Indigenous People of Taiwan
Taiwan is an island nation off the coast of China that houses 560,000 indigenous peoples — around 2.7% of the entire population. In the 1940s, the Chinese Civil War forced the Republic of China (ROC) to relocate its base to Taiwan, causing 1.4 million people to migrate from the mainland. Prior to this incident, in 1895, Japan defeated the Qing empire for Taiwan in the First Sino-Japanese War. War has ravaged native families and brought thousands of colonists to the country. This decreased the number of aboriginal people and created a divide between the settlers and the indigenous people of Taiwan.

The Reasons Behind Poverty

Due to consistent colonization since the 1600s, the native people of Taiwan (originally Formosa) have faced persistent oppression. Under Dutch rule from 1624 to 1662, the indigenous people of Taiwan had to convert to Christianity. Colonists also recruited them for military services and placed them into strenuous jobs. Japanese soldiers in the early 1900s raped women, illegally took land and enslaved indigenous men. In 1914, the Japanese killed over 10,000 aboriginal inhabitants of the Taroko area, resulting in the major uprising the Wushe Rebellion of 1930.

Oppression and discrimination have quelled the process of native people integrating into modern society. Most of the indigenous people of Taiwan remain below the poverty line. Household incomes of aboriginal families are 40% lower than the national average. A study by an Academia Sinica sociologist surveyed Han people of Taiwan: only 40% of families would let their children marry an aboriginal person while 80% allowed their children to marry another Han person. This is shocking evidence of the prominence of societal discrimination. The Democratic Progressive Party leaders have been heard calling indigenous peoples racial slurs to suppress and insult aboriginal people. Many businesses still refuse to employ aborigines. The problem worsened when an influx of workers from southeast Asian countries came in and competed for traditionally aboriginal jobs.

Natural disasters that often rampage the island consistently annihilate sources of income for indigenous families. Typhoon Morakot, a fatal category 2 typhoon that hit Taiwan in August of 2009, killed 673 people, mostly from aboriginal villages. Landslides and heavy winds destroyed villages and small economies. An earthquake on September 21, 1999 killed over 2,400 people and sent 100,000 people into homelessness.

The Effects of Being in Poverty

Poverty in indigenous communities has hurt their access to education, insurance and healthcare and is exacerbating the inequality gap. In 2013, 10% of aboriginal students dropped out of college. Of those, 12% could not afford to continue their education. Although 90% of aboriginal college students receive a higher-level education at private universities, they tend to be more expensive causing many students to have financial burdens. Despite the 12-year compulsory education system, aboriginal students in rural areas receive a substandard education. Financial struggles prevent 3% of students from enrolling in school. Aboriginal parents often move to the city for work while their children provide for themselves. Sometimes, the oldest sibling drops out to take care of their younger siblings.

According to a survey that professors at the National Taiwan University conducted, 45% of indigenous participants believe that they are least likely to be hired and promoted compared to Han people. The study also found that the indigenous people of Taiwan lack access to social welfare services. This leads to the widening gap of inequality among the rich and poor, as well as between the Han and indigenous people. In 1985, the income gap between the indigenous people and the national average was $3,702 (USD), while in 2006 it increased to $20,006 (USD). Gradual increases in inequality build higher obstacles for indigenous people to conquer.

Combatting Poverty

The Council of Indigenous Peoples (CIP) is a group of ethnically indigenous government individuals, working to improve the life of indigenous people of Taiwan. Recently, CIP initiated the Four-Year Plan to develop a proper social welfare system to protect aboriginal individuals. The government hopes to increase employment by providing internship opportunities to the indigenous youth and creating websites like “Indigenous Job Agency.” The CIP also guides aboriginal businesses, teaching companies how to market, package and sell their products in the metropolitan area. They aim to develop a “sustainable self-sufficient industrial model” in indigenous villages. A self-sufficient model will help businesses survive with the modern market economy and traditional manufacturing skills. CIP also plans to increase healthcare services and protect indigenous rights to bridge the inequality gap.

The Renewal Foundation, a nongovernmental organization devoted to children’s education, is helping bring people out of poverty. The Bunun Tribe’s official website, run by the Bunun Cultural and Educational Foundation and the Bunun Tribal Leisure Farm, aims to develop educational and financial sectors of their own communities.

Taiwanese indigenous communities are gradually rising out of poverty. Recent statistics have shown increasing education rates and income equality. With assistance from the government and other institutions, aboriginal people will preserve their cultural heritage and reintegrate back into society.

Zoe Chao
Photo: Flickr

Innovalab Fights Poverty
Guinea-Bissau is a country made up of 1.8 million people comprising diverse ethnic groups, different religions and languages. About half of the country’s populace lives in urban cities such as Bissau (the capital), and the other half of the population lives in rural areas and depends mostly on subsistence farming. The country, which was once a Portuguese colony, is currently one of the poorest countries in the world, struggles with a large foreign debt and has become a centerpiece for the trade of Latin American drugs. InnovaLab, a social enterprise based in Guinea-Bissau, is working to improve conditions in the country.

The Situation in Guinea-Bissau

According to an interview with a past missionary from BMS World Mission who served in Guinea (Guinea-Bissau’s neighboring country), the general West African populace faces many challenges to development. These challenges include the lack of access to sanitary water, lack of access to healthcare and the lack of social mobility. While there are some houses that had solar panels installed to conserve energy, this was not a norm. Most of the populace had to deal with power outages as and when they came.

Despite the country having an abundance of natural resources, Guinea-Bissau faces a chicken and egg problem with regard to its efforts to fight persistent poverty. The country faces constant political and economic stagnation due to the deep-rooted problems within the country. As a result, the population is largely dissatisfied. For instance, one of the recurring problems is that schools do not operate on a daily basis. Additionally, workers do not always receive their wages. Lack of access to a sustainable income and public services limits the long term growth and development of the country’s human capital. This in turn stalls solutions to these underlying problems.

Furthermore, the country heavily relies on receiving international aid due to the ongoing domestic instability. International donors do not always release the funds on time, which leads to frequent protests.

InnovaLab Fights Poverty by Promoting Entrepreneurism

InnovaLab fights poverty by setting up an entrepreneurial ecosystem amidst all the country’s uncertainties. It does this by supporting and mentoring people through online courses, boot camps and technology-driven initiatives. The founder of InnovaLab is Adulai Bary. InnovaLab was born in 2015 out of the movement of the increasing presence of startups in the markets. Bary’s idea for InnovaLab focuses on helping to generate employment, reducing incidences of crime and helping to promote small businesses.

InnovaLab fights poverty in Guinea-Bissau by playing a key role in the backbone of the country’s economy. It connects public and private sector organizations to work on innovative projects around new technologies and increased job opportunities. The organization emphasizes the importance of mentoring and incubation resources that it provides to its members. It offers personal business coaching and exclusive invitations to educational and networking events. It also provides consulting on revenue growth and sales to these budding entrepreneurs.

InnovaLab is also opening up a co-working space for people to brainstorm and collaborate in a safe environment. It hopes to attract small businesses, freelancers and startups. These organizations would benefit from 24-hour access to working facilities, free WiFi and housing for a maximum of 15 people. InnovaLab also has an acceleration and expertise center that provides professional services such as finance, legal and accounting services to entrepreneurs. InnovaLab fights poverty by providing opportunities for business owners to get a more in-depth understanding of the problems and opportunities for improvement.

Progress Thus Far

InnovaLab has succeeded in helping various local projects and online businesses come to fruition. Examples of InnovaLab’s success stories include Bandim Online (an e-commerce site for domestic products), a community ICT school, Big Technology (a service supplier company) and UBUNTU (a solar energy project). InnovaLab has a variety of other promising entrepreneurial ideas that have yet to meet the funding requirements. Notably, a total of 5,000 people benefitted from InnovaLab’s educational courses, and 20 new enterprises were incubated by InnovaLab’s efforts. More recently the organization has responded to the impact of COVID-19 on the business environment and economy of Guinea-Bissau. InnovaLab held a virtual forum on the 17th to 19th of July 2020 to initiate and spearhead the brainstorming and collective efforts of private and public sector workers in the fight towards dealing with the pandemic.

In the midst of domestic challenges and uncertainties, InnovaLab is a breakthrough in the entrepreneurial space of Guinea-Bissau. It provides sustainability for small businesses to flourish with the right mentoring and resources. InnovaLab fights poverty by creating a counter-culture to poverty in periods of instability by supporting the growth and cultivation of businesses and startups.

Mariyah Lia
Photo: Flickr

Increased Information TransparencyThe ready-made garment (RMG) industry is a significant source of growth for Bangladesh’s rapidly developing economy. Bangladesh is the world’s second-largest exporter of garments, and the garment industry in Bangladesh employs 4.4 million workers in more than 4600 factories. However, the size and complexity of the industry leads to poor working conditions and exploitative labor practices. These practices often do not garner attention until a tragic disaster happens, like the Rana Plaza collapse. As such, there is an urgent need for increased information transparency in the garment industry in Bangladesh to improve labor rights and workplace safety for these millions of workers. The digital initiative Mapped in Bangladesh is stepping up to the challenge.

Rana Plaza: Leaving a Legacy of Responsibility

The Rana Plaza building, located in Dhaka, Bangladesh, housed five garment factories that supplied American brands. Its 2013 collapse is one of the world’s worst industrial disasters, killing at least 1,1232 people and injuring 2,500 more. In the wake of the tragedy, activists and consumers worldwide demanded the codification of workplace safety standards. However, the lack of transparency surrounding which brands used the building to produce their garments concealed the companies involved. In fact, people had to dig through rubble for loose clothing labels to confirm which companies worked at Rana Plaza.

As such, the Rana Plaza collapse was an eye-opening example of how a lack of transparency costs lives. It indicated that the first step toward reforming the garment industry in Bangladesh requires greater visibility of workers and their working conditions. Although companies saw a lack of transparency in their supply chain as a competitive advantage, disclosing of supplier factory information actually drives profits. Indeed, 85% of executives from the apparel and footwear industries say that “transparency is either extremely or very important to the industries’ success.”

Consumers’ focus on ethical manufacturing has also driven this call for reform. A survey from Accenture found that when consumers’ values do not align with a company’s position on social, ethical, and environmental issues, 42% of consumers will step away from the brand. Further, 21% will never buy from that company again. In this way, transparency serves as a tool for accountability. It provides consumers with the information they need to make more informed shopping choices and demand more ethical practices. That said, the push for information transparency requires more than shifting consumer preferences.

Mapped in Bangladesh

A promising milestone for information transparency in the garment industry in Bangladesh comes from Mapped in Bangladesh (MiB). Implemented by the Centre for Entrepreneurship Development at Brac University, this initiative has collected and published a comprehensive database of RMG export-oriented factories. It formats this information as an interactive, digital map reminiscent of Google Maps. The initiative came about as a pilot project in response to the Rana Plaza Collapse. As a stakeholder of the RMG industry explained, “If we had such a map during the Rana Plaza tragedy, we could have reacted more quickly.”

Syed Hasibuddin Hussain, the project manager for MiB, outlined their methodology to The Borgen Project. Despite not knowing the exact number of factories, the team determined the general industrial areas where they exist. Because single factories interact with the larger RMG system, they rarely exist in remote villages.

From there, they decided the most effective method would be a door-to-door census on the streets of the industry’s four major districts. Hussain described the process as using “the snowball effect to identify additional factories,” no matter how dispersed individual factories are within a cluster. As of August 2020, the MiB site displays complete data sets from the Dhaka, Gazipur, and Narayanganj districts. The researchers expect to add the last major district’s data in 2021.

Mapping Transparency for Consumers

The project aims to fill the absence of an authenticated and continuously updated method of tracing RMG producers. Additionally, it serves as an alternative to sources with unverified secondary information. Hussain added that MiB can authenticate some data points directly. These include factory name, address, certifications, products made, export countries and worker’s participation committees. However, it is impossible to completely validate information like the number of workers and their demographic breakdown.

MiB’s formal data validation process also involves cross-checking for consistency with both brands and other outside sources. Specifically, it verifies memberships with certain associations and again with the factory at a later date. When MiB finds contradictory information during the verification process, it flags the data. This lets the consumer make the final call for their purchases.

Some factories lie about which brands’ products they manufacture for marketing purposes, but brands themselves also challenge the data. Hussain shared, “Initially, we thought this transparency would be attacked by the local associations, but it was unexpected for us that brands would come in and falsify their reporting,” even when the factories show proof that they do manufacture said brands. These inconsistencies highlight exactly why transparency in the garment industry in Bangladesh is so important.

The Impact of COVID-19 Moving Forward

COVID-19 has hit Bangladesh’s RMG industry especially hard. At the end of April 2020, 1,149 factories reported that brands canceled orders for more than $3.16 billion worth of garments. In the wake of these economic impacts, activists are concerned that progress on worker protections and safety regulations after the Rana Plaza collapse will disappear.

In May and July of 2020, MiB surveyed export-oriented RMG factories to create a COVID-19 specific map. It found that a large part of the garment industry in Bangladesh is back in action. “It seems like things are getting normal, but one of the questions we asked is about how optimistic they are about the immediate future, and we found out that people were extremely pessimistic,” said Hussain. There is a possibility that factories are using their current capacity for orders that were initially canceled and recently reinstated.

Perhaps the pessimism also results from in the market uncertainty facing workers during the upcoming winter season. With the current quarantines in many Western markets, the RMG industry is not working on a natural order pipeline. Though factories traditionally produce knits and coats in the winter season, demand is sure to change with people staying home. With this added unpredictability for workers who already live under extreme financial uncertainty, the garment industry in Bangladesh requires increased information transparency now more than ever.

Christine Mui
Photo: Wikimedia

Glamour BoutiqueThere are a number of advancements in legal gender rights across the world. However, social norms still play a large role in preventing women from attaining economic independence. Globally, women are almost three times more likely than men to work in the unpaid sector—namely domestic work and caring for children. When the women who are confined to this lifestyle are able to find paid work, it is often part-time and low-wage. This sets them at a significant financial disadvantage. They must depend on their husbands and families to provide for their basic needs.

The Fix

The Inclusive and Equitable Local Development (IELD) sector of the United Nations Capital Development Fund fights to right these wrongs. They invest in small businesses in developing countries that are largely run by women. Through their investments, these businesses expand, hire more people, increase their consumer market and earn more money. When women achieve financial independence, the reward is multiplied. Economically secure women are likely to invest in education, health and their community.

The Entrepreneur

One of these businesses that the IELD benefits is Glamour Boutique—a fashion business in Jessore, a small town in southwestern Bangladesh.

Glamour Boutique was officially founded in 2007 by Parveen Akhter. Akhter had been kidnapped and forced into child marriage when she was in the ninth grade. Her husband—her kidnapper and a drug addict—made it a habit of abusing her throughout their seventeen-year marriage. Encouragement from her oldest son, 16-years-old at the time, led her to file for divorce and set up the Glamour Boutique House and Training Centre. It was based in her home and capitalized on the embroidery and tailoring skills Akhter had taught herself over the years. Once business picked up, she moved into a rented space.

This is when the IELD stepped in. Akhter had little money, a small market and limited machines. They loaned her nearly 30,000 USD to expand. Since then, Glamour Boutique has employed over 50 women and consistently trains around 20 in tailoring and embroidery.

More than anything, the company is female-friendly. It helps to lift women out of poverty and give them a purpose and community. Additionally, she is sensitive to her employees having outside commitments. She offers short four-hour shifts for women who are enrolled in school, have children or have other situations warranting a flexible schedule.

Mussamad Nafiza, an employee at Glamour Boutique, testifies to the beauty of working there. She describes her own and others’ financial gain and independence as well as her dreams of opening a business similar to Akhter’s. Dipa Monjundar, a friend of Akhter’s and fellow small business owner, commends Akhter’s work and celebrates the economic empowerment of women across Bangladesh.

Next Steps

Although important, investing in women’s businesses is not the only way to help women achieve economic prosperity. Commitments from men and the government are essential. They need to respect, uphold and uplift women’s rights to sustainably change the way communities approach gender disparity.

Jessore’s mayor participated in several gender equality training sessions before starting any major projects. If other community leaders encourage participation in similar training courses, economic gender parity may no longer be a far-fetched dream.

Rebecca Blanke
Photo: Flickr

cash grants in Kenya
If you have ever wondered what good remittances do for poverty reduction, a study done by the researching nonprofit Innovations for Poverty Action (IPA) could help put things in perspective. Researchers at IPA evaluated the economic progress of Kenyan villages from 2014 to 2017 after families were given unconditional cash transfers or UCTs. The cash grants in Kenya were provided by a charity organization called GiveDirectly.

The results of the study highlight the potential UCTs have to financially elevate communities around the world. However, when dispersed without careful consideration, some aspects of cash transfers can be detrimental. Let’s discuss GiveDirectly’s trial and why it was successful in initiating great economic stimulation in Kenya.

The Logistics of the Study

The study took place in villages surrounding Lake Victoria in Siaya County, Kenya. To avoid a concentration of funds, researchers categorized villages by two groups: villages with high saturation and low saturation status. Random assignment appointed two-thirds of high saturation villages and one-third of low saturation villages to the trial. As an extra measure to confirm financial need, GiveDirectly only chose families residing in homes with a thatched roof; about one-third of households qualified.

GiveDirectly provided money transfers in intervals to a family member, totaling 87,000 KES, or 1,000 USD. Data was recorded through baseline and closing surveys taken by the participating families and local business owners. The surveys covered topics such as “household financial, physical, and mental well-being, business performance, changes in market prices, and the provision of local public goods.”

Cash Grants in Kenya: The Results

The increase of income stimulated a surge in spending from recipient families. For the most part, these expenditures occurred in the region. Business disclosed that 86% of their clientele were from local or neighboring villages.

The increased consumption had a spillover effect, as non-participant households also saw an influx of income. According to their report, GiveDirectly claims that having higher local enterprise revenues, “in turn, appears to increase the income of local untreated households, leading to higher spending on their part.” The grants created a pattern of earning and consuming that resulted in overall higher cash flow in the area.

Furthermore, participant households across the board showed “higher levels of psychological well-being, food security, education, and security.” Increasing their financial security had an overall positive impact on many other aspects of their lives.

Why it Worked

Before the 2014 study, UCTs previously given by GiveDirectly were also proven to generate economic stimulation in Kenya due to rising consumption and investments. To fully understand the results of this study, it is important to note a few specific factors.

First, GiveDirectly provided UCTs rather than conditional cash transfers, or CTTs. The World Bank defines CCTs as being “contingent on behaviors like school attendance and visits to health clinics.” These requirements do not come as easily to some families as others, especially those living remotely. In contrast, UCTs provide financial support to families without burdening them with specific requirements that they may be unable to meet.

The location also played a big role in the success of this trial. GiveDirectly chose families from an area containing a major national road that IPA determines may be one of the reasons for economic overspill. The IPA report also depicts Kenya’s traditional “harambees,” gatherings meant for community fundraising, as another cause for the balanced wealth distribution.

Moving Forward

The economic stimulation in Kenya proves the efficiency of tactful cash grants. GiveDirectly’s accomplishments in poverty alleviation are just a fraction of what is possible. Moving forward, if more funds are devoted to foreign poverty aid, it is possible for such results to be seen on a global scale.

Lizt Garcia
Photo: Flickr

Entrepreneurship in Africa
Africa stands as a continent of nearly 1.3 billion people, with 27 nations having a poverty rate of over 30%. As COVID-19 spreads through the region, falling demand and break down of supply chains threaten to further slow already-sluggish growth rates. Ever the land of great resilience and innovation, hundreds of enterprising individuals have excelled in Africa, enriching themselves and their countries. Increasingly more Africans are seeking out entrepreneurial and small business opportunities to combat poverty. One such businessman helping in this effort, multimillionaire Tony Elumelu, is using his wealth to fuel entrepreneurship in Africa and transform the continent into a booming commercial hub and providing hope for the future.

Roadblocks to Economic Growth in Africa

Africa’s economy has long suffered stubborn development setbacks. Government inaction, fragile infrastructure and widespread instability have hindered the region’s industrialization and economic growth. Many countries grapple with deficient infrastructure, including inadequate means of transportation, limited access to electricity and water and poor telecommunications systems. The World Bank estimates that the resolution of these structural shortcomings would increase the region’s productivity by as much as 40%.

Politicians have been reluctant to bolster manufacturing despite an international consensus on Africa’s need for industrialization. Such apprehension can be partially attributed to Africa’s unique position in the world economy: a pre-industrial continent already aspiring to post-industrialism. This misguided ambition has discouraged lawmakers from implementing protectionist policies. Without tariffs that benefit domestic manufacturing industries, larger international corporations choke out Africa’s budding factories and discourage entrepreneurship in Africa.

Ongoing fiscal and political instability serves to magnify these already difficult issues. Mounting debt levels divert money from investment to reimbursement and waste significant capital on unproductive endeavors. For example, sub-Saharan Africa’s aggregate debt-to-GDP ratio doubled from 2008 to 2017. Additionally, frequent leadership turnover has deterred international companies from entering African countries.

Working to mitigate these hurdles is Tony Elumelu, the founder of Heirs Holdings Ltd, a private investment corporation that operates in the energy sector. Beyond oil and gas, Elumelu is investing in a far more valuable asset: Africa’s future innovators. His nonprofit organization, the Tony Elumelu Foundation (TEF), empowers young entrepreneurs with the resources they need to build meaningful businesses.

How The Tony Elumelu Foundation Advances Entrepreneurship in Africa

The Tony Elumelu Foundation fosters entrepreneurship in Africa to alleviate poverty and spark economic gains. The TEF Entrepreneurship Programme offers grants and mentorship to innovative African businesspeople, allowing them to transform their ideas into profitable corporations. Endowed with a generous $100 million, the program has already assisted 9,000 individuals in creating businesses that invigorate their entire communities.

The broad scope of TEF’s investments cultivates economic diversification, a key tenet of development and stability. Some of the organization’s recent beneficiaries include:

  • Stars From All Nations (SFAN): Headed by Tom-Chris Emewulu, SFAN nourishes young minds through informative programs and workshops. Aimed at augmenting and supplementing children’s schooling, the company is helping to resolve Africa’s undereducation crisis.
  • Doctoora: Jubril Odulana, a Nigerian doctor, created Doctoora as a solution to Africa’s limited healthcare access. The platform collaborates with medical professionals to open private practices and ensures patients receive the care they need. In the face of COVID-19, Doctoora plays an essential role in promoting public health across the region.
  • Ufinix.com: The brainchild of Nnodim Uchenna, Ufinix.com offers aspiring developers comprehensive coding courses and guidance, preparing them for future careers in computer science. By equipping students with technological knowledge, the website is propelling Africa into the digital age.
  • Light Salone: Light Salone founder Mohammed Akamara aims to redress Sierra Leone’s severe energy shortage. In pursuit of this goal, Akamara engineered affordable hybrid solar-wind power sources to electrify rural areas and boost development. Manufactured using recycled supplies, these Sowind Technologies provide a mindful solution to Sierra Leone’s electrical desert.

By supporting young visionaries, the Tony Elumelu Foundation is generating hope, ambition and entrepreneurship in Africa. Its passionate beneficiaries are launching innovative and impactful companies that not only empower their creators but also their communities. The foundation has employed the continent’s most creative, altruistic minds, initiating a cycle of philanthropy that portends Africa’s future prosperity.

Rosalind Coats
Photo: Flickr

Multinational Corporations in Developing Countries
Multinational corporations (MNCs) have a global presence, even in developing countries. There are over 80,000 companies that drive the 21st-century economy. For example, Coca-Cola sells its product in nearly every country and has established over 900 bottling facilities worldwide. MNCs have propelled the GDP of their parent countries, most notably the United States, Japan, China and Western Europe, but how do their international operations affect developing countries?

It is difficult to say whether multinational corporations in developing countries are decidedly ‘good’ or ‘bad.’ One must consider many perspectives before making that judgment. However, researchers have identified a variety of positive and negative impacts applicable to most MNCs.

Individual Wellbeing

Multinational corporations in developing countries employ millions of people, but the quality of these jobs is often low. When Coca-Cola instituted a bottling facility in El Salvador, its supply chain hired sugar cane harvesters. El Salvador needed this hiring surge, as its poverty rate is 25.70%. However, an Oxfam study discovered that many workers receive less than the minimum wage. Additionally, harvesters face physical risks (burns, lacerations, exhaustion). This is because their work entails cutting cane stalks with a machete in chemically treated agricultural fields.

Perhaps the most notorious examples of worker exploitation in developing countries are sweatshops. These facilities in MNC supply chains provide employment with long hours, low wages and unsafe working conditions. An estimated 250 million children work in sweatshops worldwide, working over 16 hours a day to provide products for the clothing and toy consumer base.

Some experts argue that sweatshops are helpful to local populations because they provide job opportunities that would otherwise not be there. This defense, the “Non Worseness claim,” essentially states that sweatshops are better than nothing and that even if there were regulations on improved wages and working conditions, the jobs would be outsourced to a place where those restrictions do not exist. Defenders of MNC sweatshops often cite this controversial idea.

Economics

At first glance, it may be easy to claim that MNCs are unequivocally good for developing countries’ economies. After all, they provide jobs that were not present before, even if they are dangerous and pay low wages. Additionally, MNCs bring in capital flow to developing countries by building factories, which require construction workers and surrounding infrastructure, thereby stimulating economic development in host countries.

However, beyond the short-term benefits, the economic value of multinational corporations in developing countries becomes rather hazy. Most of the profit produced by an MNC subsidiary in a developing country goes to the company’s parent country. In the case of El Salvador, most profits generated by cane harvesters return to Coca-Cola’s executives in the U.S.

When multinational countries flood the economic landscape of developing countries, small businesses and local entrepreneurs find it difficult to compete. Thus, host countries develop a kind of dependency where they cannot break off from the MNCs’ influence in fear of rising unemployment. They also cannot compete with MNCs because of their established production methods.

Solutions

The Human Rights Watch and other humanitarian nonprofits have called for supply chain transparency in MNCs, particularly clothing and footwear industries, to publicize and improve working conditions in sweatshops across the globe. These corporations would have to provide specifics about factories manufacturing their products beyond the general tag: “Made in China.”

Additionally, the social inequities surrounding MNCs appear to be a result of their intentions. Paying low wages, building factories with unsafe working conditions, and outsourcing production relate to a key goal of MNCs: the corporate mantra, “maximize shareholder value.”

But MNCs do not need to operate according to this objective. At the very least, maximizing profits is not the only objective that they can strive for. Many MNCs, such as Ben and Jerry’s and Patagonia, have altered their practices to become benefit corporations. This role includes adding the goal of benefiting the public good to their company mission. Through this method, MNCs have a chance to reverse social injustices by redirecting their profits into improving the social, environmental and economic processes in developing countries.

Christopher Orion Bresnahan
Photo: Flickr

American ExportsThroughout the past several decades, nations in Southeast Asia have seen significant declines in extreme poverty rates. As poverty has fallen and these nations have developed economically, the Association of Southeast Asian Nations has become the United States’ fourth-largest trading partner. While the United States does rely heavily on this region for imports, trade with ASEAN also supports American exports and bolsters nearly 346,000 American jobs. The following five countries in Southeast Asia are critical trading partners and demonstrate the economic benefits that can coincide with a decrease in extreme poverty:

1. Malaysia

Malaysia has been extremely successful in reducing poverty throughout the past several decades. According to the United Nations, “… in 1970, 49.3% of Malaysian households were below the poverty line.” As of 2015, the figure had fallen to 0.4%. As poverty has fallen, Malaysia has also grown economically, developing profitable manufacturing, petroleum and natural gas industries.

As the country has reduced poverty and developed economically, it has become an important trading partner to the United States. The United States imports electrical machinery, tropical oils and rubber from Malaysia. It also exports soybeans, cotton and aircraft to the nation. In total, the trade between the two nations totals around $57.8 billion each year and supports nearly 73,000 American jobs.

2. Thailand

Thailand is another country that has seen impressive levels of poverty reduction in recent decades. According to The World Bank, poverty rates fell from around 65% in 1988 to under 10% in 2018. The nation has also evolved economically, developing large automotive and tourism industries as poverty rates have fallen.

Trade between the United States and Thailand has steadily grown, totaling $48.9 billion in 2018. When analyzing imports, the United States relied on Thailand for machinery, rice and precious metals. In terms of exports, the United States provided the nation with electrical machinery, mineral fuels and soybeans. In total, the exports to the nation supported nearly 72,000 American jobs. Additionally, exports to Thailand have been increasing in recent years, growing nearly 14.5% from 2017 to 2018.

3. Vietnam

Vietnam is perhaps one of the most astounding examples of poverty reduction and economic development. The World Bank reports that “the poverty headcount in Vietnam fell from nearly 60% to 20.7% in the past 20 years.” As it has done so, the nation developed one of the most rapidly growing middle classes in Southeast Asia, became a center for foreign investment and developed key industries in electronics, footwear and textiles.

While the United States has come to heavily rely on Vietnamese imports, Vietnam is also a rapidly growing market for American exports. In fact, American exports of goods to Vietnam increased by 246.9%, and American exports of services to the nation increased 110% since 2008. According to the Office of the United States Trade Representative, “U.S. exports of Goods and Services to Vietnam supported an estimated 54,000 American jobs in 2015.”

4. Indonesia

Though the nation still has significant progress to make, Indonesia is another nation that has seen a reduction in extreme poverty rates. Since 1990, the nation has managed to half its poverty rate and make significant economic advancements. Currently the largest economy in Southeast Asia, the nation has developed notable industries in petroleum, natural gas, textiles and mining.

Trade with the nation totaled around $32.9 billion in 2019. While the United States imported apparel and footwear from the nation, it also exported soybeans, aircraft and fuels to Indonesia. In total, American exports to Indonesia are growing, increasing 19.1% from 2017 to 2018 and supporting nearly 56,000 American jobs.

5. Philippines

While poverty is still an issue in the Philippines, it has seen significant declines in recent years. According to the World Bank, poverty fell from 26.6% to 21.6% from 2006 to 2015. The nation has also made significant improvements in developing industries outside of agriculture. While agriculture composed nearly one-third of the nation’s GDP in the 1970s, it currently represents 9.3%, split between an emerging industrial and service sector.

Trade with the nation currently provides $29.6 billion each year, and exports to the Philippines grew 3% from 2017 to 2018. Mainly, the Philippines relies on American exports for electrical machinery, soybean meal, and wheat. Overall, exports to the Philippines support an estimated 58,000 American jobs.

Affecting nearly one in five American jobs, international trade is a critical part of the American economy. As demonstrated by Southeast Asia, a reduction in global poverty rates not only contributes to global economic development but also supports the export industry and American jobs.

– Michael Messina
Photo: Pexels

Poverty Eradication in Egypt
Innovations in poverty eradication in Egypt have taken a sustainable and decentralized form in the last four years. Through local initiatives and collaboration with the United Nations Development Programme (UNDP), Egypt has incorporated social welfare and development programs aimed at improving the standard of living in its poorest governorates and providing a permanent path out of poverty for future generations.

With Egypt’s poverty rate rising to 5% in 2019, how exactly does Egypt plan to have a “competitive, balanced, diversified, and knowledge based economy” that would eliminate poverty by 2030?

UNDP Sustainable Development Strategies

One significant innovation in poverty eradication in Egypt is the UNDP’s adoption of a social entrepreneurial and minority centralized model. Through partnerships with Egypt’s public sector, private companies and civil society, the UNDP not only helped prioritize economic development but also made women, children and disabled people a focal point.

  1. The GSER Program: The GSER program under the Misr El-Kheir Foundation, a nonprofit development institution in Egypt, organizes social innovation camps with UNDP’s support. Youth from all parts of Egypt co-scheme solutions to improve the livelihoods in Fayoum’s fishing community, one of Egypt’s poorest governorates. Accomplishments include a redesigned shrimp peeling table for fishermen’s wives, which advanced hygiene and shell quality in Fayoum.
  2. The IBM Academic Initiative: The IBM Academic Initiative invested $70 million with the objective of providing over 25 million Africans free digital skills training and launching one of its regional offices in Egypt. UNDP’s contributions will help Egypt cultivate a STEM-oriented workforce through access to IBM’s cutting edge tools and course material.
  3. The Game Changer Fellowship: The Game Changer Fellowship is a one-year program that provides incubation support to aspiring Egyptian game designers through a partnership between UNDP Egypt and the Engagement Lab at Emerson College in Boston, U.S.A. This has enabled Egypt’s youth to uniquely approach development challenges by stimulating behavior change. Given that 84% of Egypt’s unemployment rate comprises young men and women, such initiatives are imperative in enhancing human capital in order to prevent an underdeveloped workforce.
  4. The Mobile Ramp App: The Mobile Ramp App helps Egypt’s disabled community lead easier, more integrated lives. UNDP partnered with Fab Lab Egypt and the Misr El-Kheir Foundation to launch a media campaign that promotes and teaches sign language as well as maps out locations with available ramps.

J-PAL’s (Abdul Latif Jamil Poverty Action Lab) Innovative Research

Despite these innovations in poverty eradication in Egypt, reports determined that there were 32.5% of Egyptian citizens living below the poverty line in 2019. According to J-PAL, a global research center aiming to reduce poverty, this extreme poverty figure of 32.5% indicates that the policies and programs designed to alleviate Egypt’s poverty are not as effective as they could be.

In order to achieve successful innovations in poverty eradication in Egypt, J-PAL’s MIT branch is launching a research center at the American University in Cairo. Through research and professional training to inform evidence-based policies and engage governments and relevant NGOs, Egypt will establish a culture of empirical policy making so that it can adequately evaluate the efficacy of its plans. 

Institutionalizing Social Innovation and Sustainable Development

While international efforts facilitate innovations in poverty eradication in Egypt, government and grassroots organizations in Egypt have adopted technological and sustainable based solutions to economic problems through their own localized projects and findings.

  1. The Egyptian Government: The Egyptian government is investing EGP 47bn ($3 billion) to Upper Egypt governorates in its 2020-2021 fiscal year. This is a 50% increase from 2019, representing 25% of total government investments.
  2. The Takaful and Karama Program: The Takaful and Karama program provides income support to the poor through a conditional and unconditional cash transfer program that aims to increase food consumption and necessary healthcare. Nevin al Qabbaj, the Social Solidarity Minister, reported that by 2020 around 2.5 million Egyptian families have benefited from the program.
  3. SEKEM: SEKEM, an Egyptian sustainable development organization, is working with the Egyptian government to implement Egypt Vision 2030. The plan includes 12 “pillars” targeting economic development, social justice, innovative research, education, health and the environment. Additionally, along with local NGOs, SEKEM has revitalized Egypt’s desert land and developed its agricultural businesses using biodynamic methods.

Egypt’s ability to mitigate poverty across all demographics using sustainable, innovative and ethical practices is testimony to its economic and cultural prosperity. Egypt’s innovations in poverty eradication are unique in that they exemplify the duality of individual, entrepreneurial growth in the private sphere and collective, righteous leadership in the public sphere.

– Joy Arkeh
Photo: Flickr

Women-Owned BusinessesNonprofit organization Mary’s Pence is working towards a world of empowered women making changes in their communities. To get there, Mary’s Pence partners with grassroots organizations in Canada, the U.S. and Central America to provide funding and development programs for women-owned businesses.

Executive director Katherine Wojtan believes Mary’s Pence is different from other nonprofits because the organization not only cares for the individual women, but also oversees the sustainment of their small businesses. Mary’s Pence also values the idea of “accompaniment,” explained by Wojtan as utilizing the abilities of everyone to accomplish a long-term shared vision. This concept is applied to the organization’s execution of both the programs in the states and in Central America, focusing on improving the whole rather than the individual.

ESPERA

The program in Central America called ESPERA, or Economical Systems Providing Equitable Resources for All, was created almost 12 years ago. “Espera” is the Spanish word for hope, a fitting name for the life-changing program working with women in Mexico, Guatemala, Honduras, Nicaragua and El Salvador.

“This is very intentional, it is not about making individual women rich, but about ensuring all women have access to resources and skills to make their way in the world and earn what they need for a good life,” Wojtan said.

ESPERA aids women who were victims of domestic or gang violence or are single mothers struggling to make ends meet. By giving grants to grassroots organizations in struggling communities, Mary’s Pence creates community-lending pools which women can take loans from to start local women-owned businesses that generate income. To ensure success, the staff of Mary’s Pence teach the community loan management and help elect leaders to track the lending.

Gilda Larios, ESPERA team lead, grew up in Guadalajara, Mexico and worked with Central American refugees before starting work with Mary’s Pence. ESPERA funding gives back to the whole community, not just the women receiving aid. Instead of focusing on building credit, women realize the importance of circulating money and products.

“Their confidence grew – first they asked for a very small loan, and over time they asked for larger loans and grew their businesses,” Larios told The Borgen Project. “With their strength, they are role models for new leadership in the community.”

ESPERA and COVID-19

ESPERA has helped develop many small women-owned businesses that create jobs for their communities and generate income for struggling women. Unfortunately, the COVID-19 pandemic put many of these businesses at risk as workers feared for their lives, but the ESPERA team responded fast, changing their focus from long-term development to responding immediately to the needs of the women.

As some women panicked about their businesses and the effects of the pandemic, the ESPERA team responded with a 12-week emotional wellness series, delivered via WhatsApp, and supported stores so they could keep reasonable prices for the communities. For women in the midst of paying back loans to the community-lending pool, their status is put on hold until they have the income to continue their payment.

Despite the support network ESPERA provides, the pandemic revealed some gaps in the system. It was challenging to ensure the safety of women experiencing domestic violence. The lack of access to phones and the internet made communication between communities and ESPERA leaders challenging. However, this time of crisis also brought the communities closer and proved the importance of working together through local businesses.

In her interview with The Borgen Project, Larios told of a woman named Aminta, who is in the ESPERA program in San Salvador, El Salvador. She transitioned from working in a “maquila,” or factory, to starting her own business sewing uniforms for local sports teams. During COVID-19, she also began sewing masks to help keep her community healthy. Success stories of women-owned businesses like this one propel communities into further financial security and empower other women to do the same.

Confidence and Creating Futures

Above all, ESPERA and Mary’s Pence hope to give women confidence in their own abilities to create the future they want for themselves and for their families. For Larios, the most rewarding part of working with ESPERA women is the “feeling of satisfaction and joy to see them embrace their possibilities and capacities that before they thought they didn’t have.”

Through ESPERA and their role in the creation of women-owned businesses, Mary’s Pence continues to change women’s lives by showing them the power they already had within themselves.

– Kiyomi Kishaba
Photo: Google Images