Poverty and income diversification The World Bank estimates that 78% of the world’s poor live in rural areas. Most individuals who reside in these areas depend on farming and agriculture not only for sustenance, but also for household income. There is consequently a correlation between poverty and having one, dominating occupation. Yet according to researchers, there seems to be a solution to this relationship through increased income diversification.

Farming

There is an issue of volatility that is inherent in farming. Variability in conditions can adversely affect crop yield, which ultimately impacts the income received by farmers. According to Farm Europe, competition can also be problematic. If all the poor in a given region take up farming as a means of earning income, then at some point, the supply outweighs the demand. When that happens, either crop prices will either decrease or crops will waste away in storage. This effect is further amplified when governments are unable or unwilling to offer adequate compensation for farmers’ excess crops.

Even in the United States, abundant in resources and well-developed in agricultural techniques, farming is a constantly changing industry. The USDA reports a wide fluctuation in income earned by a typical commercial farmer between 2000 and 2014. As a result, there is a need for income diversity worldwide, and this is particularly illustrated by some of the success stories in impoverished countries.

Vietnam

Since the 1990s, Vietnam has experienced high rates of economic growth. Researchers with the IFPRI (International Food Policy Research Institute) assert this is due in large part to income diversification.

Vietnam’s highest concentration of poverty is located in the Northern Hills. An analysis of the region suggested that those able to earn income by way of agricultural production, as well as non-farming activities, experienced the highest spike in their earnings over time. However, where does that leave those solely reliant on farming?

Residents limited to farming only managed to earn a living by applying the principle of diversification to their crops. They deviated from the typical crop grown, rice, and added cash crops, like coffee and tea, to their output. The cash crops yielded a much higher profit per unit of sale and required less land, labor and resources to grow and maintain. Even so, their spike in income did not match that of those who participated in both farming and non-farming activities. Nonetheless, the practice of diversification provided a much more stable source of income overall.

Niger

Niger currently ranks as the fifth most impoverished country in the world, and it is actively striving to end its poverty issue. People are seeing positive results attributed to the dynamic between poverty and income diversification.

A study conducted on over 600 smallholder rice farming families in Niger revealed that those who also participated in non-farming wage employment were better off than those who strictly farmed or were self-employed in some capacity related to farming. An important effect of a second stream of income was the ability to maintain the size of a given farm. The ancillary job could generate enough profit during a poor season to cover overhead costs for the following season.

Conclusion

The relationship between poverty and income diversification has become a central focus for policymakers across the globe. It is an effective way for individuals to mitigate the impacts of poverty. Empowering impoverished families to earn steady income can solve many issues embedded in poverty. If a family can individually afford food and water, they can pay to keep their lights on or go for a visit to a doctor. Moreover, the idea of attaining an education or further developing their current form of income becomes a realistic possibility. Diversifying income creates a pathway to not only sustaining livelihoods, but lays the groundwork for prosperity.

Christian Montemayor
Photo: Flickr

Deworming PillsThis July, the National Bureau of Economic Research (NBER) published data from a longitudinal research study that looked at how deworming Kenyan children affected their economic outcomes. Youths took deworming medication under professional supervision and were revisited 20 years later by researchers. Economists used these findings to estimate the impact of deworming pills. They find an enormous effect: taking deworming pills during childhood boosts household income by as much as 13% in adulthood.

NBER Research

Deworming has a positive effect on children’s education; reducing absenteeism and dropping out of school. However, this study finds that in addition to, and perhaps as a result of improved education, deworming increases the likelihood of working in nonagricultural jobs with higher incomes. If students are healthier from a younger age and succeed in school, they have a higher chance of bettering their futures. However, it must be noted that the study only found this future income boost applied to men, suggesting that although deworming medicine increases better education, it does not improve economic mobility for women. Further research is necessary to study this gender gap and its causes.

Further Research

The World Health Organization (WHO) and The World Bank have been funding the distribution of deworming pills in Africa for many years now. In sub-Saharan Africa, there are high infection rates of intestinal worms, especially among school-age children. Worms stunt children’s development and affect their ability to function. Deworming kids is inexpensive, and it results in healthier individuals and communities. Additionally, when previous generations are treated, the current generations are shown to reap the benefits. With deworming programs having such clear positive results, many organizations such as the WHO support and supply school-based deworming in sub-Saharan Africa, as well as other developing countries.

Deworming pills cost less than a dollar per child treated, so the return on deworming programs is enormous. For instance, the NBER study predicts a 37% return on deworming investments. However, these researchers acknowledge that there is a low chance this effect is statistically significant. In other words, they may have vastly overstated the effect of deworming pills on future outcomes.

Deworm the World

Hassenfeld is the co-founder of GiveWell, a nonprofit dedicated to finding and rating giving opportunities for donors. GiveWell backs an initiative called “Deworm the World,” which they consider a “priority program” because of how cheap deworming is and how beneficial the outcome may be. GiveWell also hires and trains monitors to attend schools, conduct training sessions, and implement distributions of deworming pills to students to ensure program efficiency.

Deworm the World spent $2.2 million more dollars in 2018 on deworming than in 2017. However, the company is continually seeking funding because they hope to expand its programs in Kenya, India, Pakistan and Nigeria.

Concluding Thoughts

This study suggests that deworming may strengthen entire communities over time, raising people out of poverty and improving their countries’ GDP. One study cannot completely explain the financial impact of deworming; however, it is clear that further research is needed and that children’s lives are being changed for the better. Previous research has shown that supporting healthcare systems and eradicating illnesses in developing countries leads to their growth and success. Similarly, deworming programs may play a big role in alleviating poverty in countries affected by intestinal worms.

– Giulia Silver
Photo: Flickr

Innovations in the PhilippinesOver the past decade, there have been drastic innovations in the Philippines. The country has experienced dramatic economic growth and development. In 2019, the Global Innovation Index (GII) found that the country improved on all metrics used to calculate advancement.

Economic Growth

In 2019, the Philippines appeared for the first time in the “innovation achievers group.” The country outperformed many other countries in the area.  Some of the metrics used to calculate these scores included increased levels of creative exports, trademarks, high-tech imports and employed, highly educated women.

As a country, the Philippines has risen 19 spots in the ranking since 2018, to 54th out of 129 participating countries. This indicates a significant increase in the standard of living for many Filipinos. This is apparent in the significant decrease in the poverty rate over the past few years. From 2015 to 2018, the national poverty rate dropped a total of 6.7%, or by 5.9 million people.

Prosperity is largely due to the success of local business owners and entrepreneurs. They have used their influence and prosperity to help those in need in their communities and countries, especially in the health sector. Coincidingly, there was a significant increase in global trade. Both factors have propelled the Philippines into the global economy as an important emerging market to keep an eye on.

Global Benefits

In 2018, the Philippines and the United States trade relationship developed significantly. The total goods trade was $21.4 billion collectively, in the petroleum and coal, aerospace and computer software, motor vehicles and travel/hospitality sectors. This is beneficial to the U.S. because international trade employs over 39.8 million Americans. As the Philippines becomes more prosperous, more Filipinos are able to pour money and resources into helping marginalized communities across the country. As such, there has been an increase in innovations in the Philippines, notably in the health and medical sectors.

RxBox

A distinct industry on the frontlines of innovations in the Philippines is the health sector. Increased health for a population is directly related to better access to opportunity and a higher standard of living overall. One company doing this important work in the Philippines is RxBox.

RxBox was developed by the country’s Department of Science and Technology. It is a biomedical telehealth system that provides health care and diagnoses to people in communities that are remote, difficult to access. The service is additionally available for people who do not have access or the ability to travel for health care.

It is a game-changer for disadvantaged people who would otherwise not be able to get fast, effective medical care. RxBox reduces costly hospital and medical visits, which facilitates better health for people. Communities are then better able to care for themselves and for their families, providing greater opportunities for everybody.

Biotek M

There is another player in the innovations in the Philippines: Biotek M. It is a revolutionary diagnostic kit for Dengue. A local team at the University of the Philippines-Diliman were the creators of this new technology.

Traditionally, the Polymerase Chain Reaction (PCR) test is used to confirm the disease but can cost up to $8,000 and takes 24 hours to get results. That is inaccessible to lower-income people who are oftentimes the demographic most commonly afflicted by the dengue infection. The kit helps reduce resource usage for both medical centers and patients by making the diagnosis process significantly more streamlined.

In 2017, 131,827 cases of Dengue were recorded with 732 deaths, mostly affecting young children aged 5 to 9-years-old. Being able to quickly diagnose and treat people who contract this illness makes a huge impact on people living in poverty.

When people spend less time, energy and money on being healthy, they are able to use their resources more efficiently. In this way, medical innovations in Philippines and a growing economy directly increased the standard of living for people living in poverty within the country.

Noelle Nelson
Photo: Flickr

Livelihoods in Brunei are ImprovingBrunei is an independent Islamic sultanate on the northern coast of the island of Borneo in Southeast Asia. Some statistics about the country still remain unknown like the percentage of Bruneians that live in poverty. This is due to the fact that Brunei still does not have a poverty line as of 2018. However, one can use other means to measure Brunei’s poverty. Additionally, other data can help ascertain whether or not livelihoods in Brunei are improving their unquantified impoverished situations.

One way to look at this is the Economic Freedom Index Score (EFIS). One can think of this as Bruneians’ freedom of choice as well as their ability to acquire and use goods. Brunei’s EFIS is 66.6, and it ranks 61 out of 180 countries. Singapore, the top country, comes in at 89.4, making it the world’s most free economy in the 2020 Index. Then there is North Korea, the bottom country, which has a score of 4.2. Despite Brunei’s moderate EFIS score, the country is working to boost that number. Here are three ways livelihoods in Brunei are improving.

1. Self-Empowerment Initiatives

His Majesty Sultan Haji Hassanal Bolkiah says Brunei has drafted “self-empowerment initiatives” to create more job and entrepreneurship freedoms. Oil and gas production supply 90% of government revenue and 90% of exports. However, these industries have limited job opportunities.

Now, the country strives for economic diversification to reduce reliance on oil and gas. To support these endeavors, the administration will simplify the processes to start a business and develop business regulations. The most significant changes were amending certain laws allowing businesses and investors to operate without a license and reducing the wait times for a business to open.

2. Employment

Unemployment rates — regardless of education level — are high. Although, Bruneians with a vocational background have the highest rates of unemployment. The youth are also at risk of higher rates of unemployment. According to the International Monetary Fund (IMF), the unemployment rate among young Brunei increased from 25.3% to 28.9% in 2019 — the Association of Southeast Asian Nations (ASEAN) was the highest percentage.

A suggestion from the IMF is to invest in technology and digitalization to capitalize on the tech-savvy generation. Also, the Manpower Planning Council is setting up a labor-management information system to lower unemployment among college graduates. This will be a cooperation between government agencies, the private sector and education institutions to ensure the turnout of employable graduates.

3. Welfare

The Sultan also says that people’s welfare is of utmost importance. This assertion stems from taqwa, the basic Islamic principle of God-consciousness together with brotherhood, equality, fairness and justice. This concept is the basis of true Islamic societies.

With this in mind, livelihoods in Brunei are improving by adjusting the financial aid requirements. This effort attempts to lift benefit recipients out of poverty and continue to provide assistance to citizens who need it. With these new rules, the government will be able to map welfare recipients and learn where there is a need to advance workforce skills and job opportunities. The implementation of this new system is more important than ever before due to COVID-19 and an expected increase of benefit recipients. Now, however, Brunei authorities can better prepare themselves to leave no one behind, per taqwa.

Overall, livelihoods in Brunei are improving. The administration has focused itself on economic diversification to be less reliant on oil and gas. The unemployment rate has increased, but the country is undergoing steps to combat that with education and jobs. Also, Brunei is updating welfare programs to include further applicant information. This will assist in financial help as well as learning where education or job options are a factor in poverty.

These changes could create a cycle of prosperity and bring more Bruneians out of poverty. However, Brunei needs to create a poverty line. That way, it can more accurately assess its poverty situation and how much progress it still needs.

Heather Babka
Photo: Flickr

COVID-19 and Global Poverty
Since early 2020, the entire globe has been battling the COVID-19 pandemic and attempting to address the outbreak properly. Most of the world’s population is currently under some form of social distancing as a part of a response to the outbreak. From scientific research to increased travel restrictions, almost every country is working on ways to boost the economy while managing the spread of the virus. However, COVID-19 has affected much more than the economy. Here are four ways COVID-19 and global poverty connect:

4 Ways COVID-19 and Global Poverty Connect

  1. The Consumption of Goods and Services: For most developing countries struggling with poverty, much of their economies depend on commodities, such as exports. Food consumption represents the largest portion of household spending, and the increase in food prices and shortages of products affect low-income households. Countries that depend on imported food experience shortages. The increase in food prices could also affect the households’ inability to access other services such as healthcare, a major necessity during this time. These are two significant connections between COVID-19 and global poverty.
  2. Employment and Income: The self-employed or those working for small businesses represent a large portion of the employed in developing countries. Some of these workers depend on imported materials, farming lands or agriculture. This requires harvest workers and access to local farmers’ markets to sell produce. Others work in the fields of tourism and retail. These fields require travelers, tourists and consumers — all of which lessen as COVID-19 restrictions increase. Without this labor income, many of these families (now unemployed) must rely on savings or government payments.
  3. Weak Healthcare Systems: This pandemic poses a major threat to lower-middle-income developing countries. There is a strong correlation between healthcare and economic growth. The better and bigger the economy, the better the healthcare. Healthcare systems in developing countries tend to be weaker due to minimal resources including beds, ventilators, medicine and a below-average economy. Insurance is not always available for low-income families. All of this affects the quality of healthcare that those living within the poverty line receive. This is especially true during the COVID-19 pandemic.
  4. Public Services: Low-income families and poor populations in developing countries depend on public services, such as school and public transportation. Some privatized urban schools, comprised of mainly higher-income families, are switching to online learning. However, many of the public rural schools receiving government funding do not have adequate resources to follow suit. This could increase the rate of drop out. Moreover, it will disproportionately affect poorer families since many consider education an essential incentive for escaping poverty. Aside from school, COVID-19 restrictions could prevent poorer families from accessing public transportation. For developing countries, public transportation could affect the ability of poorer families to access healthcare.

Moving Forward

There are many challenges that families across the globe face as a result of COVID-19. Notably, some organizations have stepped forward to help alleviate circumstances. The World Bank, Care International and the U.N. are among the organizations implementing programs and policies to directly target the four effects of COVID-19 mentioned above.

For example, the World Bank is continuously launching emergency support around the world to address the needs of various countries in response to COVID-19. By offering these financial packages, countries like Ethiopia, which should receive more than $82 million, can obtain essential medical equipment and support for establishing proper healthcare and treatment facilities. These financial packages constitute a total of $160 million over the next 15 months as a part of projects implemented in various countries, such as Mongolia, Kyrgyz Republic, Haiti, Yemen, Afghanistan and India.

Nada Abuasi
Photo: Flickr

innovations in poverty eradication in ethiopiaEthiopia, officially known as the Federal Democratic Republic of Ethiopia, is located in East Africa. It has historically struggled to keep a majority of its population out of extreme poverty. In 1995, 71.1% of Ethiopia’s population lived on less than $1.90 a day. However, thanks to innovations in poverty eradication in Ethiopia, this figure has decreased to 30.8% as of 2015. The top innovations in poverty eradication in Ethiopia include economic development plans and the expansion of social services. Foreign aid from allied nations, like the U.S., has helped make these innovations in poverty eradication in Ethiopia possible.

Economic Development Plans

The main mechanism for successfully reducing poverty in Ethiopia is its chain of innovative economic development plans. Beginning with the Plan for Accelerated and Sustained Development to End Poverty (PASDEP) in 2005, Ethiopia has implemented a series of these plans. Each last five years in order to adapt to the new market. In 2010, the First Growth and Transformation Plan (GTP I) replaced the PASDEP. The Second Growth and Transformation Plan (GTP II) succeeded this plan in 2015.

The GTP II remains in place but is nearing the end of its five-year installment. The plan doubled down on the previous strategies’ prioritization of human resource and infrastructure development. As such, it has sustained economic growth in Ethiopia. This was most evident in Ethiopia’s huge spending increase in the education sector. Roughly one quarter of the nation’s total expenditures go toward education and training. Importantly, this far surpasses the allocated budget in every other nation in the region. Access to “universal primary education” also rose exponentially—an important milestone for the country. In addition, the plan called for large investments in roads, railways, power and agriculture.

The plan also focused on industrial development, strengthening the manufacturing industry to increase economic growth. Analyst for the Development Initiatives, Peace Nganwa, writes that “interventions that increase economic growth also contribute directly to poverty reduction.” Since the GTP II’s implementation, Ethiopia’s GDP has grown substantially. The total GDP grew from $64.6 billion in 2015 to $96.1 billion as of 2019, a whopping 48.8% increase.

Expansion of Social Services

Ethiopia’s focus on improved social services has dramatically increased the welfare of its citizens. Besides education, health, transportation, energy infrastructure and water and sanitation have expanded greatly. Health coverage in particular has been a priority for Ethiopia in the past few years. Substantial increases to healthcare funding brought Ethiopia’s access to health coverage to 98% in 2018. This was an important mark to hit, especially before the coronavirus pandemic reached the country.

Furthermore, water scarcity has historically been problematic for Ethiopia. The nation accounts for 7.5% of the global water crisis, affecting more than 62 million citizens. However, Ethiopia’s focus on the issue has helped reduce it significantly. This work has brought the country’s access to potable water to 66%. All of these social service expansions contributed to increasing the overall life expectancy of Ethiopians. Specifically, it now rests at 64.6 years.

International Assistance

Foreign development assistance made these innovations in poverty eradication in Ethiopia possible. In 2010, for instance, the $3.5 billion Ethiopia received in total foreign donations covered more than half of its spending. The largest contributor to this was the United States, giving $875 million.

As the nation plans another five years of poverty eradication measures, it faces one of the hardest challenges the world has come by: COVID-19. Ethiopia has proven that it can strategize to eradicate poverty within its borders. However, it needs assistance from foreign nations to make it truly achievable, now more than ever in the face of a pandemic.

– Asa Scott
Photo: Wikimedia

Hunger in ParaguayParaguay is one of the smallest countries in South America but is still home to more than seven million residents. Many Paraguayans residing in the landlocked region struggle to survive, with nearly 17% of the population living in poverty. The poverty rate is even higher among rural and indigenous communities. As a result, hunger in Paraguay continues to be a significant problem.

The Causes of Hunger: Exports and Inequality

A prominent yet paradoxical cause of hunger in Paraguay is its growing export rates. As the UN reports, “Only 6% of agricultural land is available for domestic food production, whilst 94% is used for export crops.” While the country produces considerable agricultural resources each year, exporters ship most of this produce and livestock overseas and leave very little in the country. This lack of domestic production means that many Paraguayans cannot afford expensive imports. As a result, many must contend with food insecurity and hunger in Paraguay.

To make matters worse, the divide between the wealthy and the working class in Paraguay is drastic. Roughly 3% of the population owns more than 85% of its land and resources. This unequal distribution of land and resources leaves small landowners impoverished and unable to compete, with many turning to urban areas in search of marginal work.

Agricultural Industry

The Paraguayan agricultural industry’s oligarchical nature makes it challenging to reallocate Paraguay’s land and natural resources. The 3% of landowners hold tremendous financial and political influence in the country, making it difficult for the Paraguayan government to reallocate resources or reappropriate land toward domestic production. The extremely wealthy are also only interested in producing a handful of different crops that do well in the global market.

However, this makes Paraguay’s economy and exporting gains very dependent on a temperamental world market. The market’s fluctuations can be particularly tricky and potentially harmful for the underserved and impoverished in the country, who are already struggling to survive. Without much opportunity for social mobility, those threatened by hunger in Paraguay must routinely find cheap alternatives to sustenance. High-quality, nutritious food remains an unaffordable commodity for many Paraguayans.

Hunger and Malnutrition

Poverty leads to food insecurity and malnutrition, two issues symptomatic of hunger in Paraguay. As nutritionist Nadia Quintana notes, “About 15% of Paraguayan children suffer from malnutrition. And that is if you do not count the children from indigenous groups. According to a United Nations estimate, if we include indigenous tribes, more than 45% of Paraguay children are at risk of hunger or malnutrition. But the problem is not lack of food. The problem here is poverty and lack of work and education. And housing is very precarious.”

While instances of undernutrition and starvation are trending downward, malnutrition and obesity rates are rising in Paraguay as poverty forces impoverished citizens to subsist on cheaper, less nutritious foods. These low-nutrient, high-calorie options may be cheap, but they have had an outsized impact on an average Paraguayan’s diet. Residents are in an impossible situation, forced to choose between going hungry or eating foods correlated with increased vulnerability to chronic diseases.

Global Pandemic and Rising Unemployment Rates

The COVID-19 global pandemic has further complicated hunger in Paraguay. While the small Latin American country was one of the first to begin quarantining measures to counteract the March 2020 outbreaks, the nationwide lockdown has crippled many of the country’s workers. Although the country has the fewest coronavirus cases in the region, many of its workers have lost their primary sources of income. The loss of employment means that nearly 60% of the population is without access to any benefits or financial support during the ongoing pandemic.

According to the Guardian, though the government has secured $1.6 billion in pandemic crisis loans, a tiny percentage of Paraguayans have received the promised $76 and food packs. As a result, the dependence on cheap, non-nutritious foods and correlated instances of malnutrition and obesity continue to rise. Rising unemployment rates and lack of federal support will inevitably exacerbate the ever-present issues poverty of hunger in Paraguay.

Indigenous Communities and Hunger in Paraguay

Among the most affected by poverty, pandemic and hunger in Paraguay are indigenous peoples with minimal economic and social resources to combat their current circumstances. Under the lockdown, many are unable to secure food and must rely on communal meals and donations to survive. The Paraguayan government has offered aid but has struggled to deliver it as it has to the rest of its people. Amnesty International has partnered with local initiatives to lobby for sufficient assistance to these indigenous communities waiting and hungry for action.

Moving forward, the Paraguayan government faces an uphill battle in providing its citizens with adequate resources to sustain healthy diets. The government finds itself in a difficult place as it struggles to assist and feed its people amid the ongoing coronavirus pandemic, especially as its workers are out of jobs. With so much of its economy tied to a small minority of extremely wealthy agricultural exports, Paraguay must find a way to help those who are not part of the top 3%, especially those living in indigenous, underserved and impoverished areas. Though extreme poverty trends downward, malnutrition and obesity will continue to characterize hunger in Paraguay.

Andrew Giang
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

Zero Poverty in Wake Island
Wake Island is a small landmass resting between Hawaii and the Northern Mariana Islands. The Spanish discovered the island in 1568 and received its name from William Wake, a British Captain who came across the island in 1796. It covers a total of 6.5 square Km, which is approximately 11 times the size of the National Mall in Washington, DC. This island boasts an impressive statistic: there is zero poverty on Wake Island.

Wake Island’s Background

In 1899 the U.S. created a cable station on the island after seizing it from Spain. In 1941, the country then constructed an air and naval base. However, the Japanese stole it shortly after, forcing the U.S. to bomb the island until Japan surrendered. By 1945, the U.S. recaptured Wake Island. During World War II, the island served as a military landing strip for the Pacific region. Wake Island is a National Historic Landmark due to its involvement in WWII. It has been under preservation by the National Preservation Act since 1966 and is protected by the United States Air Force. The U.S. government maintains the Island for emergency landings.

Reasons for the Absence of Poverty

However, Wake Island has no indigenous people: the only residents on the island come from the United States government and are contractors or military personnel. The sparse population watches over the facilities and airfields. There is currently one military doctor on the island for emergencies. There are no commercial flights to or from Wake Island, making it accessible solely to military personnel. The only telecommunication systems on the island are the Defense Switched Network circuits off the Overseas Telephone System (OTS), located in the Hawaii area code.

Approximately 150 people live on Wake Island as of 2019. Wake Island’s small perimeter does not have the structure or capabilities to hold more people. Thus, the small population creates the condition of zero poverty in Wake Island.

The U.S. regulates, and the present military personnel manages the island. The U.S imports all of the island’s food and manufactured goods for the limited population. By having the food and products imported, Wake Island has a lower possibility of falling into poverty. The island’s currency is in U.S. dollars due to its status as a United States territory. With the U.S. defensive base and government support, the island stays out of poverty.

Environmental Impacts on the Economy

In 2006 a super typhoon almost hit Wake Island, carrying the potential to devastate the island. The government evacuated all residents, but due to the storm’s size, there was a possibility of severe damage. The storm could have destroyed the island’s economy; however, despite the storm’s 155 miles per hour winds, no significant impact affected the military base or buildings. With wreckage of only trees, power lines and rods, the island was fortunate to escape destruction narrowly.

Since 2006, there have not been any storms or other major disasters to threaten the island’s economic status. The island also did not contribute to any wars: following WWII, the island sat peacefully with zero damage. This overall safety has significantly contributed to the absence of poverty in Wake Island.

– Mackenzie Reese
Photo: Flickr

Poverty in Mongolia
Mongolia is a landlocked nation in East Asia, caught between Russia to the north and China to the South. Since transitioning into a capitalist democracy in the 1990s, it has become one of the region’s fastest-growing economies. However, Mongolia is held back by various issues such as poverty and uneven economic growth. Here are five facts about poverty in Mongolia:

Five Facts About Poverty in Mongolia

  1. Poverty Rates: According to the World Bank, 28.4% of Mongolians lived below the poverty line as of 2018. The Mongolian Poverty Line is defined as living off 166,580 Tugrug ($66.4 USD) per month. A further 15%  are considered vulnerable to falling into poverty due to unforeseen events. Taken together, these statistics show that two out of every five Mongolians live in or close to poverty.
  2. High Inflation: Mongolia has been experiencing rapid inflation over the past few years, compounding the issues surrounding poverty in Mongolia. Inflation rates increased from 0.73% in 2016 to 7.26% in 2019. This financially strains vulnerable communities who already struggle to provide for necessities. High inflation notably impacts the urban poor more than the rural poor; while the urban poor need to buy all their food, many rural herders and farmers can produce much of their own food and gain greater profits from increased prices.
  3. Uneven Economic Growth: Mongolia’s GDP has grown in the past few years, but that doesn’t mean that everyone has benefited. Approximately one-third of Mongolian GDP growth comes from mining, which only employs about 6% of the total population and relies heavily on foreign investors. Rural areas are experiencing continuing economic growth due to increased livestock prices, as well as higher rates of consumption and decreasing poverty rates, as opposed their urban counterparts. This is most evident in the rates of herders who fall below the poverty line. According to the World Bank, “Herders were among the poorest in 2010, but now only one in three herders are estimated to be poor.”
  4. Rural v. Urban: This uneven economic growth can best be seen in the divide between the rural and urban poor. While poverty percentages have decreased in rural areas, the rate of urban poverty has remained unchanged. As previously stated, those in rural areas are experiencing economic growth while the urban poor are trapped in stagnation. Rural poverty decreased from 34.9% in 2016 to 30.8% in 2018, while Urban poverty hovers just above 27%. While the rural poverty percentages are still higher, it’s important to keep in mind that 63.5% of the poor live in cities.
  5. Poor Living Conditions: Due to the country’s nomadic past, gers (traditional Mongolian tents), are still widely used throughout the country. These structures are cheap compared to apartments and other housing arrangements, with both the rural and urban poor living in them. A reported 57% of all poor Mongolians live in gers. However, most gers lack many modern necessities such as insulation and running water. This exacerbates the fact that nine in 10 poor Mongolians lack access to various basic infrastructure services like sanitation and heating. The central government is continuing to address these issues and is attempting to move those living in gers into more modern housing.

The Good News

Mongolia has been experiencing nearly 30 years of economic growth and social development. Many experts describe Mongolia as “The Wolf Economy” due to its massive growth and supply of natural resources. The nation has tripled its GDP since 1991 with help from international groups and smart government investments. Healthcare industries have seen a massive improvement, with Mongolia seeing declines in maternal and child mortality rates. The government has also instituted various programs to help people out of poverty in Mongolia and raise the general standard of living. The United States has provided aid and development funds to help strengthen the Mongolian economy and promote democratic political reforms. As a result, the US is Mongolia’s fourth-largest import partner, valuing more than $200 million dollars in items such as machinery and consumer goods. Various American businesses also operate within Mongolia such as Visa, Caterpillar Inc. and GE.

– Malcolm Schulz
Photo: Flickr