Information and news about economic crisis

Venezuela’s Rum
Extended hyperinflation continues to cripple Venezuela’s economy with prices of basic groceries skyrocketing to five times the monthly minimum wage from 2015 to 2017. Estimates determined that extreme poverty in Venezuela in 2016 was 82 percent. Yet, there is a shimmer of light with potential economic growth through Venezuela’s rum industry.

Fall in Whiskey Sales

For a long time, people have seen Scotch as a status symbol in Venezuela and often only for the upper-class to enjoy at home or for middle-class friends to have on a night out. In 2007, Venezuelans consumed over three million boxes of whiskey, fifth in consumption worldwide and priced at nearly $151 million in imports. In 2009, imported Scotch whiskey outsold Venezuela’s rum sales nearly two to one.

However, with hyperinflation setting in, reaching over 60,000 percent in 2018 and almost 350,000 percent in 2019, imports experienced restriction and the tightening of currency controls, putting whiskey out of reach for many. At the black market rate, a bottle of Chivas Regal 18-Year-Old Whiskey costs $31, more than the country’s monthly minimum wage.

Rise in Rum Sales

The popularity of whiskey began declining in 2013, with a 29 percent drop in sales. At this point, the country had only recently crossed the hyperinflation threshold of 50 percent, while Venezuela’s rum sales increased by 22.6 percent. During that same time period, domestic rum production increased from 15.8 million to 21.8 million liters.

In addition to the rising cost of imports, the government’s recent introduction of relaxed regulations and loosening price controls has bolstered domestic rum production. This has led to Santa Teresa, one of Venezuela’s rum distilleries, to become the first in the country to release a public offering in 11 years, selling one million shares on January 24, 2020. With banks hesitant to lend, public offerings provide alternative forms of capital that can allow businesses to grow and become more competitive in the global market.

Project Alcatraz

Project Alcatraz, a recreational rugby initiative, launched as a means of rehabilitation and to serve as a deterrent for gang violence after gang members broke into the grounds of the Santa Teresa rum distillery. Now, Project Alcatraz includes vocational training, psychological counseling and formal education, reaching roughly 2,000 adolescents and a few hundred inmates.

Additionally, experts believe that the project has led to a drop in the murder rate of the local municipality. In 2003, the year the project originated, there were 114 murders per 100,000 people; as of 2016, that number had dropped to 13 per 100,000 people.

Cocuy

Venezuelan rum has not been the only liquor that has seen recent success in the country. Cocuy is a liquor similar to that of Mexican tequila because it comprises of fermented agave plants. Cocuy has a long history in the country, with indigenous groups originally making it 500 years ago. The country reportedly outlawed the drink prior to 2006 to boost Venezuela’s rum and beer production and sales. Cocuy production companies regained licensure, resulting in the drink gaining popularity throughout the years. This once stigmatized drink meant for the poor and less refined is now one of choice primarily because of its low price point.

While the rise in domestic liquor sales may be seemingly insignificant, the growth of any domestic industry can play a critical role in the reversal of the economic climate of an impoverished nation. Venezuela’s rum revolution in the past decade could turn the country’s economy around.

– Scott Boyce
Photo: Pixabay

7 Facts About Poverty in Iran
In recent years, absolute poverty in Iran has risen drastically. Action is necessary in order to provide basic needs and prevent more Iranians from falling under the poverty line. Here are seven facts about poverty in Iran.

7 Facts About Poverty in Iran

  1. Economic Downshift: According to the Iranian Parliament’s Research Center, between 23 to 40 percent of Iran’s population will be living in absolute poverty soon. This is due to an increase in unemployment, inflation and a downward trend in economic growth. The Research Center’s report shows that the inflation rate has risen to 47 percent from 2018 to 2019 and estimates that 57 million more Iranians will fall into poverty over 2020.
  2. Support Packages: The Iranian Parliament’s research center recommends that the government send support packages to the Iranians suffering under the worst conditions in order to supply them with basic needs. The government would provide support packages four times a year. It would also include cash cards that people can use only for food items.
  3. Crossing into Poverty: For a family of four living in Tehran, the poverty line rose to a monthly income of 27 million rials or $650 per month. Now, anyone living with a monthly income of $650 per month and under is considered to be living in poverty. The Research Center’s report shows a 22 percent increase in people living in poverty since 2017. The increase means that Tehrani families of four that were not under the poverty line in 2017, now are.
  4. Organizations that Help: The Imam Khomeini Relief Foundation is an Iranian organization that provides support to families living in poverty. The government and private donors support the foundation. The Imam Khomeini Relief Foundation invested almost $155 million in solar plants to assist families living in poverty.
  5. The Weakened Rial: In May 2019, President Hassan Rouhani announced his decision to partially withdraw from the 2015 nuclear agreement. Shortly after, the rial decreased by 3,500 points. In 15 months, the rial went from 40,000 to 156,500 to the dollar.
  6. Sanctions and Corruption: Iran’s banking and oil sectors are its backbone, but U.S. sanctions have greatly affected these sectors, causing an economic crisis in Iran. Many Iranian’s have fallen victim to panic-buying due to fear of price increases. Internal corruption has led to an occasional scarcity of goods due to merchants and entrepreneurs hoarding goods to increase prices.
  7.  Plan B: To generate income, Iranian officials say that they are ramping up non-oil goods. They have also built up a network of traders, money collectors and exchange companies in other countries to get around banking and financial sanctions. If sanctions remain, they plan to export other goods to prevent further economic despair.

In Iran, 26 million people are living in absolute poverty. However, with more support from the Iranian government and better relations with the U.S., Iran’s increase in poverty can come to a halt.

Lisa Di Nuzzo
Photo: Flickr

The Anglophone Crisis in Cameroon
The Anglophone Crisis in Cameroon has internally displaced half a million people. Many are seeking refuge in forests with little access to medical care and portable water. Only recently has the world acknowledged the crisis, despite three years of growing human rights abuses driving the country to the brink of civil war.

The Makings of a Disaster

French and English are the official languages of Cameroon, which consists of 10 semi-autonomous regions. However, the Northwest and Southwest English-speaking regions have felt marginalized by the central government for decades.

Anglophones make up 20 percent of the population and have long complained of few job opportunities and the predominance of Francophones. When the government assigned French-speaking teachers and judges to anglophone schools and courts, anglophone lawyers and teachers felt that it violated their rights, leading to peaceful protests in 2016.

Government security forces responded by killing four protestors and arresting around 100, including several anglophone leaders. The government even banned civil society groups seeking a peaceful solution.

Escalating the Crisis

In 2017, an anglophone separatist group declared a new independent state called Ambazonia. In a pro-Ambazonia demonstration, security forces killed 17 people. The Borgen Project interviewed Mausi Segun, executive director of Human Rights Watch (HRW) in Africa, who said, “If anyone is putting the abuses on both sides on a scale, the government has the upper hand. They have the most effective military equipment.”

Security forces have killed unarmed civilians and burned down villages. Meanwhile, authorities are arresting civilians on suspicion of supporting or belonging to the separatist movement. A number of those held on suspicion are undergoing torture.

Dr. Christopher Fomunyoh, a Regional Director at the National Democratic Institute told The Borgen Project that authorities are catching civilians in a web of violence and mistaken affinity. “They can be arrested for not having their identification card,” he said.

As authorities hold anglophones in detention without trial, lose property and loved ones, resentment and distrust in the government is growing, fueling the grievances of the separatist movement. “We’re concerned the government is throwing the military, and arms and ammunition at a problem that is beyond just a military one,” Segun said.

Armed separatists have committed unlawful abuses as well, including killing security forces, kidnapping students and burning down approximately 36 schools. The International Crisis Group reported the killing of 235 soldiers, along with 1,000 separatists and 650 civilians.

Although one can blame the Anglophone Crisis on a failure of governance, Fomunyoh said that it is no longer a governance issue, “It’s now one of political insecurity.”

International Response

Cameroon now has the sixth-largest displaced population in the world. A wider conflict could threaten the entire region, impacting bordering countries such as Chad and Nigeria, who are fighting Boko Haram alongside Cameroon.

In March 2019, after three years of growing systematic violence, the U.N. human rights chief told the Cameroon government that its violent response will only fuel more violence and the U.N. Security Council (UNSC) held its first meeting on the crisis in the following May. The E.U. called on Cameroon’s government to initiate a dialogue with armed separatists and Switzerland agreed to act as a mediator.

Fomunyoh said that countries may have been slow to respond because they expected African organizations to intervene. The African Union (A.U.) is one such organization, which has intervened in precarious situations before, including South Sudan’s recent crackdown on protestors. The A.U. called on Sudan to restore civil law and expelled the country from the Union. Although the A.U. has endorsed Switzerland’s peace talks, it has yet to take further action.

Solutions

Fomunyoh said that there are three divided propositions to the Anglophone Crisis, “The Amba boys who want separation, those who want a federation and those who believe the status quo is fine the way it is,” however, the first step should be to end this violence.

All parties need to agree to a cease-fire, separatists need to allow children to go back to school and the government should release anglophone prisoners so they can be part of finding a solution. Although the idea of federalism has almost become taboo, Human Rights Lawyer Felix Agbor Nkongho strongly believes it would appease all sides.

“People would have a separation of powers. People would have the autonomy,” said Nkongho. However, the government has made promises in the past it did not keep.

Cameroon’s previous federation dissolved in 1972 under the same government. So, promises to implement any agreement will not mean anything unless the government regains trust. Segun believes this can start by holding those guilty of human rights abuses accountable. “To sacrifice justice on the order peace would only lead to more violence and a crisis later, if not immediately.”

Preventing a future crisis also requires healing from the trauma, which is Fomunyoh’s biggest concern. If the country does not make investments in healing, it could threaten future security by creating an environment where corruption thrives.

“When you have dead bodies in the street when that becomes the norm, then other abuses like assault, rape, theft, are pale in comparison,” said Fomunyoh. The Anglophone Crisis can become much direr and have unintended long-lasting consequences.

International solidarity helped South Africa’s struggle against apartheid. The AU and UNSC helped resolve Côte d’Ivoire’s post-election crisis. There is no reason that Cameroon cannot stop its Anglophone Crisis.

Emma Uk
Photo: Flickr

 

History of the Asian Development BankThe Asian Development Bank (ADB) is a regional bank aimed at fostering social and economic development in Asia. The history of the Asian Development Bank is that of an evolving institution, constantly shifting focus towards new problems and expanding its role in regional affairs.

Founding and Early History

The bank was founded in the early 1960s to foster cooperation among Asian countries and spur economic growth in the region. In 1963, the United Nations Commission for Asia and the Far East held its first Ministerial Conference on Asian Economic Cooperation, where a resolution passed for the creation of this regional bank. The ADB was officially created two years later in Manila, the capital of the Philippines with 31 member states and Takeshi Watanabe residing as president.

OPEC Oil Crisis and Expanding Role

Asia, along with the rest of the world, suffered a severe economic downturn due to the OPEC oil crisis in 1973. The Asian Development Bank responded by increasing funding towards the development of domestic energy sources and infrastructure, to cope with the current shock and mitigate against future instability in the energy markets.  The resources of the Asian Development Bank began to expand during this time period to include increased co-financing and management of other organizational funds. The Asian Development Bank issued its first bond in 1973 worth $16.7 million in Japan.

The ADB also made strides to address the needs of developing nations. In 1974, it established the Asian Development Fund, a program designed to provide poorer nations in the region with safe, low-interest loans to aid in their economic and social development. The positive impacts of the Asian Development Fund on developing economies in Asia came to quick fruition, as some recipient countries’ reliance on the bank’s assistance ended within a decade.

Push for Social Development and Cooperation with NGOs

In the 1980s, the Asian Development Bank shifted its focus away from economic development to initiate support of social development in Asia. It began financing programs related to the environment, healthcare, urban development and women’s issues. In its 1987 policy paper, the Asian Development Bank established a framework for cooperation between the bank and various non-government organizations (NGOs) with the aim of increasing efficacy of social development efforts in the region. During the decade of the 1980s, the Asian Development Bank also expanded its support for infrastructure projects with particular emphasis on energy production, as memories of the OPEC oil crisis were still fresh in the minds of regional policymakers.

Poverty Reduction and the Asian Financial Crisis

With the end of the Cold War, the Asian Development Bank added several new central Asian countries as member states. Fears that the benefits of economic development were bypassing those most in need prompted the ADB to focus its efforts on poverty reduction in the mid-1990s. In 1995, the Asian Development Bank instituted a policy to ensure that 100 percent of its developmental assistance from the was directed to decreasing poverty.

The late 1990s were a dark period for Asia, which was hit hard by the Asian Financial Crisis of 1997. The ADB’s response was a shift towards aiding the poor and creating a social safety net for those hit hardest by the crisis. By 1999, poverty reduction became the top priority of the ADB.

Response to Humanitarian Crises

In the 2000s, the Asian Development Bank expanded its response to the humanitarian crisis in Asia. Following the Millennium Summit of the United Nations, the World Bank established the Millennium Development goals, which include the elimination of hunger and extreme poverty, promotion of universal primary education, reduction in child mortality, gender equality, combating disease, ensuring environmental sustainability, improving maternal health and establishing a global cooperative effort towards development. The ADB committed to helping its member states achieve each of these goals.

In 2003, Asia was struck with a severe acute respiratory syndrome epidemic, illustrating the need for regional cooperation to combat infectious diseases. The Asian Development Bank provided financial support for efforts to combat HIV and the Avian Flu in the region. In December 2004, the Indian Ocean tsunami caused widespread devastation across India, Indonesia, the Maldives and Sri Lanka. The ADB responded to the disaster by providing over $775 million to recovery efforts. In 2005, the ADB mobilized almost $400 million to help the victims of an earthquake in Pakistan.

The history of the Asian Development Bank is one of constant evolution. It was established with open-ended goals and forced to adapt to new challenges as they arose. In the 1970s, the OPEC Oil Crisis forced the bank to invest in energy infrastructure. The financial crisis in 1997 prompted a focus on poverty reduction. Most recently, the natural disasters in the early 2000s catapulted the ADB into disaster recovery. In its eventful 55-year history, the one constant of the Asian Development Bank is its willingness to assume a central role to address regional challenges.

– Karl Haider
Photo: Wikimedia

Cost of Measles
A virus spreads measles; the disease is highly contagious and can cause further serious health problems, including death. Globally, 111,000 deaths occurred from measles in 2017 and most of these deaths were of children under the age of 5. While there is a cost-effective and safe vaccination available, there are gaps in vaccination coverage, especially in developing countries. This allows outbreaks of measles to continue to ravage communities and causes the death toll to rise.

Measles in the Developing World

The global cost of measles is high, but it is highest in the developing world. It is estimated that in the United Kingdom, the medical cost of a single measles case is $307, while the vaccine costs are $1.93. Estimates also determine that currently in the developed world, the cost of a measles outbreak can range between $4,091 and $10,228 per day, depending on the size of the outbreak. Each of these outbreaks can last an average of 17.5 days as well. Economies spending little on health care funding might find the cost of quarantining and ending a measles outbreak daunting and that it would cost more resources and funding than is available.

In 2014, the Federated States of Micronesia saw its first measles outbreak in 20 years. Starting with two confirmed cases of measles, the outbreak grew to over 50,000 people, causing 110 deaths. The cost of this measles outbreak matched the cost of measles outbreaks in the industrialized world; the total costs to treat and contain these 50,000 cases were nearly $4 million costing roughly $10,000 per case. Medical costs accounted for approximately a quarter of the total cost of measles in this example. The other costs came from the loss of productivity for those measles infected as well as their caregivers, and the majority of the cost of this measles epidemic was to contain the outbreak. In total, the country spent around $3.5 million on containment. Containment costs are high for countries struggling to provide health care for their citizens, and the loss of productivity for many families in the developing world can mean the difference between feeding their family and starvation.

Measles’ Recent Appearances

The first quarter of 2019 saw a huge upswing in reported measles cases worldwide versus the same time period a year prior. From January through March of 2019, there were over 112,000 cases, and the vast majority of these cases were from developing countries. For comparison, the same three-month time period in 2018 had only 28,000 reported cases of measles. If the cost of measles containment and medical treatment averaged $10,000 per case, as evidenced by the Federated States of Micronesia, then subject countries have spent at least $1.1 billion in a three-month time span to care for patients worldwide. The effects of the loss of productivity on impoverished families, including starvation, added a deficit of several million more dollars to the cost of measles in 2019.

Combatting Measles

To combat the rise of measles, five leading global health NGOs have formed a partnership to control measles deaths, giving support to immunization drives, and working to lower child mortality rates overall. The partnership includes the American Red Cross, United Nations Foundation (U.N. Foundation), Centers for Disease Control and Prevention (CDC), United Nations Children’s Fund (UNICEF), World Health Organization (WHO) and the Pan American Health Organization (PAHO).

When asked about the origins of the partnership, Timothy E. Wirth, President of the United Nations Foundation, said, “It is increasingly clear that every citizen, every sector and every nation has an interest in working together to promote progress in health, human rights, the economy and the environment. Those who think progress in these areas is elusive need look no further than this very tangible, impressive collaboration.” If ever there was a chance to lower child mortality rates, these five NGOs working in connection with one another would be the closest the world has seen.

Vaccination is the Key

Vaccination rates have drastically improved over the last few decades. Measles outbreaks have dropped 80 percent since the year 2000 thanks to increased vaccinations. One can partly attribute the recent increase in measles cases to a decrease in vaccinations worldwide. The cost of measles outbreaks is far too high to continue battling a disease that people can avoid with a vaccine costing less than $2. The cost of lost productivity can continue the cycle of poverty for developing nations for years to come. Measles vaccinations must increase and become available in all reaches of the world to counter the issues that measles outbreaks pose.

Kathryn Moffet
Photo: Flickr

How the Breakdown of the Nuclear Deal has Affected Poverty in IranAs the relationship between Iran and the U.S. deteriorates, Iran’s quality of living is plummeting, the cost of living is soaring and Iranian citizens are feeling the pressure.

Since the dissolution of the Joint Comprehensive Plan of Action, more commonly known as the Iran Nuclear Deal, in May 2018, extreme hardship has hit the West Asian country. Economic sanctions that were thwarted by the nuclear agreement have been reimposed and are damaging Iran’s oil and precious metal sectors, handicapping the country’s export potential.

The primary component of the economic decline is the dent that sanctions are making in the oil sector–which, according to the World Bank, accounts for two-thirds of Iran’s economic growth.

Post-Breakdown Economic Turmoil

Iran’s oil production has already fallen steadily every month since the breakdown of the nuclear deal, according to the U.S. Energy Information Administration, and the resulting impact on the economy is devastating. On April 2019 the World Bank reported that Iran’s economic growth slowed to 1.8 percent in the first quarter of 2018/2019–down by 4.6 percent from the previous year. Compounded with years of corruption and mishandling of public funds, the breakdown of the nuclear deal has positioned the Iranian economy in a state of stagflation (negative GDP growth) estimated to continue until April 2020.

Compounding the decline in GDP, the national currency has depreciated by around 60 percent on the U.S. dollar. An IMF senior official revealed that the inflation rate could reach 40 percent by the end of 2019. This economic turmoil has reduced accessibility to living essentials, increased societal instability and swelled poverty rates.

Increased Poverty

The World Bank reports that the upper-middle class poverty rate, which is classified as at or under $5.50 PPP (Purchasing Power Parity), is at an estimated 11.6 percent for 2018/2019 and forecasted to grow to 12.6 percent in 2019/2020.

It is essential to note that $5.50 PPP is not daily income–that figure is usually much lower. According to the Global Basic Income Foundation, PPP is defined as the amount a person can afford to spend on any given day, taking into account both earnings and savings. To put this into perspective, 11.6 percent of people in Iran could not afford to buy something today that costs $5.51.

Higher Prices

With the reimposed sanctions resulting from the breakdown of the nuclear deal, accessibility to living essentials is rapidly shrinking. Even humanitarian organizations struggle to acquire adequate supplies to carry out their work due to soaring prices.

A recent report from the Statistical Centre of Iran reveals eye-opening inflation statistics. Between 2018 and 2019, the price of food and drink increased by 43.5 percent,  clothing and footwear by 33.9 percent, housing and utilities by 18.2 percent and health and medical services by 18.8 percent. The overall Consumer Price Index is up by 30.6 percent.

The amalgam of decreasing wages and currency devaluation is restricting Iranian citizens’ ability to acquire necessities. The World Bank expects Iran’s poverty rate to rise to 12.8 percent by 2021.

Humanitarian Response

With poverty levels rising in Iran, humanitarian agencies are stepping up to meet the need. Moms Against Poverty is a nonprofit organization that is working to alleviate poverty in Iran through hunger relief, education and orphan care. Since the breakdown of the nuclear deal, Iran has had a 6.3 magnitude earthquake and major flooding. Moms Against Poverty provided natural disaster victims with food, water and blankets, distributed safe heaters and helped rebuild and furnish health clinics and pre-schools in the flooded areas. The organization also funded 2,000 food baskets for the Persian New Year across three Iranian provinces.

The breakdown of the nuclear deal has been economically painful for Iran. Tensions have only risen since the reimposition of sanctions and, as of now, show no signs of alleviating. There have already been multiple conflicts between the U.S. and Iran in the Strait of Hormuz, Iran’s main shipping route, since the breakdown.

Organizations like Moms Against Poverty provide some poverty relief and help the quality of life for many citizens. However, relief on a nationwide scale could be achieved if U.S.-Iran relations are restored or if Iran can boost its economic growth and halts the devaluation of the national currency. For now, the citizens of Iran are feeling the pressure.

– Zach Brown
Photo: Flickr

10 International Issues to WatchWith the world always changing, there are some issues that remain constant. Some of these issues are directly related to poverty while other events increase the likelihood of creating impoverished communities. Here are 10 international issues to watch in relation to world poverty.

10 International Issues to Watch

  1. Poverty in sub-Saharan Africa
    The good news is that global poverty rates have been dropping since the turn of the century. Nevertheless, there is still work that needs to be done. Approximately 10 percent of people in developing areas live on less than $2 per day. Poverty rates have declined in Eastern and Southeastern Asia, but more than 40 percent of residents of sub-Saharan Africa still live below the poverty line.
  2. Lack of Access to Clean Water
    There are more than 2 billion people in the world who cannot access clean water in their own homes. Lack of access to clean water increases the likelihood of contracting illnesses. When people get sick, they have to spend money on medicine, which can cause families to fall into extreme poverty. In other cases, people have to travel extremely far to collect clean water. Altogether, women and girls spend approximately 200 million hours walking to get water daily. Access to clean water is one of the 10 international issues to watch in relation to world poverty.
  3. Food Security
    By 2050, the world will need to feed 9 billion people, but there will be a 60 percent greater food demand than there is today. Thus, the United Nations is taking steps to address the problem. The U.N. has set improving food security, improving sustainable agriculture and ending hunger as some of their primary focuses by the year 2030. The U.N. must address a wide range of issues to combat these problems. These issues include gender parity, global warming and aging populations.
  4. Improving Education
    Most impoverished communities around the world lack a solid education system. Some common barriers include families being unable to afford school, children having to work to support their family and the undervaluing of girls’ education. UNESCO estimates more than 170 million people could be lifted out of poverty if they had basic reading skills.
  5. Limited Access to Jobs
    In rural and developing communities around the world, there is often limited access to job opportunities. There is a multitude of factors that can lead to a lack of adequate work or even no opportunities at all. Two common roadblocks are a lack of access to land and a limit of resources due to overexploitation. It is obvious that no available means to make money ensures that a family cannot survive without outside help.
  6. Limiting Global Conflict
    When conflict occurs, it impacts the poor the hardest. Social welfare type programs are drained, rural infrastructure may be destroyed in conflict zones and security personnel moves into urban areas, leaving smaller communities behind. At the state level, impoverished communities have lower resilience to conflict because they may not have strong government institutions. Poverty and conflict correlate strongly with one another.
  7. Gender Equality
    From a financial standpoint, gender equality is vital to improving the world economy. The World Economic Forum states that it would take another 118 years to achieve a gender-neutral economy. In 2015, the average male made $10 thousand more a year than their female counterparts. However, there has been an increased amount of awareness on the issue that may lead to an improved economy for all.
  8. Defending Human Rights
    In 2018, the world saw a decline in global freedom. However, over the last 12 consecutive years, global freedom rights have decreased. More than 70 countries have experienced a decline in political and civil liberties. However, in 2019, steps are being taken to limit this problem. At the International Conference on Population and Development, there will be a focus on human rights. France will also align its G-7 efforts at limiting a variety of inequalities.
  9. Responding to Humanitarian Crises
    The 2019 Global Humanitarian Overview shows a large number of humanitarian crises around the world. Between Syria, Colombia and the Democratic Republic of the Congo, there are more than 19 million internally displaced people. In 2019, approximately 132 million people have needed humanitarian help, costing the world economy almost $22 billion.
  10. Climate Change
    From a scientific standpoint, the land temperature has increased by 1 degree C. in the last half decade, and greenhouse gas emissions have risen to their highest levels in more than 800,000 years. This has led to increased storms and droughts throughout the world. In the last 39 years, weather-related economic loss events have tripled.

Even though the world still has many issues to address, progress is being made in a variety of areas that may help limit global poverty. These are but 10 international issues to watch in relation to global poverty. The global awareness of poverty-related issues is something that continues to be extremely important for the advancement of our world.

Nicholas Bartlett
Photo: Google Images

puerto rico
One year ago this September, Hurricane Maria made landfall on the small Caribbean island of Puerto Rico. The Category 4 hurricane left destruction and turmoil in its wake, causing as much as $94 billion in damage to the island and approximately 2,975 fatalities according to the most recent estimates. Since then, there has been an exodus from Puerto Rico to The U.S. mainland of people seeking to escape the economic depression which plagues the island.

The Economic Crisis Leading to an Exodus from Puerto Rico

The damage caused by the Hurricane compounded an already desperate situation for Puerto Rico, which at the time of the storm faced $71 billion in debts and $49 billion in pension liabilities. The financial crisis in Puerto Rico had been in the making since the 1990’s when the island’s government began to borrow billions of dollars in order to pay its bills. The government borrowed from investors and U.S. banks through the sale of bonds until they racked up an enormous debt, which in 2015 surpassed the island’s GDP. The situation went further south in 2013 when bond prices fell and hundreds of millions of dollars in Puerto Rican capital was wiped out.

The faltering economy in Puerto Rico during the early 2000’s incited an early exodus from Puerto Rico by a certain demographic. “Between 2006 and 2013, there was what you could call a brain drain of the island,” explains Jennifer Hinojosa, Data Center Coordinator at the Hunter College Center for Puerto Rican Studies. “Young professionals chose to leave the island in search of education and employment elsewhere. A huge reason for this out-migration was that there were no jobs.”

Hurricane Maria’s Aftermath

When Hurricane Maria came pummeling down upon the island in September of 2017, 44.3 percent of the island’s population was already living in poverty and the unemployment rate was at 10.1 percent. 155 mph winds tore through the island, floodwater more than 30 inches deep ran through neighborhoods, for a long period of time, 100 percent of the island’s population lost electricity and access to food and water was limited for most.

The situation looks dire for many Puerto Ricans who are now trying to rebuild their lives and cope with the severe infrastructural damage caused by the storm. For example, after the storm, some towns had to deal with 80 to 90 percent of their structures destroyed. With long-term damage making recovery efforts slow and difficult, more and more Puerto Ricans are faced with the tough decision of leaving their island to find opportunity elsewhere.

Hinojosa weighed in on this situation explaining that “when Maria hit, everyone was leaving, regardless of socioeconomic status. It was more of a free fall, we’re talking about professionals and low-skilled workers alike. The impact of this was that you had people who couldn’t find jobs in Puerto Rico during the economic crisis period and then you add on top of this another tragedy like Hurricane Maria, the result was that the number of those leaving the island significantly increased and the probability of those who left returning to Puerto Rico became pretty unlikely.” Hinojosa and the Director for Puerto Rican Studies at Hunter College, Edwin Melendez further elaborated on the post-Maria exodus in their report, “Estimates of Post-Hurricane Maria Exodus from Puerto Rico”.

The government of Puerto Rico estimates that by the end of 2018, 200,000 residents will have left the territory for good. In addition, according to Hinojosa’s and Melendez’s predictions, 114,000 to 213,000 Puerto Rican residents will continue to leave the island each year in the aftermath of Hurricane Maria. These numbers are disheartening to those who hope to see the economic situation improve in the country.

The primary reason given in the Centro’s report to explain the exodus from Puerto Rico is that there are not enough jobs to found on the island. The Hurricane dealt a heavy blow to infrastructure in key areas like the country’s electrical system, transportation system and communications network, all of which directly impact the commerce and service sector.

What’s Next for Puerto Rico?

Aside from the immediate destruction and crisis brought about by the Hurricane, the impact of the storm is predicted to influence the island’s economic future for years to come. Some reports suggest that the damage done by Maria could lower Puerto Rican incomes by 21 percent over the next 15 years totaling $180 billion in lost economic output.

Looking towards what’s to come in the future, Hinojosa expressed that, “it’s all dependent on what happens in Puerto Rico. If young people are able to find jobs in The U.S. they will pick up and leave. If the government wants to keep their labor force intact they will have to think about creative ways to better the economy. For many Puerto Ricans, if they find a job in the U.S., and achieve some level of stability, they are going to stay in the U.S.”

The future for the tragedy-stricken Puerto Rican people is uncertain, but what is evident is that at the start of hurricane season this June, thousands of people remained without permanent homes, electricity or employment. In order for people to stay on the island and prevent a continuing exodus from Puerto Rico, major reconstruction efforts must be undertaken so that the country has the opportunity and resources to thrive.

Clarke Hallum

Photo: Flickr

Greece
The past decade has not been kind to Greece. The global recession in 2008 ravaged its markets and cut wages, leaving millions destitute and reliant on government handouts to survive. Despite the fact that a relatively large portion of Greece’s population is educated, many still cannot find employment within national borders. An ongoing EU bailout in the magnitude of billions of dollars has not brought an end to the financial predicament of Greek citizens. Here are the top 10 facts about poverty in Greece.

10 Eye-Opening Facts About Poverty in Greece

  1. The Greek unemployment rate, though lower than it was in 2014, sits at 20 percent — a fifth of the population cannot find a source of steady income. It comes in at last of all countries in the EU.
  2. The government is still largely inefficient, and its bureaucratic functions are largely characterized by personal connections and a lack of transparency. The Tsipras administration, which came to power in 2015, has failed to affect significant change.
  3. The recent fires in Greece took 93 lives. Investigations have shown both the possibility of arson and insufficient responses from the government to have exacerbated the fires.
  4. Slightly over 34 percent of Greece’s population is deemed to be at risk of poverty — one of the most unnerving facts about poverty in Greece. However, without government handouts and pensions, this figure would leap to nearly 51 percent.
  5. The Greek brain drain remains high, though slowing down in recent years. Over 130,000 postgraduates have left Greece since 2010, a trend that bears dire consequences for the future of Greece if they do not return.
  6. Greece’s GDP has recovered somewhat since its implosion in 2008. GDP growth was estimated at -0.2 percent in 2015, 0 percent in 2016 and 1.8 percent in 2017. GDP is a measure of economic performance and individual wealth, and last year’s small surge is good news for a country whose GDP had shrunk by a quarter from 2007.
  7. The fertility rate in Greece went from a local high of 1.5 births per woman in 2009, to a low of 1.29 in 2013 and steadily climbed (though very slowly) to 1.33 in 2016. Too-low fertility rates result in an aged and reduced workforce that cannot meet the demands of the market, culminating in a lack of competition and economic decline.
  8. Facts about poverty in Greece relating to children are the worst off in the European Union. The poverty rate for minors stands at 45 percent, according to a report by UNICEF in 2017.
  9. After a decade of international economic bailouts and austerity packages valued at nearly 250 billion euros, or $288 billion, Greece is due to stop borrowing by the end of this summer. If it maintains an efficient budget and pays back its debts, Greece can finally re-enter the international market as a self-sustaining economy.
  10. In March 2018, the Bank of Greece reported a 7 percent drop in the number of nonperforming loans or unpaid loans. At about 43 percent, it still has major hurdles to overcome; the EU average is below 10 percent.

Hope on the Horizon

Despite the palpable negativity of these top 10 facts about poverty in Greece, hope is on the horizon. The economy is better off now than it was at the height of the recession; though growth is slow, consumer confidence has grown and individual spending has increased in the past year. Foreign investment is also mounting — an indication of international expectations of an economic recovery.

Greece’s government is the crucial actor. If it blunders in its management of foreign debt and continues its streak of opacity, Greece could head towards another economic recession. If it initiates sizeable social and economic reforms ahead of expectations in the international community, Greece could even reach past its previous economic heights before the recession. Time will tell.

Alex Qi
Photo: Flickr

Facts About Poverty in South America
Substantial parts of Africa, Western Asia, South America and the Caribbean are regions that grapple with scant economic growth and poverty. South America alone consists of twelve sovereign states, most of which are subject to low per capita GDP and high rates of poverty. Here are ten facts about poverty in South America:

10 Facts About Poverty in South America

  1. South America (SA) suffered the onslaught of European colonization roughly from the 15th to the 17th Centuries. The Iberian colonial policies led to uneven distribution of land and insecure property rights, which in turn contributed to persistent economic and political inequality until the 19th and 20th Centuries. Oxfam reported in 2016 that Latin America still has the most unequal distribution of land in the world, which in turn “limits employment; increases urban poverty belts, as people are expelled from rural areas; undermines social cohesion, the quality of democracy, environmental health; and destabilizes local, national and global food systems.”
  2. In 2016, there was an estimated rise in poverty in SA from 28.5 percent in 2014 to 30.7 percent. In fact, 61 million people live in extreme poverty and 220 million people live on less that $10 a day in this region.
  3. The entire region of SA was majorly affected by the economic crises of the two largest countries on the continent — Brazil and Argentina between 1998-2002. By 2001, the IMF feared that Argentina’s fiscal policy, public debt and currency board would become unsustainable. The holdouts case in Argentina (2005) and the Petrobras scandal in Brazil (2014) later created a chaotic and fragile economic scenario. In fact, Argentina is still trying to recover from high inflation and its currency crunch. Brazil’s external debt in 2017 was 26.5 percent of its nominal GDP and government debt was 74.04 percent of the GDP. Venezuela’s wavering economic policies, economic collapse and inflation have also contributed to the scale of poverty in the region.
  4. Of the ten facts about poverty in South America, eco-political causes hold a special mention. Discovery of rampant corruption and bribery in Brazil’s state-controlled oil giant, Petrobras, and other industries led to largescale arrests of company officials and many politicians. This in turn caused a loss of jobs for thousands of employees and a huge economic set-back. A dip in international oil prices further affected the Brazilian economy, as did the the arrest of Odebrecht’s chief executive and lay-offs in 2015. The unemployment rate in Brazil remains at a high of 11.8 percent. Argentina, too, has suffered the economic consequences of a sovereign debt default since 2001. It has encountered a decline in GDP and inflation, resulting in recession. The MIT Billions Project in 2014 quoted an annual inflation rate of 40 percent in Argentina. Venezuela is on the verge of defaulting its foreign debt and has encountered a massive decline in its GDP accompanied by inflation. Ever since the 2014 economic recession, Venezuelans have been suffering from poverty, high mortality rates, unemployment, lack of medical facilities and hunger.
  5. Large-scale unemployment followed by economic recession, strict government regulations, corruption and other factors have led to the creation of a parallel or informal economy in many of these SA countries. These illegal businesses evade state-regulations, taxation, social security contributions, market standards, minimum wage/work hour policies and thrive as shadow economy. While a certain portion of the money earned is spent directly on the official economy, these underground businesses lead to tax evasion, reduced tax revenue, increased tax rates, lower wages and work hours, corruption and inflation.
  6. According to the World Hunger Report, despite being successful in tackling food insufficiency, SA saw a rise in undernutrition from 5 percent in 2015, to 5.6 percent in 2016. As of 2018, the economic crisis in Venezuela led to devastating food shortage and starvation. The United Nations Organization for Food and Agriculture estimates that more than 42 million people in South America are suffering from hunger.
  7. The Word Bank observes that while more children have started going to school, there still remains a disparity in access to education based on the huge income gap in these countries. The other factor affecting education lies in the urban-rural divide, with the latter having lower rates of secondary-school enrolment.
  8. Brazil and Colombia, which make up a large portion of the region’s population, have been experiencing a decline in fertility and mortality rates alongside new health problems from industrialization and urbanization. The health infrastructure in these countries are not up-to-date and people have limited access to safe water and sanitation facilities. Economic inequality adds to the lack of equal distribution of health services and access to healthcare.
  9. Despite the scale of poverty in SA, consistent steps are being taken to ameliorate poverty across the region. Oxfam has been urging the governments to redistribute land evenly, protect territorial rights of indigenous communities, prevent depletion of natural resource and establish fair taxation. The U.N.’s Food and Agriculture Organization and the International Fund for Agricultural Development have been proposing ways to end rural poverty and increase employment. Since the 1990s, attempts have been made by the governments to improve the healthcare system through reforms. Several banks have been trying to ease the monetary policies and rates of interests.
  10. The 2018 World Economic Situation Prospects Report states that the region’s economy has grown by one percent in 2017 and is expected to increase to 2.5 percent in 2019. The recovery will be largely a result of improved economic activity in SA.

Future Efforts

The ten facts about poverty in South America listed here provide a general yet critical understanding of aspects of poverty in the region. Unequal land/wealth distribution, corruption and eco-political instability still remain some of the common and overarching reasons behind the region’s struggle with poverty and its aftereffects.

– Jayendrina Singha Ray
Photo: Flickr