Information and stories about economic growth.

Eye Care and COVID-19
Globally, more than 1 billion need eyeglasses but do not have them. VisionSpring is an organization that recognizes that the lack of access to eye care worldwide highlights the link between poverty and vision impairment. To improve the situation, VisionSpring provides eyeglasses for individuals who need them the most. Currently, the organization fights the lack of access to eye care in the world in the midst of the COVID-19 pandemic.

Seeing the Connection Between Poverty and Eye Care

Poor eye health and poverty link in a feedback loop. Poverty can worsen eye health due to lack of resources, and worsened eye health can cause or intensify poverty. For example, estimates have determined that vision impairments like cataracts and trachoma are more prevalent in impoverished communities due to missing clean water access and overcrowded environments. Once individuals become significantly vision-impaired or blind, they are not able to access beneficial opportunities as easily.

Subsequently, people with compromised eye health or eye disabilities are negatively affected in multiple aspects of their normal lives. This impacts a wide range, including employment, health, education, material wealth, social prosperity and access to aid. In summary, poor eye health lowers a person’s quality of life, especially if that person is or already was in poverty. Now more than ever, this issue draws attention as the quality of life worsens for those experiencing poverty due to inadequate eye care and COVID-19.

VisionSpring’s Intentions and Influence

VisionSpring’s mission is to provide eyeglasses to those who need them. Eyeglasses are instrumental in furthering social, economic, educational and personal advancement. Proper eyeglasses can correct about half of the world’s vision impairment problems. Supplying vision-challenged individuals with eyeglasses can boost their productivity up to 32%, which in turn can allow them to have greater opportunities for income.

Giving students the eyeglasses they need can increase their learning gains by up to one full additional year of school. VisionSpring aims to make these empowering changes in peoples’ lives. It specifically focuses on providing eyeglasses for people in new or growing markets, typically living on less than $4 a day. The organization does this through a mix of revenue, generated by “high-volume low-margin sales,” and philanthropic contributions.

For every $4-5 donation, VisionSpring can give one pair of glasses to someone struggling to see, which can then translate into an average 20% growth in their income. VisionSpring has screened millions of people for vision correction, including garment workers, students, drivers and more.

Over the years, the organization provided 6.8 million pairs of corrective eyeglasses in 24 countries. It has seen an increase in productivity between 22-32% among those receiving eyeglasses and witnessed $1.4 billion in economic influence. Despite all this momentum, however, VisionSpring’s global service slowed in 2020 due to the pandemic. It is now navigating the process of tackling eye care and COVID-19.

VisionSpring Through a COVID-19 Lens

Eye care and COVID-19 alleviation fit together under VisionSpring’s scope of action. Although it has scaled back efforts to provide eye care services in the midst of COVID-19, VisionSpring has ramped up its efforts to serve in other ways.

“Because our eye screening work intersects with community health workers, hospitals, government health ministries, supply chain providers, and the manufacturing sector, we have built in capabilities that have been helpful in the COVID-19 response,” said VisionSpring in a statement.

Accordingly, it established multiple “COVID-19 response goals.” These include obtaining and sending two million units of PPE, including goggles, face shields, gowns, masks and more, to health workers VisionSpring has an association with. Additionally, VisionSpring intends to provide 250,000 cloth masks to people and health centers in low income communities to curb the spread of COVID-19. It has employed and commissioned people it works closely with in the garment industry to make these masks.

VisionSpring also works to deliver 300,000 food and hygiene care kits to people who need them due to lockdowns. In particular, it has targeted transportation drivers, migrant workers and others with the kits and is working to implement handwashing stations outside health facilities in communities it is present in.

VisionSpring’s Impact During the Pandemic

As of December 2020, VisionSpring delivered over 2.1 million units of PPE, exceeded its cloth mask distribution goal by a factor of two and sent out about 304,000 kits to communities. At the same time, due to limitations, the organization scaled back its eye screening services because it lacked the ability to conduct them while social distancing.

VisionSpring CEO Ella Gudwin says VisionSpring plans to return to its full services with a priority on reading glasses due to current specializations and COVID-19 safety precautions. Through VisionSpring’s efforts, past, present and planned, it shows a commitment to the wellbeing of people and communities it serves. By working to maintain priorities and expand impact, VisionSpring strengthens both vision and economic capabilities for individuals, even in challenging times.

Claire Kirchner
Photo: Flickr

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

The Implementation and Benefits of the AfCFTA

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

AfCFTA: A Trade Milestone for Reducing Poverty in Africa

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

Malala Raharisoa Lin
Photo: Flickr

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

The Economic Benefits of Hemp Production

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

A Sustainable Replacement for Cotton

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

Hemp Research Possibilities

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

Medicinal Properties of Hemp

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

The Potential of the Hemp Industry in Pakistan

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

Linda Chong
Photo: Flickr

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

COVID-19 Response

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

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

Diversified Opportunities in Emerging Markets

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

Market Expansion and Economic Growth

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

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

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

Geographical Location

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

Foreign Investment Returns

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

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

Malala Raharisoa Lin
Photo: Flickr

Mobile Data TrafficMany poverty-stricken individuals do not have access to the internet, creating a digital divide. The COVID-19 pandemic has revolutionized mobile data traffic around the globe, particularly in sub-Saharan Africa. Mobile broadband supports access to education, work, healthcare, goods and services. It plays an imperative role in reducing poverty. With nearly 800 million people in the region still without access to the mobile internet, it has never been more urgent to close the digital divide.

The Need for Mobile Broadband

According to Fadi Pharaon, president of Ericsson Middle East and Africa, the increasing demand for mobile broadband provides an unprecedented chance to improve economic conditions for Africa. Currently, Africa is one of the quickest growing technology markets.

In addition to younger populations requiring technology to develop practical computer skills, during the COVID-19 pandemic, access to the internet is also crucial for remote learning and remote work to continue development and economic progression.

In response to the pandemic, sub-Saharan African countries that were able to implement telework adaptations had considerably greater access to the internet, as much as 28 % of the population, as opposed to countries that were not implementing telework, at 17 %.

Due to the increase of digitalization during the pandemic, these developments are expected to positively contribute to the region’s economic recovery post-pandemic. Research suggests that expanding internet access to cover an additional 10% of the region’s population has the ability to increase gross domestic product (GDP) growth by one to four percentage points.

The Mobile Broadband Demand

Fixed Wireless Access (FWA) delivered over 4G or 5G is a more affordable alternative to providing broadband in areas with limited access. By 2025, FWA connections are expected to reach 160 million, accounting for 25% of global mobile data traffic.

The estimated total growth of mobile data traffic is from 0.87EB per month in 2020 to 5.6EB by 2026, an increase of 6.5 times the current figures.

To keep up with the demand, service providers are predicted to continue upgrading their networks to meet their customers’ evolving needs.

Additionally, networks expect to see an increase in customers purchasing mobile data subscriptions. Long-term evolution (LTE) was predicted to amount to 15% of subscriptions at the conclusion of 2020.

Novissi Digital Cash Transfers

The Novissi cash transfer program in Togo is an example of why mobile broadband access is important in developing countries. To support struggling people in Togo during COVID-19, instant mobile cash payments were made to their mobile phones to address urgent needs. The program provided more than half a million people with financial assistance during a crisis.

Closing the Digital Divide Reduces Poverty

Experts suggest that funding infrastructure, increasing electricity access and developing approaches to support digital businesses will aid in economic recovery and continue to close the digital divide. While sub-Saharan Africa has seen an acceleration of mobile data traffic during COVID-19, more action still needs to be taken to support its citizens post-pandemic. Providing affordable access to mobile phones, mobile broadband subscriptions and internet access will help support the recovering economy and alleviate poverty in the region.

Diana Dopheide
Photo:Flickr

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

The Introduction of the RCEP

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

RCEP Regulations

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

RCEP Benefits for the Philippines

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

Supporting Myanmar’s Economic Growth

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

Industries Impacted by the RCEP

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

The Potential for Poverty Reduction

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

Andy Calderon
Photo: Flickr

Improving Energy in AfricaOne in 10 people in the world (800 million) have no access to electricity and the access of an additional 2.8 billion people is considered insufficient and unreliable. In regions with insufficient access to electricity, the standard of living is poor, particularly with regard to adequate healthcare and education. Africa is such a region. Half of the population of sub-Saharan Africa lives without electricity. Improving energy in Africa is essential for economic growth and prosperity across the continent.

The Consequences of Inadequate Energy Access

Energy is vital to reduce the cost of business activities and for creating economic opportunities and jobs. More than 640 million Africans lack access to electricity. When the sun sets for these individuals, workable hours in the day end. Insufficient access to energy can also restrict the economy more indirectly, by way of increased risk of deaths related to wood-burning stoves, restricted hospital and emergency services and compromised access to education.

Along with appropriate infrastructure, household health and productivity are essential for boosting economies. The persistent use of wood-burning stoves is evidence of lacking infrastructure that presents a burden to health and productivity. This dated method has drawbacks that include indoor pollution, deforestation and unpaid time spent collecting biomass fuel. In 2017, an estimated 600,000 Africans died due to indoor pollution.

Fulfilling household responsibilities requires more time and must be done within restricted hours when electricity is unavailable. These responsibilities often fall on women and children and prevent their participation in the formal economy or pursuit of education that could encourage later participation. African economies suffer because of these barriers to participation. Industrialization is key to economic growth in Africa. To industrialize the continent, energy in Africa needs to be sustainable and easily accessible to all.

Improving Energy in Africa

Africa already has significant capacity for improvements in energy. Much of this potential lies in renewable energy sources. For example, one-fifth of Africa’s current energy is produced using hydropower. Hydropower, however, is only being utilized to one-tenth of its potential. Along with hydropower energy, solar, biomass, wind and geothermal energy all show promise for further development.

There are several existing avenues for further development of energy in Africa. As a shift toward renewable energy is gaining momentum across the globe, largely due to its environmental advantages, the resulting new and affordable technologies may provide the needed boost to further industrialization in Africa. Ensuring that renewable energy innovations reach Africa and are suited to build on current capabilities is essential for economic growth throughout the continent.

The 2020 African Economic Conference (AEC)

The African Development Bank (AfDB), the Economic Commission for Africa and the United Nations Development Programme jointly hosted the 2020 African Economic Conference (AEC) from Dec. 8 to 10. The conference facilitated presentations and discussions among leading academics, early-career researchers, policymakers and decision-makers. The central theme of the conference was how to ensure continued sustainable development in Africa amid the challenges posed by the COVID-19 pandemic. Specific topics included the role of governments and private institutions in regulating and developing African economies, adjusting goals and methods to conditions brought on by COVID-19 and preparing Africa for future resilience in crisis. The conference has been held since 2006 and helps to maximally inform efforts toward development in Africa, consider the challenges unique to local economies and emphasizes the importance of sustainable and renewable energy.

The New Deal on Energy in Africa

The AfDB Group is leading the New Deal on Energy in Africa to help develop energy in Africa and achieve universal electricity access for Africans by 2025. Its strategy is to build awareness of barriers to economic development, secure innovative funding for energy developments and strengthen energy policy and regulation. According to the AfDB, without stable energy in Africa, the U.N. Sustainable Development Goals will not be achieved. The emphasized ideal for energy in Africa is renewable; nevertheless, efficient and less expensive methods of energy production can quickly work to stimulate the economy. Gas will be an important transition fuel as efforts are made to establish cleaner, maintainable methods.

Electricity Access for Economic Growth

Improving energy in Africa means that the continent needs reliable power grids and universal access to electricity to further economic stability. The path to sustainable energy in Africa is evolving thanks to new momentum derived from the global and continental potential for renewable energy development. Keeping energy progress in mind throughout pandemic response efforts is a goal of international organizations as they work together with Africa toward economic growth across the continent.

Payton Unger
Photo: Flickr

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

What is the Least Developed Country List?

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

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

The Success Behind Vanuatu’s Graduation

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

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

Maintaining Sustainable Development

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

Significant Success for Vanuatu

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

– Zahlea Martin
Photo: Flickr

Vanuatu's Graduation From the LDCsSince the United Nations created the least developed countries (LDCs) list in the 1970s, only six nations have moved off of the list to a higher ranking of development. Vanuatu, an island nation in the South Pacific, became the sixth country to do so on December 4, 2020, after being designated an LDC in 1985. Vanuatu’s graduation from the LDCs list can serve as a beacon of hope for more LDCs to achieve higher rates of development.

Economic Growth

The U.N. Committee for Development Policy (CDP) identifies LDCs based on their level of human assets, environmental and economic vulnerability and per capita income. Since 1991, Vanuatu has met the CDP’s income per capita threshold and was recommended for graduation in 2012, having more than twice the income per capita threshold and also meeting the threshold for human assets. In an effort to pursue graduation, Vanuatu began shifting its economic policies to decrease reliance on imports, increase exports and create employment and income-generating opportunities. Vanuatu’s rural economy grew after improvements in the livestock sector in addition to the country’s diversification of agricultural activities to include timber, kava, coconut oil and copra. The tourism industry and real estate investments were also an aid to Vanuatu’s economic growth as income per person increased by more than 2.5 times between 2002 and 2017.

Vanuatu’s Setbacks

Throughout Vanuatu’s progress in economically developing the country, the nation has also been stymied by recurring natural disasters. The U.N. Conference on Trade and Development estimates that Vanuatu is affected by an average of two to three natural disasters per year and noted that Vanuatu is uniquely affected by natural disasters as its size causes the entirety of the country to be affected as opposed to just specific regions. In 2015, Vanuatu was hit by Cyclone Pam, a Category 5 cyclone that destroyed 50-90% of the country’s shelters and 95% of crops. Cyclone Pam delayed Vanuatu’s previous progress toward graduation and warranted an extension of the country’s grace period to 2020. Additionally, the onset of the COVID-19 pandemic has caused a decrease in the country’s tourism industry. While Vanuatu’s first case of COVID-19 was reported only in November 2020, the pandemic has impacted the nation and its economic sectors.

A Pathway for LDCs

While Vanuatu is the third country in the Asia-Pacific region to graduate from LDC status, following Samoa in 2014 and the Maldives in 2011, it is only the sixth country to graduate overall. On track to move up from LDC status are Angola in 2021, Bhutan in 2023 and São Tomé and Príncipe and the Solomon Islands both in 2024. Vanuatu’s graduation can bring hope to the other 46 countries on the LDC list, especially given the global circumstances in which Vanuatu achieved this feat. The COVID-19 pandemic has effectively stalled worldwide markets and further excluded many LDCs from international supply chains. With the encouragement of Vanuatu’s graduation from the LDCs list during a global pandemic, hope for the four countries scheduled for graduation in the near future increases alongside support from the international community to ensure an eventual zero countries on the LDCs list.

Caroline Mendoza
Photo: Flickr

Poverty Eradication in Dominica
In a significant step towards poverty eradication, the Caribbean country of Dominica is using the funds it garnered through a program called Citizenship by Investment (CBI) in order to become the world’s first climate-resilient nation. This effort would both prepare the island for the future while addressing poverty in the present. Dominica’s poverty rate is 39%, higher than that of neighboring countries, due in large part to its economy’s reliance on banana exports, an industry that extreme weather events increasingly impact. In the wake of Hurricane Maria in 2017, the government committed to the construction of affordable, weather-resistant housing that strengthens the social safety net, the expansion of its health care infrastructure and the support of its jobs program, all with CBI funding. Here are seven facts about CBI and poverty eradication in Dominica.

7 Facts About CBI and Poverty Eradication in Dominica

  1. CBI: International Investment, Local Impact: CBI issues citizenship in exchange for monetary investment. According to the Financial Times, Dominica’s CBI program is the best in the world. It is relatively affordable at $100,000, efficient due to Dominica’s experience in administering the program and has a commitment to integrity, thoroughly vetting the source of every cent that goes to the country. Recipients enjoy the business and travel opportunities that having a second citizenship affords them while the issuing country is able to invest the revenue at the local level. Though the program has been in place in Dominica since 1993, it has only recently become the primary source of the climate-resilient investments that are helping to progress poverty eradication in Dominica. This shift in focus follows the devastation of Hurricane Maria in 2017.
  2. The Storm that Changed the Face of the Island. Hurricane Maria made landfall in Dominica, aptly known as “The Nature Island,” on Sept. 18, 2017. Winds reaching up to 160 mph battered the island, triggering landslides, destroying infrastructure, washing away crops and either razing or damaging an estimated 90% of homes, left tens of thousands of people without a roof over their head. The prime minister of Dominica, Roosevelt Skerrit, took to Facebook to announce that the hurricane blew his own roof off his residence in an effort to draw attention to the crisis as it was still ongoing. When the storm abated, the government endeavored to put the CBI funds, and the people of Dominica, back to work.
  3. The Housing Revolution. In September 2018, one year following Hurricane Maria, Dominica partnered with the Montreal Management Consultants Establishment (MMCE) to build homes across the island. As of September 2020, this initiative, known as “Housing Revolution,” has built over 1,000 affordable, weather-resistant homes, with plans to ultimately construct a total of 5,000 of these units. CBI funds support the program entirely.
  4. An Emphasis on Community. The nascent neighborhoods include commercial centers, sports fields and farmers’ markets, a reflection of the Housing Revolution’s commitment to fostering communities, not simply constructing houses. To that end, the CBI-sponsored Trafalgar Community Centre, which opened in August 2020, features a sickbay, an events space, clinic and a dining and activity hall. The government heralds the Centre as “a place where at-risk youths can receive help, neighbors can socialize with each other and anyone can receive educational classes and participate in recreational activities.”
  5. Health Care: Prior to Hurricane Maria, the Dominican health care system centered on its four national hospitals. Care was specialized and reactive rather than general and preventative. After Maria’s devastation forced every sector to re-examine priorities, the Ministry decided to use CBI funds to strengthen its primary care system. In addition to a state-of-the-art hospital, Dominica is building 12 new primary health centers that will emphasize community-based care. Further, CBI funds subsidized the complex medical treatment abroad for 16 Dominican children.
  6. Jobs: The National Employment Program (NEP), which helps young people secure internships, jobs and develop vocational skills, has stayed afloat during the COVID-19 pandemic due in large part to the CBI. The NEP has provided support to 4,500 businesses and 3,896 interns.
  7. Economic Growth. An Economic Commission for Latin America and the Caribbean (ECLAC) report indicated that Dominica is the fastest growing economy in the region, its GDP up 9% in 2019. One can attribute this growth to both the CBI program and the rise in ecotourism as world travelers seek out Earth’s most rugged, unspoiled gems.

Looking Ahead

The rise in GDP is an indicator of the country’s economic upside, but one will soon be able to see whether it will correlate with the eradication of poverty in Dominica. The country is still rebuilding and the people are still getting back on their feet. If poverty rates do tick down over the coming years, then the investment of CBI funds into community-based, climate-resilient infrastructure and jobs could serve as a blueprint for other developing countries as they work to lift their people from poverty while investing in their future.

– Greg Fortier
Photo: Flickr