Archive for category: Economy

Information and stories about economy.

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Reducing Poverty in Vietnam Through Economic Reform

Poverty in VietnamIn 1986, most of Vietnam’s population lived in the countryside and depended on subsistence farming with little access to markets, credit or modern health care. That year, the government introduced Doi Moi, a set of market-oriented reforms that decollectivized farmland and opened the economy to foreign trade. The changes set off one of the most significant declines in poverty in Vietnam ever recorded. Gross domestic product per capita climbed from less than $700 in 1986 to nearly $4,500 in 2023, according to the World Bank.

A Sharp Decline in Extreme Poverty

Extreme poverty in Vietnam, measured against the World Bank’s international line of $2.15 a day, fell from 45% of the population in 1992 to less than 1% in 2022, according to the Organisation for Economic Co-operation and Development. Using the World Bank’s benchmark for lower-middle-income countries of $3.65 a day, the poverty rate declined further, from 14% in 2010 to about 4% in 2023.

Health and education outcomes improved alongside income. Infant mortality dropped from 32.6 deaths per 1,000 live births in 1993 to 12.1 in 2023, and life expectancy rose from 70.5 years in 1990 to 74.5 years in 2023, World Bank data show. National health insurance now covers 93% of the population.

Land Reform and Export Manufacturing Drove Growth

Two mechanisms account for much of the drop in poverty in Vietnam. First, Doi Moi returned control of farmland to individual households instead of state collectives, allowing farmers to sell surplus rice and other crops on the open market. Second, the government opened special economic zones and courted foreign manufacturers, turning the country into a hub for electronics, textiles and footwear production. The World Bank describes Vietnam as a middle-income economy that transformed from one of the world’s poorest countries within a single generation.

Millions Remain Vulnerable

Despite the sharp decline in extreme poverty in Vietnam, close to one in five people remain in a low-income bracket and could fall back into hardship after an economic shock or natural disaster, the Organisation for Economic Co-operation and Development (OECD) reported. Ethnic minority households in the country’s northern mountainous provinces and rice-farming communities in the Mekong Delta face particular exposure, as remote terrain and increasing flooding limit access to jobs, credit and health services.

A Road Program Reaching Remote Communities

One initiative addressing this vulnerability is the World Bank-supported Local Road Asset Management Program, which ran from 2016 to 2024 across dozens of Vietnam’s provinces. Rather than funding new construction, the program focused on routine maintenance of existing rural roads and bridges, ultimately improving the lives of more than 11 million people. Close to 51,000 kilometers of rural roads received regular upkeep under the program, connecting thousands of communes, home to some of the country’s most vulnerable populations, to schools, hospitals and markets, the World Bank reported. Lower transport costs allow farmers in remote provinces to reach buyers, addressing one of the structural barriers that keeps pockets of poverty in Vietnam persistent even amid national growth.

A Model for Continued Progress

Vietnam’s experience shows that sustained, reform-driven growth combined with targeted infrastructure investment can transform a country’s fortunes within a single generation. As the World Bank continues to describe Vietnam as a remarkable development success story, the country’s next task is ensuring that the millions still living near the poverty line are not left behind by the same shocks that once defined its past.

– Rachel Ma

Rachel is based in Florham Park, NJ, USA and focuses on Business and New Markets for The Borgen Project.

Photo: Pixabay

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World Bank Steps in to Help Fight Poverty in Nigeria

Poverty in NigeriaNigeria is one of the fastest-growing populations in Africa, with a growth rate of about 2.1%. Like other post-colonial nations, it has struggled to provide its youth population with employment. This has led to rising poverty, which has started to outpace the number of people employed. Based on the World Bank’s 2024 projections, nearly 47% of Nigerians have fallen into poverty. This marks a significant increase from 2019, showcasing the severe impact of COVID-19.

Nigeria’s poverty affects every sector, from health care to education. This has seriously inflated the nation’s youth unemployment rate, which reached as high as 21.5% in 2016. Women represent up to 79% of the rural workforce but are five times less likely to own their own land than men, contributing to wage and wealth inequality in the nation.

Statistics from The Conversation, citing Nigeria’s Multidimensional Poverty Index, indicate that more than 133 million Nigerians live in poverty, with the poverty rate in rural areas as high as 72%, compared with 42% in urban areas. Poverty in Nigeria rises due to several reasons, one being the post-colonial effects that many nations have faced since independence.

The country also struggles with domestic issues of ethnic tension, terrorism and bureaucratic corruption, according to The Conversation. This has led to a serious issue for the government to provide a steady line of policies that will positively reduce poverty in the short and long run.

Nigeria implemented its National Anti-Corruption Strategy 2022 to 2026, aimed at targeting corruption activities in the workplace, especially the public sector, judiciary and most importantly political financing. However, public perception of corruption and government efforts to address it did not significantly change, according to the United Nations Convention against Corruption (UNCAC) Coalition.

The Role of the World Bank

In July 2026, President Bola Tinubu unveiled a $3.05 billion package of World Bank-backed anti-poverty programs, according to Punch. The package includes $1.25 billion for the Nigeria Community Action for Resilience and Economic Stimulus program, $300 million for the Solutions for Internally Displaced and Host Communities program, and $1.5 billion for the Human Capital Opportunities for Prosperity and Equity program, which focuses on governance, primary health care and education.

Separately, the World Bank has laid out a Country Partnership Framework for 2026 to 2032, focusing on making young Nigerians more employable by supporting private sector-led job creation. As part of this framework, the World Bank approved a $1.25 billion Development Policy Financing operation to support economic reforms.

The Bank aims to increase private sector investment in development areas and help reduce poverty statistics in Nigeria, with targets including expanding energy access to 32 million people, delivering broadband to 58 million people, improving health and nutrition services for 40 million people and supporting 9.5 million farmers.

Both efforts are intended to advance the government’s “Renewed Hope Development Plan 2026 to 2030.” Tinubu said the programs represent “promises kept” under his administration’s economic reform agenda, adding that “real prosperity means no Nigerian is left behind” as the country works toward a $1 trillion economy by 2030, according to Punch.

Looking Ahead

The government aims not only to improve poverty statistics in Nigeria but also to directly impact people and their households. As Tinubu put it, positive results are emerging from Nigeria’s economic reforms, but that progress must be felt in every household, not just in national statistics.

– Tanay Ashok Sonthalia

Tanay is based in Melbourne, Australia and focuses on Good News for The Borgen Project.

Photo: Pexels

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Digital ID Reform Offers Update on SDG 10 in Nigeria

SDG 10 in NigeriaThis update on SDG 10 in Nigeria centers on a legislative reform reshaping who can participate in the country’s formal economy in an era where digitalization serves as a prerequisite for economic development. Across Nigeria’s markets and workshops, banks and insurers often deny small business owners credit extensions and insurance policies because the owners cannot provide recognized proof of identity. This gap kept millions of Nigerians out of the country’s formal financial system for decades, preventing them from opening bank accounts, securing loans or growing their businesses beyond cash transactions. 

Nigeria’s poverty rate illustrates the scale of what is at stake. The World Bank reported in 2026 that the share of Nigerians living below the national poverty line rose to an estimated 63%, up from 61% the previous year. Financial exclusion compounds that poverty. Without access to credit, savings or insurance, low income households have fewer tools to absorb shocks like illness or crop failure, and small businesses cannot grow beyond what cash on hand permits. Expanding financial access cannot eliminate poverty on its own, though it removes one of the structural barriers preventing people from building financial resilience – the exact goal SDG 10 sets.

In June 2026, Nigeria signed the National Identity Management Commission Act into law – a reform officials say is designed to expand financial inclusion in Nigeria by giving citizens a single, trusted form of identification. The law replaces its former 2007 framework that fragmented the country’s identity system across competing databases. The reform in Nigeria reflects a commitment to United Nations SDG 10, which calls on countries to reduce inequality by expanding the social and economic inclusion of marginalized populations by 2030.

A New Legal Foundation

President Bola Tinubu signed the NIMC Act 2026 into law at the State House in Abuja on Friday, June 26, 2026, according to a statement from the presidency. The Senate President, the Deputy Speaker of the House of Representatives, the Attorney General, the Interior Minister and a World Bank representative witnessed the signing. The law establishes the National Identification Number as what officials describe as the single source of truth for identity verification across government and financial services. Nigerians already use the number for passport issuance and renewal, and banks and insurance companies are integrating it into their systems, according to Leadership newspaper.

A Market Already Taking Shape

The digital economy’s contribution to Nigeria’s gross domestic product has risen from about 16% to roughly 19% in recent years, Bosun Tijani, the Minister of Communications, Innovation and Digital Economy, said in November 2025. The government is targeting a $1 trillion economy overall, with the digital sector accounting for 21% of GDP by 2027, Tijani said.

Global companies have already found opportunity in Nigeria’s identity infrastructure. In 2013, the National Identity Management Commission partnered with Mastercard, the American payments company, on a pilot program to issue 13 million Mastercard-branded identity cards combining biometric verification with electronic payment functions.

Nigeria’s identity system has since moved toward a domestic card scheme called AfriGo, which the Central Bank of Nigeria and the Nigeria Inter-Bank Settlement System operate. Nonetheless, the Mastercard partnership was an early demonstration that Nigeria’s push toward digital identity holds visible commercial value for global payment providers.

The World Bank’s Wider Bet

Nigeria’s NIMC reform corresponds with a larger effort backed by the World Bank. Its Global Digital Public Infrastructure Program, launched in May 2026, funds digital identity, fast payments and secure data-sharing systems that banks, insurers and other private companies can build services around. This serves to extend, spanning financial inclusion in Nigeria and comparable markets to populations previously unreachable by formal lenders. The program estimates that 2.9 billion people worldwide currently lack a digital identity for online transactions, with only 8% of lower middle-income countries and 16% of upper middle-income countries having fast, inclusive payment systems in place.

In Nigeria specifically, that connection is already visible. According to the World Bank, the government’s rollout of targeted cash transfers for 15 million vulnerable households has moved more slowly than planned because it depends on integrating the national identity management system. In other words, the same infrastructure this reform strengthens is the mechanism the government relies on to identify and pay Nigeria’s poorest households directly, rather than through intermediaries who can introduce delay or leakage.

A World Bank representative attended the NIMC Act signing in Abuja, positioning Nigeria as an early participant in the program’s venture into Sub-Saharan Africa. A growing share of the population once locked out of the formal economy is approaching the threshold banks and insurers require before extending credit, savings products and coverage. As more Nigerians gain recognized identification, product lines that were commercially unviable for a fragmented, undocumented customer base start to fall under business logic.

Looking Ahead

With a $1 trillion economic target on the horizon and financial inclusion advancing alongside it, this update on SDG 10 in Nigeria points to a country using digital infrastructure to pursue the UN’s 2030 inclusion goals. For a country where more than 60% of the population lives in poverty, closing the identity gap is a foundational step toward opening a new consumer market and reaching the people that market has excluded.

– Gayatri Lilly Sabharwal

Gayatri is based in London, UK and focuses on Business and Politics for The Borgen Project.

Photo: Wikimedia Commons

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Everything To Know About Remittances to Philippines

Remittances to PhilippinesRemittances are an important driver of economic growth in the Philippines. Remittances amounted to $38.34 billion in 2024, accounting for 8.7% of the GDP. Approximately 40% of all remittances to the Philippines came from the United States, followed by Singapore and Saudi Arabia.

Background Information About the Philippines

The Philippines is an island country in Southeast Asia in the Pacific Ocean. The country is the twelfth-most populated country in the world, with a population of more than 117 million.

The Philippines fell under Spanish rule from the mid-16th century to the late-19th century, until it became a U.S. territory. Between 1906 and 1934, an estimated 120,000 Filipinos migrated overseas to Hawaii to work in sugarcane and pineapple plantations. After independence in 1946, many struggled with rural instability and moved overseas to the U.S. Since then, the U.S. has remained the top destination for Filipino migrants.

Despite poverty rates falling from 23.5% in 2015 to 15.5% in 2023, poverty in the Philippines remains high. About 28% of Filipinos remain at risk for falling back into poverty, especially from climate related risks. Additionally, the unemployment rate in the Philippines remains high, which was at 4.8% in May 2026 and is higher than the previous year’s 3.9%.

Migration was initially a way to curb high unemployment and poverty rates; however, it has changed to a long-term solution for national economic development.

The Philippines launched an overseas employment program in the 1970s, which led to many Filipinos pursuing work in the Middle East, Canada, Australia and New Zealand. Remittances from diaspora communities are an intrinsic part of the Philippines’ economy and household income.

Importance of Remittance to the Philippines

  1. Drives the National Economy – Remittances continue to support the Philippine economy despite global uncertainties. Remittances support consumer spending, stabilize the peso and provide a buffer against shocks.
  2. Helps Household Consumption Grow – Remittances help household consumption, which grew by 3% in the first quarter of 2026. This allows the Philippines to rely on consumer spending to grow their GDP.
  3. Covers Essential Needs – About 75% of remittances are used for food, medical expenses, school fees and housing expenses. Meanwhile, about 25% is used to save and invest in assets.
  4. Key Pillar to the Local Community – Remittances support families while also contributing to spending on local businesses and job creation.
  5. Empowers Women – About 1.25 million or 57.2% of Overseas Filipino Workers (OFWs) were women. Remittances empower families and shifts traditional gender roles.

Looking Ahead

Remittances to the Philippines remain an important source of inflow to the Philippine economy. Remittances support domestic consumption, strengthens communities and drives national growth. Although there are criticisms of heavily relying on remittances, it continues to be an important driver of economic growth and development in the Philippines.

– Maya Hagiwara

Maya is based in Tokyo, Japan and focuses on Good News for The Borgen Project.

Photo: Flickr

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Poverty in the Czech Republic

Poverty in the Czech RepublicWhile poverty rates in the Czech Republic are among the lowest in the European Union (EU), with Eurostat (2022) noting a 9.5% poverty risk in 2020 compared to a 16.7% average across the EU, vulnerability still exists. Factors contributing to poverty include economic instability. By outlining the causes of impoverished conditions in the Czech Republic and the ways poverty is being addressed, the country’s challenges and achievements can be highlighted.

With a total population of 10,886,878 people as of 2025, the World Bank set an extreme-poverty line of $3.00 per day, meaning extreme poverty is not prevalent in the country. Such low poverty rates indicate an unlikely chance for widespread poverty. These statistics can be attributed to the economy’s prosperity, with a 2025 survey by the Organisation for Economic Co-operation and Development (OECD) expecting real gross domestic product (GDP) growth to increase from 1.0% in 2024 to 2.5% in 2026.

Impoverished Peoples of the Czech Republic

No country or region is fully prosperous, as shown by the fact that not all of the Czech Republic is economically stable. Based on a methodology examining economic performance by Maitah et al., the economy’s performance compared to the average employment rate of the EU overall was found to have a below-average employment level at 6.7% compared to the EU’s 9.7% in 2011. Numerous categories of Czech citizens suffer from poverty, including single parents, less educated individuals and the unemployed. An in-depth analysis of vulnerable groups found that among high-risk in-work poverty persons, women’s in-work poverty rates were lower than the 2.7% rate of men.

A study on wealth distribution revealed that Czech participants were unaware of the wealth inequality in their country. Participants overestimated wealth at the bottom percentile and underestimated wealth at the top percentile. This inequality suggests economic hardships in some areas of the Czech Republic.

The Roma people are a particularly marginalized group in the Czech Republic. Marginalized Roma communities struggle with spatial segregation, with 52% of Roma at poverty risk compared to 58% in 2016. Roma children face a 70% poverty risk, compared to 65% in 2016. Various solutions aim to provide social inclusion for marginalized groups. These strategies include implementing social work to promote diversity, preventing indebtedness — which is a major cause of social exclusion — and creating a labor-focused environment that includes marginalized people, according to the Ministry of Labour and Social Affairs (MPSV).

Czech Reforms: Steps Toward Improvement

Although the Czech Republic has substantially low poverty rates, the country is actively promoting and implementing reforms. These projects include the Energy Regulation Academy in 2026, the Czech Workforce Future Skills Portal in 2025 and the Social Climate Plan for Czechia in 2024, among others. These reforms demonstrate Czechia’s steps toward economic stability. The country is actively acknowledging and finding solutions for factors that may increase the chances of poverty.

More specifically, Caritas Czech Republic provides annual reports on changes the country has made to promote fair humanitarian and social conditions. The latest 2024 report noted significant events and projects, from the First Ever Charity Online Auction to the Young Caritas Forum, all in an effort to support human rights and draw attention to those in need.

Conclusion

Impoverished conditions are evident around the globe, and every country faces economic challenges. The Czech Republic is no different, yet it has a particularly low poverty rate compared to other countries. This low rate and overall economic stability can be attributed to the many reformation projects the country has adopted over the years.

– Allison Peterson

Allison is based in Carson City, NV, USA and focuses on Good News and Global Health for The Borgen Project.

Photo: Flickr

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World Bank Framework Reducing Poverty in Nigeria

Poverty in NigeriaLocated on the western coast of Africa, Nigeria is a country with diverse geography and an even more diverse population. An estimated 250 ethnic groups call Nigeria home, with hundreds of languages spoken across the nation. Building on Nigeria’s diversity and economic potential, the World Bank Group has endorsed a new Country Partnership Framework that will run from 2026 to 2032. By encouraging private-sector investment and supporting economic growth in Nigeria, the framework aims to create more job opportunities.

New Policies Aim to Strengthen Nigeria’s Economy

As part of this effort, the World Bank also approved the Nigeria Actions for Investment and Jobs Acceleration (NAIJA) Development Policy Financing operation to help strengthen Nigeria’s economy. The program aims to encourage investment from businesses and entrepreneurs while supporting government efforts to create jobs and promote economic growth. By attracting both private and public investment, the initiative seeks to expand economic opportunities and strengthen key sectors across the country.

Through the new framework, 32 million Nigerians are expected to gain access to electricity, while broadband connectivity will expand to reach 58 million people. Health and nutrition services will improve for 40 million people, and 9.5 million farmers will receive support to increase agricultural productivity. By investing in energy, digital infrastructure, health care and agriculture, the framework aims to improve living standards and support long-term economic growth in Nigeria.

Poverty in Nigeria

Despite these efforts, poverty remains a significant challenge in Nigeria. According to the World Bank, 41.8% of Nigerians lived below the international poverty line in 2022. Rising inflation and limited economic opportunities have made it difficult for many families to afford necessities such as food, housing, education and health care. The World Bank estimates that an additional seven million Nigerians fell into poverty in 2025, increasing the share of people living below the national poverty line from 61% in 2024 to 63%.

For many Nigerians, poverty affects daily life in tangible ways. Families often struggle to afford basic necessities and maintain stable housing as the cost of living continues to rise. By expanding access to electricity, internet services, health care and agricultural support, the Country Partnership Framework aims to address some of the barriers that contribute to poverty and limited economic opportunity.

In a 2022 poverty assessment, the World Bank reported that four in 10 Nigerians lived in poverty and lacked access to essential services such as education, safe drinking water, electricity and sanitation. The report also found that only 17% of workers held jobs that provided wages sufficient to lift them out of poverty, as many Nigerians rely on small-scale farming and household businesses for income.

A New Framework: Reducing Poverty

The World Bank identified three key areas for reducing poverty in Nigeria: implementing macroeconomic reforms, supporting farm and nonfarm household enterprises and expanding access to electricity, water and sanitation. The new Country Partnership Framework aligns with these priorities by investing in infrastructure, agriculture and human development programs designed to improve economic opportunities.

With Nigeria’s population expected to continue growing, expanding economic opportunities for young people will be critical to the country’s long-term development. If successful, the partnership could help create jobs, strengthen businesses and improve access to essential services for millions of Nigerians. Through investments in key sectors and support for economic growth in Nigeria, the World Bank hopes to help build a stronger and more prosperous future for the country.

– Alexandra Pedroza

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

Photo: Pexels

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Infrastructure Investment in Southern Africa

infrastructure investment in Southern AfricaThe World Bank and its partners are currently financing loans to support socioeconomic regional infrastructure investment in Southern Africa. These efforts aim to enhance transboundary interconnectedness, economic prospects, sustainability, electricity and energy access and sanitation services. One flagship regional effort, the Regional Infrastructure Finance Facility, has already connected 3.02 million people to new or improved electricity service across Eastern and Southern Africa. More than half of those connected are women. Households report increased study time for children and reduced time spent fetching fuel or cooking with kerosene and wood.

Extreme poverty affects 45.1% of Southern Africans, according to the United Nations Economic Commission for Africa. Since the COVID-19 pandemic, 60% of Namibians, South Africans and Zambians have reported significant losses in work and income. This has pushed 51 million more people into extreme poverty. Southern African countries face challenges with power supplies, logistics and job opportunities. These challenges make theg World Bank-supported loans vital for the region’s citizens living in extreme poverty.

Infrastructure Investment in Southern Africa

  • South Africa: The World Bank and the International Bank for Reconstruction and Development have issued their fourth development policy loan to South Africa, valued at $1.5 billion. South Africa’s economy was growing at just 1% annually, with electricity tariffs leading to frequent power shortages and transportation issues harming productivity. The World Bank’s loan aims to create 600,000 new and higher-paid jobs by 2032. It will also help alleviate domestic burdens related to structural damage, water fetching time, family health risks and electricity connection issues for 300,000 households. Investment in renewable energy has increased sixfold, with rail, port and freight financing doubling since 2023.
  • The Kalahari and Namib Deserts: The African Development Bank and its partners are administering the southern Great Green Wall Accelerator, allocating $4 million across Botswana, Namibia, South Africa and Angola. The program focuses on improving water access, renewable energy, resilient ecosystems, climate-resilient infrastructure, sustainable agriculture and inclusive economic development.
  • Zambia: By 2024, fewer than 10 million people in Zambia had access to electricity, with supplies often unreliable due to drought-prone conditions. The International Development Association grant of $200 million from the World Bank will provide more sustainable energy services to one million Zambians. An additional $43 million supports transboundary electricity transmission projects between Zambia and Malawi, enhancing socioeconomic prospects for households and businesses.
  • Malawi: The 2019 Malawi Electricity Access Project increased electrification rates from 11% overall and 4% in rural areas. The rate now stands at 25.9%, thanks to a $100 million World Bank grant. Currently, nearly two million Malawians have electricity access, fueling community economies and infrastructure systems. Close to 30% of these newly connected households are female-headed. The project set a benchmark for future infrastructure investments, as demonstrated by the $43 million IDA grant funding the Zambia-Malawi Interconnector Project.

Conclusion

Before World Bank financing, the Southern African infrastructure sector hindered millions of residents’ well-being, health, businesses, and economic prosperity. While challenges persist, loans from the World Bank and its partners provide hope for residents. These investments also strengthen socioeconomic diplomatic relations, endorsing efforts that enhance Southern African livelihoods.

– Oliver Jones

Oliver is based in Manchester, UK and focuses on Business and Global Health for The Borgen Project.

Photo: Flickr

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The Limits and Economic Effects of Cuba’s Market Reforms

Cuba’s Market ReformsOn June 18, 2026, Cuban lawmakers approved a collection of 176 free-market and decentralization reforms, marking the most significant transformation to Cuba’s socialist model since the 1959 revolution led by Fidel Castro. These reforms principally seek to authorize private real estate development, private banks, private enterprise (effectively lifting the previous 100-employee limit on private businesses and mandatory intermediaries), and to dissolve the requirement that foreign investors form joint ventures with the state.

The U.S. Embargo and Cuba’s Economy

The United States (U.S.) has maintained a comprehensive economic embargo on Cuba since 1962, originally implemented by President John F. Kennedy. President Donald Trump strongly enforced and expanded these restrictions during both his first and second terms, introducing several “maximum pressure” campaigns to isolate the Cuban government. The Trump administration’s pressure campaign toward Cuba forms part of “a broader strategy to assert U.S. primacy in the Western Hemisphere and limit the influence of adversaries such as China and Russia,” according to the Council on Foreign Relations.

When the embargo was first implemented, Cuba efficiently adjusted through trading opportunities with Soviet Bloc countries. According to a 2001 study from the U.S. International Trade Commission, “Soviet economic assistance, which peaked at nearly $6 billion annually in the 1980s, largely offset any adverse effects of U.S. sanctions and enabled the Cuban economy to grow.”

However, in 1991, upon the collapse of the Soviet Union and consequent loss of Soviet assistance, Cuba experienced an extended economic crisis called Período Especial (“Special Period”). Deprived of vital trade subsidies and cheap oil, the country’s GDP plummeted by 35%, bringing about severe food and fuel shortages, leading to widespread power blackouts and famine.

Since the Special Period, the U.S. embargo has cost the Cuban economy nearly $144 billion, as estimated by the Cuban government. Humanitarian organizations such as the Washington Office on Latin America, a United States nongovernmental organization (NGO) working for social and economic justice in Latin America and the Caribbean, argue that expanded sanctions and travel restrictions have contributed to shortages in fuel, medicine and food. As of 2025, a reported 89% of Cubans live in extreme poverty, according to a survey by the Cuban Observatory of Human Rights (OCDH), a Madrid-based group that has received U.S. government funding. Notably, that same OCDH survey found Cubans themselves cited power outages, food scarcity and low wages as their top concerns, while only 3% named the U.S. embargo as a primary worry. The continued impact of the embargo provides important context when evaluating the extent to which Cuba’s market reforms can improve conditions, as the embargo has not been lifted alongside the reforms — though Cubans’ own reported priorities suggest domestic factors weigh heavily on daily life as well.

Economic Effects of Cuba’s Market Reforms on Banking

Cuban Prime Minister Manuel Marrero stated that new private banks will operate under the regulatory supervision of the Central Bank of Cuba and theoretically on “equal terms” with existing state commercial banks. The reforms also authorize private and foreign capital institutions to set up operations on the island and provide microcredits directly to its growing entrepreneurial sector.

Due to U.S. secondary sanctions, many global banks are reluctant to conduct business with Cuban financial institutions. However, the banking reforms provide alternative channels for international investors, remittance companies and foreign vendors to route transactions through private entities, which significantly lowers the risk of triggering U.S. compliance penalties. If these changes attract greater foreign capital into the newly privatized banking sector, they could increase the financing available to domestic businesses and support expansion within the economy, potentially creating more employment and income opportunities for Cuban households.

Reviving Real Estate and Tourism

In his speech at the Extraordinary Plenary Session of the Central Committee of the Communist Party of Cuba (PCC), Miguel Mario Díaz-Canel Bermúdez, first secretary of the Central Committee of the PCC and president of the republic, announced plans to “develop a productive, regulated real estate market” that includes leasing idle state-owned properties, renting commercial and industrial spaces, and opening transparent bidding to state, private, cooperative and mixed-ownership entities.

Although the reforms are intended to stimulate tourism and economic activity, widespread flight cancellations persist due to U.S. sanctions, fuel shortages and the departure of major international hotel chains such as Blue Diamond Resorts (Canada), Meliá Hotels International and Iberostar (Spain). In January 2026, the U.S. government imposed additional tariffs on imports from countries that directly or indirectly supply oil to Cuba. Following the action, Cuba experienced a 58.4% decrease in international visitors during the first five months of the year compared to the same period in 2025, according to the Oficina Nacional de Estadística e Información. These external pressures may limit the effectiveness of Cuba’s efforts to support the economy through revitalizing tourism despite the introduction of private and mixed-ownership opportunities.

Retail and Food Services

The sector of Cuban food and retail services will undergo substantial change under Cuba’s market reforms alongside the shifts in the financial, tourist and real estate sectors. The government is eliminating “la libreta,” the state-issued booklet established in 1962 that entitled each Cuban household to a ration of heavily subsidized goods, and replacing it with a system of subsidized assistance exclusively for the “socially disadvantaged,” according to IPS News.

Simultaneously, state-owned enterprises and agricultural cooperatives will become autonomous, gaining authority to set their own worker pay scales, keep or reinvest their profits and directly partner with private companies. MiPymes, or MSMEs (private micro, small and medium-sized businesses), no longer have to navigate state intermediaries to purchase goods from abroad, allowing for direct imports of agricultural products, retail merchandise and other goods.

While the reforms are expected to increase the availability of imported goods through private trade, they may also deepen existing economic inequalities. Because MiPymes price imported goods in dollars at unregulated market rates, their shelves remain out of reach for millions of Cubans still living on fixed peso salaries or small pensions. For example, according to reporting from Barron’s, a liter of cooking oil at one Havana MiPyme costs $3, which makes up half of the monthly pension of retired security guard Joaquín Velázquez.

The Prospects for Economic Recovery

The economic effects of Cuba’s market reforms may rewire how business is conducted on the island, but they are unlikely to transform the country’s financial reality in isolation. By expanding the role of private enterprise, the government has created new opportunities for investment and commercial activity, yet many of the conditions that have contributed to Cuba’s economic crisis remain in place. As inflation continues to erode purchasing power, the benefits of greater market liberalization may remain out of reach for many Cubans. Nevertheless, greater access to private financing and fewer restrictions on businesses could allow the reforms to generate new sources of income and economic activity even under significant external and domestic constraints. If effectively implemented, the reforms could make Cuba’s emerging private economy a greater source of economic opportunity for its population.

– Nilani Mathur

Nilani is based in Longmeadow, MA, USA and focuses on Business and Politics for The Borgen Project.

Photo: Flickr

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Currency Crisis Deepens Food Insecurity in Laos

Food Insecurity in LaosDespite a decrease in poverty, food insecurity in Laos has increased amid a currency crisis. According to the World Food Programme (WFP), the prevalence of food insecurity is significantly higher in rural (12.8%) and mountainous areas (19.3%) than in urban (5.6%) and non-mountainous (7.1%).

A Currency Crisis Affects Household Budgets

The Lao kip has fallen by 60% against the U.S. dollar since 2022, driving up prices for food and fuel and straining households already dealing with malnutrition. Inflation climbed above 40% in 2023 before easing to just under 20% by late 2024, following tightened monetary policy and new exchange rate controls.

High food inflation has increased food insecurity in Laos, particularly among urban households that do not grow their own food. The World Bank conducted a survey between May and June 2024, finding that average wages grew 8% in the first half of the year, far below the 26% inflation rate at the time. The share of households reporting a significant negative impact from inflation rose to 58% by June. Many families responded by scaling up home food production and foraging, while rising numbers of workers migrated to Thailand for better pay.

Heavy flooding in 2024 further reduced agricultural output in the country’s northwest, putting pressure on a population where nearly one in three children experiences stunting. According to reports, 20% of the population also remains food-insecure. Even still, Laos is one of the fastest-growing economies in the Asia-Pacific region and is expected to graduate from least-developed country status in 2026, though persistent malnutrition and rising anemia and wasting rates continue to threaten that progress.

WFP’s Two-Decade Investment in School Meals

WFP has spent two decades partnering with the Lao government on nutrition and school feeding programs, providing nutritious food and cash assistance when needs exceed government capacity. School feeding began in Laos in 2002 as a pilot program serving 30,000 children and has since expanded to reach hundreds of thousands of students nationwide. The program has been credited with increasing school enrollment by helping 140,000 children in 1,430 schools. According to WFP’s Country Director and Representative, well-nourished, healthy schoolchildren are better equipped to learn, to “fulfill their potential as adults” and to contribute to national development.

With this assistance, there has been a growing number of children enrolled over the past two decades, including children receiving school meals. Thanks to this, they have spent six months longer at school in contrast to their peers who do not receive meals.

WFP’s current strategic plan targets improved nutrition for women, girls and children under 5, alongside a national school meals program intended to reach vulnerable districts by 2026. The plan builds on a partnership with the Ministry of Agriculture and Forestry. It helps smallholder farmers, especially women, to supply diversified, nutritious food directly to schools, strengthening local agricultural markets alongside child nutrition outcomes.

ADRA’s Community-Based Nutrition Programs

The Adventist Development and Relief Agency (ADRA) also runs programs addressing hunger and malnutrition directly, focusing on reproductive-age women and children under 5 in Lao, Khmu and Hmong villages. ADRA staff, village health volunteers and health center staff visit pregnant and lactating mothers at their homes to inform them on health messages and teach them how to take care of their own health, their families and children.

Its Positive Deviance/Hearth approach enrolls malnourished children in a 12-day community feeding and education program, teaching mothers to prepare nutritious meals while monitoring children’s growth for a full year afterward. In Xiengkhuang Province, acute malnutrition among children under 5 has reached as high as 10.43%, chronic malnutrition 33.43% and underweight 12.71%, underscoring the need for sustained intervention.

In addition, through past projects like the Mok Mai Integrated Development Initiative, which was implemented in Lao and Hmong villages in Mok Mai District, Xiengkhuang Province from 2010 to 2016, ADRA analyzed the local communities to determine what kinds of agriculture systems are suitable in the local context.

ADRA worked to provide training for the establishment of Group Enterprises to aid in the development and sustainability of local markets, which helped local value-adding processes within the target villages. By having farmers and producers collaborate, the Group Enterprises empowered local producers to not only improve their livelihoods but to improve the overall agricultural landscape within their communities.

The project’s goal was to increase resilience and decrease vulnerability to poverty in target rural communities through a comprehensive integrated approach to ground-level community development.

Building Resilience Amid Economic Uncertainty

These programs are building long-term resilience against food insecurity even as Laos navigates continued economic uncertainty. With the launch of the National Action Plan on Transition toward Sustainable Food Systems Transformation in partnership with the United Nations Resident Coordinator’s Office, the Food and Agriculture Organization of the United Nations and Asian Development Bank, the plan focuses on specific areas to bring action and prioritize inclusive, resilient and nature-positive food systems. As it heads toward graduation from least-developed country status, this will be an opportunity for change.

– Joy Kohol

Joy is based in Muncie, IN, USA and focuses on Good News and Global Health for The Borgen Project.

Photo: Unsplash

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How Remittances in Kyrgyzstan Are Building Financial Opportunity

Women farmers in Kyrgyzstan learning to dry tomatoes for business diversification.For many families in Kyrgyzstan, money sent home by loved ones working abroad is more than financial support. As organizations work to expand financial education, digital services and access to banking tools, remittances are creating new opportunities for families to build financial security.

The Role of Remittances in Kyrgyzstan

Remittances in Kyrgyzstan provide income for thousands of families, helping reduce poverty and strengthen household financial security. According to the World Bank, remittances remain a key part of Kyrgyzstan’s economy, alongside agriculture, while strong economic growth from 2022 to 2025 has helped lower poverty rates. Despite this progress, the World Bank estimated that approximately 0.9 million people in Kyrgyzstan were living on less than $4.20 per day in 2024.

In August 2025, the International Fund for Agricultural Development and Kompanion Bank announced a partnership under the REMIT PRIME Central Asia Programme, co-funded by the European Union, to help Kyrgyz people make better use of remittances. The initiative supports migrants, returnees, aspiring migrant workers and their families by expanding access to financial services and knowledge that can help them make informed financial decisions and build economic stability.

How Remittances Reduce Poverty

For many families in low-income rural areas of Kyrgyzstan, remittances help bridge household income gaps. According to the International Organization for Migration, about one million workers from Kyrgyzstan work in Russia, reflecting the country’s long-standing migration ties with the Russian Federation. Remittances have historically accounted for roughly a quarter to a third of Kyrgyzstan’s gross domestic product, though that share has declined in recent years. It highlights their continued importance to the country’s economy. In rural areas, one in four people rely on money sent home by relatives working abroad, demonstrating the vital role remittances play in supporting households.

Remittances in Kyrgyzstan have also helped reduce poverty. The International Organization for Migration reported that remittances lowered the national poverty rate by 11.1 percentage points in 2019, from 31.2% to 20.1%. Many migrant workers come from low-income rural communities, making the money they send home especially important for household stability. However, many families rely on remittances to cover basic needs. Declining remittance flows reduce their ability to pay for essentials such as food, health care and education.

The Challenges of Remittance Dependence

Although remittances have reduced poverty in Kyrgyzstan, heavy reliance on income earned abroad can leave families vulnerable to economic shocks. Russia has long been the primary destination for many migrant workers from Central Asia because of its geographic proximity, shared history and cultural ties. This means that economic downturns there can reduce job opportunities and the money workers can send home. During a 2022 visit to Kyrgyzstan, the United Nations (U.N.) special rapporteur on extreme poverty and human rights said remittances should not serve as the country’s long-term development strategy. It called for greater investment in education, employment opportunities and social protection to create opportunities beyond migration.

Helping Families Build Financial Security

Through the REMIT PRIME Central Asia Programme, the initiative aims to help more than 800,000 Kyrgyz people make better use of remittances. The program will introduce new digital remittance channels from Europe, Turkey, South Korea and the United States. This will allow families to send and receive money more quickly, conveniently and at a lower cost through the Kompanion mobile app. The app will also include a financial assistant to help users manage budgets, track spending and make informed financial decisions.

According to the International Fund for Agricultural Development, participants will have access to tailored savings and loan products, financial literacy training and guidance on topics such as digital safety, household budgeting and sustainable agricultural practices. By helping families save, invest and plan for the future, the program seeks to move remittances beyond day-to-day support and make them a stronger tool for financial resilience and rural development.

Building Opportunity at Home

One example of the REMIT PRIME Central Asia Programme’s impact can be seen in Uzgen, in Kyrgyzstan’s Osh Region, where migrant families and returnees have received hands-on agricultural training through Kompanion Bank, with support from the International Fund for Agricultural Development and the European Union. Among the participants is Kanat Sadykov, a farmer from Shoro Bashat village, who spent years working in Russia before returning to Kyrgyzstan in 2022 to start his own farm. With support from Kompanion Bank, he started with a single cow and now manages a herd of more than 30 cows. He also completed financial and digital literacy training to strengthen his budgeting and investment skills as he expanded his farm.

Sadykov said the training helped him better understand how to manage his income and investments, with financial literacy playing an important role in his progress. He now plans to expand his dairy production and hire local workers, showing how skills development and access to financial tools can help rural households use remittances to build economic opportunity.

Remittances in Kyrgyzstan support many rural families. Programs that combine financial education, digital tools and practical skills can help those families turn that income into long-term opportunities. Sadykov’s experience shows how remittances, when paired with the right training and resources, can help families build financial stability, invest in their futures and create new opportunities in their own communities. As REMIT PRIME Central Asia expands, families are expected to gain access to financial education, digital tools and banking services that support long-term financial stability.

– Lily Hoch

Lily is based in Midway, PA, USA and focuses on Good News for The Borgen Project.

Photo: Pixnio