Archive for category: Economy

Information and stories about economy.

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4 Reasons Why Renewable Energy in Brunei Reduces Poverty

Renewable Energy in BruneiWith lush rainforests, a royal palace and an absolute monarchy, Brunei is Southeast Asia’s fourth-smallest country located on the north coast of Borneo. Known for its oil and gas reserves, accounting for around 90% of its exports, Brunei is turning to more renewable and sustainable energy to support its economy in the long term and build economic stability.

The Situation

Although Brunei is considered a high-income country, economic vulnerability still exists because its economy relies heavily on oil and gas. According to the World Bank, Brunei’s unemployment rate was approximately 5.3% in 2023. Brunei does not publish an official national poverty rate, and almost all households have access to electricity, thus there is no largely reported energy poverty rate. However, dependence on oil and gas leaves the country’s economy vulnerable to fluctuations in global energy prices, making economic diversification more and more important.

Although Brunei has one of the highest incomes in Southeast Asia, poverty and economic vulnerability still exist for some households due to the country’s heavy dependence on oil and gas. According to the World Bank, Brunei’s unemployment rate was about 4.9% in 2023, while fluctuations in global energy markets create long-term economic uncertainty. Expanding renewable energy in Brunei can help create a more diverse economy, improve employment opportunities and strengthen long-term economic stability.

Although renewable energy sources such as solar and wind energy are mostly known for their environmental benefits, transitioning to renewable energy also helps alleviate poverty by diversifying economies, lowering energy costs and creating more job opportunities. The Energy Transition Division is advancing renewable energy in Brunei, which is leading the country’s shift toward cleaner energy.

Brunei’s renewable energy plans include solar energy projects, new national climate goals and renewable energy targets to support a more sustainable future. The government, through the Energy Transition Division, aims for 30% renewable electricity generation by 2035. One major initiative is the Temburong Smart City, launched as part of Brunei’s Smart Nation vision. The project combines solar power, smart grids and energy-efficient technology to improve sustainability while supporting economic development.

The Benefits

  • Creates New Jobs: Renewable energy efforts create jobs that provide stable incomes for workers in future industries. Some ways renewable energy in Brunei helps alleviate poverty are through creating jobs such as solar installers, engineers, construction workers, maintenance workers, technicians and other green industry careers, according to the United Nations. Brunei’s growing solar industry, including projects such as the Tenaga Suria Brunei solar power plant and new large-scale solar developments, requires engineers, technicians, maintenance workers and construction workers while supporting the country’s long-term energy transition.
  • Diversifies Brunei’s Economy: Increased use of renewable energy also helps alleviate poverty in Brunei by diversifying its economy. For decades, Brunei’s economy has relied heavily on oil and natural gas, making it vulnerable to changes in global energy prices. By investing in renewable energy, the country is creating new industries while encouraging investment in clean technology and innovation. A more diversified economy supports greater long-term employment and protects citizens from fluctuations in fossil fuel markets.
  • Lowers Energy Costs: The third way renewable energy decreases poverty in Brunei is by lowering the cost of energy over time. Although Brunei currently subsidizes electricity prices through its oil and gas revenues, renewable energy can reduce long-term electricity generation costs while helping the country rely less on fossil fuels.
  • Improves Rural Communities: The fourth and final way poverty is reduced in Brunei through renewable energy is by improving rural communities. One example is the Temburong Smart City initiative, which supports cleaner energy, smart infrastructure and sustainable development in one of Brunei’s most rural districts. The project aims to improve energy efficiency, increase the use of renewable energy and create better opportunities for businesses and residents while supporting long-term economic growth. Off-grid renewable energy also provides reliable electricity, improved education, better healthcare access and greater opportunities for small businesses according to ScienceDirect.

What Does This Mean for Brunei’s Future?

Although Brunei’s heavy reliance on oil and gas, along with renewable energy’s currently small share of electricity generation, presents challenges during the country’s energy transition, the benefits of expanding renewable energy and its growing number of successful projects outweigh these obstacles.

Brunei’s transition toward renewable energy in Brunei creates more than a greener future. It creates jobs, strengthens and diversifies the economy, provides long-term opportunities for rural communities and helps reduce poverty. As Brunei continues investing in clean energy, the country is building a stronger, more sustainable and more prosperous future.

– Kayla Moore

Kayla Moore is based in Lake Forest, Illinois, USA and focuses on Good News and Celebs for The Borgen Project.

Photo: Wikimedia Commons

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How China Plus One is Creating Jobs in Vietnam

China Plus OneOver the past decade, a shift in global manufacturing has quietly reshaped Vietnam’s economy. As companies move to reduce their dependence on a single country for production — a strategy known as “China Plus One” — Vietnam has become one of the world’s favored alternatives. The result is a wave of factory investment that is pulling rural Vietnamese workers into steady, formal jobs and helping drive one of the developing world’s most dramatic reductions in poverty.

What “China Plus One” Means for Vietnam

The China Plus One shift took hold after 2018, when U.S. tariffs on Chinese goods pushed multinational firms to diversify their supply chains. Vietnam, with labor costs roughly half those of neighboring China, a young and growing workforce, and membership in 17 free-trade agreements, positioned itself to absorb the change. It has become a leading destination for electronics, footwear and apparel manufacturing.

The investment figures are striking. In 2024, Vietnam attracted around $38.2 billion in registered foreign direct investment and a record $25.35 billion in actual disbursements, up more than 9% from the year before, with most of it flowing into manufacturing, according to figures from Vietnam’s Ministry of Planning and Investment. Much of that capital builds factories, and factories create jobs.

The Anchor: Samsung

No company illustrates the trend better than Samsung. The South Korean electronics giant has invested about $23.2 billion in Vietnam, making it the country’s single largest foreign investor, and now employs roughly 87,000 people across six manufacturing plants. Its footprint is so large that Samsung’s operations accounted for around 13% of Vietnam’s GDP and export turnover in 2024, according to Vietnam’s National Statistics Office. Its network of local suppliers employs tens of thousands more, spreading the benefits well beyond Samsung’s own payroll.

The Role of U.S. Companies

American firms sit at the center of Vietnam’s China Plus One boom. Vietnam is now Nike’s largest manufacturing base worldwide, producing roughly 51% of the company’s footwear, and the factories that supply Nike employ close to 500,000 Vietnamese workers. Apple’s suppliers have followed suit: contract manufacturers like Foxconn now assemble iPads, AirPods and other devices in Vietnam, work that once happened almost exclusively in China. This deepening trade relationship has paid off for both sides. U.S. imports of Vietnamese goods surged more than 360% in the decade to 2023, topping $144 billion, according to U.S. government data reported by CNN.

From Factory Floors to Poverty Reduction

The human impact makes this a development story. Manufacturing jobs have drawn workers out of subsistence agriculture and into the wage economy, often transforming quiet rural provinces into industrial hubs. Regions like Thai Nguyen and Bac Ninh, once farming districts, now host sprawling industrial parks that employ tens of thousands.

That transition tracks closely with Vietnam’s broader gains. The World Bank reports that Vietnam’s extreme poverty rate fell from 14% to under 4% between 2010 and 2023, while GDP per capita climbed from under $700 in 1986 to nearly $4,500 in 2023, a rise that export manufacturing largely powered. For millions of families, a factory paycheck has meant predictable income, access to benefits and a path into the middle class.

Why It Matters

The model has real limits. Much of Vietnam’s electronics work remains lower-margin assembly that depends on imported components, and factory towns can suffer when global demand slumps. Analysts note that sustaining progress will require Vietnam to move up the value chain and build domestic capacity.

Still, the core lesson offers hope to advocates of global poverty reduction: integration into world markets, combined with steady investment, can lift large numbers of people into stable work. For Vietnam, China Plus One has been more than a supply-chain footnote — it has been a jobs engine.

– Jen Phan

Jen is based in Hanoi, Vietnam and focuses on Business and New Markets for The Borgen Project.

Photo: Flickr

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Yemen’s Economic Recovery

Yemen's Economic RecoveryThe World Bank recently approved a new 5-year framework aimed at supporting Yemen’s economic recovery through investments in jobs, infrastructure and essential services. The plan comes after a decade of conflict that has severely damaged Yemen’s economy and infrastructure.

More Than a Decade of War

Civil war has affected Yemen for more than a decade as conflict between the Houthis and the internationally recognized government continues to drive one of the world’s worst humanitarian and economic crises.

Yemen’s economy has faced severe strain due to policy decisions on both sides, including the relocation of the Central Bank of Yemen from Sanaa to Aden and the printing of trillions of rials in new banknotes without sufficient foreign reserves. These actions have contributed to currency depreciation and rising inflation.

One of the country’s biggest challenges is the existence of two separate financial systems. In 2019, authorities in Sanaa stopped accepting government-issued banknotes, further dividing monetary policy between the two areas.

The collapse of oil exports and reduced foreign currency inflows further weakened government revenues, accelerating economic decline. Combined with disruptions to trade and infrastructure, these pressures deepened Yemen’s overall economic crisis.

The Human Cost of Conflict

Even before the war, Yemen had one of the highest malnutrition rates in the world and ranked among the most vulnerable countries in the Middle East. Nearly half of the population lived in poverty and lacked access to safe water.

Today, food insecurity affects 17 million people, while 18 million lack access to safe water and sanitation. Additionally, 80% of the population lives below the poverty line, while displacement remains widespread across the country. Women and children account for 80% of Yemen’s 4.5 million internally displaced people. Women and girls face heightened risks of gender-based violence, exploitation and early marriage as conflict and economic hardship place additional pressures on families.

Better Livelihoods and More Jobs Amid Fragility

In response to these challenges, the World Bank’s new framework aims to support Yemen’s long-term recovery through investments in health care, infrastructure, water access and economic development.

Under the theme “Better Livelihoods and More Jobs Amid Fragility,” the new Partnership Framework aims to improve nutrition, expand access to electricity and strengthen agriculture and fisheries businesses. The framework also seeks to increase women’s participation in the economy by expanding access to jobs, resources and economic opportunities.

To support these goals, the World Bank approved four projects focused on health care, water access, infrastructure and institutional development.

One of the largest investments targets health and water security. A $94 million health, nutrition and water and sanitation project will expand access to essential services for vulnerable populations, particularly women and children. The initiative will strengthen disease monitoring systems, improve health infrastructure and provide outpatient services to more than 6 million people.

Another $153.6 million project addresses Yemen’s ongoing water crisis by restoring irrigation systems, rehabilitating water infrastructure and introducing digital tools to manage water resources more efficiently. By 2030, the project aims to expand access to water, sanitation and hygiene services to 6.4 million people.

The framework also invests in urban infrastructure. A $21 million project will restore roads, electricity and water systems in selected cities, improving access to essential services for up to 1.75 million people.

In addition to rebuilding infrastructure, the World Bank plans to strengthen public institutions. A $20 million governance project will improve financial management and statistical systems, helping rebuild government capacity and support Yemen’s economic recovery.

Looking Ahead

While Yemen continues to face economic and humanitarian hardships, the new framework offers renewed support for a country working toward recovery. Stéphane Guimbert, World Bank Division Director for Egypt, Yemen and Djibouti, said Yemen’s future “has to be built now,” adding that the goal is to create real opportunities for Yemenis, especially women, while strengthening the institutions that will carry the country forward. Although recovery will take time, the framework aims to lay the foundation for a more stable future.

– Isabella Pedroza

Isabella is based in Salt Lake City, UT, USA and focuses on Good News for The Borgen Project.

Photo: Pexels

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Small Countries Reducing Poverty

small country reducing povertyWhen people discuss global poverty reduction, they often focus on large economies like China or India. However, several smaller nations have achieved remarkable progress through targeted social programs, strong public investment and people-centered development strategies. These examples show how small countries reducing poverty can create meaningful change despite limited resources.

Many of these nations prioritize health care, education, environmental sustainability and social protection. Their success demonstrates that governments do not need massive populations or global economic dominance to improve quality of life and reduce poverty.

Costa Rica: Prioritizing People Over Military Spending

Costa Rica stands out as one of the strongest examples of a small country reducing poverty through long-term social investment. In 1948, Costa Rica abolished its military and redirected funding toward education, health care and public welfare.

This decision helped create one of the most stable social systems in Latin America. According to the World Bank, Costa Rica built a health care system that covers nearly the entire population while also maintaining high literacy and life expectancy rates.

Costa Rica also invested heavily in rural electrification, clean water access and environmental protection. The country now generates most of its electricity from renewable energy sources, which supports sustainable economic growth.

These policies reduced poverty while improving public health and economic opportunity. Costa Rica proves that governments can strengthen human development when they prioritize social investment over military expansion.

Uruguay: Building Strong Social Protection Systems

Another example of a small country reducing poverty is Uruguay. Although Uruguay has a relatively small population, it developed one of the strongest welfare systems in Latin America. The government expanded pensions, unemployment support and health care coverage while increasing access to education. Uruguay also implemented labor protections that strengthened wages and worker rights.

According to the Center for Economic and Policy Research, Uruguay consistently ranks among the countries with the lowest poverty and inequality levels in the region.

Uruguay’s economic strategy also focused on inclusion. Rather than concentrating growth among elites, policymakers expanded benefits to lower-income households and rural communities. This approach increased economic stability and reduced vulnerability during financial downturns.

The country demonstrates how democratic institutions and social spending can help small nations achieve lasting poverty reduction.

Bhutan: Progress Beyond Economic Growth

Bhutan offers a unique insight into how small countries reduce poverty as it measures national success differently from most countries. Instead of focusing only on Gross Domestic Product (GDP), Bhutan promotes the concept of Gross National Happiness (GNH). This concept emphasizes sustainable development, cultural preservation, environmental conservation and good governance. While Bhutan still faces economic challenges, the country has significantly reduced poverty over the last two decades.

According to the World Bank, Bhutan reduced poverty from 23.2% in 2007 to 8.2% in 2017 through investments in infrastructure, agriculture and social services.

Bhutan expanded road networks, improved rural health care access and increased school enrollment across remote communities. Hydropower exports also generated revenue that supported public programs.

This country’s development model shows that economic progress does not need to come at the expense of environmental sustainability or social well-being.

Mauritius: Diversifying Economy

Mauritius transformed itself from a low-income agricultural economy into an upper-middle-income country through diversification and investment in human capital. During the ’60s, many predicted economic difficulties because Mauritius relied heavily on sugar exports. However, the government expanded into tourism, manufacturing and financial services while investing in education and infrastructure.

The World Bank credits Mauritius with maintaining strong growth and reducing poverty through inclusive economic reform.

Mauritius also developed trade partnerships and encouraged foreign investment, which created jobs and increased income opportunities. Free education and health care strengthened social mobility and supported long-term development.

The country’s success demonstrates how smaller economies can adapt and compete globally through strategic planning and inclusive growth, moving itself away from the effects of poverty.

Important Lessons from Small Nations

The successes of these countries reveal several patterns behind small countries reducing poverty: Governments invested in health care and education. Leaders prioritized long-term human development. Social protection systems supported vulnerable populations. Economic growth reached rural and low-income communities. Policymakers emphasized sustainability and inclusion.

These nations also adapted policies to fit local conditions rather than copying outside models without modification. These examples are important to highlight because they demonstrate that poverty reduction remains available with the right policies and political commitment.

Global poverty still affects hundreds of millions of people, but the achievements of these smaller nations provide hope and practical guidance for others to follow. As governments continue to work toward the U.N.’s Sustainable Development Goals (SDGs), these examples of small countries reducing poverty remind the world that size does not determine impact. Strong social policies, inclusive economic growth and investment in people can help nations build a more equitable future.

– Leah Denning

Leah is based in Bristol, UK and focuses on Good News and Politics for The Borgen Project.

Photo: Flickr

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Higher Education in Kazakhstan and its Transitioning Economy

Higher Education in KazakhstanHigher education in Kazakhstan, in more recent years, has reformed its systems with the support of the European Union, increasing enrollment rates in higher education. 

Since the fall of the Soviet Union, Kazakhstan has been a country in transition. This has not only affected its economy and central government but also its education system. As of 2024, more than half of children in primary education are unable to read and understand age-appropriate text. This created challenges in secondary education, which can reduce students’ motivation to pursue higher education.

Promoting Higher Education

After the fall of the Soviet Union, private schools expanded, but were later deemed to be of poor quality. During this time, the government controlled public schools and universities. Following the country’s independence, public universities introduced fees.

As Kazakhstan’s oil-driven economy grew, its need for higher education increased. This created a slight increase in enrollment in universities as employers demanded more skilled professionals. However, in recent years, employment rates among university graduates have remained low.

Driven by education reforms, the country’s 2050 Strategy pledged to diversify Kazakhstan’s economy. This strategy includes goals to improve the quality of teaching while providing access to higher education for poorer students. The European Bank for Reconstruction and Development (EBRD) has identified the need to “improve inclusion across regions and for vulnerable population groups.”

The Republic of Kazakhstan launched many bold internationalization goals within the implementation of the Academic Mobility Strategy in Kazakhstan 2012-2020. These goals focused on increasing the number of international students in Kazakhstan as well as the number of students studying abroad. To support these programs, Kazakhstan joined the Bologna Process. According to a WENR article, “The government has embraced educational reforms aimed at opening education provision to the free market.”

The European Union’s Help With Higher Education

Kazakhstan became part of the Bologna Process in 2010, which is making higher education in Kazakhstan more inclusive and accessible. The Bologna Process started with the Sorbonne and Bologna Declarations, which addressed the difficulties in the recognition of degrees in Europe. 

The Bologna Process consists of a three-cycle education system that includes bachelor’s, master’s and doctoral degrees. Among the 28 counties involved, there is an agreed system that creates a standard for qualifications and principles.

The Republic of Kazakhstan also incorporated the Paris Communiqué to create more inclusive learning approaches to learning to create more participation in higher education. The main focus of this implementation was to make university degrees more accessible to all citizens, especially those with lower representation.

When it comes to accessibility in lower-income households, the government does provide support to help improve access to primary and secondary education, but it does not target financial support for higher education. Only about 50% of students enrolled in universities in Kazakhstan receive financial support. Kazakhstan is currently introducing measures to help increase participation, but it has only adopted two of four proposed measures.

Another major program introduced to Kazakhstan was the European Credit Transfer and Accumulation System (ECTS). This allows a way to transfer loans from one institution to another, specifically if a student studied abroad. According to the Independent Agency for Quality Assurance in Education, “Currently, this system plays an additional role in the accumulation of loans, the development, description and implementation of programs.”

Current Institutions in Kazakhstan

According to the admission quota, “64,300 people study in higher education institutions.” Of those enrolled in higher education, 45.1% are in attendance in public institutions, 54.1% attend private institutions, while the last 0.7% are enrolled in foreign universities. Students are accepted based on general secondary education, technical and vocational education, and on the basis of higher education.

There are different types of organizations offered for higher education in Kazakhstan. These include research universities, academies, conservatories as well as national research universities for postgraduate degrees. Research universities offer five-year programs approved by the government, while institutions considered National Organizations of Higher Education are granted special status.​

At the national level, Al-Farabi Kazakh National University holds the highest ratings for its educational programs. The institution has been ranked in the top 3% of the best universities in Asia. On a global level, the institution is ranked 166th due to its academic reputation, graduate employment and large share of foreign students and professors.

Working Towards the Future

​Although Kazakhstan is still in a transitional period, changes are still occurring to education in order to align their education system with international standards. Still today the country’s government is working on improvements to inclusion within higher education. Scholarship programs have played a major role in establishing international partnerships providing more opportunities.

Poverty continues to be a problem in the country, as factors such as aftershocks of COVID-19 and the war in Ukraine have affected employment and inflation. There is a correlation between poverty levels and the percentage of those enrolled in higher education. As of 2023, only 25% of the bottom 40% have post-secondary education, whereas 75% of the top 60% have higher education.

Looking Ahead

Improving education systems within the country is not only beneficial to their education rates, but also to their economy. As dependence on petroleum for the economy increased, so did pledges of diversification, leading to the many reforms that have expanded higher education. As the economy continues to grow, so do the rates of education within Kazakhstan.

– Jacquelyn Orr

Jacquelyn is based in Philadelphia, PA, USA and focuses on Business and Good News for The Borgen Project.

Photo: Wikimedia Commons

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What Leaders Are Doing To Address Extreme Poverty in Curaçao

Poverty in CuraçaoWhile Curaçao reached an athletic milestone by becoming the smallest country to compete in a FIFA World Cup, recent data has hinted at failures in other, more pressing aspects of the small island country’s society. Despite its growing tourist industry and GDP, the country is also one of the most unequal in its region, according to recent government reports and projections have determined that the situation will likely only become worse. Here is more information about poverty in Curaçao and efforts to address it.

Extreme Poverty in Curaçao Despite Growth?

While Curaçao’s economy has recovered from its COVID-era recession, with inflation peaking at 7.4% in 2022 according to its Centrale Bank, the country’s most recent GINI index of 46% reports extreme income inequality. With its booming tourist, hospitality and financial sectors dominating approximately 75% of GDP, Curaçao has seen lower unemployment rates since the COVID years due to job growth solely within its low-skilled and informal sectors.

This places Curaçao’s economy in a precarious state with more than 30.4% of households below the monetary poverty line in 2023, a 5% increase from 2011. Furthermore, a recent publication by its Central Bureau of Statistics is similarly disturbing, reporting 37.7% of the country—more than a third of all households—are vulnerable to multidimensional poverty. Thus, top leadership has recently started to meet these challenges as external events continue to have negative effects on fuel and food prices.

Response From Top Leadership

Top ministers within Curaçao’s national government have not ignored its status as an increasingly impoverished Caribbean country. In 2021, Charetti America-Francisca became the first woman to serve as the President of the Parliament of Curaçao, and has recently championed efforts to combat poverty in Curaçao through her new role as the Minister of Social Development, Labor and Welfare (SOAW). Emphasizing the government’s commitment to “working on a new approach focused on targeted and active intervention, aimed at creating lasting change rather than temporary relief,” Minister America-Fransisca stressed “the two most important pillars for combating poverty are education and work” during a parliamentary question hour.

In April, she heavily advocated for creating “an interministerial task force together with NGOs, so that the problem can be addressed in an integrated, more effective and more efficient manner.” America-Fransisca recognized varying forms of poverty citing relative, social, cultural and temporary poverty, all of which represent structural barriers apart from just financial instability that can inhibit upward mobility.

Furthermore, her recent investigation into poor working conditions in the island’s large retail industry has only furthered her experience with fighting poverty in Curaçao. In May, following reports of retail workers alleging that they are required to stand continuously for eight or more hours, she “instructed the labor inspectorate to carry out inspections and further investigations into the alleged practices.”

Looking Ahead

Curaçao is a testament to poverty’s existence as a multidimensional problem. Despite promising economic stability from its booming service industries, important voices like Minister America-Fransisca have cited the shortcomings of solely using financial measurables to understand Curaçao’s more structural issues: “A person can have an income and still be poor, can work and still be unable to make ends meet. Although we do see that the economy is partly recovering and unemployment is declining, poverty remains high.”

– Thaddaeus R. Rios

Thaddaeus is based in Washington, DC, USA and focuses on Good News and Technology for The Borgen Project.

Photo: Unsplash

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How Street Vendors Drive Microenterprise Poverty Reduction

Microenterprise Poverty ReductionMicroenterprise poverty reduction is rarely discussed in the streets of Chennai, but it is happening there every day. More than 10 million street vendors operate across India, quietly sustaining one of the world’s largest informal economies. This sector accounts for 4.2% of total urban employment and contributes an estimated 63% of the country’s GDP, according to India’s Ministry of Urban Development and Poverty Alleviation.

In Chennai, the kulfiwallas — ice cream cart vendors earning less than $5 a day — are demonstrating what sustainable microenterprise poverty reduction actually looks like without a single development program behind them. Some of these families are now in their third generation of street vending, having weathered financial crises, urban redevelopment drives and increasingly brutal summer heat. That kind of multigenerational survival does not happen by accident.

Built Without Banks

In Chennai’s older neighborhoods, street vendors have built financial support systems largely outside formal banking structures. Among the most common are informal lending groups known as chit funds, in which members regularly contribute small amounts and take turns receiving a larger pooled payout. For many vendors, these funds serve as a crucial financial lifeline. 

A kulfi vendor facing cart repairs or a slowdown during the monsoon season can access much-needed capital without navigating interest charges, paperwork or credit requirements. The system relies on long-standing relationships and mutual accountability, with trust acting as the foundation of transactions that have supported local businesses for generations. Members are typically neighbors, relatives or vendors who operate along the same trade routes, creating networks built on familiarity and trust. 

Within these groups, failing to repay a contribution carries consequences that extend beyond finances, potentially damaging relationships and reputations within the community. That social pressure has helped sustain the system for decades, encouraging high repayment rates and accountability. In many cases, the arrangement achieves outcomes that formal microfinance institutions frequently struggle to match.

For context, India’s formal microfinance sector, which serves more than 50 million clients and holds a gross loan portfolio exceeding $5 billion, still faces rising delinquency rates, with 90-plus days past due increasing in recent periods. Informal finance, meanwhile, still accounts for 31% of rural loans in India, demonstrating how deeply communities continue to rely on trust-based systems rather than formal alternatives. Chit funds remain one of the most effective grassroots microenterprise poverty-reduction tools precisely because they carry no such institutional overhead. 

Routes as Inheritance

In Chennai’s street-vending world, a trade route is not just a path; it is an asset. Families pass down specific streets, market corners and residential lanes the way other families pass down land. Customers along these routes expect the same vendor or their son or their grandson.

This inherited geography gives third-generation vendors a head start that no microenterprise poverty-reduction program can replicate. Their customers already trust them. Their competitors already know not to encroach. The route itself is a form of capital, entirely invisible to any balance sheet but utterly real in its economic effect. 

Research on street vending across Indian cities documents how these vendors build “ad hoc alternatives” and create “informal institutions” that sustain livelihoods despite the total absence of legal frameworks or institutional support.

Loyalty as Credit

The third pillar of the kulfiwalla economy is supplier relationships built over decades. Long-standing vendors receive informal credit from kulfi manufacturers — product now, payment later — a system unthinkable for a newcomer but routine for a family known to a supplier for 30 years. In lean months, this acts as a lifeline. In good months, it frees up cash for other needs.

No contract enforces this. Reputation does. The vendor who has never defaulted in 20 years is a better credit risk than any algorithm can calculate — and a more powerful argument for community-based microenterprise poverty reduction than most academic papers manage. Formal microfinance institutions acknowledge this gap implicitly: a 2025 microfinance sector report found that more than 90% of MFI borrowers are women and that institutional lending still struggles to penetrate the trust networks informal communities have already built.

What Policymakers Are Missing

India’s street vendors remain legally precarious. The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014, was intended to change this. However, more than a decade later, implementation remains partial in most cities, with many vendors still subject to eviction orders and police harassment rather than the law’s protections. Urban redevelopment regularly displaces them without compensation, as documented in multiple Indian cities, including Bhuj, where post-earthquake redevelopment displaced large numbers of vendors with no adequate alternatives provided.

Rising heat is compounding the threat. A 2025 WIEGO policy brief, drawing on surveys of nearly 500 street vendors in Delhi, found that extreme temperatures are already measurably affecting vendors’ health, incomes and working hours — losses that fall hardest on those with the fewest formal protections. A November 2025 report by The Bridgespan Group estimated that India needs approximately $52 billion annually to address urban climate adaptation needs across the informal sector.

According to the Ministry of Urban Development and Poverty Alleviation, India’s street vendors contribute 50% of the country’s savings. The sophistication of the economic infrastructure they have quietly constructed — the chit funds, the inherited routes and the decades-long supplier credit lines — is rarely cited. Before policymakers design the next microenterprise poverty-reduction intervention, they might first ask what the kulfiwalla already knows.

– Parthivee Mukherji

Parthivee is based in Edinburgh, UK and focuses on Celebs and Politics for The Borgen Project.

Photo: Flickr

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Rwanda’s F1 Ambitions: A Race To Transform Africa

Rwanda's F1Rwanda, a landlocked nation in East Africa, is making a high-speed push onto the global stage and Formula 1 (F1) may be its most powerful vehicle yet. Rwanda’s F1 ambitions and economic growth have become central talking points in development circles as the sport turns its attention back to Africa for the first time in more than three decades. Rwanda positions itself not only as a host of the race but also as a model for how developing nations can use global sporting events to accelerate economic transformation.

Rwanda’s $1.2 Billion F1 Bid

The Rwandan government has officially bid to host Africa’s first F1 Grand Prix since the 1993 South African Grand Prix at Kyalami. The centerpiece of the initiative is a $1.2 billion state-of-the-art circuit planned near the new Bugesera International Airport, about 40 kilometers from the capital, Kigali. Construction is expected to begin in 2026, with the inaugural race targeted for 2027 or 2028. 

Rwanda’s Foreign Minister, Olivier Nduhungirehe, confirmed that the country remains in active talks with F1 leadership, pointing to the nation’s growing track record of hosting major international events. “We have demonstrated the capacity to host major sporting events,” Nduhungirehe told Semafor Africa.

The Economic Case for a Grand Prix

The link between F1 and Rwanda’s economic growth and long-term poverty reduction is grounded in concrete data. According to Further Africa, each F1 Grand Prix injects more than $100 million into a host country’s economy. Television broadcasts reach more than 400 million viewers worldwide and generate significant sponsorship and hospitality revenue.

Rwanda’s broader economy is already on a strong upward trajectory. The World Bank reported that Rwanda’s real GDP grew by 8.9% in 2024, surpassing the previous year’s rate of 8.2%, driven by robust private consumption, significant investment and strong performance in the services and industry sectors. That growth also produced tangible results for workers, with more than half a million new jobs created year over year. 

Sports Tourism Already Delivering Results

Rwanda has not waited for F1 to begin building its sports economy. The country signed sponsorship deals with Arsenal, Paris Saint-Germain, Bayern Munich and Atlético de Madrid as part of its “Visit Rwanda” tourism campaign. This strategy helped drive a 36% increase in tourism revenue to $636 million in 2023.

In 2025, the Rwanda Development Board (RDB) reported tourism revenues rising to $685 million, supported by 1.49 million visitor arrivals, a 9% year-over-year increase. That year also saw Rwanda host the UCI Road World Championships, a historic first for Africa, alongside Season 5 of the Basketball Africa League at the BK Arena in Kigali and the 73rd FIFA Congress. Rwanda’s travel and tourism sector contributed a record $1.5 billion to the national economy in 2024, representing 9.8% of GDP.

Building the Infrastructure of Growth

Rwanda’s sports ambitions are matched by targeted infrastructure investment. The Ministry of Sports has set a target of generating approximately $20.4 million (Rwf 30 billion) from sports tourism by 2029, a dramatic increase from the roughly $681,000 (Rwf 1 billion) projected for the 2024/25 fiscal year. Plans also include the construction of 540 sports facilities nationwide by 2028/29, with priority given to schools and public spaces to broaden access to athletics and associated economic opportunities.

Job creation is a direct priority. Experts forecast steady growth in sports tourism jobs, with positions increasing from 2,625 in 2024/25 to 3,190 by 2028/29. This growth across hotels, event planning and sports support services will create clear employment opportunities for young Rwandans.

A Blueprint Beyond the Track

Rwanda’s sports-led growth model aligns with its broader Vision 2050 agenda, which prioritizes economic diversification, job creation and sustainable development. The RDB reported $2.62 billion in registered investments across 799 projects in 2025, which are expected to generate more than 38,000 jobs in real estate, manufacturing and tourism. Analysts tracking the relationship between F1 and Rwanda’s economic growth say the motorsport bid reflects a broader pattern of using high-visibility events to attract foreign investment and build lasting infrastructure.

Local drivers Eric Gakwaya and Queen Kalimpinya have expressed optimism that Rwanda’s motorsport ambitions will also catalyze the development of local talent. It will inspire a new generation to pursue careers in competitive racing and the industries that support it.

If Rwanda secures the Grand Prix, it will restore Africa’s presence on the F1 calendar. It will also demonstrate how strategic investment in major sporting events can drive poverty reduction, infrastructure development and long-term economic growth across the continent.

– Nay Mohamad 

Nay is based in Milan, Italy and focuses on Business and Technology for The Borgen Project.

Photo: Flickr

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Supporting Women’s Economic Development in Indonesia

Women’s Economic Development in IndonesiaThe poverty rate in Indonesia has been steadily declining since 1999, with rates down to approximately 8.57% as of mid-2024. Women, however, continue to experience higher rates of poverty, unemployment and vulnerable employment than men. Many groups are working to combat this disparity. Here are organizations supporting women’s economic development in Indonesia.

Women’s Economic Development in Indonesia

  • Women and Youth Development Institute of Indonesia: Women and Youth Development Institute of Indonesia (WYDII) aims to empower youth and women. WYDII initiatives have directly supported approximately 100,000 people in the past decade. WYDII promotes women’s economic growth through networking and political and digital literacy training. The institute uses tools such as information and communications technologies to promote community leadership and reduce poverty among women and youth.
  • Women-Headed Household Empowerment Program (PEKKA): PEKKA is a grassroots program that helps women heads of households improve their livelihoods and access resources for economic development in rural Indonesia. This initiative helps women and other marginalized groups gain access to critical legal, social and economic services.
  • Wahid Foundation: The Wahid Foundation combats poverty in Indonesia by supporting grassroots women’s groups. The foundation partnered with U.N. Women to create the Peace Village Initiative, a woman-led project that combats poverty and supports the development of resilient communities. The initiative constructs women-led groups and support efforts to promote community leadership and financial independence.

Cherie Blair Foundation for Women

Cherie Blair Foundation for Women supports women’s economic development globally. The foundation developed the Women Entrepreneurs Amplifying Ventures and Economies (WEAVE) project, enabling more than 12,000 Indonesian and Vietnamese women to develop entrepreneurial skills through mentorship, mobile learning and business administration training. It also created the Road to Growth business management training and the Road to Leadership advocacy and empowerment training.

In 2018, the foundation launched a business skills app called HerVenture, which has already helped more than 5,500 Indonesian women develop their businesses. The app offers business training on various topics and provides entrepreneurial support. The foundation partners with local organizations to help women entrepreneurs access economic support, mentorship and business training.

Though women continue to face higher rates of economic instability in Indonesia, organizations and programs like these are helping to bridge this gap. The economic situation of Indonesian women will continue to improve as more individuals achieve economic stability and prosperity.

– Melody Hubbard

Melody is based in Knoxville, TN, USA and focuses on Global Health and Politics for The Borgen Project.

Photo: Flickr

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Bangladesh’s Trillion-Dollar Economy Plan

Bangladesh's Trillion-Dollar Economy PlanBangladesh has spent the past few years navigating political and economic challenges, with poverty still affecting many rural communities where access to adequate income and food remains limited. In response, the government has been actively pursuing strategies to stabilize and strengthen the economy. Most notably, the finance minister recently confirmed Bangladesh’s trillion-dollar economy plan, targeting economic growth to reach the milestone by 2034.

While this goal may seem distant, economic transformation is rarely immediate. Sustainable growth requires consistent policy implementation, structural reforms and time for these changes to yield stable, measurable results.

What Is the Plan for Achieving This Goal?

Bangladesh’s biggest source of financial support comes from the garment sector. However, the country might face a shock due to its standard approach to this sector. If an economy wants to thrive, it needs diversity to achieve its goals.

The government has prepared a plan and is considering investing more money, creating jobs across various sectors, democratizing the economy and opening new sectors in creative fields and sports. The main reason is to give the country a range of options and help it become part of Bangladesh’s trillion-dollar economy plan. However, looking at the figures for the last financial year, economic growth was 0.48% lower than expected, mainly because it relied heavily on the service and agriculture sectors to generate that profit. 

Therefore, the government has developed this diversity plan to achieve this goal. Bangladesh attracted significant foreign investment, with its strongest year recorded in 2019 when direct investment exceeded $1.8 billion. However, political upheaval and internal ambiguity led to a decline in investment levels in subsequent years.

Despite these challenges, 2025 marked a recovery year for Bangladesh, with direct investment rising to $1.77 billion. Although this figure remains below the 2019 peak, it shows that foreign investors are still interested in investing in the country despite the global financial situation.

Bangladesh and the International Monetary Fund

Earlier in April 2026, discussions during a meeting in Washington, D.C. raised concerns about Bangladesh’s financial situation. Although Bangladesh was approved for more than $5 billion in IMF loans between January 2023 and June 2025, the country has received only about $3.64 billion so far, with nearly $2 billion still pending for future disbursement.

The program was not designed to give the country the money for free; it came with conditions, such as increasing government revenue and strengthening oversight of the banking sector. Bangladesh agreed to these terms before signing the deal, as the measures were intended to support stronger long-term financial stability.

If Bangladesh is serious about becoming a trillion-dollar economy by 2034, it must take economic diversification more seriously, as the country still relies heavily on the garment sector and foreign direct investment. The government also needs to reform trade policies, strengthen sustainability measures and address key industry challenges to protect long-term growth.

Final Thoughts

Bangladesh aims to expand investment into higher-value sectors such as banking, insurance, telecommunications and pharmaceuticals to strengthen long-term financial stability and maintain steady investment inflows. Diversifying the economy is considered essential to the country’s goal of becoming a trillion-dollar economy by 2034, as it would create multiple sources of revenue and improve resilience during financial issues.

These are challenges Bangladesh can overcome. Over the past 30 years, the country has shown remarkable economic resilience through a hardworking labor force, a dynamic private sector and strong financial flows.

– Sibel Yasharoglu

Sibel is based in Leicester, UK and focuses on Business and Good News for The Borgen Project.

Photo: Unsplash