before analyzing the impact of COVID-19 on poverty in Iran, one needs to understand the context in which the pandemic took place. In May 2018, under President Trump, the U.S. withdrew from the Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA). As a result of the U.S. withdrawal, a “maximum pressure” campaign that consisted of unilateral sanctions against the Middle Eastern country replaced the Obama-era Iran foreign policy.

The sanctions contributed significantly to the downfall of Iran’s economy. The country’s GDP went down by 11% and average living standards have reduced by 13%. The “maximum pressure” campaign also caused an inflation shock. The sanctions cut oil exports, which reduced the supply of foreign exchange and resulted in hyperinflation. For example, the sanctions were one of the main reasons for prices rising by 41% in 2019.

How COVID-19 Worsened Iran’s Economic Crisis

The pandemic has further accelerated the crisis of the already declining Iranian economy. The mismanagement of the COVID-19 outbreak resulted in Iran being one of the worst impacted countries in the world, with almost 94,603 deaths and more than four million overall cases. Considering how widespread the highly transmissible Delta variant is and the fact that only about 4% of the country’s 83 million citizens are fully vaccinated, the future seems even more pessimistic.

Observing the health effects of the pandemic, it is not surprising how severely COVID-19 damaged Iran’s economy. In 2020, an estimated three to four million Iranians were at risk of losing their jobs, with the potential of increasing the actual (not official) unemployment rate from 20% to more than 35%. The country’s GDP shrunk by 5% in 2020 and inflation nearly doubled from February 2020 to February 2021. The COVID-19 pandemic caused a decline in GDP and an increase in public spending led the government to take extensive debt and sell its assets on the stock market. As a result, the fiscal deficit-to-GDP ratio more than doubled.

The Lives of Impoverished Iranians During the Pandemic

COVID-19 forced working-class, low-income Iranians to choose between their health and earning a basic income necessary for physical survival. In previous decades, the combination of charity work and welfare ministry, which provided financial assistance to economically vulnerable families, managed to maintain poverty below the 10% threshold. However, sanctions and the pandemic have put the survival of millions of Iranians, particularly informal and daily workers, at risk.

Around six million Iranians (a quarter of the overall workforce) work in the informal economy and earn daily wages. They often have no fixed salaries, minimal or no savings and little insurance from the social protection programs. Although these workers face a greater risk of infection, their financial situation does not allow them to stop working. Due to the fragile economic reality of Iranian people, particularly low-income citizens, the government cannot afford strict quarantine measures because these restrictions can push an additional 20% of Iranians into extreme poverty.

Moreover, according to a World Bank report, consumer price inflation stood at 30.6% from April to November 2020 and reached 46.4% in November 2020. The hyperinflation caused drastic price increases in food and housing, which disproportionally harmed working-class families.

The Way Out of the Economic Crisis

Various international and local nongovernmental organizations work tirelessly to alleviate poverty in Iran. One of the most significant NGOs that provides financial and educational resources for Iran’s vulnerable is Relief International. The organization has been particularly active since the outbreak of COVID-19. Relief International has provided multi-purpose cash assistance for 26,000 families who lost their income due to the pandemic.

Although the work of Relief International and other NGOs is significant for mitigating the impact of COVID-19 on poverty in Iran, NGOs have limited resources. Therefore, the Iranian government should play a greater role in the process of poverty reduction. For easing the short-term economic impact, the government should provide direct income assistance to its vulnerable citizens. More importantly, for a meaningful, long-term change, the Reisi administration should end the four-decade-long animosity with the U.S. and agree to the new nuclear deal. The precedent of the 2015 JCPOA agreement shows that lifting sanctions will reverse the negative economic impact of COVID-19.

– Aleksandre Jgarkava
Photo: Flickr

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

How Vietnam improved its economy
Vietnam has seen a tremendous amount of growth in various sectors over the past three decades. This growth is largely due in part to economic reforms that have undergone implementation in the country. Before the reforms, Vietnam remained one of the poorest countries in the world. However, it has since grown to become a country with a lower-middle income. The GDP of Vietnam grew tremendously between 2002 and 2018 by increasing 2.7 times. Even in the face of the worldwide COVID-19 pandemic, the economy of Vietnam has been able to remain steadfast and resilient through trying times. Here is some information about how Vietnam improved its economy.

The Doi Moi Reforms

The Doi Moi reforms that the government implemented in 1986 helped Vietnam improved its economy. Under these reforms, Vietnam as a country took three significant steps as a country that would help improve the economy. The first of these steps was embracing free trade.

For many years, Vietnam has entered into various free trade agreements with numerous nations. One includes ASEAN, which Vietnam became a part of back in 1995. Vietnam and the U.S. partnered together by signing a free trade agreement in 2000, and seven years later, Vietnam joined the World Trade Organization. By joining these institutions and forming these alliances, Vietnam has been able to reduce the number of tariffs on imports coming into the country and exports leaving the country.

Making Changes

The second step that the Doi Moi reforms took to better the economy was implementing deregulation and making it cheaper for companies to conduct business within Vietnam. One way this occurred was through the enactment of the Law on Foreign Investment which passed in 1986. This law allowed companies from foreign countries to come into Vietnam to conduct business. Over the years, this law underwent revisions numerous times to better accommodate investors.

This law has improved Vietnam’s competitiveness tremendously over the years. In 2006, Vietnam’s global competitiveness ranked at 77. Only 11 years later in 2017, Vietnam ranked at 55 in world competitiveness. Lastly, the Doi Moi reforms aimed at improving human capital in Vietnam and improving the country’s infrastructure.

To improve the human capital of Vietnam, the government decided to prioritize education within the country. Better education is a must for Vietnam due to its ever-growing population. A larger population means more jobs and citizens must receive quality education to perform them. Infrastructure has been vitally important for the growth of Vietnam’s economy as well. Making sure that all citizens have access to internet services is important for a country due to the technological needs of the modern age.

How It Helps

Vietnam improved its economy due largely to the Doi Moi reforms. Today, the economy of Vietnam continues to flourish. In 2020, during the midst of the COVID-19 pandemic, Vietnam’s economy expanded by 2.9%. Compared to other countries at the time, this growth rate was among the highest in the world.

Since 2010, the poverty rate in Vietnam has slowly declined each year. In 2012, the poverty rate was at 40.8%. By 2018, the poverty rate fell almost by 20%, leaving it at 23.1%. As it currently stands, the Vietnamese economy continues to stay strong and grow.

– Jacob E. Lee
Photo: Flickr

COVID-19's impact on IndiaIn January 2020, India reported its first COVID-19 case, a student attending the University of Wuhan in China. As the virus spread, Prime Minister Modi ordered a massive lockdown to prevent any further spread. “If you can’t handle these 21 days, this country and your family will go back 21 years,” said Modi in an address to the nation. The lockdown worked in reducing COVID-19’s impact on India. Over time, the country managed to successfully contain the virus while the rest of the world struggled. However, difficulties were on the horizon with an impending second wave. Nevertheless, COVID-19 vaccinations bring hope to the nation of India.

A Deadly Second Wave

In April 2021, the manageability of COVID-19 cases in India took a turn for the worse. India was hit by a second wave of the virus, far more severe than the first. Religious ceremonies and political rallies exacerbated the spread of the virus, creating the perfect breeding ground for its resurgence. In May 2021, India reported COVID-19 deaths surpassing 4,000 per day. But, official tallies are most likely inaccurate due to systematic undercounting. Excess deaths, seen by pundits as a more reliable proxy for COVID-19’s impact on India, were much higher, at more than 12,000 per day during the same period. This number of excess deaths is significant compared to around 5,000 daily excess deaths in the United States at the height of the pandemic.

Major Economic Trouble

India has the sixth-largest economy in the world. The nation has long been in a position to greatly drive global poverty reduction. Thus, heavy pandemic-related casualties in the country have had the potential to magnify the national economic crisis. In 2020, sustained lockdowns and supply chain disruptions caused a sharp GDP contraction, more severe than any declines noted in the United States. Once the second wave hit in April 2021, millions of people were pushed below the poverty line almost overnight. In total, the poverty rate in India increased more than twofold.

Vaccines Bring Hope

Like other nations, India has entered a new phase of recovery, one that promises to be more durable and long-lasting than any phases in 2020. The keys to this nationwide recovery are COVID-19 vaccines and their widespread distribution. From social media to politics, Indian nationals call on the rest of the world for help, with many individuals and organizations responding. In June 2021, the White House pledged to send stockpiled doses to India.

Meanwhile, on the ground, NGOs have taken the lead. A local Delhi organization called the Centre for Holistic Development is helping to enroll eligible citizens for official COVID-19 vaccinations from the government. These efforts include homeless people living in government-managed shelters, a frequently marginalized and excluded population.

These cumulative efforts have added up. Although less than 5% of India’s massive population is fully vaccinated as of July 8, 2021, compared to 47% in the United States and 16% in China, about 22% of Indians have received at least one dose as of July 12, 2021. There is hope that this rate will increase, further slowing the spread of infection.

Going forward, mobilization from the Indian government, in combination with NGOs and international aid, has the potential to create positive conditions on the ground. The acceleration of vaccine drives will inoculate the population faster and more expansively. If all goes to plan, cases of COVID-19 in India will become manageable again and the economy will be able to fully recover as economic activity normalizes.

Zachary Lee
Photo: Flickr

WFP in Venezuela
In April 2021, the United Nations World Food Programme (WFP) reached a deal to distribute food to vulnerable school children in Venezuela. The program ambitiously seeks to help 185,000 students in 2021 alone and 1.5 million children by the end of the 2023 school year. Since schools in Venezuela remain closed due to the COVID-19 pandemic, parents and teachers can pick up rations at their local schools. A monthly ration consists of nine pounds of lentils, 13 pounds of rice, one pound of salt and one liter of vegetable oil. The WFP additionally manages its own supply chain and partners with local teachers and nongovernmental organizations to distribute food. Once schools open again, the WFP in Venezuela will also teach school faculty about food safety.

First Shipments Arrive

Recently, the first shipments of food arrived in Maracaibo, Venezuela. The stockpile includes 42,000 packages of food for this month. The WFP in Venezuela targets children under six deemed to be the most food insecure. Originally, the program began in the state of Falcón and intends to expand to other Venezuelan states gradually. The first set of rations went to a total of 277 schools in the state of Falcón.

Venezuela’s Economic Crisis

According to the Council on Foreign Relations, 96% of Venezuelans live below the poverty line. The country is heavily reliant on the export of natural gas and oil. In fact, oil makes up one-quarter of Venezuela’s gross domestic product (GDP). As oil prices dropped dramatically in 2014, Venezuela began to undergo an economic crisis. Between 2014 and 2016, oil prices had decreased from $100 to $30 per barrel. Since 2015, over 5 million Venezuelans have left the country in search of better opportunities, according to the United Nations. Additionally, Venezuela’s GDP reduced by two-thirds between 2014 and 2019.

Venezuela was once the second-largest producer of oil in the world, behind the United States. Venezuela was also a founding country of OPEC in 1960. The country has had a long history of dictatorships and consolidation of the oil industry, which the state and a select few companies controlled. Some believe that the current president, Nicolás Maduro, underwent reelection through undemocratic means in 2018. In January 2021, after Maduro had claimed victory in the election, candidate Juan Guaidó argued that Maduro had won illegitimately. The United States and several other countries acknowledged Guaidó’s victory.

Although exact figures are unknown, the WFP estimates that one-third of Venezuelans do not have enough to eat. Furthermore, approximately 16% of children suffer from malnutrition within the country. About 7 million Venezuelans are in need of humanitarian aid.

The Importance of WFP in Venezuela

The WFP in Venezuela is much needed as the country struggles economically and fails to provide for its citizens. WFP representative Susana Rico said that “We are reaching these vulnerable children at a critical stage of their lives when their brains and bodies need nutritious food to develop to their full potential.” Hence, this program will be instrumental in providing the necessary resources to underserved young children.

– Kaylee DeLand
Photo: Flickr

Uganda’s Economic Recovery
Uganda, like many other global nations, is battling the economic consequences of the COVID-19 pandemic. The pandemic reversed a decade of economic progress for the country. On June 28, 2021, the executive board of the International Monetary Fund (IMF) approved a $1 billion Extended Credit Facility (ECF) arrangement for Uganda’s economic recovery in a critical time of need.

COVID-19’s Impact on Uganda’s Economy

According to the World Bank, Uganda’s real GDP grew less than half as much in 2020 than in the year before. A four-month nationwide lockdown deterred the economic activity of the industrial and service sectors. The country’s COVID-19 lockdown forced company closures and permanent layoffs, especially in the industry and services sectors. Many informal jobs were impacted, leading to a reliance on farming for income creation and food security.

A Rise in Child Labor

A 69-page report by the Human Rights Watch and the Initiative for Social and Economic Rights explains that many families’ household incomes dropped due to the pandemic’s effects. Furthermore, with schools shut down, the burden of decreased income fell on many children. Child labor surged as many children as young as 8 years old had to work in hazardous conditions in order to provide for their families.

Nearly half of the Ugandan children interviewed in the report worked at least 10 hours a day, sometimes every day of the week. Some children even reported working as much as 16 hours a day. Most of the children only earned a meager $2 a day while subject to dangerous work conditions. Children in agriculture were injured by sharp tools used in fieldwork and “the sharp edges of sugarcane stalks.”

Other children working in quarries “suffered injuries from flying stones.” Many children also reported violence, harassment and pay theft during their employment. Many employers try to exploit child labor and maximize production. Due to these circumstances, Human Rights Watch asserts that part of Uganda’s economic recovery must include targeted assistance to households with children.

Funding From the IMF

The three-year loan approved by the board under the ECF includes the immediate disbursement of $258 million for much-needed budget support. The disbursement follows the $491.5 million release of emergency funds in May 2020 to support the post-pandemic recovery of Uganda. In an effort to strengthen Uganda’s economic recovery, authorities seek to increase household income throughout the country. Authorities are encouraging inclusive growth by investing in the development of the private sector and enacting reforms in the public sector.

Uganda’s Economic Outlook

Uganda seeks to combat its financing issues as it goes forward. Hopefully, the crucial aid from the IMF will help create jobs by investing back into the industrial and service sectors. Also, the financing aid may help children return to school as parents find new work. Economic growth in 2021 and 2022 is estimated to climb to 4.3% before reaching pre-pandemic levels of growth. While some industries such as tourism may remain subdued for a while, other sectors such as “manufacturing, construction and retail and wholesale trade” expect to rebound in 2021. However, Uganda’s economic recovery is currently still tenuous. The government will need to tread carefully as the economy remains vulnerable to the effects of COVID-19.

– Gene Kang
Photo: Flickr

Zuma's Imprisonment
Jacob Zuma, president of South Africa from 2009 to 2018, has received 15 months in prison for contempt of court. Many South Africans, who viewed Zuma and his presidency as corrupt and harmful to their country’s democracy, have long awaited Zuma’s imprisonment and his willingness to serve his sentence. However, there are several factors in Zuma’s life that his supporters point out when contesting his arrest. These include his ties to Nelson Mandela and his role in fighting against apartheid. Those who do not support him accuse him of raising South Africa’s unemployment rates. This has subsequently created an impoverished, undemocratic society that encourages extreme inequalities.

Zuma’s Presidency

Jacob Zuma’s supporters point to the former president’s role in ending apartheid and the sacrifices he made to do so: being imprisoned for 10 years, going into exile in order to best serve the African National Congress (ANC) and finally becoming his nation’s president, all after he had grown up uneducated and impoverished. However, people are re-examining his efforts now that they have accused him of several heinous acts:

  • Many have alleged that Zuma “looted the state’s wealth on a grand scale.”
  • He transformed the ANC into “a vehicle of self-enrichment for many officials.”
  • Furthermore, people have accused him of assassinating rivals who threatened his then newly acquired power and money.
  • Finally, he evaded the South African authorities for years before finally giving himself up.

These acts help explain many public reactions to Zuma’s imprisonment.

Unemployment in South Africa

One of the major criticisms of Jacob Zuma was his unwillingness to address unemployment in South Africa. In 2017, towards the end of Zuma’s presidential term, the unemployment rate in South Africa was 27.7%, an increase from 24.9% since the start of his term. Debt was at an all-time high and businesses were failing. Zuma was unable to lift his country out of the recession that the global financial crash of 2008 spurred. The unemployment rates during his presidency show the push into poverty that many South Africans suffered under his governance. They also exemplify the stark inequalities between the South African public and those in power. Those in power ultimately grew wealthy through investing the country’s money into their own business ventures and lifestyles.

The Aftermath in South Africa

In terms of Zuma’s imprisonment, some South Africans have gone so far as to say that the nine years Zuma was president were “wasted years.” Magnus Heystek, a director and investment strategist, recognized the damage Zuma inflicted, saying that “it will take a stupendous effort by government and private sector to reverse the damage.” He provided a comprehensive list of things South Africa lost between 2009 and 2018 and he included per capita GDP which declined from “8,066 USD per annum in 2011 to 6,268 USD per annum in 2017.” He also includes South Africa’s total debt which stands at approximately 3 trillion rands or around $211 billion. Even more startling is the fact that “Poverty is increasingly visible on every street-corner, in declining car and retail sales, in empty rugby and soccer stadiums, in dwindling golf and bowling memberships. The list is almost endless,” Heystek says.

The Call for Imprisonment

Jacob Zuma’s imprisonment represents a victory for South Africans who believe in democracy and obeying their country’s rule of law. Cyril Ramaphosa, Zuma’s successor, has vowed to “clean up the ANC and the government” while he is in office. His next steps will include building the South African economy back up to where it was before Zuma’s presidency. This is especially important after the COVID-19 further weakened the country’s economy. He will also be working to hold Zuma accountable for bribery and corruption, as well as upholding the notion that South Africa thrives thanks to the rule of law, not because of power and wealth-hungry presidents.

– Grace Manning
Photo: Flickr

Chamas in Kenya
A chama is a micro-saving society that groups of Kenyans use to pool savings. Beginning in the 1960s, chamas in Kenya have become impressive tools of economic empowerment that follow the spirit of harambee, the Kiswahili word for ‘all pull together.’ Their community approach helps alleviate poverty by providing a means to pay tuition for children, make small-scale investments in community development, buy household items and more. More than 40% of Kenyans are chama members.

A Communal Economic Model

To form a chama, a group of around 15-35 people come together through mutual trust and pay a certain amount of money every week or month. The group then uses the money to offer very low-interest loans to members. Additionally, the group may decide to invest in an asset that members can own collectively, such as a piece of land, or in an industry, such as horticulture.

Chama members understand that fighting poverty must go hand-in-hand with psychosocial well-being. They provide each other with access to employment, help when a member gets sick, support at funerals and are joyful at weddings.

Chamas Help Avoid Economic Crisis

Chamas have been vital in helping Kenyans avoid economic crises. In the 1990s, many of Kenya’s informal retailers had to close down their businesses as their suppliers became too expensive due to the liberalization of the economy. Chamas proved tremendously helpful in dealing with rising prices. For example, a group of garment traders created a chama that enabled them to switch to Chinese suppliers and keep their businesses afloat.

Chamas Empower Women

In Kenya, women often have to be financially dependent on men. However, Kenyan women, who make up half the informal sector, have been able to achieve some financial independence thanks to chamas. According to the World Bank, 55% of Kenya’s urban women aged 15-25 are unemployed. Chamas can help them to avoid or escape poverty by securing financial help from their community to become self-employed. All-women chamas like Wikwatyo Wanoliwa (Hope for the Widows) have proven that women are a key demographic in the fight against poverty.

Chamas are also good avenues for community outreach. For instance, in 2017, around 80 women from chamas received training on the Kenyan electoral process and in turn, encouraged thousands of women in their communities to register to vote. Civic education is important in poverty eradication because it empowers women to match their economic decisions in chamas with democratic decisions on the ballot.

Chamas are a creative and resilient way to fight poverty in Kenya. Their intuitive approach to financial security has become so important to the Kenyan financial sector that banks have even started using it as an economic model to lure more clients.

Frank Odhiambo
Photo: Wikimedia Commons

Impact of COVID-19 on Poverty in TurkeyAfter the 2018 currency crisis impeded Turkey’s downward trend in poverty, the COVID-19 pandemic has presented another major setback for the country’s poverty reduction goals. When Turkey suffered its first wave of the pandemic, the country lost 2.6 million jobs, which made up 9.2% of total employment. Populations living above the poverty line, but with high vulnerabilities to economic insecurity, have endured the brunt of these job losses, accounting for six out of 10 of the job losses. The impact of COVID-19 on poverty in Turkey has been severe as COVID-19 disproportionately impacts the impoverished.

The Economic Impacts of COVID-19

The short-term effects of the pandemic on limiting job prospects and on low-income families are immense. In a survey conducted by the Organisation for Economic Co-operation and Development (OECD), more than seven out of 10 respondents from Turkey said they are “concerned” or “very concerned” about their ability to make ends meet in the short term.

Further, the fear of job insecurity has reached a high in the country. In September 2020, a record 1.4 million people were too discouraged to search for work, up nearly threefold from the previous year. A poll by Istanbul Economics Research found that nearly half of those with jobs were “very afraid” of losing them by winter.

A notable rise in the prices of basic goods and services has also added to the concern of low-income families. Items such as bread and cereals, unprocessed foods and transportation rose by 16.3%, 19.8% and 14.7% respectively.

The true extent of the impact of COVID-19 on poverty in Turkey may be much more than first anticipated. Turkey’s official unemployment rate hovered at 12% to 13% during the pandemic. However, alternative calculation methods, which consider those who stopped actively looking for jobs out of despair or due to COVID-19 restrictions, claim a 40% unemployment rate.

COVID-19 Impacts Informal Workers and Working Women

Another impact of COVID-19 on poverty in Turkey is the disproportionate impact on certain segments of the low-income population compared to other segments. The pandemic has resulted in a bulk of job losses for informal and lower-skilled workers. At the peak of the pandemic, informal workers suffered a -0.25% change in year-on-year employment, more than five times what formal workers have endured.

In addition, female workers were three times more likely to become unemployed during the pandemic compared to their male counterparts. This is especially due to Turkish female workers’ higher concentration in jobs that lockdown measures highly affect, such as hospitality, food and tourism.

Recovery Strategies and Results

Turkey’s government swiftly and decisively implemented notable mitigation policies to deal with the crisis, which consisted of increased unemployment insurance benefits, social transfers and unpaid leave subsidies amounting to a welfare shield of about $6.2 billion.

Without these mitigation policies, projections determine that the rise in poverty could have been three times higher. These mitigation policies fostered a significant job recovery in the country. As of September 2020, the country has regained 72% of the lost jobs with the help of the Unemployment Insurance Fund, which contributed monthly allowances to approximately five million laid-off employees.

Room for Improvement

Despite the government’s efforts to minimize poverty stemming from the pandemic, there is room for the government to do more to overcome the disproportionate impact of COVID-19 on poverty in Turkey. While the relief packages of similar countries have reached up to 9% of their GDPs, Turkey’s total relief packages have amounted to less than 1% of its estimated GDP in 2020.

Increased comprehensive government intervention to deal with the rise in poverty is an idea that appears to resonate well with the public. About 80% of Turkey’s citizens think the government should be doing “more” or “much more” to ensure their “economic and social security and well-being.”

Greater investments by the Turkish government, as well as the short-term and long-term development of more comprehensive social safety nets, would mitigate the impact of COVID-19 on poverty in Turkey. Additionally, upskilling, training and other active labor interventions by the Turkish Employment Agency (ISKUR) could be key in closing the worker gaps that the pandemic has widened.

– Gabriel Sylvan
Photo: Flickr

Impact of COVID-19 on poverty in greece
Over the past two decades, Greece has suffered significant economic and social upheaval. After an economic depression and an ongoing refugee crisis, the country now faces a new threat: the impact of COVID-19 on poverty in Greece. The country’s crisis-prompted grassroots culture provides support during another economic setback.

The Economic Crisis in Greece

Following the global financial crisis in 2008, Greece found itself in extreme debt to lenders, specifically Germany and the European Union, forcing Greece to adhere to strict austerity measures such as cutting pensions and increasing taxes. During this period of austerity, Greece’s economy shrank, unemployment rose and poverty soared. In 2017, one-third of the Greek population lived below the poverty line and the unemployment rate was 22%.

Impact of COVID-19 on Poverty in Greece

Before the COVID-19 pandemic, Greece’s economy experienced a period of significant recovery and GDP was on the rise. However, Greece fell into another recession due to the economic fallout in 2020 prompted by COVID-19. As schools closed, businesses shut down and economic activity came to a halt, unemployment and poverty rose substantially.

In 2019, before the COVID-19 pandemic, the European Commission estimated that 30% of people in Greece were “at risk of poverty or social exclusion.” While 2020 data has not yet been analyzed, it is clear that the pandemic sent shock waves through Greece’s slowly recovering economy.

According to an MDPI survey conducted across Greek cities just after the country’s lockdown period in May 2020, 73.3% of respondents said that lockdowns and restrictions significantly impacted them financially. Furthermore, about 9% of respondents experienced job losses and 18.6% received suspensions from work due to the implications of COVID-19.

Migrant workers feel the impact of COVID-19 on poverty in Greece acutely. While most migrant workers are from Albania, others hail from countries like Bangladesh. With government restrictions and limitations on exports, the need for export labor has decreased and earning a daily wage has become increasingly difficult for these workers. In 2020, the unemployment rate stood at 16.85%. Greece currently holds the highest unemployment rate in the E.U.

Grassroots Efforts During COVID-19

While COVID-19 has worsened conditions for the country’s most vulnerable, Greece’s experience with past crises has paved the way for a strong grassroots response. Organizations like the ANKAA Project and O Allos Anthropos are fighting to mitigate the impact of COVID-19 on poverty in Greece. Both founded in the wake of previous crises, the organizations have redirected efforts to help with the COVID-19 crisis in Greece.

The ANKAA Project is a nonprofit organization that began in 2017 to address unemployment in Greece. The organization provides language lessons and vocational skills training to refugees, migrants and unemployed Greek citizens. By equipping people with the necessary skills for employment, the ANKAA Project addresses poverty in Greece. In the wake of the COVID-19 pandemic, the organization transformed its Athens facilities into mask-making workshops. Since the pandemic began, the organization has provided thousands of masks to hospitals and refugee camps in need.

O Allos Anthropos

O Allos Anthropos is “a community soup kitchen in the Kerameikos neighborhood of Athens, Greece.” The organization began in 2011 to help those suffering from homelessness and hunger after the 2010 Greek debt crisis. Before the pandemic hit, the government and local organizations assisted struggling households with meals and food packages.

In mid-March 2020, COVID-19 restrictions meant this assistance came to a halt. O Allos Anthropos was the only organization still providing food assistance. The organization had to rapidly expand its efforts, mobilizing to increase meals from 200 to 2,000 per day. Other humanitarian groups stepped in to assist so that thousands of food packages could be provided across Athens.

While Greece has faced several social and economic disasters over the past decade, the country’s crisis-prompted grassroots culture helps to relieve the impact of COVID-19 on poverty in Greece today.

– Zoe Tzanis
Photo: Unsplash