Information and stories about economic growth.

economic growth in East AfricaIt is no surprise that the COVID-19 pandemic has dampened growth momentum worldwide. Nonetheless, it is expected for Africa to recover and experience continued economic growth. The launch of the 2021 African Continental Trade Area already shaped a very promising economic future for Africa that can amount to a $450 billion income gain by 2035. Contributions to this growth can be credited to the robust economic dynamics of East Africa. In terms of economic growth, Africa is expected to maintain a stable positive percentage. In 2019, East Africa remained the continent’s fastest-growing region with an average growth of 5%. Projected GDP growth in East Africa before COVID-19 was forecasted above 5%. The economic growth in East Africa is positively contributing to development in Africa overall.

East African Economies

Economic growth can be evidently demonstrated by looking at annual GDP in the last decade. Some of the main economic players of the region show steep upward directions. Notably, of the world’s top 10 fastest-growing economies in 2020, three are East African countries including Rwanda, Ethiopia and Tanzania. In the year 2019, Ethiopia and Rwanda placed second and third respectively. Ethiopia averaged a 10.3% growth as Africa’s fastest-growing economy from 2007 to 2017. For the same period, Rwanda followed closely with an average of 7.5%.

Increased Foreign Investments

In 2019, East African Foreign Direct Investment (FDI) inflow increased from $5.7 billion to $11.5 billion in just a year. Inflows to all East African countries except Tanzania increased during this time period. This 103% increase is largely due to China as East Africa’s largest investor. Chinese investment accounts for almost 60% of FDI inflow in East Africa. Investment is going into the technology, manufacturing and services sectors. FDI inflows created 89,877 jobs in 2018 and 211,084 in 2019. Employment increased in Uganda, Tanzania, Rwanda, Kenya, Burundi and South Sudan.

Economic Development Initiatives

Investment within the region has also increased from $152.7 million to $724.6 million. The number of projects supported by these investments increased by 23.3%. To take advantage of the high investment flow in the region, the East African Community (EAC) has placed incentives for development in related markets. The six-member countries of the EAC account for a sizable market of consumers for agricultural raw materials and other extracted goods. Additionally, the EAC provided necessary information and technology to increase opportunities for investment in the financial and banking sectors.

Looking Ahead

Income distribution, inflation and poverty conditions remain concerning for the region and were worsened by the COVID-19 pandemic. This means that to maintain growth and counter these chronic economic conditions, the region must implement policy that utilizes the available resources and supports economic growth.

The African Development Bank Group suggests accelerating structural transformation and strengthening the macroeconomic policy approach. This would address issues such as inflation and increase financing and trade. Another important policy recommendation is to invest in human capital. Developing a skilled workforce by starting with education for the youth and technology training will further promote innovative economic growth in East Africa and the African continent overall.

Malala Raharisoa Lin
Photo: Flickr

gender wage gap In “one of the most substantial moments for gender equality in New Zealand in decades,” the Equal Pay Amendment Bill was passed by the New Zealand parliament and took effect in November of 2020. This legislation intends to address pay equity, advance previous work toward pay equality and address the gender wage gap. Rather than just addressing gaps between men and women’s wages in the same professions, this bill targets differences between wages in female-dominated professions as compared to male-dominated ones.

How Equal Pay Addresses Poverty

Addressing gender wage gaps is key to fighting global poverty for numerous reasons. Not only do women tend to be in lower-paying occupations, but they also lack employment opportunities. Females are also tasked with two to 10 times the care work (housekeeping, childcare, etc.) than men. Research in developing countries shows that women lose out on $9 trillion annually due to economic inequality. As the number of women in paid work increased between 2000 and 2010 in Latin America, overall poverty fell by approximately 30%.

To truly appreciate this victory in fighting the gender wage gap in New Zealand, we can take a brief journey through the nation’s history of work toward equal pay.

New Zealand’s Work Towards Equal Pay

New Zealand National Tramways Union afforded equal pay to women in 1942. As women entered the workforce during World War II due to the shortage of male workers, the New Zealand National Tramways Union insisted women received the same pay as men. It became the nation’s first union to win equal pay for females working as tram conductors.

Almost two decades later, The Government Service Equal Pay Act was passed in 1960, thanks in part to the lobbying of the Council for Equal Pay and Opportunity (CEPO). The New Zealand government began to investigate equal pay in the country more holistically. The findings of that investigation led to the Equal Pay Act of 1972. This act gave women in both “private and public sectors” equal pay opportunities. By 1985, the gender wage gap diminished by 22%.

During that time in 1957, the collaboration among multiple New Zealand unions including the Māori Women’s Welfare League and the National Council of Women formed CEPO. The group began advocating for equal pay through raising awareness and educating people, political lobbying and more. CEPO was then revived in 1986 as the Coalition for Equal Value, Equal Pay and began work to disrupt male-dominated professions and fight for truly equitable pay for all New Zealanders.

In another effort to move the country toward pay equity as opposed to equality, the New Zealand Government formed the Joint Working Group on Pay Equity Principles (JWG). The JWG developed principles and formal processes through which the government would field pay equity claims.

National Organisation for Women

One of the more structured groups of the women’s liberation movement in New Zealand was modeled after the National Organisation for Women in the United States. Founded in 1972 New Zealand’s National Organisation for Women (NOW) fought not just against the gender wage gap, but for gender equality in all areas of life. This includes legal protections.

Unfortunately, the organization in New Zealand didn’t have the same impact that it did in the U.S. so members decided to help in different ways. Many feminists took to community projects or attempted to tackle the gender wage gap in the corporate world.

New Zealand ranks 6th place in the World Economic Forum’s Global Gender Gap Report for 2020. The Equal Pay Amendment Bill is not only an important step toward eliminating the gender wage gap in New Zealand but a great step toward narrowing gender gaps across multiple national benchmarks. This includes economic, educational, health, or political areas.

Despite a three-year stall in the nation’s gender pay gap, the New Zealand government’s continued focus on equal pay for work of equal value is bound to chip away at that gap and foster poverty reduction.

– Amy Perkins
Photo: Flickr

The Economic Value of PeaceThe Institute for Economics and Peace (IEP) recently published its annual report, “The Economic Value of Peace,” demonstrating the economic consequences of violence throughout the world. The findings show that violence directly impacts the economy and countries’ macroeconomic performance. Countries that improve on peace average a 1.4% higher gross domestic product (GDP) per capita growth. Therefore, a decrease in violence corresponds to an increase in economic activity.

The Poverty-Violence Cycle

Without proper intervention, countries engrossed in conflict often fail to break from the perpetual cycle of violence-to-poverty. Such conflicts may directly damage essential infrastructure, institutions and even fundamental interpersonal relationships within a society. The effects are both short and long-term. The short-term cost directly affects the victim and the perpetrator while the long-term cost has ripple effects through lost productivity and undermining of societal structures. The consequences eventually translate to a loss in education, widespread food insecurity and high mortality rates.

The Economic Cost of Violence

According to the IEP, “the economic cost of violence for the 10 most-affected countries ranges from 23.5 to 59.1% of their GDP.” In 2019 alone, the global cost of violence came out to approximately $14.4 trillion — 10.5% of the world’s GDP or roughly $1,900 per person. Moreover, if the world decreased its violence containment spending by 15%, $1.4 trillion could be redirected to other economic activities that would lead to long-term growth. Democratic governments demonstrated significantly less economic costs compared to their authoritarian counterparts. The average authoritarian government had a cost that equated to 11% of its GDP while democracies averaged about 4%.

In countries such as Syria and Afghanistan, the cost of violence exceeds more than 50% of their GDP. Both countries face extremely high poverty rates. This amounts to roughly 80% and 50% of populations that live below the poverty line respectively, reinforcing the direct connection between violence and poverty. In 2018, the United Nations estimated that the conflict in Syria resulted in nearly $120 billion in infrastructural damage. By 2017, 50% of Syria’s infrastructure was considered non-operational and it is estimated that Syria experienced $226 billion GDP losses between 2011 and 2016.

How Peace and Growth Connect

The IEP Economic Value of Peace report confirms the direct link between violence and poverty. Violence both stunts the positive benefits of peace and has a direct, empirical effect on the economy. Nevertheless, there are global signs of improvement. As a result of an overall decrease in violent conflict, from 2018 to 2019, the global economic impact of violence has decreased by $64 billion. Fully democratic countries reduced their economic impact of violence by roughly 16% in 2020.

These signs of recovery demonstrate that development and peace go hand-in-hand as there is an undeniable relationship between violence and poverty. Without stable and secure institutions, a fundamental basis for a prospering economy is lacking. Violence creates insecurity and a poverty trap for a country’s marginalized people, causing them to undermine their governance. Nevertheless, consistent data shows that this can be reversed through peacemaking efforts.

Alessandra Parker
Photo: Flickr

Updates on SDG Goal #8 in China
The global economy is an ever-changing and ever-expanding system. Whether through the opening of new markets, job creation or GDP fluctuations, one can measure the success of an economy in numerous ways. However, attempts at sustainability goals receive more specific judgment. The Sustainable Development Goals (SDGs) measure the success of an economy not only in regard to its growth but also that growth’s sustainability. Many countries with SDGs are those that have a pivotal impact on the world economy overall. This correlates with positive updates on SDG 8 in China, which commits the nation to the achievement of full employment for all citizens by 2030.

Laying the Economic Foundation

The Chinese economy has undergone many changes over the centuries. In the first 1,500 years, China followed the policy of Isolationism strictly. In the next few centuries, China gradually opened to the European countries. Many countries such as Germany, Russia and England vied for control over many of China’s crucial exports and markets. By the 20th century, China faced more pervasive and detrimental economic factors. It suffered from the toll of its countless Opium Wars as well as the resulting strain of having to compete with other countries vying for its resources. But by the mid-21st century, the post-WWII economic boom rejuvenated and then expanded China into the economic force that it is today.

Positive Correlations for SDG 8 in China

There are positives to China’s economic growth. World reliance on Chinese goods does not have a parallel, with China occupying a large percentage of the world’s imports. Furthermore, the particular rise in GDP in Beijing, which now accounts for 5% of China’s GDP, indicates the importance of Beijing as an ever-growing and pertinent city in China and the world’s economy.

Beijing itself has also sought to expand the visibility of industrialization in China. For example, Beijing devised a plan to push 15 million people into workplace training, as well as the expansion of 11 million more jobs by the end of 2021. China’s rise in GDP is so colossal that it actually managed to grow by 2.3% during the COVID-19 pandemic while many other prominent economies have dropped by 2.3%. This suggests positive updates on SDG 8 in China for development and job creation. Furthermore, estimates of China’s GDP, if its growth continues, could overtake the U.S. economy by 2028. If the value of Chinese currency continues to increase, it could accelerate this rise by 2026.

The Challenges

The results of these estimates are promising, but they are still only estimates. Moreover, there are prominent issues when it comes to the area of decent work. China’s advancing industrialization puts profound stress and lack of availability on its rural citizens. Those left behind in China account for about 30.46 million and are confined to the rural areas in China.

One of China’s main problems is the uncertainty of it all. Furthermore, a Communist government controls China. As a result, the political system suffers from high amounts of censorship and misinformation. Eric Hu accounted in the New York Times that “China is both the world’s newest superpower and its largest authoritarian state.”

Hu’s and similar statements acknowledge the economic power of China. However, the nature of China’s political system does question the validity of its informative claims, including those of an economic nature. China resists forfeiting government control or enlisting the aid of NGOs. In fact, many successful NGOs have to operate without government permission in order to assist people facing poverty. Yet, there is some improvement in this area, with available NGOs like Jiangxi bringing 500,000 yuan to struggling Chinese villages as well as financial plans for its disbursement.

Meeting Opportunities

China’s middle class may be on the rise, as well as its GDP and hopeful updates on SDG 8 in China. However, in order for true advancement to occur, there needs to be a greater emphasis upon financial aid and transparency towards its citizens who are in poverty and even extreme poverty. If this occurs, coupled with China’s impressive GDP growth, the country could attain many economic benefits.

– Jacob Hurwitz
Photo: Flickr

Mobile Government
Worldwide, more people have access to mobile phones than to proper sanitation. As crazy as it sounds, mobile phone access can be advantageous. The International Telecommunication Union estimates that out of the 7 billion people on earth, around 6.5 billion have access to a mobile phone. As of 2018, 100% of the population in low- and middle-income countries had access to mobile phones, whereas 55% of the population in low-income countries owned a mobile phone. The pervasiveness of mobile technology can help build expansive government networks. Mobile Government (mGov) could provide citizens and businesses with extended benefits and stir up overall economic growth.

Since the COVID-19 pandemic began, several countries with pre-established digital governments have launched public services that people can access via mobile phones. The introduction of these online services could be a blessing for developing countries, where the communication between the government and the residents is almost nonexistent.

What is a Mobile Government (mGov)?

Mobile Government is a government-led platform that uses mobile technology to increase active participation in government operations while offering several government services and applications that individuals can access electronically. It provides quick and easy access to integrated data and location-based services and helps to empower citizens. Here are different ways Mobile Government can make a positive impact.

Increased Financial Inclusion

As per World Bank reports, by 2018, the number of people holding bank accounts shrank from 2.5 billion to 1.2 billion in just seven years. As a result, less than 50% of the adult population did not have a link to traditional banking systems. Therefore, to increase the financial inclusion of the citizens, governments all across the globe are undertaking initiatives to encourage and support the development of financial technologies.

In India, Jio, an Indian telecommunications company, in collaboration with the government, stirred a socio-economic revolution by providing subsidized 4G service to more than 200 million subscribers in under two years. Likewise, the mobile currency has transformed the Kenyan economy. More than three-fourths of the population have gained access to mobile wallets (M-Pesa) and can participate in financial transactions.

Similarly, online services can be useful in distributing money among the poor since only a small fraction have operational bank accounts. About 1.2 billion users across 95 countries use mobile money. Many countries use mobile payment services to provide monetary assistance through Government-to-person (G2P) payment systems.

In Bangladesh, the government is providing 5 million families with economic support by transferring money online, ensuring that families have a stable recovery from the COVID-19 pandemic. The usage of mobile has helped reduce corruption dramatically, improve access to financial services and boost participation in economic activities.

Better Access to Essential Services

Mobiles have made access to health, education, agriculture and other services trouble-free for the general public. In the same way, mobile phones are going toward addressing serious health problems. Increased communication can bring awareness about safe drinking water, birth control, maternal health and malnutrition amongst many others.

Globally, 774 million people are unable to read or write. Out of that group, 123 million are youth. One can frequently trace illiteracy to a lack of books. Studies have revealed a positive correlation between high illiteracy rates and a shortage of books. The majority of people in sub-Saharan African do not have access to books and the schools in the region rarely do anything about it. As a solution, several developing countries have replaced physical texts with online books, allowing a larger proportion to access books. For instance, educators in schools in countries like Zimbabwe, Uganda, Nigeria and Pakistan read stories to the children from mobile phones.

Mobile phones can also combat dengue fever in Pakistan. Sanitary workers use smartphones to send geo-tagged images of swamps to the central health experts. Afterward, health experts monitor the images.

The agriculture sector in Ethiopia and Uganda also utilizes mobile phones in a significant way. It employs mobile phones to deliver early alerts on droughts, food shortages, pests and weather-related calamities.

Enables Social Accountability

The governments in developing countries are using mobile technology to promote the use of SMS texts to enhance social accountability among the citizens. A study that took place in 46 African countries unearthed a correlation between high mobile penetration and low corruption rates.

In several developing countries, citizens receive encouragement to notify their governments of any matters that require addressing. In Pakistan, the Director-General of the Passport Office sends a message to the visitors inquiring about any bribery encounters or any other issues.

Mobile Government can be a powerful tool, useful in extending access to existing services, developing further innovative, inclusive services and increasing citizen participation in all realms of the public sector. Mobiles can dynamically foster civic engagement, facilitate transparent democracy, reform the outdated educational systems and create advanced healthcare infrastructure in developing countries. The use of mobile technology can tackle the growing digital divide between low-income and high-income countries. Hopefully, this will uplift the economies and literacy rates in developing countries.

– Prathamesh Mantri
Photo: Flickr

The Northern Triangle
Latin America is in a vicious circle of crime, poverty and corruption. High crime rates thwart economic opportunities and crime rates push people into poverty, all cumulating into corrupt leaders who use the pain for their power and self-interest. Nevertheless, nowhere is crime more prevalent than in the Northern Triangle.

The Northern Triangle is region in Central America that includes Guatemala, Honduras and El Salvador. It has experienced the worst problems such as poor economic growth, rampant gang violence and political corruption. This three-prong nightmare has fueled an estimated 265,000 people toward the Southern U.S. Border and will continue to grow into the foreseeable future. While some do attempt to find safety in Europe and elsewhere in South America, others take the risk and traverse their way to the U.S-Mexico border, where they risk entering the country illegally. Others surrender to U.S. border patrol and seek asylum. However, it is unlikely that they will receive asylum. On average, only 13% of individuals receive asylum and experience integration into the United States.

Gang Corruption

In 2017, a survey asked the people in El Salvador, “who runs the country?” About 42% of respondents said “Delincuencia/Maras.” For non-Spanish speakers, this translates to gangs, like MS-13.

These answers have visible ramifications that strike at the core of the government. Governments in the Northern Triangle are weak, and the people know this; the gangs know this. People understand the country’s power lies in gangs’ hands, not in the government’s.

For example, in 2012, the Salvadorian government agreed to sign a truce with the criminal organizations to address skyrocketing homicide rates. The profoundly unpopular legislation did lower the homicide rate but the people still had to continue to pay gangs. Tactics like homicide and racketeering are not the only ways these organizations flex their might.

Throughout the Northern Triangle, gangs rely on drug and human trafficking, money laundering, kidnapping and theft to export their criminal enterprise well beyond the Northern Triangle. Issues in the Northern Triangle are not just an inter-state problem but also a problem for the entire Western Hemisphere.

Governance Problem

Northern Triangle nations have made some progress when it comes to corruption. But the total damage that such corruption caused is still in the billions: $13 billion to be precise.

In 2006, Guatemala successfully combated corruption when it appealed to the U.N., which established the International Commission Against Impunity in Guatemala (CICIG). This independent body investigates the infiltration of criminal groups within state institutions. Such an organization resulted in the conviction of hundreds of officials and reduced the homicide rate.

In El Salvador, in 2019, the country created its own independent body called Commission against Corruption and Impunity in El Salvador (CITIES), which could yield the same results as CICIG. Over in Honduras, the hopes of establishing such independent oversight do not seem to be gaining the same traction. After the resignation of President Lobo Sosa in 2013, an investigation into the Honduran Institute of Social Security revealed a scandal that cost the people over $200 million. It also implicated President Orlando Hernández, who admitted to unknowingly using some of the money to fund his presidential campaign.

Unlike Guatemala and El Salvador, the Honduras legislature rejected a proposal to create its own CICI. Instead, it created Support the Fight against Corruption and Impunity in Honduras (MACCIH). Although intended to fight corruption, it does not have the same autonomy as CICIG and CITIES. MACCIH is not autonomous and cannot investigate Honduran Public Ministry. Instead, it relies heavily on its relationship with the Attorney General and Congress, which could shield the people committing corruption. This inability to pass support for CICIH instead of settling for MACCIH might be signaling that the $200 million white-collar crime is the beginning of a giant iceberg.

A Path Forward

In Washington DC, support exists for CICIH and CITIES. Congresswoman Norma Torres and others released a statement in 2019 supporting these institutions. Reinstating the CICIG and implementing the same structure in CICIH and CITIES would stop corruption. This would allow the state to use its monopoly on violence to fight crime and allow positive economic growth. In April 2021, the State Department announced $740,740 in available funding for “competition for organizations interested in submitting applications for projects that empower civil society to combat corruption and protect human rights.”

– Diego Romero
Photo: Flickr

Extreme Poverty in Botswana
The nation of Botswana, home to approximately 2.3 million people, has undergone an amazing change over the past three decades, transforming from an impoverished nation to one of the wealthiest nations in sub-Saharan Africa. While many of its neighbors have lagged behind—in fact, the United Nations classifies sub-Saharan Africa as the poorest region in the world—Botswana reduced the percentage of its population living on less than $1.90 a day from 29.8% between 2002-2003 to 16.1% between 2015-2016. What are the secrets to success in combatting extreme poverty in Botswana that have allowed it to prosper relative to its neighboring African nations?

A Brief Look at the History of Botswana

Botswana gained its independence from Great Britain in 1966 and quickly adopted a parliamentary constitutional republic. In fact, Botswana is the oldest democracy on the continent, though one party—the Botswana Democratic Party—has dominated elections since the adoption of the country’s constitution. Compared to its neighbors, Botswana began with a commitment to free enterprise, rule of law and individual liberties. Its first president, Seretse Khama, had a devotion to fighting corruption, which was critical to Botswana’s success.

To fight extreme poverty in Botswana, the country invested in four critical pillars: public institutions, education, economic diversification and women’s rights.

4 Pillars to Tackling Extreme Poverty in Botswana

  1. One of the most remarkable aspects of Botswana is its extraordinarily low levels of corruption as a result of institutional checks and balances. According to the 2017 Corruption Perception Index, Botswana was the least corrupt nation in Africa, with its score twice as high as the average sub-Saharan African nation. Botswana is one of only a handful of nations that outperform parts of Western Europe, with its score outpacing Spain in 2018. This is as a result of institutional checks and balances, including the Corruption and Economic Crime Act of 1994 and the development of the Directorate on Corruption and Economic Crime, an agency tasked with investigating and preventing corruption. As a resource-rich state known for diamond mining, Botswana was careful to prevent government employees from benefiting from what the nation’s first president deemed public resources.
  2. Botswana invests a considerable percentage of its GDP in education; this percentage was more than 20% in 2009. Botswana’s investment in education translated to a literacy rate of 87% in 2019, compared to a regional average of 65%. High rates of education have contributed to Botswana’s increased economic diversification and strong political stability, making the nation one of the more attractive places to do business in Africa.
  3. Smart economic development has contributed to Botswana’s high living standards and low corruption levels, placing it ahead of its peers. Botswana derived much of its early economic growth from diamond extraction which, among other exports, accounts for approximately 40% of Botswana’s GDP composition by end-use. However, consistent investment in other sectors of the economy has remained a strategy for the ruling party, and the government has increasingly diversified its economy towards the service sector and tourism jobs. Investment in conservation and wildlife has grown the tourism industry to approximately 14% of Botswana’s GDP,  nearly doubling since 1999. Remarkably, Botswana’s commitment to managing its domestic ecosystems allowed it to sign one of the first “debt-for-nature” agreements with the United States, which forgave more than $8 million in debt in exchange for the continued protection of the Okavango Delta and tropical forests.
  4. In addition to the high rates of women’s education and literacy, Botswana remains committed to a strong National Family Planning Policy and healthcare service. Botswana has experienced a rapid decline in fertility, according to the CIA World Factbook, with the total fertility rate falling from over five children per woman in the 1980s to 2.42 in 2021. Easy access to contraception and above-average rural and urban access to healthcare facilities have not only contributed to a decline in fertility but emboldened women’s rights and improved standards of living.

Botswana is by no means a perfect nation. It has extremely high rates of HIV/AIDS, like many of its African peers, and its single-party government has been criticized by some international organizations for suppressing competition. However, decades of consistent improvement in education and women’s rights, increased economic diversification, high levels of economic freedom and a commitment to fighting corruption have made Botswana the most prosperous nation in sub-Saharan Africa and a model for its peers.

– Saarthak Madan
Photo: Flickr

India's Foreign Aid
The Republic of India receives millions of dollars each year in foreign aid. This money goes toward ending poverty and improving living standards. However, as India develops and modernizes, the government has started to lend a helping hand to poorer nations across the world. Many see India’s foreign aid as both a tool for diplomacy and an act of good faith. As in the words of India’s Development Partnership, its approach to foreign aid is, “shaped by India’s struggle for independence and solidarity with other colonized and developing countries and the inspiring leadership of Mahatma Gandhi…” The nation is transitioning from a recipient to a donor, as the nation often gives more in foreign aid than it receives.

By The Numbers

The Indian Government allocated $1.32 billion for foreign aid in its 2019-2020 budget year (around 0.3% of the budget). This amount follows a trend of India drastically stepping up its foreign aid over the past decade. The budget went from around $500 million in 2010 to a peak of $1.5 billion in 2015. Despite a three-year slump in funding, the central government is now stepping back up to the plate. The main focus of India’s foreign aid centers around the development and modernization of its recipients.

Most of India’s foreign aid goes to countries in Asia and Africa, as it seeks to improve relations with its neighbors and assert its global presence. The nations India is providing aid to include Myanmar ($56 million), Bangladesh ($24.5 million) and Bhutan ($392.7 million). Aid that these nations receive has the goal of promoting regional stability and creating higher living standards. The Indian Government has also taken more interest in Indian Ocean countries such as Mauritius ($161 million), Sri Lanka ($35 million) and The Maldives (~$81 million) to increase Indian presence in the Indian Ocean.

How India’s Foreign Aid Helps

India’s foreign aid goes to a variety of projects such as infrastructure, agriculture and energy. The nation has invested billions in infrastructure projects in nations like Nepal and Afghanistan, such as hydroelectric plants, dams and schools. Famously, India and Afghanistan finished the Salma Dam, renamed the Afghan-India Friendship Dam. The Dam cost India around $300 million and provides hydroelectric power and irrigated farmland to the surrounding area. Additionally, India gave millions in foreign aid to Caribbean nations to improve their renewable/clean energy sectors that combat pollution and environmental challenges.

India is also heavily active in humanitarian efforts and disaster relief, frequently giving out loans, medical supplies and other types of assistance. The Brookings Institute has even called the nation “The Neighborhood First Responder,” helping with disaster relief in Sri Lanka, Afghanistan and Myanmar. Humanitarian aid has gone to nations like Fiji after Cyclone Winston hit the nation in 2016. Recently, India has helped combat the COVID-19 pandemic through monetary aid, donating food and distributing vaccines. Brazil, which faces a vaccine shortage, received 2 million doses from the Indian government.

Indian-US Relations

India is a prime example of how U.S. Foreign Aid benefits all sides. Nations like the United States have invested heavily in India and continue to help the government combat problems that plague the nation. As a result, India and the U.S. are now close allies and often cooperate on shared goals such as combating environmental challenges and ending extreme poverty. The two nations also cooperate with each other in international organizations like the U.N. and IMF. Both nation’s economies benefit from a strong India, with bilateral trade totaling around $149 billion. A diverse array of U.S. businesses operate in India, from energy and infrastructure business to ones involving technology and entertainment.

– Malcolm Schulz
Photo: Flickr

Agricultural Improvements in Tanzania
Tanzania is a country located along the coast of the Indian ocean in Eastern Africa. It has a population of more than 60 million people and continues to grow. Tanzania’s economy has been on the rise over the last decade. However, its agricultural sector employs a large number of people and is still struggling to make ends meet. The country partners with many agencies and organizations. Moreover, the U.S. government-funded USAID is Tanzania’s most important donor. It has been working to contribute to agricultural improvements in Tanzania by increasing the efficiency of weather information. Here are some facts about Tanzania’s economic condition, the importance of access to climate information and the U.S. aid that the country’s farming sector has received recently.

The Total Number of Low-Income Tanzanians Has Increased Despite Economic Growth

Tanzania has a wide variety of resources and economic reforms. As a result, the nation has witnessed astonishing growth in its economy within the last 10 years. Thus, the poverty rate fell from 34.4% in 2007 to 26.4% in 2018. Additionally, approximately 14 million people were living in poverty. However, due to the country’s rapid population growth, the absolute number of people living in poverty increased while the relative number decreased. The areas of economic growth were related to industry and service. This only gives work to 6% of the total population. The agriculture industry requires the most support and foreign aid because it grows slower. In addition, many Tanzanians work in this industry.

Easy Access to Weather Information is a Necessity

Access to weather information is the main tool in the process of agricultural improvements in Tanzania. This has become increasingly important as the climate is constantly changing. Since food production heavily relies on precipitation, farmers need to be able to predict and prepare for any amount of rainfall. The Tanzania Meteorological Authority (TMA) has been sending out SMS to more than 3,000 farmers all around the country several times a month to provide them with the much-needed information. However, due to high cost and inefficiency, the methods of spreading information have been the main focus of improvement.

Database for Farmers has Supported Agricultural Improvement in Tanzania

USAID funds the Building Capacity for Resilient Food Security Project and serves as an important partner in improving the spread of information. This project’s goal is to support the Tanzanian government in stabilizing its agricultural sector through different climate challenges. Additionally, the Food and Agricultural Organization of the United Nations (FAO) is one of the project’s three national partners. It has also supported TMA in creating a database for farmers to access and analyze weather information. The new technology has made it easier for farmers to receive the necessary information and has also resulted in higher usage of social media platforms by people in rural areas. It has become much easier for those in the agricultural sector to schedule the planting and harvesting of crops with this improvement.

USAID Sponsored Training to Increase Food Production Efficiency

The Building Capacity for Resilient Food Security project has contributed to many agricultural improvements in Tanzania. For example, the project sponsored training sessions for decision-makers and stakeholders throughout Tanzania in 2019. These training sessions teach farmers how to survive different climate crises and how to plant and harvest efficiently. Experts from American universities and various international partners are leading the training program. Furthermore, the goal is to teach the participants how to practice climate-smart agriculture. The hope was that the training session would increase Tanzania’s food production and decrease the number of farmers living in poverty.

Making Tanzanian Agriculture Self-Reliant

The partners of the Building Capacity for Resilient Food Security Project, FAO, USAID and the U.S. Department of Agriculture (USDA) improved Tanzanian farmers’ capability to plan their food production efficiently in January 2021. Furthermore, the partners provided important supplies such as ph meters, measuring cylinders, bottles and new technologies for a weather database to the TMA.

It will be easier for the agency to collect weather data and quickly spread the information to Tanzanian farmers with the new equipment. This will support the farmers’ goal in expanding their food production and security to the point of self-reliance. The organizations hope that making Tanzania’s agriculture more sustainable will contribute to the country’s economic growth and help many people who have employment in the sector out of poverty.

– Bianca Adelman
Photo: Flickr

Brazil's Emerging Market
Brazil currently has the ninth-largest economy in the world. It has a gross domestic product (GDP) of $2.05 trillion which accounts for slightly more than 2.5% of the global GDP in 2020. Brazil would account for 2.5% of the world’s wealth if one measured it by all of the goods and services it exchanged in 2020. Thus, Brazil’s emerging market has become a reputable force on the world economic stage. It has now surpassed some developed economies in GDP. For example, Brazil’s economy is now larger than Italy’s, which accounted for 2.4% of global GDP in 2020. Several factors contribute to the success of Brazil’s emerging market: better international relations, the adaptation of technology and improved education. However, the most important element of an emerging market is a solid mix of domestic companies. Here are three Brazilian companies that have been driving the economy forward.

Eletrobras

Eletrobras is the number one supplier of electricity in Latin America. Additionally, it projects that it can be one of the top three clean energy suppliers for the entire world by 2030. Furthermore, Eletrobras differentiates itself from other energy companies by focusing on generating electricity through renewable methods. In fact, the company strives to ensure that less than 10% of electricity produced comes from sources that have high greenhouse gas emissions. Eletrobras utilizes hydropower and wind farms to create the vast majority of its electricity.

The company supplied about one-third of Brazil’s total energy in 2020. As a result, there was a reduction in reliance on foreign energy companies. In addition, it provided vast employment opportunities to Brazilians and residents of other Latin American countries.

Vale

Vale is a Brazilian mining company responsible for churning out more iron ore and nickel than any other mining company. Iron ore has multiple applications and is the raw ingredient for steel. One can find it in cars, trains, sinks, dishwashers and much more. Additionally, a battery’s fundamental material is nickel. It has a shiny appearance and is inexpensive. Therefore, many countries use it to make their currencies.

Vale now employs more than 100,000 workers ranging in countries from Canada to Indonesia. The company has been able to successfully push into other sectors including artificial intelligence and energy production.

Itau Unibanco

Itau Unibanco is Brazil’s largest bank in the private sector. The company’s headquarters are in Sao Paulo and it employs more than 90,000 people across nine countries. The government now owns the majority of the company’s equity because it is in the private sector. The primary shareholders are private institutions, corporations and individuals. As such, Itau Unibanco is a bank for everyday workers.

Furthermore, Itau Unibanco has a commitment to giving back to the community. The company invested more than $0.5 billion into education projects and improving transportation infrastructure in Brazil. It shows that people should not consider domestic companies that give back as charities, but rather as an investment in the people.

The Reason these Companies Matter

These companies are critical to Brazil’s emerging market for two major reasons. First, Brazil needs businesses that spark interest in countries abroad to make the leap from emerging markets to the developed economy. All three of these companies successfully accomplished this goal. As such, these companies are appealing to many nations. As a result, there is an inflow of non-domestic goods and services. This allows the economy to expand and raise the overall quality of life for everyone.

The second reason is that these companies provide employment opportunities to Brazilian citizens in diverse sectors. Brazil needs companies such as Eletrobras to provide electricity in an economic boom and a severe recession. In addition, Brazil needs Vale to produce steel. In the end, these companies create many opportunities for Brazilian citizens in many sectors.

If Brazil can navigate through the pandemic while keeping companies like Eletrobras, Vale and Itau Unibanco afloat, it has a fair shot at becoming a developed economy in the future.

– Jake Hill
Photo: Wikimedia Commons