Information and stories about economic growth.

Poverty Eradication in Angola
Angola has struggled to recover from decades of civil war and economic turmoil, with over 40% of the population, mostly in rural areas, living in extreme poverty. However, recent innovations in poverty eradication in Angola have begun to help the once virulent nation gain stability. New technologies and funding from private companies, financial institutions and organizations have allowed Angola to modernize and combat extreme poverty. Here are three innovations in poverty eradication in Angola.

Open Data Platforms

Open data platforms are a way to gather large amounts of data, statistics and information from diverse and large groups to analyze potential problem areas. Governments and large organizations use this analysis to tackle identifiable issues head-on. For example, an investment group may notice a glaring need for communications upgrades in rural areas, which leads to the creation of jobs and infrastructure.

Open data is a recent innovation in poverty eradication in Angola and examines anything from economic growth to healthcare strategy. Through the International Monetary Fund’s Enhanced General Data Dissemination System, Angola set up its own National Summary Data Page at opendataforafrica.org in 2018. The African Development Bank and the International Monetary Fund (IMF) offer the NSDP to Angola for free. Using key indicators through the NSDP, the IMF and other organizations utilize this information for transparency, economic investment opportunities and identifying necessary aid in Angola, which are ways the NSDP’s data collection can reduce poverty.

South Atlantic Cable System

Angola lacks a strong telecommunications network. Rural communities suffer the most due to decreased technological abilities in farming and irrigation and emergency medical services. But a revolutionary project may help. One of the most impressive innovations in poverty eradication in Angola is the South Atlantic Cable System. Developed by the telecommunications operator, Angola Cables, this submarine communications cable provides interconnectivity between Luanda, Angola and Angonap Fortaleza, Brazil. The SACS improves the telecommunications and information technology infrastructure in Angola while connecting fast communication services throughout Africa and South America.

Although Angola is still developing its ICT sector and job growth has remained stagnant, the SACS potential is exponential. Angola could use this project to establish the country as a leader in tech in sub-Saharan Africa. This would reduce Angola’s reliance on oil exports and drive IT education to encourage entrepreneurship and competition, leading to increased IT and communications jobs and eventual ICT expansion in rural Angola to reduce poverty and improve healthcare access.

Neighboring nations that lack IT infrastructure can reach out to Angola Cables and the Angolan government, launching international funds to Angola. The SACS also makes Angola a centralized location for data in the entire southern hemisphere. The premium digital connection is unrivaled, leading to even more considerable international interest in Angola as a tech hub.

Commercial Agriculture Development Project (PDAC)

Due to the Angolan Civil War, farming in Angola suffered from a lack of development and slow regrowth due to landmines. Agriculture also suffers due to persistent and unpredictable droughts in Angola. The Commercial Agriculture Development Project received funding from the World Bank in 2018 to improve the economic condition and technology in Angola’s rural areas, providing much-needed support to the most vulnerable people in Angola to improve domestic food security. Primarily directed at improving irrigation systems and infrastructure related to the electric grid, the PDAC receives funding through 2024 and supports developers’ creative solutions to these problems.

So far, the project has granted contracts and requests in 2020 for the following:

  • Creating innovative management systems for irrigated perimeters, which help water efficiency usage during periods of drought
  • Development of financial risk tools, like risk management software and microinsurance for at-risk communities to ensure oversight of food security
  • Geospatial electrification options to create renewable energy that people can use in rural areas
  • IT tools, such as tablets, drones and tech support for better agriculture analysis
  • Multiple feasibility studies

All of these contracts and requests have happened in 2020 during the COVID-19 pandemic. Even with the pace slowing to handle the pandemic, the PDAC has led to several innovations in poverty eradication in Angola. Developers have maintained a healthy advancement rate since the beginning of the project, and they will continue through 2024.

Angola’s Future

With all the new technology and projects, Angola will continue to reduce extreme poverty for large portions of its population. As the nation continues to establish a commercial agriculture program and the telecommunications sector, there is a reduced reliance on oil exports. Angola can continue to diversify its economic strategy allocating its vast resources for a bright future and eliminate extreme poverty.

– Zachary Kunze
Photo: Pixnio

Billions to Charities
It is no surprise that Forbes named Charles “Chuck” Feeney the James Bond of Philanthropy. After 38 years, Feeney achieved his lifetime goal: giving away all his $8 billion amassed wealth to charity and being alive to see its impact. When someone donates billions to charities, the impact should be substantial.

Charles “Chuck” Feeney

Chuck Feeney amassed his wealth from establishing a franchise of stores within thousands of airports known as the Duty-Free Shoppers Group. He also launched the General Atlantic, an American growth equity firm. Yet, the man, with this immense fortune lives in a rented San Francisco apartment. Moreover, he has even been found riding public transit. Feeney has credited his life philosophy to the Andrew Carnegie essay, “The Gospel of Wealth.” The essay declares that the millionaire’s sole duty is to give back to the poor. As Feeney donates billions to charities, he certainly obliges. Carnegie’s influence is extremely apparent within Feeney’s life. His coined phrase and mantra in life, “Giving While Living,” is essentially saying that you should give all you can to charity now rather than later. This, which closely resembles the messages behind The Gospel of Wealth.

Atlantic Philanthropies

In the early ’80s, the Duty -Free Shoppers franchise was at its peak. This is when Feeney decided to be the one who donates billions to charities. Without anyone’s knowledge, he secretly handed over all his shares and formed his new foundation, the Atlantic Philanthropies. Since 1982, the Atlantic Philanthropies has focused on issues of health, social and public policy throughout Australia, Bermuda, Ireland, South Africa, the U.S. and Vietnam. Within these countries, the foundation has addressed many important issues. Among them include facilitating the peace process in Northern Ireland, reducing the number of children without health insurance in the U.S., providing millions with HIV/AIDS medication in South Africa and helping modernize Vietnam’s health care system. While the foundation has officially dissolved recently, Feeney has one last message to relay: “To those wondering about Giving While Living: try it, you’ll like it.”

3 Countries Impacted

  1. South Africa: In the early years after Apartheid, Atlantic Philanthropies saw the opportunity to help advance South African society from its previous suppression. During the ’90s, the foundation assisted young black South African attorneys in getting their law degrees. In the 2000s, Atlantic made funds to advance nursing and health services. By the end of 2016, Atlantic Philanthropies had totaled $442 million in investments toward building democratic institutions and organizations. Overall, the foundation brought 2 million South Africans access to HIV medication. Also, it convinced the government to pledge $1 billion toward school improvements. Finally, it increased the number of nurses between 2005 and 2013 by 44%.
  2. Vietnam: The Atlantic Philanthropies have invested $381.5 million towards improving Vietnam’s public health system and renewing old libraries and universities. With Feeney’s contribution of billions to charities, Vietnam modernized its healthcare system, resulting in 9 million citizens receiving better and improved treatment. Further, the foundation focused on efforts that advocated for healthier behaviors. These included the widespread anti-smoking campaign and the passed mandate that forced motorcyclists to wear helmets. Also, in the education sector, Atlantic Philanthropies improved Vietnamese university libraries.
  3. Cuba: In the early 2000s, Cuba’s healthcare, although seen as one of the best worldwide, was suffering from a lack of resources. This, in turn, sparked the Atlantic’s activism. Overall, the foundation invested $66 million into organizations that work toward improving the care and treatment of Cubans. Moreover, these bodies spread knowledge about Cuba’s effective public health practices in nations with impoverished communities.

An Inspiring Message

Feeney’s extreme display of generosity via contributions of billions to various charities has inspired many notable philanthropists and entrepreneurs to do their part to help the less fortunate. An example of wealthy business moguls following in Feeney’s footsteps is the “Giving Pledge.” Warren Buffet and Bill Gates launched the Giving Pledge in 2010 as a campaign that seeks to persuade wealthy figures across the world to donate close to half of their wealth before they die.

Maya Falach
Photo: Flickr

Education Will Help End Poverty
Education is a luxury many people take for granted, but it is something poverty-ridden families often sacrifice to have. Globally, over 250 million children and young adults are not in school. As a result, around 617 million young children and adolescents around the world are unable to read or do mathematics within the minimum proficient level. Poverty is one of the main reasons for this tragedy and it often comes from generations prior that also lacked schooling. By properly educating new generations, poverty rates could reduce significantly. Here are some ways that proper education will help end poverty.

Health

Estimates have determined that in developing countries, one-eighth of all children are born malnourished and that about 47% of those in low-income countries will continue to experience malnourishment until they reach the age of 5. Poor nutrition is a direct result of poverty and often linked to insufficient knowledge of proper nutritional diets. A study that occurred in 13 different countries found that the standard yearly gain production increased with those with basic education by 8.7%, which in turn increased food security and helped lower rates of malnourishment in children.

Education will help end poverty because, with basic education, parents learn more about how to care for themselves and their families, which in turn leads their children towards healthier lifestyles. Health education gives families have a higher chance of survival and even reduces rates of HIV and AIDS.

Mortality Rate

Education will help end poverty because it is particularly powerful for girls. Education has many effects on girls and women, but a primary impact is that if all women in poverty finished primary school, then the child mortality rate would reduce by almost 17%. This adds up to about 1 million newborns saved every year, but how does saving lives help lower poverty rates?

If more children survive, then families would not feel the need to have more children, thus the size of families would be smaller. If the families were smaller, then families would have more income and resources to go around, thus reducing poverty. For example, sub-Saharan African women with no education have 6.7 births on average, but with access to schools, these women only have 5.8 births. And finally, those studied who had finished secondary education have 3.9 births on average.

With schooling, women could more easily recognize danger signs in pregnancy and be able to seek care faster. Women with more knowledge about their body, pregnancy and childbirth have a better chance of giving birth safely. Records have determined that a child with a mother who had basic education is 50% more likely to surpass their fifth birthday.

Income and Economic Growth

Income is, of course, a huge factor in poverty. Records have stated that if someone has basic education (that is, reading, writing and mathematical skills), this not only has a positive impact on their own income but can also “increase the rate of return on the economy.” Those with education have a much higher chance of getting better jobs with higher wages. Just one year of education can result in a 10% raise in pay. More pay means better, more nutritious food, better access to sanitation, better access to healthcare and better housing.

For example, Vietnam was one of the poorest economic countries in the world due to its 20-year war. However, since 1990, Vietnam transformed its poor and war-torn country into a GDP that grew to 3,303%. Its economic growth rate was the second fastest and the main strategy for this success was the improvement and modernization of its education system. Vietnam is only second to China, which also implemented a new education system, causing it to have the number one fastest GDP growth.

With children attending schools and developing both important skills and abilities, they will one day get better jobs. The more income they have, the more goods and products they consume which benefits the companies. This in turn increases the demand for the production of more products, thus giving jobs to more people and helping the economy grow. These changes and more will be key in eradicating poverty around the world.

Katelyn Mendez
Photo: Flickr

Microsoft's Global Skills InitiativeIn the wake of COVID-19, economies across the world have been hit hard. Countries alike have seen decreases across all economic sectors as quarantine and stay-at-home orders were mandated in an effort to slow the spread of the virus. People transitioned to working remotely, while millions of others lost their jobs entirely due to market crashes. In an effort to cushion the economic travesty that the pandemic has bought, Microsoft is launching a global initiative, partnering with LinkedIn and Github, to teach 25 million people across the world new digital skills. Microsoft’s global skills initiative aims to remedy the global economic impact that has come with COVID-19.

Digital Skills

Microsoft believes these newfound digital skills will give people the ability to take on jobs where digital skills are necessary in order to be successful. The initiative targets those who have lost jobs due to the pandemic, as well as minorities, women and others affected by poverty.

Recent statistics predict that over 250 million people globally may be unemployed by the end of 2020 due to COVID-19. Microsoft found that in the U.S. alone, in May 2020, women had an unemployment rate of 14.4% compared to men who were at 12%. Additionally, Latinx populations had unemployment rates of 16.7%, which is much higher than other groups. These statistics indicate why the initiative particularly targets populations such as women and minorities.

By learning digital skills, those who are at an economic disadvantage will be able to take on jobs in the digital age and improve their economic status. Those who attain these newfound skills might even be able to teach others and distribute their knowledge to uplift an entire community.

Three-step Process

The three partnered companies have come up with a three-step process that they hope will encourage economic growth in communities across the globe. The first part relates to the Linkedin Economic Graph. The Economic Graph is a digital representation of the global economy based on more than 690 million professionals, 50 million companies, 11 million job listings, 36,000 defined skills and 90,000 schools. In short, it is data that shows available jobs and their required skills as well as global hiring rates. These insights will help create economic opportunities for the global workforce.

The second part consists of free tools, programs and content that people will be provided with, in order to learn the skills necessary for job applications. This initiative will give people free access to content from LinkedIn Learning, Microsoft Learn and the GitHub Learning Lab.

Thirdly, low-cost certifications and other cost-free job-seeking tools will be available to help people pursue new jobs with their newly developed skills.

Along with this digital skills initiative, Microsoft will be backing $20 million worth of cash grants that will be distributed across the globe to different nonprofit organizations. These grants will help nonprofits to combat the effects of the pandemic and allow the nonprofits to further extend reach in order to help more people.

Microsoft believes that global shutdowns and social distancing have accelerated the path to digitalization in all fields and economies. The company knows that digital tools are now necessary regardless of the field of work and will continue to be relevant far after the pandemic has passed. Microsoft’s global skills initiative may help the world’s economic recovery and may possibly uplift the entire globe during the COVID-19 pandemic.

George Hashemi
Photo: Flickr

vanilla in IndonesiaOver the past two decades, employment in agriculture in Indonesia has declined from 45% in 2000 to about 29% in 2019. This decline has been accompanied by an aging farmer population, with 60% to 80% of rice farmers above the age of 45. However, Indonesia is the third largest producer of rice in the world. Its agriculture sector also provides an integral source of income for Indonesian families and export-revenue for the country. Without millennial interest in these jobs, the fading light of agriculture could cast a dark shadow on the economy. Thankfully, vanilla in Indonesia is bringing Indonesian youth back to agriculture and making the sector more profitable. This underscores the vanilla trade’s potential as a way out of poverty in Indonesia.

A Tale of Agriculture Revitalized

Sofa Arbiyanto, 30, began farming vanilla in 2018 in Blora, Central Java. Blora is one of two regions that produce most vanilla in Indonesia. After leaving his manufacturing job in South Korea and connecting with vanilla farming groups online, Arbiyanto began farming vanilla on a 1,200-square meter plot. He now has 2,000 vanilla vines.

Arbiyanto made the switch to farming because of the profitability potential he saw in the market. In 2019, vanilla beans from Madagascar, the world’s top producer, cost more by weight than silver. Vanilla itself is the second-most traded spice in the world. Vanilla in Indonesia accounted for 29% of the global supply in 2016, making Indonesia its second largest producer.

The lack of millennial attraction to farming is rooted in cultural stigma. Children who grow up in farming families learn from their parents that farming is a dirty job imbued with poverty and hardship. For these families, farming is as a last-resort career for their children. Thus, the people most likely to become farmers seek out other jobs instead.

Hilmi, a graduate student from Cigugur who spoke with The Diplomat, explained that young people in Indonesia see farming as a life of “soiled clothes with no pride.” However, vanilla in Indonesia may be changing this outlook. Indeed, Arbiyanto said, “My initial view that farmers live in hardship and poverty has changed. With a touch of innovation and technology, it is a promising opportunity.”

Indonesia Vanilla Farmers’ Association

Arbiyanto is one of around 250 vanilla farmers ages 25 to 35 who trained with the Indonesian Vanilla Farmers’ Association (PPVI). PPVI has a YouTube channel where farmers across the country can access informational videos. The channel has almost 15,000 subscribers, while some of its videos have more than 115,000 views.

This innovative approach to training farmers is revitalizing vanilla in Indonesia. Many millennials, more in touch with technology, have learned farming techniques through this method. Further, PPVI notes that experienced farmers use platforms like WhatsApp to offer the new generation their tips and tricks.

According to McCormick & Co., “Indonesia has strong potential to become an alternative origin [for vanilla], in terms of quantity and quality.” Although price volatility puts some risk in vanilla in Indonesia, the spice is bringing life back to a sector that many Indonesians have long associated with poverty.

Vanilla in Indonesia in the Global Trade

To make matters more enticing, the vanilla market has seen an increase in demand during the pandemic. Because of global stay-at-home orders, grocery shopping and home cooking have increased. This means that the average household now consumes more vanilla.

At the same time, the pandemic has caused shipping delays that resulted in an 18% drop in shipments from January to May of 2020. Kasan, a director-general in Indonesia’s trade ministry, noted that price volatility puts some risk in this enterprise. Still, the government has maintained its support.

“When the new normal begins and trade activities are gradually increased … vanilla exports will become one of the mainstays of trade that will be expanded,” Kasan said. This sentiment is part of a larger desire from the Indonesian government to diversify its agricultural exports, which are largely dominated by palm oil. The government also wants to use vanilla to create pathways out of poverty in Indonesia.

U.S. Aid

The opportunity to reduce poverty via vanilla came when a cyclone hit Madagascar in 2017, cutting off much of the global supply of vanilla and creating a shortage on the global market. This was an opening for other suppliers to gain a greater share of the market. The U.S. Agency for International Development, in collaboration with Cooperative Business International (CBI), stepped in to help. They have established partnerships between more than 5,000 small-scale, Indonesian spice famers and international spice vendors. Thus, U.S. aid further supports growth of vanilla in Indonesia.

Through this co-op, Agustinus Daka, an experienced vanilla farmer, told AEC News Today that his income had doubled. This moved him beyond subsistence farming. Daka harvests his beans after nine months and sends them to a spice factory in Central Java, where some 700 Indonesians work.

Sam Filiaci, senior vice president for Southeast Asia at CBI, explained the broader scope of such partnerships. “Even though we talk about the 700 people working in this facility,” Filiaci said, “the employment that it creates in the United States or the destination markets is even greater.”

He continued, “Vanilla and these other high-value crops that we grow and produce are a tool to improving people’s lives … helping farmers educate their children, build their houses, get health care. I think it’s extremely important and strategic for the U.S. government to invest in opportunities like this.” Thus, international aid has a large role to play in using vanilla in Indonesia to lift Indonesians out of poverty.

Olivia du Bois
Photo: Flickr

Entrepreneurial Spirit in Developing CountriesIn the ongoing effort to alleviate global poverty, many entrepreneurs focus on solutions that address social, cultural and economic challenges within a community or region. International organizations and institutions provide funding to developing countries to improve infrastructure, policy and services. All of this, in hopes of solving large-scale problems like poverty. However, perhaps the most powerful way to reduce global poverty is by focusing on the entrepreneurial spirit in developing countries. One such organization, Kountable, delivers goods and employment to emerging markets to reduce poverty.

All About Kountable

Kountable is a global trade organization that aims to interrupt generational poverty in developing countries by overcoming financial obstacles. It is these barriers that are hindering the fruition of small companies. Kountable provides funding and professional development opportunities to small and medium-sized enterprises (SMEs) that would otherwise lack access to the global market economy due to institutional barriers.

By combining “local knowledge with global expertise,” Kountable connects and fosters trade relationships between “large global suppliers… local SMEs, logistics providers, banks, and buyers from government, NGOs, and the largest multilateral institutions and foundations”.

The goal is to “bring the right goods to the right places on time” says Kountable President and Co-founder, Catherine Nomura. Another valuable aspect of Kountable is the multifaceted nature of its approach. For example, the organization collaborates with micro, small and medium-sized enterprises (MSMEs) in many industries — including healthcare, education and information and communications technology.

Financial Opportunities for MSMEs

Julian Kyula, entrepreneur and founder of MODE (Mobile Decisions) from Nairobi, Kenya, explains the challenges faced by SMEs in Sub-Saharan Africa and how Kountable’s strategy can reduce poverty. Kyula founded MODE in 2010 as a technology platform cooperating with telephone companies to distribute small mobile loans. While Kyula was fortunate to overcome financial obstacles, he reveals that, since banks do not often invest in startup businesses, about 70% of MSMEs “in emerging markets lack access to credit” and are therefore unable to grow. These obstacles tend to stifle the entrepreneurial spirit in developing countries.

Furthermore, the overall lack of financial opportunities hits MSMEs especially hard in developing countries. This is because SMEs create on average, 70% of jobs in emerging markets. Also, they represent 90% of businesses worldwide. The global workforce is growing at a rate that would require an additional 600 million jobs by 2030. Importantly, SMEs are expected to be a prime supplier of these jobs.

Researchers define micro-enterprises as organizations consisting of less than 20 workers and associate these businesses with lower poverty rates, especially in rural areas. Smaller and medium-sized enterprises can provide job opportunities and mobility within the workforce. SMEs benefit local communities, unlike massive corporations that often move to rural towns but lack the structural systems to lift regions from poverty into economic prosperity. Representing another reason that the entrepreneurial spirit in developing countries is so important for poverty reduction.

COVID-19 Challenges

Amid the Covid-19 pandemic, another challenge small businesses face is acquiring the U.S. dollars needed to secure essential health goods (PPE equipment, ventilators, masks, testing materials, hospital beds, etc.). Kountable identifies this currency struggle as the “trade before the trade,” and its commitment to funding MSMEs helps small businesses avoid this particular challenge.

The Doing Business in Africa Award

Kountable recently won runner-up for NABC’s 2018 Doing Business in Africa Award, making history by being the first, global trade network ever nominated for this award. Kountable’s success in delivering goods and employment to emerging markets has confirmed its credibility as an innovative solution. Alleviating global poverty and generating wealth by supporting small businesses.

– Nye Day
Photo: Wikimedia Commons

Tech Industry in South AsiaAs recently as a few decades ago, the pursuit of worldly education and career in Western countries was a badge of fame for South Asians. India, Pakistan and other South Asian nations could not offer the same level of job opportunity as the West. Therefore, many people in the educated class chose to emigrate in hopes of a wealthier lifestyle. Two factors contributed to this trend – the lack of opportunities at home and the increased quality of life abroad. At one point, over 80% of the graduates from India’s most prestigious university, IIT, used to pursue opportunities abroad.

As a result, the tech industry in South Asia fell to a baseline, sustaining itself without thriving. However, a phenomenon is occurring that has been dubbed a ‘reverse exodus’. Many of the South Asian professionals that emigrated to the West have returned to their mother country. This mass-return of individuals to their home countries is causing a boom in the industries that traditionally experienced what is known as ‘brain-drain’ (the loss of skilled professionals to emigration).

These five factors are integral to understanding the resurgence of the tech industry in South Asia.

5 Factors Causing The Resurging Tech Industry in South Asia

1. One of the major reasons behind the reverse exodus is for family. Parents that had once wanted their children to grow up in Western nations are returning to South Asia after a strong development in the education sector. Allowing children to grow up alongside a larger, more connected family creates a stronger bond than when oceans separate families. In addition, the parents of these emigrated high-skilled tech professionals are aging. The choice is to “bring them there or return home.” Oftentimes, the family will choose to return to their mother country to care for their aging parents.

2. The rapid development of South Asian opportunities pulls professionals back home. Rich with a younger population well-versed in global technology and a large market for labor, South Asia’s economy is on the cusp of a boom. This is recognized not only on the global economic scale but by the individuals choosing to return as well. In an interview conducted with a returnee, Ram, he notes that “there were opportunities in India – India is growing”. Ram already has a family and was advancing in his career steadily. However, the economic opportunity offered to him if he returned home was a stronger pull than anything in the West.

3. Industry specific zones are springing up, allowing clusters of innovation and clusters of returnees from the West. One example of this cluster effect is the Andhra Pradesh MedTech Zone in India, where medicinal technology is being innovated and discovered at a rapid rate. Medical and technology professionals from the West that returned to this sector find themselves surrounded by a silicon-valley type industry cluster. They also find clusters of similar-minded people. Returnee Ram meets people from Chicago and other US cities: “in the community of people (…) it’s like a mini-US”.

4. Capital for businesses is now readily available in South Asia. After the economy surged forward, jobs became widely available. Funding was plentiful for those that wished to start their own businesses. The IT industry hosts a yearly gathering in California for individuals who might want to return to South Asia. Companies like Intel, Amazon and Yahoo have started to attend the job fair. These potential opportunities for job growth pull many of the interested population back home. The job market and capital is potentially more accessible than in the West.

5. Government support is present for those that want to return and pursue a higher standard of living. Ram noted that entrepreneurial activities are “open to everyone”, fully accessible to anyone that wants to try their hand. The government streamlines the process so that “if you come and expect that you’re going to open your own company in a few weeks,” it’ll happen. Though there may be a more established support system in the West, the clear government support for individual development in South Asia is one of the strongest factors causing many to return.

Though the South Asian region continues its development as a result of the high-skilled professionals returning home, there is still substantial work to be done to retain the talent. Government support, economic opportunity, and familial support are all strong initial pulls. However, the issue of brain-drain won’t be fully resolved until there is sustained regional development. Focusing on industry development must be a mainstay for countries in the region in order to retain their talent and continue the growth of the tech industry in South Asia. Hopefully, through a region-wide commitment to development, South Asia will fully recover from the past losses of brain drain and develop into a hub for the global technology industry.

Pratik Samir Koppikar
Photo: Flickr

poverty reduction through microloans

Poverty reduction through microloans has been a successful strategy in many parts of sub-Saharan Africa. Between 2007 and 2016, Tanzania’s poverty rates have decreased from 34.4% to 26.8%. Consequently, microloans have become a necessity for low-income earners whose businesses are apart of informal sectors.

MYC4 is an online platform that helps individuals loan money to small enterprises in sub-Saharan Africa. Mads Kjaer, its chief executive, describes the importance of microcredit by stating how “people need access to capital to grow their informal and formal businesses that offer them a regular income and enable them to lead decent lives.”

As a result, governments now appreciate the impact of microfinance. They are encouraging investments by opening up the industry to foreign capital and improving policing mechanisms for customer protection. With micro and small enterprises making up approximately 32% of Tanzania’s GDP, microcredit strategies have played an essential role in reducing poverty through progressive business approaches.

New Microfinance Act in Tanzania

In 2018, the parliament of the United Republic of Tanzania passed a Microfinance Act that illustrates the framework under which microfinance institutions operate. The Act allows for enhanced regulation of the microfinance sector for the mainland of Tanzania and Zanzibar. But with only 16% of Tanzania’s population banked, 27% is financially excluded. Microfinance options and the accessibility of mobile money have expanded financial inclusion to nearly half of Tanzania’s population. For example, as of 2017, financial NGOs, mobile money and microloan providing institutions served 48.6% of the population.

Nonprofits that are Helping

Opportunity Tanzania, a nonprofit organization that provides loans, savings, and insurance to impoverished entrepreneurs, has helped over 3,625 clients in Dar Es Saalam. Its microfinancing services provide entrepreneurs and their families with a path out of poverty. Only 20% of Tanzania’s population has access to a formal bank within an hour’s walking distance of their home. Therefore, Opportunity Tanzania is now working to build a regulated bank that will offer clients savings products and provide them with a secure place to store their money.

The International Labour Organization [ILO], in collaboration with the UN joint program on Youth Employment, established a five-day training program for financial service providers to create outreach strategies that will educate youth on microfinance resources.

High population growth and substantial poverty are still present in Tanzania. However, the expansion of microloan services play a crucial role in supporting entrepreneurs and creating more job opportunities for youth. In short, poverty reduction through microloans is an important avenue for growth in Tanzania.

Erica Fealtman
Photo: Unsplash

Modern Business Opportunities in Africa
Over the next 10 years, Africa’s total populace could surpass 1.5 billion. Moreover, only 20% of the continent’s predicted population growth will transpire in rural areas. Therefore, an industrial transformation is occurring. International markets now have multiple modern business opportunities in Africa.

Online Finance Services

The demand for financial consulting is immense. Estimates have determined that 80% of Africa’s population does not have access to banking or financial services. Therefore, the evolution of the FinTech industry is underway. FinTech utilizes modern technology to improve the affordability and accessibility of financial services. Approximately 88% of sub-Saharan African countries now implement FinTech policies. Companies such as M-Pesa and Branch have successfully established their business strategies in these regions.

Branch is a digital financial service provider that capitalizes on the worldwide growth of smartphone usage to deliver financial consultation to those in need. The company operates in Tanzania, Kenya and Nigeria. Branch currently serves 3 million customers. Recently, Branch acquired over $150 million in funding to further pursue its initiative. The company hopes that providing small loans will stimulate economic development in low-income areas.

Virtual Healthcare

Providing equal access to affordable healthcare is an objective modern technology can accomplish. In sub-Saharan Africa, only one physician is available for every 5,000 people. In the U.S., there is one physician per 384 citizens. Generating digital platforms to further distribute healthcare in Africa is an under-crowded market. Companies such as Redbank and Lafiya Telehealth App now operate in this sector.

Lafiya Telehealth App incorporates smartphone application technology to provide healthcare to citizens of Nigeria. Lafiya focuses specifically on individuals living in isolated areas, who tend to be poorer. Lafiya’s programs aim to replace in-person medical examinations with voice calls, video calls and instant messaging. With wide and accessible reach, Lafiya is serving an enormous market.

United States Government Initiatives Promoting Commerce with Africa

The African Growth and Opportunity Act (AGOA) is a U.S. government initiative that provides African countries with access to thousands of American commodities. In order for countries to participate, they must launch programs to decrease poverty, protect individual rights, institute a criminal justice system and more. Currently, 38 African countries are eligible to engage in trade and investment with the U.S. AGOA has directly created over 100,000 American jobs, connected U.S. businesses with buyers and suppliers in Africa and generated over $1 billion in exports. Trade between the U.S. and African nations has grown by 300% since the Act came into effect. The U.S. government has extended this program to 2025.

The success of AGOA has prompted the creation of Prosper Africa. Prosper Africa is a U.S. policy with a design to further increase opportunities for trade between the United States and Africa. Prosper Africa increases Africa’s availability to U.S. digital and in-person services, supports commerce by advancing profit-making contracts and enhancing cooperation with African institutions to create healthy business environments. The completion of these objectives will produce profits for employees, businesses and stakeholders among both regions.

The U.N. Conference on Trade and Development recognized Africa as one of the most profitable regions in the world. The continent’s growing urban population, increase in consumer spending and largely untapped markets provide ample scenarios for international corporations. Modern business opportunities in Africa will continue to grow with the implementation of U.S. government initiatives to improve local economies, promote stable growth and persuade future business investments. These modern business opportunities in Africa will expand as wealthy nations share resources and generate economic growth in regions across the continent.

John Brinkman
Photo: pxfuel

Natural Disasters in the Philippines
Every year, hundreds of natural disasters are reported worldwide. In 2019, 409 natural disasters occurred, many in the Asian Pacific region. Natural disasters in the Philippines are quite common and they pose great difficulties for islands with large populations and vulnerable infrastructure.

Geography of the Philippines

The Philippines is one of highest-risk countries for natural disasters. The nation’s location exposes it to storms that lead to floods, mudslides and typhoons. Additionally, the presence of offshore trenches such as the Manila Trench puts the Philippines at risk for tsunamis. Unfortunately, the list does not end there. The Philippines is also on top of the Ring of Fire, a path in the basin of the Pacific Ocean where there is a high risk for earthquakes and active volcanoes.

Infrastructure

The Philippines is made up of 7,107 islands, which poses many challenges to improving infrastructure. Natural disasters also disproportionately impact infrastructure in poverty-stricken areas. That being said, in the past decade, the Filipino government made strides to improve infrastructure and make the nation more disaster-ready.

In 2020, nearly a quarter of the Filipino government’s budget was allocated for infrastructure. President Rodrigo Duterte hopes to allocate 6% of the nation’s GDP to infrastructure by 2022. His “Build, Build, Build” program has played a large role in this increase of funds, which will be allocated to projects such as the Manila subway and other modes of transportation, water resources and energy.

The Global Facility for Disaster Reduction and Recovery (GFDRR) has outlined $2.5 million in funds being used for infrastructure projects in the Philippines. GFDRR focuses on understanding and reducing disaster risk, strengthening governance and improving recovery, rehabilitation and reconstruction. GFDRR currently has three active projects in the Philippines. First, the “Support to the Sustainable, Inclusive, and Resilient Tourism Project” is set to be complete in June 2021. The second project is “Philippines Disaster Risk Financing,” scheduled to be complete in August 2020. Finally, the “Support to the Earthquake-Resilient Greater Metro Manila Program” is set to be complete in September 2021.

Poverty Reduction

According to the World Bank’s October 2019 report, the Philippines is expected to sustain its progress in poverty reduction. The Philippines’ GDP growth was roughly 5.8% in 2019 and is expected to reach 6.2% by 2021. Many believe this growth is tied to transportation infrastructure among the Filipino islands. According to the 2013 Philippines Human Development Report, economic integration will be key to creating sustainable growth throughout all of the Filipino islands and reducing poverty in rural areas.

The main production sectors in the Philippines are electronics assembly, garments, footwear, pharmaceuticals, food processing, petroleum refining and fishing. Agriculture is also a significant sector; however, self-employed farmers are the most susceptible to geographic hardships from natural disasters. Additionally, many farmers struggle due to a lack of insurance, inadequate post-harvest facilities, inadequate irrigation techniques and limited access to the market as a result of poor transportation services.

To address these problems, the Philippine Development Plan for 2017-2022 plans to expand economic opportunities for those engaged in the agricultural sector, especially small farmers. This plan aims to get rid of irrigation fees for small farmers, pass the National Land Use Act to protect important natural lands, implement the Agrarian Reform Program to distribute land to landless farmers.

Conclusion

The Philippines is still considered at third world country according to its GDP, human development index, life expectancy and infant mortality rate. However, while the Philippines still has many structural issues inhibiting its growth, its progress over the last decade has been momentous. Equipping islands to handle natural disasters in the Philippines and supporting farmers are two key ways the country can reduce poverty and improve livelihoods.

Danielle Forrey
Photo: Flickr