Law in Timor-LesteAll states face economic, social and political pressure, but when the pressure exceeds a state’s ability to control it, the state becomes fragile. The Fund for Peace uses the Fragile States Index (FSI) to assess the vulnerability of 179 countries every year. The Southeast Asian nation of Timor-Leste has shown significant decreases in economic and environmental fragility in recent years. In 2020, for the first time, the Organization for Economic Cooperation and Development’s (OECD) report on the state of fragility did not list Timor-Leste as a fragile state. In the FSI’s 2021 report, Timor-Leste ranked first of all the world’s countries for yearly reduction in overall fragility score. Improvements to fragility and rule of law in Timor-Leste have also helped the nation reduce poverty.

History of Timor-Leste

Timor-Leste, formally known as East Timor, is one of the world’s youngest nations. It was a Portuguese colony until 1975, then remained under Indonesian sovereignty until 1999. In 1999, the U.N. organized the East Timorese Independence Referendum, in which citizens chose independence over greater autonomy within Indonesia.

Timor-Leste became the first new sovereign state of the 21st century after the formal ratification of independence in 2002. Timor-Leste has devoted the last 20 years to rebuilding infrastructure and formal institutions damaged by past conflict. Around 1.3 million people call the newly peaceful, democratic nation home.

Economic Growth in Timor-Leste

Timor-Leste’s poverty rate dropped from 50% in 2007 to 42% in 2014, indicating economic growth. Less poverty means less violence, so the drop in poverty means improvement in fragility and rule of law in Timor-Leste. The Timorese government has put great effort toward reducing disparities within the economy, especially through education.

After decades of conflict, the Timorese needed to rebuild nearly all institutions from the ground up. Between 2005 and 2008, the government devoted significant funding to primary education, leading primary education enrollment to increase from 68% to 85%. However, older youth and adults still lacked the education to participate fully in society and the economy.

In 2010, with only 36% of the population functionally literate, the World Bank launched the Second Chance Education Project. The program set up nine community learning centers with flexible hours, providing a second chance to those too old for primary school. By the time the project ended in 2017, 1,670 students had participated in the mature education course, 55% of whom were women. Timor-Leste’s recent efforts put the country on target to achieve U.N. Sustainable Development Goal 4 (quality education) by 2030.

Social Improvements

Improvements in health and nutrition directly improved fragility and rule of law in Timor-Leste. Malnutrition is the country’s leading cause of premature death and disability. Timorese children suffer the third highest stunting prevalence in the world, with more than 50% of children younger than 5 identified as stunted. Experts believe that loss of productivity due to malnutrition costs Timor-Leste $40 million per year.

To combat malnutrition, the World Bank implemented the Community Driven Nutrition Improvement Program. Operating in 49 villages, the four-year program taught families how to grow and cook nutrient-rich foods. The program gave more than 1,000 families sweet potato cuttings and provided more than 400 families with seeds for their home and community gardens.

With the help of the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM), Timor-Leste has also brought its malaria epidemic under control. The GFATM funded and helped launch the National Malaria Control Program in 2003. Following the launch, Timor-Leste saw a 97% decrease in reported cases, which dropped from around 223,000 cases in 2006 to only around 6,200 in 2012. The program followed a six-part strategy:

  1. Enhance early detection and effective therapies.
  2. Distribute long-lasting insecticidal nets.
  3. Conduct indoor residual spraying.
  4. Improve epidemic prevention, preparedness and response.
  5. Educate the public.
  6. Enhance monitoring and research.

Political Improvements

Timor-Leste’s democracy continues to flourish. Since gaining independence in 2002, the state has successfully held four peaceful, free and fair multi-party elections, all of which ended with a smooth transfer of power. Democratic stability will continue to improve fragility and rule of law in Timor-Leste. As one of Southeast Asia’s most stable democracies, the 2020 Sustainable Development Goals (SDG) Report classified Timor-Leste as on target for SDG 16 (peace, justice and strong institutions).

The Timorese government now prioritizes rebuilding infrastructure and public services. The Timor-Leste Road Climate Resilience Project is currently restoring 110 kilometers of road connecting three of the main districts in the country. Inability to travel throughout the country isolates communities and isolation hurts the economy. The project will connect 410,000 citizens, encouraging greater economic activity. The road will also help decrease malnutrition by giving families access to diverse foods grown in other parts of the country. The road restoration project is nearly 80% complete.

Goals for Timor-Leste Through 2024

In November 2019, the World Bank Group established the Country Partnership Framework for Timor-Leste. It plans to transform Timor-Leste’s “natural wealth into improved human capital and sustainable infrastructure” with three main objectives:

  1. Promote private sector-led growth and diversify the economy.
  2. Improve human capital.
  3. Continue to rebuild infrastructure, especially transportation.

Along with Timor-Leste, the OECD also removed Egypt, Malawi, Nepal and Rwanda from the list of fragile nations in 2020. As fragility and rule of law in Timor-Leste and other nations improve, their neighboring nations will also find more stability. There is always room for improvement but the world should take a moment to celebrate the significant progress in the small, young country of Timor-Leste.

– Ella LeRoy
Photo: Flickr

Economic Expansion and Poverty Reduction Over the past half-century, Asia has become the world’s standard-bearer for both economic expansion and poverty reduction. Asia has made tremendous growth that accompanies poverty reduction.

Asia’s Economic Profile

In 2020, the Gross Domestic Product (GDP) of Asia was greater than the GDP of the rest of the world combined. Experts estimate that by 2030, the Asia-Pacific region will account for 60% of the world’s economic growth.

Tremendous economic growth is not a new phenomenon in Asia. In fact, since 1960, Asia’s economy has grown at a higher rate than any other continent. East Asia’s economy, specifically, has exceeded the rest of the world over the same time frame. Japan kickstarted Asia’s period of growth after World War II. Soon after, the “four dragons” —  Taiwan, Singapore, Korea and Hong Kong, emerged. The dragons each experienced tremendous and sustained economic growth in the latter half of the 20th century. In 1978, China opened its economy to the world, marking a huge leap forward for Asia’s economy.

With economic growth comes an increase in prosperity as the Asia-Pacific region is home to 90% of the world’s new members of the middle-class. While Asia’s economic prospects are tremendously promising, economic growth does not always translate into advancements in quality of life. Poverty reduction is an essential component of improving living standards and poverty reduction in Asia has been an important focus for Asian governments.

Poverty Reduction in Asia

Since the beginning of Asia’s period of tremendous economic growth, the region has seen similarly tremendous progress in poverty reduction. Asia continues to lead the world in poverty reduction.

No single country is more responsible for this achievement than China. In the last 30 years, more than 700 million people in China have made it out of extreme poverty. On a shorter time scale, China’s efforts to reduce poverty have yielded similarly promising results. From 2015 to 2019, China reduced poverty from 5.7% to 0.6% of the total population. In February 2021, China officially celebrated the end of absolute poverty, defined as the level at which a person cannot afford to meet their basic needs like food, water, healthcare, education and more.

Room for Improvement

Economic growth is not solely responsible for the successes of poverty reduction in Asia. In fact, as economic growth has progressed, Asia has actually experienced diminishing marginal returns in poverty reduction. In other words, as Asian economies have continued to grow, the growth has had a reduced effect on poverty reduction rates. Economic expansion and poverty reduction do not always happen equally. Policy is still needed to ensure poverty does not become a hidden issue. Despite all the expansion of the past 50 years, poverty in Asia is still a significant problem.

Asia’s progress in reducing poverty has been substantial but continued efforts are needed to truly eradicate poverty with further progress. There are still more than 320 million people in Asia who live in extreme poverty, defined as less than $1.90 a day. Furthermore, the COVID-19 pandemic has negatively affected poverty reduction in Asia. A World Bank report in September 2020 estimated that for the first time in 20 years, poverty could rise in East Asia. It estimated that as many as 38 million East Asian people could fall below the $5.50 poverty line. As such, continued focus on poverty reduction efforts is crucial, now more than ever.

Leo Ratté
Photo: Flickr

Africa's Digital Economy ContributesDigitalization is not new to the African economy. However, with the COVID-19 pandemic, the need to improve and expand Africa’s digital economy has become evident. With intentions to minimize the health and economic risks of the pandemic, African businesses are implementing strategies that will lead to the rise in digital transformation. Economic sectors such as banking, transportation, agriculture and telecommunication have already digitally evolved to adjust to the economic climate and health crisis. Most importantly, Africa’s digital economy contributes to the U.N. Sustainable Development Goals (SDGs).

Developing Africa’s Digital Economy

The World Bank started the Digital Economy Initiative for Africa (DE4A) in mid-2019 to accelerate digital enabling achievements as part of the 2030 SDGs. As the COVID-19 pandemic transpired, the rise in digitalization laid expectations for more transformations in the coming years. With investments being made, Africa’s booming digital economy contributes greatly to the SDGs.

A digital economy would create more jobs, promote entrepreneurship and introduce new markets. Reaching DE4A’s targets would raise growth per capita by 1.5 percentage points annually and poverty would be reduced by 0.7 percentage points per year. In addition, this approach takes into account that only 27% of the African population has access to the internet. Increasing access to digital resources will be the focus of the five pillars of the DE4A. This includes digital infrastructure, digital public platforms, digital financial services, digital businesses and skills.

Growing the Economy by Promoting Digital Transformation

The African Union (AU) has launched the Digital Transformation Strategy for Africa (2020-2030). The initiative strives for a collaborative digital single market, building on the recent trade initiative, Africa’s Continental Free Trade Area (AfCFTA). This would facilitate the movement of digitized services and propel the expansion of internet access across the continent.

Notably, the initiative also promotes innovation and digital upskilling with development programs. The e-skills vocational program will reach 100 million Africans a year by 2021 and 300 million annually by 2025. This would not only integrate Africa into the digital era but create new opportunities for startup businesses.

An important tool to achieve the initiative’s objectives is collaboration with policymakers. The government plays an important role in the promotion of market transformation. As a result, the AU will propose actions to equip educational institutions with renovated technology, promote digital rights and security awareness.

Significant growth will occur when stable infrastructure is built for the 200 million people currently without internet access. Addressing this digital divide is how Africa’s digital economy contributes to the SDGs as it plans to build resilient infrastructure, create sustainable industrialization and foster innovation.

Investing in Digital Resources

There are many investment opportunities in Africa’s digital economy as a myriad of sectors start transitions. For example, banking in Africa is experiencing major changes. Mobile-based digital banks provide access to transaction activity, savings, loans and other financial services. Banking in Africa is expected to increase to $53 billion by 2022 so long as digitalization continues, contributing to the DE4A’s digital financial service objective.

Additionally, large international corporations have set foot in Africa, which will further increase investment flow. In 2019, Amazon Web Service launched its first data center in Africa. Likewise, Microsoft expanded its cloud services and opened its first data centers in South Africa. With two of the biggest players in the global digital economy in Africa, increased access to methods for digital transformation for businesses becomes more feasible. Digital transformation in Africa has the potential to significantly reduce poverty on the continent.

Malala Raharisoa Lin
Photo:Flickr

Renewable Energy in BarbadosBarbados is quickly becoming a leader in renewable energy. A former English colony, Barbados is a small island in the Caribbean known for its scenic beaches and tropical ecosystem. Natural disasters in the past and the COVID-19 pandemic have highlighted the need for a more diverse economy in Barbados. Renewable energy is a promising solution moving forward. Barbados is investing in renewable energy to reduce poverty and ensure sustainability.

4 Facts About Renewable Energy in Barbados

  1. Investing in the Future – Barbados may be a small island but it has taken large steps to transition to renewable energy. By 2030, Barbados plans to have 100% of its energy consumption come from renewable sources. Although this goal may be ambitious, Barbados put its words into action by securing loans, including a $30 million loan in 2019 from the Inter-American Development Bank. The focus is on building solar photovoltaics for both residential and commercial purposes. Barbados is also interested in growing wind, waste, biomass and ocean and wave energy in order to modernize its energy grid while cutting costs for energy imports and creating jobs.
  2. Geographic Advantages for Wind and Solar Energy – The political feasibility of renewable energy in Barbados is unique because it does not have large petroleum reserves that would cause competing interests. This is a problem that is characteristic of countries in other regions such as North America and the Middle East. The tropical climate in Barbados makes it ideal for wind and solar energy. Barbados averages 8.3 hours of sunshine per day and 5.6 kilowatts of solar irradiation per square meter. Additionally, the annual wind speed averages 5.5 meters per second. These averages make Barbados well-positioned to utilize wind and solar energy compared to the rest of the world. Barbados also has the ability to use the ocean not only for energy produced by water but for installing offshore wind turbines. The ocean provides stronger wind regimes. Since there is very little space to build large wind turbines onshore, this feature will become increasingly valuable.
  3. Renewable Energy Cuts Costs – Barbados experiences very high electricity costs due to its reliance on crude oil. The high electricity bills for an individual household or business and the economic burden of purchasing oil from other countries caused the need to transition to renewable energy. Fuel reflects an average of 15% of its import costs and about half of this is used just for generating electricity. Cutting down the cost of fossil fuel spending and having a more sustainable and efficient energy source would cut costs for citizens and improve the overall economy.
  4. Economic Vulnerability – Because of the COVID-19 pandemic, the economy of Barbados has suffered a major setback. With 40% of its GDP and 30% of the workforce in the tourism industry, many are without an income. About 90% of the industry, including hotels, had to close or reduce their normal operating levels because of the pandemic. In addition, Barbados has a hurricane season every year. Hurricanes damage infrastructure, harm the health of beaches and prevent tourists from coming to the island. Hurricane Dorian cost the country an estimated $3.4 billion or a quarter of its GDP when it hit the island in 2019. In the United States and around the world, renewable energy jobs are some of the fastest-growing occupations. Barbados would greatly benefit from being a part of the trend.

Moving Forward

Barbados is planning ahead for its future and moving forward with renewable energy to ensure economic stability and lessen the effects of natural disasters. The country stands as a strong model for other nations in approaching renewable energy and preparing for the future.

Stephen Illes
Photo: Flickr

the AfCFTATrading within the African Continental Free Trade Area (AfCFTA) finally took effect on January 1, 2021. The AfCFTA is the world’s largest trading area since the establishment of the World Trade Organization with 54 of the 55 countries of the African Union (AU). The AfCFTA was established by the African Continental Free Trade Agreement signed in March 2018 by 44 AU countries. Over time, other AU countries signed on as the official start of trading under the provisions of the agreement approached. The AfCTFA is projected to create opportunities and boost the African economy. By facilitating this intra-African trade area, the international community expects sustainable growth and increased economic development.

The Implementation and Benefits of the AfCFTA

  1. Creating a Single Market. The main objective is to create a single market for goods and services to increase trading among African nations. The AfCFTA is tasked to implement protocols to eliminate trade barriers and cooperate with member states on investment and competition policies, intellectual property rights, settlement of disputes and other trade-liberating strategies.
  1. Expected Economic Boost and Trade Diversity. UNECA estimates that AfCFTA will boost intra-African trade by 52.3% once import duties and non-tariff barriers are eliminated. The AfCFTA will cover a GDP of $2.5 trillion of the market. The trade initiative will also diversify intra-African trade as it would encourage more industrial goods as opposed to extractive goods and natural resources. Historically, more than 75% of African exports outside of the continent consisted of extractive commodities whereas only 40% of intra-African trade were extractive.
  1. Collaborative Structure and Enforcement. All decisions of the AfCFTA institutions are reached by a simple majority vote. There are several key AfCFTA institutions. The AU Assembly provides oversight, guidance and interpretations of the Agreement. The Council of Ministers is designated by state parties and report to the Assembly. The Council makes the decisions that pertain to the Agreement. The Committee of Senior Trade Officials implements the decisions of the Council and monitors the development of the provisions of the AfCFTA. The Secretariat is established as an autonomous institution whose roles and responsibilities are determined by the Council.
  1. Eliminating Tariffs. State parties will progressively eliminate import duties and apply preferential tariffs to imports from other state parties. If state parties are a part of regional trade arrangements that have preferential tariffs already in place, state parties must maintain and improve on them.
  1. Settling Trade Disputes. Multilateral trading systems can bring about disputes when a state party implements a trade policy that another state party considers a breach of the Agreement. The AfCFTA has the Dispute Settlement Mechanism in place for such occasions which offers mediated consultations between disputing parties. The mechanism is only available to state parties, not private enterprises.
  1. Protecting Women Traders. According to UNECA and the African Trade Policy Centre, women are estimated to account for around 70% of informal cross-border traders. Informal trading can make women vulnerable to harassment and violence. With the reduced tariffs, it will be more affordable for women to trade through formal channels where women traders will not have to put themselves in dangerous situations.
  1. Growing Small and Medium-Sized Businesses. The elimination of import duties also opens up trading activities to small businesses in the regional markets. Small and medium-sized businesses make up 80% of the region’s businesses. Increased trading also facilitates small business products to be traded as inputs for larger enterprises in the region.
  1. Encouraging Industrialization. The AfCFTA fosters competitive manufacturing. With a successful implementation of this new trade initiative, there is potential for Africa’s manufacturing sector to double in size from $500 billion in 2015 to $1 trillion in 2025, creating 14 million stable jobs.
  1. Contributing to Sustainable Growth. The United Nations 2030 Agenda for Sustainable Development includes goals that the AfCFTA contributes to. For example, Goal 8 of the Agenda is decent work and economic growth and Goal 9 is the promotion of industry. The AfCFTA initiative also contributes to Goal 17 of the Agenda as it reduces the continent’s reliance on external resources, encouraging independent financing and development.

AfCFTA: A Trade Milestone for Reducing Poverty in Africa

The establishment of the AfCFTA marks a key milestone for Africa’s continental trade system. The size of the trade area presents promising economic development and sustainable growth that reaches all market sectors and participants. Additionally, the timing of the initiative launch is expected to contribute to the alleviation of the pandemic’s economic damages.

Malala Raharisoa Lin
Photo: Flickr

Hemp production in PakistanIn September 2020, the Pakistani Government approved industrial hemp production, legalizing hemp and allowing hemp farming in agricultural sectors. Hemp is a type of cannabis plant, used commonly for medicinal purposes due to its cannabidiol (CBD) concentration. Considering the many benefits of hemp production, this landmark decision brings exciting possibilities for many areas in Pakistan. Since the economy of Pakistan has been long in need of a boost, the new approved hemp production and legalization is said to bring economic benefits to the country.

The Economic Benefits of Hemp Production

Officials in Pakistan’s government encouraged hemp legalization and production in efforts to relieve fiscal deficits and Pakistan’s struggling economy. Considering the industrial hemp market is worth about $25 billion globally, Pakistan’s science and technology minister, Fawad Chaudhry, says Pakistan is aiming for a profit of $1 billion over the next three years by joining the global hemp market. Exports in hemp can target CBD oils and cannabis-based products and can be a sustainable cotton replacement during slowdowns within the cotton industry.

A Sustainable Replacement for Cotton

Hemp production in Pakistan is most exciting to the workforce, especially for farmers participating in hemp markets and those working within the cotton industry. Cultivating hemp will create more jobs for the small-scale farmers responsible, but more importantly, become a sustainable replacement for cotton in Pakistan’s markets. As the fourth biggest cotton producer in the world, Pakistan’s cotton production has been declining due to climate change, water scarcity, locust attacks and industrial imbalances such as declining prices and low-grade seeds. The hemp plant’s stalk has strong properties of cellulose-rich fiber which is an effective ingredient in the making of paper, rope, construction and reinforcement materials, due to its strong fiber components. Hemp, therefore, makes for a worthy sustainable replacement to cotton.

Hemp Research Possibilities

For researchers, hemp production in Pakistan is exciting for many reasons. With the new hemp legalization, hemp research is no longer taboo, according to Muhammed A. Qayyum, an advisor in the Pakistani government and the director of Medics Laboratories. With this new allowance, researchers can delve into more potential applications of hemp in medicine and more.

Medicinal Properties of Hemp

Advocates have listed numerous medicinal properties to hemp, more specifically, the chemical cannabidiol (CBD) within the plant. Cannabis is seen as medically beneficial as the cannabinoid compound is said to relieve pain and regulate appetite, mood, memory inflammation, insulin sensitivity and metabolism. Hemp is also a valuable food supplement, incorporated in gluten-free products to increase nutritional value from hemp’s high levels of fiber and proteins.

The Potential of the Hemp Industry in Pakistan

With this new federal approval, Pakistan can enter global markets as a new exporter of CBD with the ability to generate millions of revenue similar to China, the United States and India. Hemp production in Pakistan opens up a wide range of possibilities but also brings thousands of jobs across multiple fields such as farm work, production, marketing, transportation, research and medicine. As a flexible crop, the hemp market can address several demands, from textiles, clothing, home furnishing and industrial oils to cosmetics, food and medicine.  Holding an overall market value of more than $340 billion and 263 million cannabis consumers worldwide, Pakistan’s economy can shift dramatically with the newly approved hemp production.

Linda Chong
Photo: Flickr

investing in BrazilThere are numerous reasons to invest in foreign aid in general. That can include partaking in growing the global economy, promoting international human rights and opening donor countries to potential investment returns. What makes Brazil a particularly good market to invest in is its promising role in the global economy. There are several reasons why investing in Brazil is beneficial.

COVID-19 Response

As of January 2021, Brazil has the third-most COVID-19 cases worldwide. The Brazilian economy was not in its best shape at the start of the pandemic because it has not fully recovered from the 2014-2015 recession. This made the economy vulnerable to precarious economic shocks that resulted in increased poverty, unemployment and small business fragility.

The COVID-19 pandemic has left countries like Brazil with possible lasting economic damages. Many emerging and developing countries rely heavily on foreign aid for financial and humanitarian support. Offering foreign aid to Brazil will not only help pave the way for a domestic post-COVID recovery but also alleviate some of the negative impacts of the pandemic through humanitarian benefits.

Diversified Opportunities in Emerging Markets

The Brazilian economy is classified as an emerging market. Emerging markets are economies that are transitioning into a developed economy. Since the launch of the MSCI Emerging Market (EM) Index in 1988, which measures portfolio performances of emerging markets, investing in emerging countries proved to create new and diversified opportunities outside of common markets.

Market Expansion and Economic Growth

Since 2016, Brazil has shown an increase in GDP growth with approximately a 1.3% increase. In 2020, Brazil fell back into recession because of COVID-19. However, Brazil’s economy displayed growth and has played an important role in the growth of the Latin American economy as it makes up 35% of the Latin American GDP. It is approximated that the Brazilian market reaches 900 million consumers in just the Americas.

On how quickly the Brazilian economy rebounded, Bloomberg reports boosted domestic demand and exports with a 9.47% rise in economic activity index from July to September of 2020 in comparison to the previous months.

As Brazil recovers from COVID-19’s economic impact, it leaves opportunity for foreign investors to take advantage of Brazil’s growing market, especially with its low interests. Some of Brazil’s profitable sectors include real estate and agricultural goods like coffee, sugar cane, corn and soybean. Participating in these sectors expands Brazil’s domestic market and hence the world market size.

Geographical Location

Especially for the United States, Brazil’s proximity allows easier trade. For other advantages, Brazil’s geographical properties for the agriculture sector also make its commodities attractive. Approximately 28.7% of land is used for agricultural production which makes up more than 4% of the annual Brazilian GDP. Following China, the United States and Australia, Brazil has the fourth-most amount of agricultural land.

Foreign Investment Returns

Encouraging enterprises to invest in foreign aid can ultimately result in great returns. A common type of foreign aid for these corporations is Foreign Direct Investment (FDI). Through FDIs, corporations can potentially gain lasting interests, multinational consumers and flexible production costs. This type of foreign aid also brings developing countries like Brazil innovative technology, investment strategies, jobs and infrastructure from investing corporations of developed nations.

Foreign investment is critical to developing and emerging markets. Investing in Brazil promotes development and sustainability and also benefits foreign investors greatly. Furthermore, foreign investment assists economic recovery following unforeseen economic shocks like that of the COVID-19 pandemic.

Malala Raharisoa Lin
Photo: Flickr

Sustainable Development in Chad
Chad, a landlocked country in Sub-Saharan Africa, is one of the poorest countries in the world. With a poverty rate of around 40%, Chad’s life expectancy is only 58.3 years. Only two million of the roughly four million people in dire need of assistance are actually receiving any. Additionally, Chad is surrounded by countries undergoing civil wars, putting further pressure on its infrastructure through refugee flows and inhibiting sustainable development in Chad.

Chad was also hit especially hard by the HIV/AIDS epidemic, with 120,000 people living with HIV in 2018. HIV/AIDS in Chad spread quickly due to a lack of healthcare infrastructure. The country has very few healthcare workers. There are only 3.7 doctors for every 100,000 people throughout the entire country. This is even worse in rural areas, given that healthcare workers are concentrated in just 1 region. In this 1 region, 65% of the entire country of Chad’s doctors practice medicine.

Africare Background

Fortunately, some organizations are stepping in order to try and solve this problem through sustainable development. These organizations believe that the best way to ensure that Chad can grow and reduce poverty is to build business infrastructure locally to create long-term growth. One such organization is Africare. Founded as a partnership between Africans and Americans in 1970, this organization has since grown to span much of the continent. Overall, they have donated approximately $2 billion dollars since 1970 towards developing the economies of 38 African countries.

Africare in Chad

The focus of Africare is on sustainable development, attempting to build enough capacity within countries to make sure the country can sustain itself and reduce poverty in the long term. One notable program in Chad is the Initiative for the Economic Empowerment of Women Entrepreneurs (IEEWEP). The IEEWP, founded in 2008 seeks to uplift communities by providing education, skills training, and economic assistance to women in order to allow them to start businesses. The ultimate goal is to foster sustainable development in Chad.

Success Stories

The IEEWP has been a big success. The projects to develop human capital have already generated returns. Within the first three years of its existence, 1,600 women were trained by the IEEWP, increasing their incomes by 60%. Africare has also encouraged women to become more involved and take more of a leadership role at a local level. One important way they accomplish this is by making sure that 95% of their field staff are women, thus ensuring that women possess a voice within the communities they serve. Putting women at the forefront of the organization, Africare hopes, can help create sustainable development in Chad.

The IEEWP works by partnering with local communities and entrepreneurs in order to support them. In one program, the IEEWP worked with a group of 18 existing entrepreneurs in order to start a restaurant. In 2006, 18 women, calling themselves “Mbailassem” or “God help us”, partnered to produce cassava together on a farm. Seeing their drive, the IEEWP decided to help Mbailassem start a restaurant in Southern Chad.

After initially assisting in running the restaurant, and helping with some financial objectives, the restaurant eventually became economically sustainable and paid their loans back within a year. The women of Mbailassem also succeeded in starting a new location of their restaurant, further improving both their own economic situation and the economic situation of the communities they are working in. Africare hopes that entrepreneurs like Mbailassem can help build sustainable development in Chad, and ultimately all across Africa.

Moving Forward

Overall, Chad is struggling to see long-term growth across the country. However, progress on a smaller scale in individual communities concerning the growth of businesses shows some promise. Applying this same model in various communities across the country could help foster sustainable development in Chad.

Thomas Gill

Photo: Flickr

RCEP will benefit Asia's impoverishedOn November 15, 2020, 15 Asia-Pacific countries signed The Regional Comprehensive Economic Partnership (RCEP). The RCEP is a free trade agreement (FTA) establishing new relationships in the global economy. The 15 countries that signed the trade deal account for 30% of all global gross domestic product and impact more than two billion people. The new economic opportunities that will emerge from the RCEP will benefit Asia’s impoverished.

The Introduction of the RCEP

In 2011, the Association of Southeast Asian Nations (ASEAN) Summit introduced the RCEP. Simultaneously, another free trade agreement, the Trans-Pacific Partnership (TPP), was undergoing development. The TPP’s existence failed to come to fruition when former U.S. president, Donald Trump, removed the U.S. from negotiations in 2017. Consequently, this led many Asia-Pacific nations to negotiate with each other to make the RCEP become a reality. The ASEAN Secretariat has declared the RCEP as an accelerator for employment and market opportunities. The RCEP has been seen as a response to the absence of U.S. economic involvement and a form of stimulating the economy due to the COVID-19 pandemic.

RCEP Regulations

The RCEP has a set of new regulations that made it enticing for many nations to join. As much as 90% of tariffs will be eliminated between participating countries. Moreover, the RCEP will institute common rules for e-commerce and intellectual property. The trade deal will also include high-income, middle-income and low-income nations.

RCEP Benefits for the Philippines

Allan Gepty, a lead negotiator from the Philippines, assures that the RCEP will benefit the low-income country in many ways. The RCEP will mean more investments in sectors such as e-commerce, manufacturing, research and development, financial services and information technology. Moreover, the trade secretary, Ramon Lopez, also believes the Philippines will benefit because the RCEP will bring job opportunities. In a country where the poverty rate stood at 23.3% in 2015, the RCEP will benefit Asia’s impoverished.

Supporting Myanmar’s Economic Growth

According to the World Bank, a way to promote the reduction of poverty in Myanmar is supporting the private sector to create job opportunities. Furthermore, vice president of the Asian Investment Bank (AIIB), Joachim von Amsberg, also believes the RCEP will benefit Asia’s impoverished. He sees the RCEP as a way to grant small and medium-sized enterprises (SMEs) more access to markets, thus creating more job growth and promoting infrastructure development.

Industries Impacted by the RCEP

Many other nations will benefit from the RCEP as well. Textile and apparel (T&A) is a key sector under the RCEP. While countries such as Australia and Japan have high labor and production costs, many others do not. The RCEP will increase investment to lower-cost and less skilled countries such as Myanmar, Cambodia and Laos. The trade deal will also impact the country of Vietnam. Vietnam will benefit from its exports which include footwear, automobiles and telecommunications. Furthermore, Vietnam is could also benefit from the exporting of agriculture and fisheries products. Malaysia anticipates greater opportunities in travel, tourism and the aviation industry. Malaysia is expected to increase its GDP between 0.8% and 1.7% through the RCEP.

The Potential for Poverty Reduction

The RCEP is the biggest trade deal in Asia-Pacific’s history. The trade deal is predicted to add US$186 billion to the global economy and 0.2% to the gross domestic product of each participating nation. Also, free trade agreements allow emerging economies to become more sustainable. According to the World Bank, poverty is reduced by boosting international trade. Global trade expands the number of quality jobs and encourages economic growth. The RCEP came at a time when there are future uncertainties due to the COVID-19 pandemic and its economic impacts. Many anticipate that the RCEP will benefit Asia’s impoverished.

Andy Calderon
Photo: Flickr

Vanuatu's Graduation Vanuatu is a southwestern Pacific Ocean country made up of about 80 islands with a small population of around 300,000. Vanuatu has recently graduated from the list of least developed countries (LDC) despite setbacks due to ongoing natural disasters and other factors. Vanuatu’s graduation from LDC status took place on December 4, 2020. It was first recognized as an LDC in 1985.

What is the Least Developed Country List?

Less developed countries are countries that struggle with maintaining sustainable development, causing them to be low-income countries. In 1971, The United Nations created a category list of the least developed countries in the world. The United Nations reviews and checks the list every three years based on the country’s economic vulnerability, income per capita and human assets. There are currently about 46 countries on the least developed country list. Angola is another country that will be scheduled for its graduation in 2021. Vanuatu has recently joined the five other countries that were able to graduate since the creation of the least developed country list.

Although less developed countries are economically vulnerable, they receive special international aid to help with creating sustainable development. These countries also have specific trade with other nations that are not accessible to more developed nations. This is why less-developed nations are sometimes referred to as “emerging markets.” The majority of the support that countries in the least developed countries list receive is either directly from or set up by the U.N. Committee for Development Policy.

The Success Behind Vanuatu’s Graduation

Vanuatu graduates form the least developed country list despite major setbacks due to climate change, natural disasters and the COVID-19 pandemic. Similar to other countries that graduated, most of Vanuatu’s success is as a result of the international aid which enabled the country’s stable economic growth. In addition to the aid, Vanuatu has also had success in its strong agriculture sector. The increased diversification in agricultural crops and stocks has helped with the per capita income and human assets criteria for the least developed countries list.

When it comes to the economic vulnerability criteria, Vanuatu is still at risk despite graduating. The risk of economic vulnerability stems from the prevalent natural disasters. Even though the country has shown consistent economic growth, the external shocks from natural disasters are out of the country’s control as it faces about two to three disasters a year. However, there is still a great chance that Vanuatu will have continued success in maintaining sustainable development.

Maintaining Sustainable Development

The most well-known source of maintaining sustainable development for less developed countries is through international aid. Even though Vanuatu has graduated from the least developed country list, the country still is able to receive aid and continue its trading relationships with countries it was given priority to when classified as a less developed nation. For instance, Vanuatu had still received $10 million in emergency aid from the World Bank organization. The funding was for the impact that both COVID-19 and a tropical cyclone had on Vanuatu earlier in 2020.

Significant Success for Vanuatu

Vanuatu’s graduation from the least developed country list is a significant achievement that demonstrates the country’s ability to maintain consistency in its economic growth, while also overcoming challenges such as the COVID-19 pandemic and natural disasters. Although the graduation signifies major growth, there is still more economic stability that is needed before the country can significantly reduce its economic vulnerability.

– Zahlea Martin
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