Information and stories about economic growth.

Worker Remittances and Poverty in the Arab World
The Arab world has one of the highest proportions of migrant to local workers in the world, with over 32 million migrant workers in the Arab states in 2015 alone. In addition, the region has one of the largest diasporas in the world. This means that many skilled workers are emigrating to wealthier countries and sending money home via remittances. But what do remittances in the Arab World mean for the region and its inhabitants?

Brain Drain vs. Gain

In Lebanon and Jordan, unskilled labor is provided by growing numbers of refugees and foreign workers, totaling over five million in 2015. However, as more foreign workers enter the country, growing numbers of high-skilled Lebanese and Jordanian nationals are emigrating. This often occurs when opportunities are limited, when unemployment is high and economic growth slows. The phenomenon is dubbed ‘brain drain’ as opposed to ‘brain gain’, whereby an increasing stock of human capital boosts economies. A drain occurs while poor countries lose their most high-skilled workers and wealthier countries in turn gain these educated professionals.

Remittances in the Arab World

These expatriates commonly work to improve their own living situations while also helping to support their friends and families. This is where remittances come into play. As defined by the Migration Data Portal, remittances are financial or in-kind transfers made by migrants to friends and relatives in their communities of origin. Remittances often exceed official development aid.  They are also frequently more effective in alleviating poverty. In 2014 alone, the Arab states remitted more than $109 billion, largely from the United States followed by Saudi Arabia and the United Arab Emirates.

There is no denying that remittances can be a strong driving force for the socioeconomic stability of many Arab countries. But not all the influences are positive. Some experts argue that remittances can actually hurt the development of recipient countries. Their arguments cite potential negative effects of labor mobility and over-reliance on remittances. They emphasize that this can create dependency which undermines recipients’ incentive to find work. All this means an overall slowing of economic growth and a perpetuation of current socioeconomic status.

The Force of the Diaspora

The link between remittances in the Arab world and poverty is clear. Brain drain perpetuates and high amounts of remittance inflow and outflow persist if living conditions remain unchanged. Policymakers are therefore focusing efforts on enticing emigrants to return to their countries of origin. By strengthening ties with migrant networks, and implementing strategies like entrepreneurial start-up incentives and talent plans, the initial negative effects of brain drain could be curbed.

Overall, though brain drain and remittances can seem to hurt development in the short-term, if policies can draw high-skilled workers back, contributions to long-term economic development can erase these negative aspects altogether. Young populations that have emigrated to more developed countries acquire education and valuable experience that is essential to promote entrepreneurship in their home countries. Moreover, their experiences in advanced democracies can bolster their contribution to improved governance in their countries of origin. The Arab world’s greatest untapped potential is its diaspora, and it could be the key to a more prosperous future, if only it can be harnessed.

Natalie Marie Abdou
Photo: Flickr

Credit Access in Mauritius
Mauritius, the island nation in the Indian Ocean, has undergone a financial transformation since the early 2000s, promoted by the government in order to catalyze the economy of the country. This has impacted credit access in Mauritius in a big way. Since 2000, the country has experienced losses connected to its truncated access to EU sugar and textile markets and is facing steeper competition from China and other East Asian exports.

Mauritius Economy Compared to Other Countries

This loss of preferential treatment and high budget deficit spells a slight struggle for Mauritius to retain its middle-income standing. Currently, the country ranks 65th in the world on the Human Development Index, and in 2014, it was the second highest country in Africa on the development list. Mauritius’ Gross National Income (GNI) per capita is at $9,770 and the Organization for Economic Cooperation and Development (OECD) reports that the country performs better than the average compared with other sub-Saharan African and middle-income countries as far as information ability, involvement of the trade community, advance rulings, appeal procedures and internal border agency cooperation.

By continuing to focus on the area of governance and impartiality, Mauritius can increase its trade volumes and lower trade costs. A strengthened customs system and transparent ethics policy could be the final stretch to reach the Prime Minister’s dream of a high-income country.

Government Initiatives

The Prime Minister of Mauritius, Pravind Jugnauth, has predicted a revamping of the economy and expresses hope for Mauritius moving into the future. Key reforms introduced in the 2018/2019 budget helped bring Mauritius its present position. The Minister also touched on the government’s dedication to raising the country to high-income level country, thereby funneling benefits to every citizen. Already this commitment can be seen in the growth of Gross Domestic Product (GDP) and financial services, estimated to continue at 4.1 percent in 2019.

The government introduced changes to the legislative system in order to prevent money laundering and corrupt business. In his speech, the Prime Minister assured that the country is conducting a national risk assessment of terrorism financing.

Credit Access in Mauritius

A report from the Global Findex as of 2017 records 68.5 percent of Mauritians making or receiving digital payments, as well as 48.3 percent using credit or debit cards. The percentage of adults above the age of 15 who borrowed from a financial institution in Mauritius was at 22.9 percent, much higher than the sub-Saharan average of 8.4 percent, in comparison. Outstanding housing loans are increasing in availability as well, and almost 90 percent of adults were able to obtain access to financial institution accounts, banks or otherwise.

Enjoying past growth of upwards of 6 percent in the 1990s and continued economic performance, Mauritius is still dealing with the changes in the EU Sugar Protocol and falling sugar prices. As of 2006, the government incentivized seafood production in order to shift toward exporting fish instead of sugar, as well as a list of Integrated Resort Schemes offering luxury villas to foreigners. Diversifying the market and leveling the competition will surely launch Mauritius ahead in the economic playing field. The GDP by sector reveals the sugar sector operates at a modest 4.3 percent in 2007, led by government services at 15 percent, wholesale at 11, finance and real estate at 14.2 and many other diverse trade sectors.

Unfortunately, drastic adjustments meant one-third of employees for the sugar sector were redundant. The lost sugar income has still not been completely replaced, but the government is focused on diversification and increasing exports in the coming years.

In addition to experiencing an incredible 195 percent wealth growth from 2007 to 2017, credit access in Mauritius continues to increase due to strong ownership rights, a resilient economy, and ease of investment. Hopefully, the country’s example spearheads a movement throughout Asia for easier credit access and stable banks and economy.

– Hannah Peterson
Photo: Flickr

Rideshare in Africa
Many African countries are moving toward urbanization. Residents are discovering that mobility is being limited by the overcrowding of roads and the lack of public transit. However, rideshare in Africa has quickly gained footing, bringing with it a new set of possibilities for the economies of the cities they serve.

Benefits For the People

Despite many countries in Africa boasting some of the fastest growing economies in the world, it is still home to 11 of the 20 countries with the highest unemployment rates. With the rapid growth of rideshare, there is an equally rapid need for drivers, providing jobs to tens of thousands of Africans in many of the continent’s major cities. Uber, an American-based company that has been servicing Africa since 2013, providing hundreds of thousands of people with rides.

Rideshare in Africa also alleviates some of the biggest transportation hindrances people in dense cities face. While Africa has quickly seen a surge of residents owning and regularly using technology such as smartphones, many still do not own personal vehicles. For those who do, the underdeveloped infrastructures of many African cities, most of which were not designed to hold the numbers they now contain, make driving difficult and impractical. Companies like SafeBoda, which started in Uganda but hopes to service various regions throughout Africa, are deploying “boda-bodas” (motorcycle taxies) instead of cars, allowing citizens to move about the city centers more easily and work in places previously out of reach.

Benefits For the Economy

Currently, almost 40 percent of Africans live in cities, and this number is expected to grow to 50 percent by 2030 and 60 percent by 2050. With this increase in population, there is a corresponding increase in demand for transportation that does not require a personal vehicle. Rideshare companies have set out to fill this demand, bringing with them foreign and domestic investors who see rideshare as growing in popularity among the people, bringing economic potential.

While Uber remains the top rideshare service throughout Africa due to its worldwide brand recognition and its ability to keep rates low, many African-based companies have been able to use their local knowledge to compete with the larger foreign companies. Kenyan-based rideshare company Mondo Ride, for example, understands that overcrowding in the city streets means that passengers taking rideshare cars would only add to the problem. Therefore, they offer the option for boda-bodas or tuk-tuks (three-wheeled motorbikes) in many of the cities they serve. This allows them to compete with giants like Uber, thereby bringing more investment into their city as they grow in popularity.

The Future of Rideshare in Africa

As rideshare in Africa takes off, it faces two battles that will shape the futures of both rideshare itself and the cities in which they operate: market competition and government regulation.

While local rideshare companies have the advantage of regional familiarity over the giants like Uber, the larger companies’ ability to lower prices threatens to make smaller African-based companies obsolete. In many African cities, there have been protests by these smaller companies, claiming that Uber is creating a monopoly over the industry, mitigating the positive economic effects of healthy competition.

 As rideshare continues to grow in Africa, local governments are struggling to regulate the industry. Ghana became the first to create formal documentation detailing Uber’s presence in its cities, but other countries have not been able to keep up with the high rate of growth this industry has seen.

Regardless of any frustrations with market competition or difficulties in regulation, rideshare in Africa is quickly becoming the norm. It is a sign not only that Africa is embracing technology but also that it is excelling in doing so. As rideshare companies and local governments begin to understand their local markets, residents will be better able to enjoy the benefits and the economic opportunities will continue to grow.

– Rob Lee
Photo: The Africa Report

Ethiopian PM Turns to Privatization to Further Economic Growth

In a move atypical of his political alignment with the Ethiopian People’s Revolutionary Democratic Front (EPRDF), Prime Minister Abiy Ahmed announced in June 2018 that the government will begin procedures to implement privatization in Ethiopia of various state-owned enterprises (SOEs) in telecommunications, energy and transportation.

Already one of the fastest growing economies in the world, Ethiopia hopes to continue this trend by selling shares in some of the country’s most profitable and promising industries. In this announcement, Ahmed proposed that privatization of these booming enterprises will aim to increase foreign direct investment (FDI), lessen the unemployment rate and reduce poverty.

Ethiopia’s Recent Improvements

The second largest country in Africa and home to more than 100 million people, Ethiopia has been experiencing tremendous economic growth in recent years. Unemployment has dropped from more than 26 percent in 1999 to less than 17 percent in 2015. The poverty rate has decreased from nearly 46 percent in 1995 to less than 30 percent in 2010.

While Ahmed has only been in office since April of 2018, his vows to reform Ethiopia economically and socially have surprised many. Since their coming to power in 1991, the EPRDF’s has had a history of complete state-ownership of the majority of the industry. The state, however, will remain in control of the majority of shares in the industries being opened up to foreign investment.

His promises of calming social tension and revamping the economy have been met with some skepticism, but Ahmed fervently retains that his intentions are to restore Ethiopia to a place of social stability, economic prosperity and peace. Ahmed has even gone as far as to reach out to Ethiopia’s long-term enemy, Eritrea, to find common ground.

The Prime Minister’s Plans

Although the government has yet to release detailed plans as to how they intend to implement privatization in Ethiopia, they have been working with consulting agencies abroad such as PwC and McKinsey to determine a practical and sustainable way to carry out an economic overhaul of such magnitude.

Among the SOEs the government plans to privatize, the introduction of Ethiopian Airlines to the private sector, in particular, represents a key component in Ahmed’s economic plan; Ethiopia will experience a shift from an agrarian society to a modern, competitive, industrial society. As the country’s national flag carrier and a symbol of state pride, Ethiopian Airlines has garnered an intake of hard currency (currency unlikely to be affected by inflation) three times that of coffee, a long-standing staple of Ethiopia’s economy.

Increasing Foreign Investment

The privatization of Ethiopian Airlines also indicates Ahmed’s desire to transform Ethiopia into a major air travel hub, similar to Emirates’ position in the United Arab Emirates. This will serve as a way to bring in foreign investors and to present Ethiopia as a modern contender in the world economy. By selling shares of Ethiopian Airlines and other rapidly-growing SOEs such as Ethio Telecom, Ethiopian Electric Power and Railway Corporation, Ahmed hopes to draw foreign investment since Ethiopia has experienced an alarming shortage of foreign exchange in recent years.

While privatization in Ethiopia is sure to be a slow transition, and the government will most likely remain majority shareholders in the enterprises they are selling, the country appears to be heading in a positive direction. Between 2004 and 2014, Ethiopia averaged annual economic growth of 10.9 percent and is projected to grow another 8.7 percent in the next two years.

With a goal of reaching lower-middle income national status by 2025 and a government promising major social and economic reform, Ethiopia has established itself as a nation in the midst of a true revival. Hopefully, Ahmed’s plan of privatization in Ethiopia will prove to be a positive step for the country’s future economic growth.

Rob Lee

Photo: Flickr

Qatar Airways
On June 4, 2017, the United Arab Emirates, Saudi Arabia and Bahrain severed diplomatic relations with its Gulf neighbor, Qatar, over the latter’s supposed support for terrorism abroad, as well as its close relationship with the Shi’a power of Iran.

BBC reported that the diplomatic crisis not only rocked Qatar’s stock market that lost about 10 percent of its market value in the first four weeks but also stunted the expansion of specific airline company- Qatar Airways. Indeed, in the immediate aftermath, Qatar Airways canceled flights to 18 regional cities and changed flight paths to other destinations due to airspace limitations.

The Impact of Qatar Airways on the Country

The crisis showed the importance of Qatar Airways as both an economic engine of its home country and a transporter of food and other vital resources. Since its founding in 1994, Qatar Airways has spurred its country’s economy, both directly and indirectly, in the following three ways described in detail below.

Economic Engine

Doha’s Hamad International Airport connects Qatar with 150 destinations. To power its massive global operation, Qatar employs 40,000 professionals and as of 2016, it was the fastest growing airline in the world.

As Qatar’s only national airline, Qatar Airways also handles shipments of goods. The diplomatic crisis of 2017, for example, increased prices of elementary goods because Qatar Air Cargo had to take longer routes around restricted airspace.

Trade and Tourism

By branding itself as a world-famous stopover destination, Qatar Airways has influenced Doha’s and country’s tourism increase, spurring economic growth in the process. Ever since 2015, passengers transiting through Doha can participate in the airline’s Discover Qatar, which allows passengers to visit landmarks, including museums, beaches and shopping malls, in Qatar.

These excursions do not only promote Doha’s visibility on the world stage, but also bring foreign money to Qatar’s businesses. Discover Qatar has numbers to back its success. In November 2017, the program hosted 80 leading trade partners. According to Gulf Times, the delegation of trade partners visited the Katara Cultural Village, the Museum of Islamic Art and the stadiums that will host the 2022 World Cup.

Qatar’s emergence as a trade center has prompted its national airline to ease visa restrictions. In Sept. 2016, Qatar Airways worked with the Ministry of Interior to expedite the process for receiving visas, creating an online platform for issuing e-visas. Later in 2017, Qatar launched a free, 96-hour transit visa and extended a visa waiver policy to more than 80 countries. These visa initiatives resulted in an increase of 40,000 visitors in the fourth quarter of 2016.

Charity

The airline has funneled its profits to charitable purposes, both inside Qatar and globally. In 2013, Qatar Airways partnered with Educate a Child, a program that provides primary education to out-of-school children. During the Muslim holiday of Eid al-Adha, Qatar Airways partnered with Qatar Charity to deliver toys for 800 orphans in the Children’s Living Center in the Reyhanli province of Hatay, Turkey.

While booking their itineraries on Qatar Airways’ website, travelers have the option of making donations to educational organizations, with donation sizes ranging from $1 to $50. In November 2014, Qatar Airways raised approximately $700,000 to Educate a Child.

Nevertheless, critics worry that Qatar’s subsidization of its national carrier stifles competition. In the decade preceding January 2015, CNBC estimated that the three Middle Eastern carriers: Qatar Airways, Emirates Airlines and Etihad received more than $40 billion in subsidies from their state governments.

The nagging question is whether these subsidies are sustainable in the long run and if the Qatari government will always have money to invest in its airline’s success.

The status quo gives a reason for optimism, with the 2022 Qatar World Cup and Qatar Airways’ aggressive expansion into new markets showing the Gulf state’s promise for the future.

– Mark Blekherman
Photo: Flickr

Identification closes the gender gap
Empowering women has long been acknowledged as a key ingredient in reducing poverty and improving economic development. The United Nations (U.N.) has set 17 Sustainable Development Goals (SDGs) and gender equality underlies almost all of them. More specifically, the fifth SDG is set to achieve gender equality and empower all women and girls. As the World Health Organization (WHO) recognizes, these goals are interdependent, meaning gender equality is essential not only to the economic prosperity of the communities but for other important issues like health and sustainability as well.

Even today, gender inequality persists worldwide, depriving women of basic human rights and equal opportunities. In poverty-stricken communities around the world, an estimated 90 percent sustain long-standing social practices that devalue women.

Need for Identification

Breaking these modes will require great efforts. Both legal and cultural strides need to change in order to counter deeply ingrained discrimination throughout societies. Studies by the U.N. and UNHCR found that women in conflict and poverty affected regions do not have adequate identification documents. These documents are necessary for achieving the benefits of civic and public life.

Access to identification closes the gender gap in the developing world, but a lack of awareness around the documents prevents women from obtaining them in some cases. Many believe that identification cards are only necessary for exceptional circumstances when in reality they are needed to make the most of social programs and civil rights.

Having personal identification cards in the developing world acts as an important stepping stone. In having the ability to access decisive services and claim entitlements as citizens, women are able to increase their voice and agency through civic participation, access to finances and voting. In assisting women’s social engagement, identification closes the gender gap.

Example of Myanmar

All factors of the country development are intertwined. Women’s documentation is often essential to the peace process in some countries. Resolving the issue of land rights, for example, is crucial to the current conflict in Myanmar, and gender inclusion in the peace process is fundamental to reaching a genuine peace accord. The laws in this country allow women to register and co-register for the property even if they are not head of the household.

While progressive laws have been enacted, there lies a major gap between the law and the reality that women face. Cultural conventions exclude women from participating in land governing let alone a peace accord, making it essential that their names are registered to partake in community meetings. The decisions affect both women and men, making identification an important transition step in transforming cultural norms in poverty and conflict-stricken regions.

Problems with Women Identification

In 2012, four out of every 10 infants born worldwide were not registered with civil governments or authorities. Globally, 750 million children lack identification. A 2013 UNICEF survey found that there is no major disparity between the birth registration of boys and girls.

Evidence suggests that adult women, however, face gender-specific barriers to getting identification documents. Women must provide proof of marriage, additional family signatures and conduct many other steps in the process to obtain identification that men simply do not have to deal with. Unmarried women especially face discrimination as, without a male counterpart or marriage certificate, obtaining identification documents (IDs) is often impossible. IDs are also optional for women, although essential to accessing civic opportunities and required for men.

Increasing access to identification closes the gender gap by helping international organizations better plan and target gender inequality in poverty. The incompleteness of civil registration for women has generated holes in statistics and data for organizations like the World Bank to measure the progress of women in the developing world.

Changing Cultural Barriers

Equality is fundamental to building strong societies. Having active members at every level of a community makes the plight of poverty that much easier to conquer. Gender equality is no different. Ensuring that more than half of the population can do its part must remain at the foremost of poverty reduction endeavors.

While the legal framework with these notions in mind has changed for the better, an uphill battle in the mindset of the communities is much needed. Obtaining identification is the first step in employing available programs and in realizing the agency needed to transform the cultural barriers that devalue women.

– Joseph Ventura
Photo: Flickr

How Abolishing Birth Limits in China Improves the Economy
As government officials convene in Shaanxi to discuss abolishing the birth limit in China, they are also beginning to understand just how the one-child limit has affected the economy, for better or for worse. Over the past three years, the Chinese government has worked towards eliminating the one-child limit and repurposing it to a two-child limit. However, in a recent reversal for the Communist Party, Chinese government officials are currently drafting ways to in fact increase childbirth and population growth, thereby abolishing birth limits in China.

The One-Child Policy in China

When Chinese leader Deng Xiaoping proposed the one-child limit in 1979, he catalyzed a series of unintended social and economic implications. At the time, China was facing major food and housing shortages. Due to its exponentially growing population, hundreds of thousands of people were entering a state near poverty.  To combat these shortages, the one-child limit was placed on the people of China. Suddenly, China’s annual population growth rate dropped to a mere 0.6 percent.

Since 1980, China has been a global hub for economic expansion. In fact, decades of China’s economic boom have lifted hundreds of millions out of abject poverty and sent over 100 million men and women to college. However, recent studies attribute the economic boom not to the stagnant population growth rate, but rather to reform policies that loosened state control over the economy.

Consequences of Limited Population Growth

In fact, fertility rates have decreased to 2.1 in China, partially due to the birth limit and partially due to socioeconomic and cultural transformations, such as later marriage, postponing childbirth to pursue careers, longer birth intervals and fewer births. Researchers suggest that these transformations are not localized to China since countries that had similar fertility rates to China in the 1970s experienced the same decrease in fertility without a strict birth control policy.

The 1980 one-child limit was intended to be a temporary measure to alleviate economic pressures at the time. However, it lasted for decades, shaping an entire generation of people. Perhaps the most tangible effect is that of the aging workforce. China’s level of productivity, measured in output per hours, is at its lowest level since 1999. According to the International Monetary Fund, the number of people in their prime working age (ages 15 to 59) will decrease by almost 200 million over the next three decades. Because the labor force is dwindling, this can pose major pressures in economic and social development.

Changing Policy

Despite the negative impact of the one-child limit, Chinese officials are trying to reverse the effects by lifting strict birth control measures and abolishing birth limits in China. Just in the past three years, ever since the passage of the “two-child” policy, China has seen the percentage of families with two children increase from 36 percent to 51 percent. The National Health Commission claims that the “two-child” policy is working, as it encourages families to not be bound to just having one child.

Additionally, local governments are taking several steps to promote childbirth as the state governments work on policies such as education and housing subsidies and investments in clinics and preschools. These initiatives, coupled with officials’ proposal of abolishing birth limits in China, will help facilitate a better working economy for China.

– Shefali Kumar
Photo: Flickr

How the Media Misrepresents ArgentinaMost of the media coverage surrounding Argentina has dealt with the country’s economic struggles, its crime rate, and, following the recent World Cup, its soccer team. The misrepresentation of Argentina by the media is evident due to the fact that negative coverage far outweighs the positive, giving the public a one-dimensional perception of this South American country.

More than a Soccer Nation

Beyond the financial crisis, much of the recent media coverage regarding Argentina has centered around the country’s World Cup run. Soccer is an immense source of national pride and a beacon of hope for many Argentinian fans, particularly during hard economic times. But soccer, while deeply engrained within the national fabric and heavily covered by the media, represents just one aspect of the diverse nation.

Portraying Economic Crisis in the Country

Argentina’s economy has far from met the expectations associated with market-friendly President Mauricio Macri. The value of the Argentine peso plummeted in April, resulting in a $50 billion loan from the International Monetary Fund. This, coupled with high inflation, has brought persistent economic hardship to the country and poses a serious threat to Macri’s “zero poverty” campaign promise.

Much of the media coverage surrounding Argentina has focused heavily on the economic crisis and the crime associated with it. While the crisis is prevalent and a resolution is much needed, the rampant and disproportionate coverage of the crisis goes to show just how the media misrepresents Argentina. In doing so, the media taint the perception of the country and fails to portray the true image of Argentina, one of an improving economic and social condition.

Economic and Social Progress

In 2017, poverty in Argentina decreased by 4.6 percent and is currently at 25.7 percent, according to official estimates. Prior to the Macri presidency, transparency about Argentina’s poverty was scarce. The publishing of official statistics only began in 2016, after being halted by the former populist government in 2013. Macri has not only strived for zero poverty, but he has established the proper balances to hold his administration accountable, something that was not the case for Argentina’s recent past.

Macri has faced the delicate task of reducing Argentina’s poverty rate while also working to alleviate a large budget deficit incurred by prior administrations. Macri’s administration has focused on reducing this deficit with the help of the International Monetary Fund and the implementation of public-private partnerships. With private companies financing long-term infrastructure contracts, Argentina expects to attract $26.5 billion in investment by 2022, reducing pressure on the budget but also contributing to the fall in poverty through the creation of thousands of steady jobs.

The citizens of Argentina have also exhibited a strong commitment to social progress, pushing landmark legislation to the floor of Congress, the Senate and the offices of President Macri. However, media coverage of these events is brief if existing at all, failing to show a highly positive dimension of Argentina.

Justina’s Law

News that the Chamber of Deputies (lower house of National Congress) passed a grassroots piece of legislation that makes 44 million citizens organ donors was seldom reported. The official increase in donors will depend on how many citizens choose to opt out, but this legislation will undoubtedly ensure the survival of thousands of patients that are in need of organ transplantation. With the approval of this law, also called the Justina’s Law, Argentina would join the ranks of France and Netherlands in this landmark legislation.

While it is typical to hear for the negative aspects of Argentina’s economy and crime, the work being done to solve these issues or the positive impacts that the Argentine people themselves are having on their country is rarely discussed.

Though it may seem that the misrepresentation of Argentina in the media has little effect on the country’s economic and social outlook, this is far from the truth. Macri’s plan for foreign investment depends heavily on the perception of Argentina as a viable place for growth. The current administration’s commitment to accountability and poverty reduction, as well as social progress, show the world that the country is trending in the right direction.

– Julius Long

Photo: Flickr

Growth within Bosnia and HerzegovinaBosnia and Herzegovina is a sovereign state in the southeastern region of Europe, found on the Balkan Peninsula and borders Croatia, Serbia and Montenegro. This nation has been through a multitude of financial struggles, yet there has been continued growth within Bosnia and Herzegovina. The country is now on the path to stable economic development.

Bosnia and Herzegovina

Rates continue to improve substantially. For example, the unemployment rate among adults decreased from 25.4 percent in 2016 to about 20.5 percent in the first six months of 2017. This is a meaningful advancement for the country.

Bosnia and Herzegovina is also a candidate nation, which signifies that it could potentially be a partner within the European Union. This is a great opportunity for Bosnia and Herzegovina as it could accelerate the country’s economic and political systems even more quickly.

In addition to this hopeful alliance, the World Bank assists Bosnia and Herzegovina by both funding initiatives and formulating a new growth model.

Projects for Growth

Growth within Bosnia and Herzegovina begins with foreign aid from international organizations, particularly the World Bank, which will implement advanced infrastructural and economic structures within the country.

There are now 11 active projects within Bosnia and Herzegovina that will hasten reforms, and the World Bank will lend an overall $521.63 million to the nation.

Better Than Before

“Better than Before — Rebuilding Bosnia and Herzegovina” is one of the many projects that are currently active. The country witnessed devastating floods that impacted 25 percent of the population. Since the economy is agriculturally-based, they lost approximately 15 percent of the country’s GDP. This initiative salvaged 248 infrastructure facilities and helped 580,000 individuals.

“Banking Sector Strengthening Project” improves “banking regulation, supervision and resolution capacity and by enhancing the governance of the Entity development banks.” This will better banking among every sector since they plan to replace obsolete banking styles with improved strategies that will promote economic development.

“Bosnia and Herzegovina Employment Support Program” will increase private sector opportunities and jobs for citizens. It will allow better interaction and discourse for employers, employees, public policy makers, etc. It will also allow the government to expand active labor market programs.

There are eight more projects that will accelerate growth within Bosnia and Herzegovina. They address public health programs, transportation systems and energy efficiency.

New Model for Growth within Bosnia and Herzegovina

Growth within Bosnia and Herzegovina also starts with a new economic strategy. The new framework consists of structural reforms within the public and private sector.

The World Bank will:

  • Encourage public policies that better public efficacy
  • Create and implement initiatives that hasten private sector advancement
  • Implement new strategies to counteract natural disasters/emergency crises

The World Bank will guide and fund this new growth model for Bosnia and Herzegovina and will continually advise the financing so economic growth occurs more rapidly.

Conclusion

The World Bank’s robust presence within Bosnia and Herzegovina is vital to its development as a sovereign state. This nation represents countries’ ability and capacity to progress and change economically.

Its history is sad and unfortunate, yet thankfully, Bosnia and Herzegovina is recovering and growing. The country has earned the right to be an E.U. candidate country.

– Diana Hallisey
Photo: Flickr

Fastest Growing EconomiesIt is no secret that developed countries experience a markedly lower incidence of poverty than their developing counterparts. Furthermore, the poverty that these developed countries experience is often not the extreme variety that is endemic to developing regions of the world.

If a country’s level of development can serve as a rough gauge of the magnitude of poverty experienced in the country, then it is worth exploring which economies are growing the fastest and developing at the most rapid pace. Below is the list of the five fastest-growing economies right now using the most recent data with the annual GDP growth rates from The World Bank.

Libya

Annual GDP growth rate of 26.7 percent (2017)

Situated on the Mediterranean Coast of Africa, the large country of Libya recorded a monumental economic GDP growth rate in 2017. The country’s economy is almost entirely driven by oil and natural gas exports, which have pushed the Libyan growth rate to this level. In 2017, oil production reached its peak for the last five years and, in combination with the rise in oil prices, spurred growth.

Since ousting of dictator Muammar Gaddafi in 2011, the country has seen severe political instability with different military groups claiming different regions of the country. However, in the summer of 2018, at meetings led by French President Emmanuel Macron, the main two opposing factions in Libya agreed to hold elections in December. If successful, the elections could lead to stability in this volatile region and give the Libyan more financial and political security.

Guinea

Annual GDP growth rate of 5.8 percent (2017)

Located on Western Africa coast, Guinea’s economy is driven largely by exports of bauxite, high-grade iron ore, gold and diamonds. Furthermore, The CIA World Factbook states that Guinea has the potential to be a major exporter of hydroelectric power due to its river potential. Additionally, the untapped mineral deposits of the country are poised to attract international investment. Guinea has seen a recovery from the severe Ebola crisis, but it is still under the threat of political instability. However, the pieces for a more prosperous Guinea are beginning to fall into place.

Ethiopia

Annual GDP growth rate: 10.2 percent (2017)

Ethiopia, Africa’s 10th largest country, lies on the eastern side of the continent within the horn of Africa. Ethiopia also holds Africa’s second largest population and one of the most dynamic economies in the region. Ethiopia’s GDP consists mostly of the service sector, agriculture and industry, respectively. According to recent estimates, Ethiopia is poised to be the fastest growing economy in sub-Saharan Africa by the end of 2018.

Furthermore, the sustained decade-long growth that country has experienced contributed to a reduction of poverty in the country, with the extreme poverty rate declining from 55.5 percent in 2000 to 33.5 percent in 2011. The government of Ethiopia has recently implemented the 2nd phase of its growth and transformation plan that aims to increase GDP growth and create jobs by a 20 percent expansion of the industrial sector of the economy.

Macau SAR, China

Annual GDP growth rate of 9.1 percent (2017)

Macau, a Special Administrative Region of China, is located off the southern coast of the Chinese mainland.  Macau’s economy is dominated by the services sector and there are little natural resources on the island. The economy of the region is driven primarily by gambling and tourism, and the area mainly serves as a playground to people from the Chinese mainland and to those from Hong Kong.

The economy of Macau is the third richest in the world in terms of GDP per person; however, this wealth does not translate to everyone in the country equally. Officially, the poverty rate is claimed at 2.3 percent, but the charitable organization, Caritas, estimates this percentage to be closer to 10 percent. Macau’s political system is also rampant with corruption, which unfortunately hampers the reduction of poverty.

Maldives

Annual GDP growth rate of 8.8 percent (2017)

The Maldives consists of over 1,190 bordering along the Indian Ocean. Only 188 of the islands are inhabited since the population is concentrated on the larger islands, including the 39 percent of the population living in the capital Malé. The economy of the Maldives is largely driven by tourism, shipping, and fishing. The most recent data on poverty was published in 2009 and it shows the poverty rate to be 15.7 percent improved from 23 percent in 2002.

These emerging economies represent some of the most promising regions on Earth because of their improvement on quality of life. Strong economies are the backbone of both political and social stability and ultimately greater well-being of people. These five countries look poised to fulfill these goals.

– William Menchaca
Photo: Pixabay