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Economic Integration with India could lower Poverty Rates in Sri Lanka

Economic IntegrationSri Lanka has been facing one of the harshest economic declines in the last decade. The country’s poverty rate has jumped from 11.3% in 2019 to 25% in 2022. More than 2 million people in Sri Lanka are suffering from the economic contraction. Some of the causes include food insecurity, lack of fuel, hyperinflation, supply chain interruptions and rising unemployment rates due to market shrinkage. The country’s northern neighbor, India, has contributed more than $3 billion toward alleviating this hardship. The leaders of both countries have been discussing economic integration, an undertaking that could benefit Sri Lanka greatly.

The Economic Integration

India’s economy has been performing better than many other countries in the world. The country’s GDP ranks as the fifth highest in the world, trailing behind only the U.S., China, Japan and Germany.

With India’s economy continuously growing, economic integration with Sri Lanka could be beneficial for both parties. Two factors will need special attention for this to work according to the Indian Council of World Affairs. The factors include profitability collaboration and foundational incorporation.

Indian Council of World Affairs notes that there are several subcategories that will need attention. These subcategories  include integration, labor market, education and integration with the Indian electricity grid.

Linking Power Grids

The economic integration process has been underway since the countries signed an official pact “to link their power grids and start negotiations on an upgraded trade agreement.” Apart from boosting power generation in Sri Lanka, the linkage of power grids could also increase the usage of renewable energy. The plan is to place a transmission line leading from southern India to the north-central province of Sri Lanka. And from the Indian electricity grid, Sri Lankans could have a continuous power supply and drive an ambitious economy.

Free Trade

Sri Lanka is known for trading high-quality textiles and garments. In 2019, the country hit $2.7 billion worth of imports to the United States (U.S.), becoming the 60th biggest supplier to the U.S. The top two categories were knit and woven apparel.

During the economic integration, the leaders of Sri Lanka plan to make that one of the big exports when it comes to the free trade agreement. There was already an agreement between the two countries. However, making updates to the arrangements could open Sri Lanka to a higher probability of creating trade pacts with China and Thailand. For this to work, Sri Lanka may need to find a way to advocate itself to its partners that it is a profitable investment for new trades and businesses. To the country’s advantage, the short commute to India is highly convenient, and with Sri Lanka’s capital being Colombo, promoting itself as a business destination may not be challenging. And that is because Colombo has a great reputation as a hub for tourism.

The Future

Based on suggestions, India and Sri Lanka would need to come together to create more means of transportation. The increase in foot traffic could create an economic boom for Sri Lanka. Overall, an economic integration between the two countries could boost the labor market in Sri Lanka and give agricultural workers more time to recover from the chemical fertilizer ban in 2021 (it was one of the major reasons for the economic contraction). As things stand, collaborating with India carries the potential to bring about economical upliftment for the people of Sri Lanka.

– Zyairah White
Photo: Flickr

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Unemployment in South Africa Soars

Unemployment in South AfricaUnemployment in South Africa reached new highs at the end of 2021, equating to more than 7.9 million individuals between October and December 2021. Typically, high unemployment rates spur predictions of economic decrease and little mobility for the coming fiscal year. The finance ministry expects South Africa’s economic growth rate to reach 2.1% in 2022, however, experts say this is insufficient “to make a meaningful dent in unemployment and poverty.” Despite the economic downturn that South Africans face, especially South African manufacturing and construction workers, there is some hope.

History of Unemployment in South Africa

Unemployment in South Africa has an extensive history and myriad reasons. The unemployment rate is dependent on which unemployment type one is referring to. There is the “standard definition” by which people between 15 and 64 actively search for employment while without a job for a specific time. Then, the expanded definition of unemployment refers to the unemployed “who have stopped looking for work.”

By the end of 2021’s third quarter, unemployment in South Africa stood at 34.9%, according to the standard definition, but stood at 46.6%, according to the expanded definition. Countless factors contribute to unemployment in South Africa. The most significant factors stem from the nation’s “legacy of apartheid,” shortages of jobs and “slow economic growth.”

Unemployment began to drop in South Africa after 2002 when the nation’s unemployment rate was about 34% if using the standard definition. It fell to 22%, the lowest percentage for decades, in 2008, but then, the unemployment rate began to rise again over the years. The 2008 recession hit the global economy and impacted jobs worldwide. South Africa has yet to recover from its losses in 2008. Furthermore, COVID-19 exacerbated the economic downturn and unemployment issues in South Africa.

COVID-19’s Impact on Construction and Manufacturing Workers

Specifically, the losses seem to be impacting the construction and manufacturing industries most in South Africa. Across South Africa, all the provinces had more than 1.3 million employees in the construction industry in the first quarter of 2020. By the last quarter of 2021, the construction industry lost at least 25,000 jobs.

Manufacturing in South Africa is suffering just as much economic downturn as construction, though, having lost 80,000 jobs in the last quarter of 2021. The manufacturing sector faced a 3.3% economic contraction in 2008. Like many areas of South Africa’s economy after the recession, manufacturing is still working to bring back more jobs and support all its workers. Though the outlook may be grim, critical steps can address South Africa’s unemployment drop.

How South Africa Can Recover

According to the standard and expanded definitions of unemployment, South Africa has many courses of action that can help those facing unemployment. The most significant hope across South Africa is that the government will intervene and create policies to help all business sectors in South Africa, not only construction and manufacturing.

There are hopes that more trade in 2022 with the U.S. and China will secure enough work for the country to help the manufacturing industry rebound.

Experts predict that the construction sector will bounce back. Projections indicate that the industry will “rebound in 2022 and expand by 9.1% in real terms.” Then, the construction sector will “stabilize at an annual average growth of 3.1% between 2023-2025, although output will not return to pre-pandemic levels during the entire forecast period.” Government investments in large-scale projects will support this recovery.

Presidential Employment Stimulus

The South African government initiated the Presidential Employment Stimulus (PES) in response to COVID-19’s impact on employment in South Africa. Overall, the program’s “aim is to create jobs and strengthen livelihoods, supporting meaningful work while the labor market recovers.”

The government implemented the PES in October 2020 to provide economic support to publicly-funded jobs. The stimulus has two phases. Phase 1 worked with regional and national departments to invest in job creation to provide the unemployed with new skills in jobs that could lead to long-term employment. As of January 2022, the PES created more than 673,000 jobs while supporting more than 140,000 livelihoods. Youths made up 85% of the program beneficiaries and females made up 63% of all program beneficiaries.

Officially, Phase 2 is currently in progress with no specific end date as yet. Overall, the PES is beneficial to South Africa in combating unemployment. PES encapsulates several different unemployment-fighting programs in South Africa, which serve to boost the economy and reduce poverty.

Looking Ahead

Several strategies have the potential to decrease unemployment and, in the long run, reduce poverty. In April 2020, the poverty rate in South Africa stood at 55.5% and the predicted economic growth in 2022 is only 2%, which would not significantly improve South Africa’s poverty levels. However, if the government continues to prioritize programs to provide employment opportunities and fund projects to ignite growth in struggling sectors, 2022 may hold greater improvements.

– Clara Mulvihill
Photo: Flickr

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The IMF’s Assistance in Costa Rica’s Economic Recovery

Costa Rica, Pura Vida, Central America, Jungle, Green

In 2021, the International Monetary Fund (IMF) agreed to provide Costa Rica with a $1.7 billion loan “to support Costa Rica’s recovery and stabilization from the economic damage caused by the COVID-19 pandemic.” Although the Costa Rican government’s response to the COVID-19 pandemic was effective, economic improvements are stagnant. Costa Rica’s economy relies heavily on tourism and the COVID-19 pandemic created a significant halt in this sector. The IMF’s assistance in Costa Rica would help create jobs in high-demand areas and improve the resiliency of businesses.

Economic Challenges During COVID-19

The World Bank indicates that Costa Rica’s economy expanded over the last quarter of a century, with poverty rates lower than other Latin American countries. However, the COVID-19 pandemic caused the economy to decline by 4.6% in 2020. As a result, “one out of five workers” experienced unemployment by the last quarter of 2020 and the poverty rate in Costa Rica increased to 13%. As the situation improves, the economy expects to grow by 2.6% in 2021 and 3.3% in 2022.

The Organization for Economic Cooperation and Development (OECD) reports that besides the pandemic, Costa Rica’s increased budget deficits and debt could have played a role in the recent economic destruction. Since the Costa Rican government had to provide additional funding for social and health programs, the budget deficits would grow further. Therefore, a strong recovery plan is necessary to lower deficits and improve Costa Rica’s economic situation.

Tourism: A Struggling Industry

According to Reuters, Costa Rica’s economy struggled since “hotel and trade shrank by 40% last year.” The pandemic and tourism produced 8.5% of its gross domestic product. At the beginning of 2021, fewer tourists visited than in previous years, indicating that economic recovery could take a while. However, officials in the tourism industry remain optimistic for more tourists in the future since many attractions are outdoors and there are fewer concerns about the virus spreading in open areas.

However, the amount of COVID-19 cases in Costa Rica was at its highest point from the end of April 2021 into early May 2021, leading to decreased levels of tourism. The U.S. even issued a travel advisory warning for citizens planning to visit Costa Rica. The Costa Rican government attempted to help the tourism sector by indicating that industries such as tourism did not need to impose new COVID-19 restrictions. Nevertheless, several groups of international tourists canceled their plans to visit.

Officials aim to improve economic conditions by expanding sustainable tourism. This would benefit the environment and help small businesses. The Minister of Tourism explained that expanding this industry would increase employees’ incomes and allow tourists to see different attractions. Officials introduced this plan to the national bank to see if it could consider using additional recovery strategies such as credits or implementing changes in rates.

Overcoming the Economic Challenges

So far, the Costa Rican government has made several efforts to assist those most impacted by the pandemic. It distributed grants to at least 700,000 citizens who suffered the most during the pandemic. It also had businesses impose strict health precautions, preventing a massive spread of the virus and further economic downturn.

Al Jazeera states that the Costa Rican government began working with the IMF to obtain a loan that would go toward tax reform and selling assets. The IMF’s assistance would also help Costa Rica pay off part of the significant debt accumulated within the past few decades.

The IMF’s assistance expects to cover a three-year time frame to improve economic conditions and reduce poverty rates. The Costa Rican government also plans to put the loan toward strategies that could boost employment. The IMF reports that the majority of those facing unemployment are women and youths. Various career fields in Costa Rica need employees and many companies are struggling to hire due to the pandemic.

The Costa Rican government thinks increased spending on social services would allow more women to enter the workforce since these programs will ease the burden of many familial caretaking responsibilities often resting on the shoulders of women. In addition, the government wants to pass legislation that aims to improve the education system to increase the possibility of employment opportunities in higher-paying jobs.

Moving Forward

The IMF’s assistance in Costa Rica would mitigate the current economic situation by addressing the root causes of high unemployment rates and income inequality. This effort would contribute to further development and potentially allow Costa Rica’s economy to reach pre-pandemic rates of growth.

– Cristina Velaz

Photo: Pixabay

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A Bright Outlook for Greek and Cypriot Poverty

Greek and Cypriot povertyAfter decades of economic struggle, which the pandemic and COVID-related restrictions exacerbated, Greece and Cyprus are optimistic about their economic futures. In 2019, both countries’ economies were in grim states. In Cyprus, 15.3% of the population was at risk of poverty as of 2020, a marginal rise from the previous year. Meanwhile, 30% of Greece’s population was at risk of poverty or social exclusion in 2020. Amid all the pessimism, however, there are reasons to have a bright outlook for the future of Greek and Cypriot poverty reduction.

EU Funding

Massive pandemic relief packages stemming from the EU budget have already allowed a solid recovery for Greece and Cyprus. In June 2021, the EU approved a recovery plan worth €30.5 billion for Greece. According to EU Commission President Ursula von der Leyen, the plan “will help Greece build a better future.” The recovery plan could spur Greek economic growth by 7% within the next six years, giving people a reason to be optimistic about the future of Greece’s economy.

In Cyprus, the €1.2 billion that Greece secured from the EU Recovery and Resilience Program and €1.8 billion from the EU’s Structural and Investment Funds form part of the Cypriot president’s self-described “ambitious” recovery plan. The massive cash influx will help add at least 11,000 new jobs, a significant number for a country with a population of around 875,000. In addition, it will help Cyprus reverse course from the continuous austerity its government has implemented in recent years, which has proven counterproductive in the fight against poverty. These two gigantic pandemic relief packages from the EU will allow a bright future for Greek and Cypriot poverty reduction.

Optimistic Economic Growth Projections

Another major reason for optimism about Greek and Cypriot poverty rates is the countries’ economic growth projections. Despite the pandemic significantly shrinking both nations’ economies, economic growth projections for upcoming quarters and years are notably better than expected.

In Greece, for example, after a fantastic 4.4% rise in GDP in the first quarter of 2021 despite the COVID-related restrictions that were in place for almost the entire quarter, the EU Commission has released a favorable economic forecast for Greece for the remainder of 2021 as well as for 2022. It expects Greece’s GDP to grow by 4.3% in 2021 and 6% in 2022. Cyprus’s economy also appears poised to bounce back phenomenally from its shrinkage. Cypriot President Nicos Anastasiades has said that the EU’s relief plan will enable a 7% increase in GDP over the next five years.

– Gabriel Sylvan
Photo: Flickr

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The Emerging Film Industry in Saint Kitts and Nevis

Film Industry in Saint Kitts and NevisSaint Kitts and Nevis became the Eastern Caribbean Currency Union’s (ECCU) first sovereign state to lower its debt-to-GDP ratio to the minimum 60% benchmark in 2018. The dual-island nation also adopted the Poverty Alleviation Program. Through this initiative, the government provided a monthly stipend to 4,000 families making less than EC $3,000 (USD $1,100) each month. However, the impacts of the COVID-19 pandemic are jeopardizing the country’s economic growth. The tourism industry contributes 60% of Saint Kitts and Nevis’s GDP. Because of the pandemic’s disruption to the tourism sector, predictions have determined that the country will experience -2% GDP growth in 2021. Fortunately, an unexpected economic opportunity has arisen that will assist the nation in generating additional revenue: the new film industry in Saint Kitts and Nevis.

The MSR Media Deal

The entertainment industry suffered a significant economic collapse due to the shutdown of movie theaters and film production studios during lockdown regulations. In 2020, estimates determined that the international theatrical and home entertainment industry was worth $80.8 billion. This is a drop of 18% from the previous year. The most substantial decrease was in theater revenue, which fell from $42.3 billion in 2019 to $12 billion in 2020. Moreover, theater companies generated just 15% of the world’s total entertainment revenues compared to 43% in 2019.

COVID-19 safety regulations cost film companies like Universal an extra $8 million due to the overall production costs in the U.K. Due to the strict safety precautions and rising production costs in the U.K., film companies like MSR Media sought after COVID-19 safe havens to continue filming. The company found Nevis Island to be the ideal solution.

Saint Kitts and Nevis had only 44 reported coronavirus cases by March 2021. All but two of the patients had recovered completely, and there had been no fatalities. Since the end of August 2020, there have been no curfew or shelter-in-place restrictions throughout the country. Additionally, the CDC has also given Saint Kitts and Nevis a Level 1: Low Covid Risk rating. In contrast, the State Department has given the nation a Level 2 travel advisory. MSR Media has invested a multi-million dollar film industry investment in Saint Kitts and Nevis as a result of the country’s efficient control of the COVID-19 pandemic. As a result, the film industry in Saint Kitts and Nevis underwent formal establishment.

New Employment Opportunities

According to data from the Eastern Caribbean Central Bank (ECCB), Saint Kitts and Nevis’ economy had a GDP of $927.4 million (2.5 billion Eastern Caribbean dollars) in 2020, down 11.2% due to the prolonged COVID-19 pandemic and its effect on the tourism industry. In 2019, the tourism industry in Saint Kitts and Nevis employed 4,800 people. However, a World Food Programme survey found 51% of the population reported job losses or lower income as a result of the pandemic in 2020. Winston Crooke, a former actor and native Nevis Islander, detailed the tourist industry’s dire state. “I haven’t seen a tourist in a year and a half,” he told The Borgen Project in an interview.

Film creators will shoot six films on the island of Nevis as part of the MSR Media deal. MSR Media has recruited a total of 32 locals to work full-time with the film crew. Eight locals have landed speaking roles. Additionally, the crew cast 160 locals as extras. Nevis Premier Mark Brantley expressed gratitude to MSR Media for bringing employment and development opportunities to the island.

Boosting the Economy

The debut of the film industry in Saint Kitts and Nevis is also proving to be profitable. As a result of the MSR Media deal, opportunities for economic diversification have developed. It has created new prospects for employment, education and increased the exposure of Nevis across the world. Every four months, $1 million will go to the national economy per terms of the MSR Media deal.

The arrival of the film industry in Saint Kitts and Nevis has also ushered in the possibility of a new tourism category known as film tourism. Several distinct characteristics contribute to Saint Kitts and Nevis’ appeal as a filming location, setting the twin islands apart from others in the Caribbean. The country’s breathtaking scenery includes green hills that meet at Mt. Liamuiga’s volcanic peak, a rainforest, a harbor with several hidden coves and inlets and many beautiful beaches. Several tourist sites, including the Saint Kitts Scenic Railway and the Brimstone Hill Fortress, are located there. The Hamilton Museum is located on Nevis, as the island is the birthplace of Alexander Hamilton, one of the founding fathers of the United States

Saint Kitts and Nevis is developing new hotels in anticipation of more tourists. Prime Minister Timothy Harris of Saint Kitts has outlined a varied hotel complex that is nearing construction. The Trinity Sunset Shores, Seaview Hotel and Hillsborough Suites Hotel are among these buildings, all of which will open in 2021.

Saint Kitts and Nevis’ Citizen by Investment Program (CBI), which began in 1984, is the world’s longest-running investment migration program. In exchange for contributing to the Sustainable Growth Fund, the program provides a haven for U.S. families. The income that the fund creates goes toward assisting many aspects of society, such as tourism and healthcare. Winston Crooke feels the film industry will aid in increasing interest in the CBI program. “There’s no such thing as bad publicity, and [filming movies in Nevis] is great publicity. I think what [MSR Media has] done is showcase not only [the island] but also what Saint Kitts and Nevis can offer to small companies,” he said.

The Acting Academy

One of the MSR Media team’s goals is to teach individuals from Saint Kitts and Nevis the skill of creating films. On February 22, 2021, the Acting Academy opened its doors. Phillipe Martinez, MSR Media’s Chief Producer and Director, and Winston Crooke, now an acting coach, lead the academy. The Nevis Performing Arts Center hosts the Acting Academy. Aspiring performers will take evening lessons twice a week, from 6 p.m. to 9 p.m. on Mondays and Wednesdays. “The Acting Academy is about developing whatever skill sets [locals] have, nurturing [those skills] and owning them,” said Winston Crooke. All classes at the academy are free.

Future of the Film Industry

The film industry in Saint Kitts and Nevis has a bright future. MSR Media is currently working on projects including A Week in Paradise, Assailant and One Year Off in Saint Kitts and Nevis. “The most important thing is to help develop these other people [or] youngsters and so on in the film industry so they will carry on and develop the market. And I also want to thank MSR Media, Philippe Martinez and the production company for being bold enough to look at Nevis Island in the way that they have and give us this fabulous opportunity,” expressed Winston Crooke.

– Tiara Tyson
Photo: Flickr

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COVID-19 and the Impoverished in El Salvador

impoverished in El SalvadorEl Salvador implemented a strong response to the COVID-19 pandemic. Now, it has one of the lowest rates of COVID-19 contractions in Central America. Still, there have been several economic depressions globally during this pandemic that have affected the impoverished in El Salvador.

The COVID-19 Pandemic

As of July 23, 2021, El Salvador has had 84,000 confirmed COVID-19 cases and more than 2,500 deaths. On April 1, 2020, President Nayib Bukele confirmed the first COVID-related death over Twitter. The victim was a 60-year-old woman who had recently returned from the United States.

This lockdown has had major ramifications for the impoverished in El Salvador. In an interview with The Borgen Project, San Salvador resident Wendy Michelle Valladares-Hernandez discussed the economic implications for the poor. “I think [the pandemic] has affected…people with entry-level [salaries] which is the majority of El Salvador,” she said. “Entry-level salaries are $300 and things can be as expensive as the U.S. so it’s like telling someone in the U.S. to live with $300 a month. It can be a lot cheaper, like housing but when it comes to food it’s very similar [to] the States.”

Despite this, Valladares-Hernandez described the pandemic procedures positively. “I think that as a country we responded very well,” she said. “The fact that we are all trying to help each other in the sense that we, you know, take care of ourselves, to take care of everyone else around us. I think that’s the reason everyone wears masks when they go out and everyone’s okay by having your temperature checked every single place you go in and cleaning yourself with alcohol every single time you go in.”

El Salvador’s Economy

The U.N. Economic Commission for Latin America and the Caribbean (ECLAC) estimates that the Salvadoran economy contracted 8.6% in 2020, compared to an expansion of 2.6% in 2019. The country has not seen such a loss since 1981 during a civil war. Additionally, El Salvador was the first country to introduce Bitcoin as legal tender. While it is a notable milestone, there are uncertain benefits for the impoverished in El Salvador. The country has a mostly cash-based economy and more than 70% of its citizens do not have bank accounts. It has sparked protests and a poll found that 77% of Salvadorans think Bitcoin is a poor idea.

El Salvador’s Healthcare Services

The organization Doctors Without Borders has recorded an increase in patients dying before ambulances reach their homes. The COVID-19 pandemic has overloaded the ambulance and hospital systems and there is a lack of access to primary healthcare services. Many patients with chronic illnesses do not have full access to medical assistance because coronavirus patients have received medicinal priority.

This has especially affected the impoverished in El Salvador. The U.S. embassy in El Salvador has found that the use of state-of-the-art technology can require medical evacuation to the United States, but even general hospitalization can cost thousands of dollars, often in cash payments. This leaves medical assistance often unaffordable to many, considering the country’s minimum wage is around $270 per month.

The Solutions

El Salvador’s government has already approved a minimum wage increase that went into effect on August 1, 2021. The minimum wage increased by 20%, bringing the entry-level wage from $300 to $365 a month per month. On top of that, the government has announced the Trust for the Economic Recovery of Companies. This Trust has offered to provide $100 million towards small- and medium-scale businesses to subsidize wages and promote the economy. The ECLAC has estimated that El Salvador will see economic growth of 3.5% in 2021 due to private and public investment.

Bukele, in response to the overwhelmed healthcare system, converted the International Center for Fairs and Conventions (CIFCO) into a hospital designed specifically for COVID-19 treatment. The hospital is now the largest hospital in Central America, costing more than $75 million to produce. Originally, the transformed center was to be temporary, however, it will now be a permanent fixture.

The hospital has the capacity to treat more than 400 individuals with COVID-19. The economy hit those who are impoverished in El Salvador hard. Additionally, they often cannot afford to pay or seek medical assistance. The Ministry of Health (MSPAS) offers a free public healthcare system that covers up to 79.5% of Salvadorans in their time of need.

Looking Forward

On July 21, 2021, Bradley A. Freden, the Interim Permanent Representative of the United States, attended an OAS Permanent Council Special Session on equitable COVID-19 vaccine distribution. There, he reiterated President Joe Biden’s announcement to contribute $2 billion in support of COVAX. Soon, 24 million vaccinations will undergo distribution across the Western Hemisphere, including to El Salvador. This contribution will greatly help the vaccination goals of El Salvador, which should be able to vaccinate 4.5 million citizens.

“Importantly, our shots don’t come with strings attached,” said Freden. “We are sharing vaccines with the world and leading in a global vaccine strategy because it’s the right thing to do: the right thing morally, the right thing from a global public health perspective and the right thing for our collective security and well-being.”

Citizens of El Salvador look forward to returning to normal, though some believe that those who are sick should continue to use masks. Valladares-Hernandez remarked, “I think that there’s gonna be things that are gonna get stuck with us. For example, even if someone has a small flu, people are still going to be wearing masks. I think that’s something we are going to do once this goes away.”

– Camdyn Knox
Photo: Pixabay

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The Impact of COVID-19 on Poverty in Bulgaria

Impact of COVID-19 on Poverty in BulgariaThe impact of COVID-19 globally is undeniable. From Canada to Ukraine, every nation is fighting the virus. Bulgaria is facing a similar battle against the COVID-19 pandemic and poverty. Organizations are fighting to keep both under control while implementing solutions to address the impact of COVID-19 on poverty in Bulgaria and around the world.

The Fight Against COVID-19

Bulgaria’s first COVID-19 case occurred on May 8, 2020, which was later than many of its neighbors. The Bulgarian parliament quickly went into a state of emergency on May 13, 2020, due partially to the weak healthcare system. Discussions about how to balance the economy and COVID-19 precautions soon started. Despite the government’s best efforts, the impact of COVID-19 on poverty in Bulgaria was significant.

The Past Against the Present

Bulgaria’s past has contributed to its present state. Bulgaria became its own independent country in 1908, with the occurrence of World War I six years later. The defeat of Bulgaria in World War I saw the loss of 100,000 people. Twenty years afterward, World War II started, resulting in an eventual Soviet invasion. Communism ruled for the next five years.

These events led to economic unrest for several years. Bulgarians boycotted and protested the crisis several times throughout the years, most recently in 2013. The first protests led to Bulgaria joining the European Union but the transition was rough on living standards. Structural reforms in the late 1990s led to faster growth and better living for Bulgarians, with some economic issues in 2008, 2013 and 2014, despite overall improvement. The impact of COVID-19 on Bulgarian poverty has many experts concerned about a possible relapse into economic decline.

The Virus Against the Economy

The negative impact of COVID-19 on poverty in Bulgaria began when the country’s economy was doing well. COVID-19 dragged the economy into a recession throughout 2020 and 2021. As a result, poverty in Bulgaria in 2021 could increase before it declines. Job losses and poverty have hit young people especially hard. Bulgaria will take time to recover from the economic shock of COVID-19, according to many experts. Alongside high productivity, experts have emphasized several components that Bulgaria must prioritize for its economic recovery:

  • Optimal use of EU money
  • Reopening of businesses
  • Reducing crime rates
  • More job prospects
  • More educational opportunities

Solutions in the Present

Bulgaria’s long-term recovery will take years, but organizations are currently attempting to lessen the impact of COVID-19 on Bulgarian poverty. SOS Children’s Villages prioritizes the well-being of young people who have suffered the most from poverty in Bulgaria.

SOS Children’s Villages dedicates itself to helping lift children and teenagers out of poverty all over the world. The organization has two bases in Bulgaria — the cities of Sofia and Trjavna. Its focus is on strengthening families, improving care in families and providing support for young people. The organization also promotes advocacy and improves emergency programs for unaccompanied refugee children. Reducing the child poverty rate is the overall goal of SOS Children’s Villages in Bulgaria.

Despite the significant impact of COVID-19 on poverty in Bulgaria, organizations like SOS Children’s Villages are providing substantial aid. With the continued commitment of organizations, poverty in Bulgaria will reduce and Bulgaria will find its way to economic recovery,

– Audrey Burran
Photo: Flickr

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The IMF Funds Uganda’s Economic Recovery

Uganda’s Economic Recovery
Uganda, like many other global nations, is battling the economic consequences of the COVID-19 pandemic. The pandemic reversed a decade of economic progress for the country. On June 28, 2021, the executive board of the International Monetary Fund (IMF) approved a $1 billion Extended Credit Facility (ECF) arrangement for Uganda’s economic recovery in a critical time of need.

COVID-19’s Impact on Uganda’s Economy

According to the World Bank, Uganda’s real GDP grew less than half as much in 2020 than in the year before. A four-month nationwide lockdown deterred the economic activity of the industrial and service sectors. The country’s COVID-19 lockdown forced company closures and permanent layoffs, especially in the industry and services sectors. Many informal jobs were impacted, leading to a reliance on farming for income creation and food security.

A Rise in Child Labor

A 69-page report by the Human Rights Watch and the Initiative for Social and Economic Rights explains that many families’ household incomes dropped due to the pandemic’s effects. Furthermore, with schools shut down, the burden of decreased income fell on many children. Child labor surged as many children as young as 8 years old had to work in hazardous conditions in order to provide for their families.

Nearly half of the Ugandan children interviewed in the report worked at least 10 hours a day, sometimes every day of the week. Some children even reported working as much as 16 hours a day. Most of the children only earned a meager $2 a day while subject to dangerous work conditions. Children in agriculture were injured by sharp tools used in fieldwork and “the sharp edges of sugarcane stalks.”

Other children working in quarries “suffered injuries from flying stones.” Many children also reported violence, harassment and pay theft during their employment. Many employers try to exploit child labor and maximize production. Due to these circumstances, Human Rights Watch asserts that part of Uganda’s economic recovery must include targeted assistance to households with children.

Funding From the IMF

The three-year loan approved by the board under the ECF includes the immediate disbursement of $258 million for much-needed budget support. The disbursement follows the $491.5 million release of emergency funds in May 2020 to support the post-pandemic recovery of Uganda. In an effort to strengthen Uganda’s economic recovery, authorities seek to increase household income throughout the country. Authorities are encouraging inclusive growth by investing in the development of the private sector and enacting reforms in the public sector.

Uganda’s Economic Outlook

Uganda seeks to combat its financing issues as it goes forward. Hopefully, the crucial aid from the IMF will help create jobs by investing back into the industrial and service sectors. Also, the financing aid may help children return to school as parents find new work. Economic growth in 2021 and 2022 is estimated to climb to 4.3% before reaching pre-pandemic levels of growth. While some industries such as tourism may remain subdued for a while, other sectors such as “manufacturing, construction and retail and wholesale trade” expect to rebound in 2021. However, Uganda’s economic recovery is currently still tenuous. The government will need to tread carefully as the economy remains vulnerable to the effects of COVID-19.

– Gene Kang
Photo: Flickr

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Italy’s NextGenerationEU Program

NextGenerationEU programThe COVID-19 pandemic has brought to light how nations must be prepared for the most unexpected crises. Countries all over the world have conjured up ideas of recovery plans to help restore and improve the world. One country to look at as a model for the rest of the world is Italy. Specifically, the Italian government has formed ENEA Tech as a Foundation that will invest in new technology and generate jobs in order to jumpstart the economy. Through this Foundation, the NextGenerationEU program formed. The NextGenerationEU program has an approximate budget of €800 billion and will be a temporary tool to aid the recovery of economic and social consequences that COVID-19 caused. This will help Italy heal from the pandemic while changing the lives of Italian citizens and providing them with new opportunities.

The Main Elements

The extraordinary effort will contribute to the recovery of socioeconomic losses that the COVID-19 pandemic inflicted. It will also allow for the transition to a more efficient and sustainable Italy. More than 50% of the funding will go toward research and technology innovations, sustainable environmental and cultural reforms while providing planning and protection within the European Union. Additionally, 30% of the budget will address other issues including climate change, environmental conservation and gender equality. Meanwhile, 20% of the financial resources will support the digitalization of the economy and other technological innovations. Finally, between the years 2026 and 2027, 10% of the yearly investment will go toward preventing and repairing biodiversity degradation. The funding will undergo investment and dispersal to Italy and other European Union countries. Recipients will obtain resources in the form of grants and loans.

The Benefits

Through the NextGenerationEU program, Italy and other European countries will become more sustainable, digitized, healthy and diverse. In addition to the previous investments, the many benefits of the program’s efforts include:

  • Investing in “green” technology, which will introduce more environmentally friendly means of transportation and make infrastructures and public areas more energy efficient.
  • Protecting the environment through conserving water, minimizing pollution, using more sources of renewable energy and improving agricultural practices.
  • Making the internet more accessible and affordable, meaning user data and electronic commerce will have more secure protection. The E.U. will also finance online education training to help people improve their digital abilities.
  • Combatting health concerns by creating new vaccines and treatments, increasing access to medical supplies and investing in professional healthcare training.
  • Creating more opportunities for internships and higher education while allocating more funds to loans and scholarships.
  • Increasing job opportunities for people with disabilities and people living in impoverished communities.
  • Fighting racism and xenophobia and supporting gender equality to honor diversity in all of its expressions.

The Next Steps

The European Commission and the European Parliament have made significant measures to ensure that authority leaders prioritize financial support and seek assistance through various NextGenerationEU mechanisms. Although the NextGenerationEU program is coming to fruition, individuals must continue to urge their respective national government leaders to help in developing and enacting recovery programs.

– Anna Lovelace
Photo: Unsplash

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US Economic Partnership with the Caribbean Islands

Partnership with the Caribbean IslandsThe vibrant atmospheres and scenic views in the Caribbean reach across 14 islands, as well as six more that are categorized as the Organization of Eastern Caribbean States. These islands in the Caribbean Sea have relatively small economies that are fiercely dependent on tourism. About 15% of employment and 13.9% of the Caribbean’s GDP centers around tourism, making the Caribbean islands the most tourism-dependent region in the world. However, the COVID-19 pandemic had a disastrous impact on the economy of several Caribbean islands, as people were not traveling and tourism decreased. Due to the United States’ reinstated partnership with the Caribbean islands, the economy may be looking up.

Background of Poverty in the Caribbean

The Caribbean’s exclusion of its poor has been apparent throughout its history, owing to hierarchies of race, class and gender established back through colonial domination. Around 30% of people live in poverty and most jobs that are accessible for uneducated people are low-skilled and low-paid.

There are few opportunities for impoverished people to gain ground in the Caribbean, and there was an even larger setback in the economy due to the lack of tourism during the COVID-19 pandemic, which has contracted the economy by approximately 8.6%. The ability of the Caribbean’s economy to bounce back from the pandemic will determine how many more of its people will fall below the poverty line.

Past U.S. Partnership with the Caribbean Islands

The U.S. has been the Caribbean’s largest trading partner for many years. Likewise, the Caribbean is the U.S.’s sixth-largest trading partner, with around 35.3 billion dollars exchanged between the two each year. The U.S. partnership with the Caribbean began in 1983 with the Caribbean Basin Initiative, consisting of two trade programs: the Caribbean Basin Economic Recovery Act and the US-Caribbean Basin Trade Partnership Act. These help Caribbean countries have more open access to U.S. markets.

The United States’ partnership with the Caribbean islands helps to boost its economy while simultaneously creating more jobs to employ Caribbean residents. This further emphasizes the importance of the U.S.’s reiteration of its commitment to the Caribbean.

Importance of Future U.S. Partnership with the Caribbean Islands

In June 2021, the United States committed itself to partner with the Caribbean as a means for economic growth and the eradication of poverty. This commitment was vocalized as the keynote address at the American Chamber of Commerce of Trinidad and Tobago by Ian Saunders, the U.S. Department of Commerce Deputy Assistant Secretary for the Western Hemisphere.

Saunders assured the Chamber of Commerce that the United States is a committed partner to the growth of the economy post-pandemic and of their efforts to help eradicate poverty throughout the islands.

According to the Trinidad and Tobago Guardian, Saunders stated that a Caribbean Region Trade Mission and Business Conference will take place in October 2021 with the help of the U.S. Department of Commerce and 14 American embassies. This conference will help connect U.S. companies to opportunities in the islands.

The COVID-19 pandemic interrupted a positive growth rate that had been maintained by the Caribbean for many years, decimating a lot of hard work by the islanders and plunging many people below the poverty line.

With the United States showing support for the economic backing of the Caribbean, things are looking up for tourism rates and commodity exportation to increase. 

– Allie Degner
Photo: Flickr