Information and stories about economy.

UN Report on Global Unemployment
Global unemployment plays a key role in global poverty. After all, the logic goes that employment leads to prosperity, even if little by little. Development economists proclaim the efficacy of providing jobs, however low paying, as the means to the end of escaping poverty, regardless of location. There is some evidence for this. According to the Brookings Institute, increasing work rates impacted poverty most, with education being second. With that said, a recent U.N. report on global unemployment clouds the future of international job growth since, for the first time in nearly a decade, the global unemployment rate has risen.

Previous Global Unemployment Rise

In 2008 and 2009, the Great Recession hamstrung the United States economy in the worst way since the Great Depression nearly 70 years prior. Unemployment soared, reaching 13.2 percent nationally and 5.6 percent globally. Between 2008 and 2009, the last time the U.N. reported on global unemployment rate increases, it increased by nearly a full percentage point, according to the World Bank. The stock market crash in the United States and Europe clearly caused this, but thankfully the rate recovered and surpassed the 2009 point in 2019, returning to about 4.9 percent.

Reasons for the Present Situation

A U.N. report on global unemployment in January 2020 indicated that this rise in the global unemployment rate was due largely to trade tensions. The United Nations said that these conflicts could seriously inhibit international efforts to address concerns of poverty in developing countries and shift focus away from efforts to decarbonize the global economy. Due to these strains, the report claims that 473 million people lack adequate job opportunities to accommodate their needs. Of those, some 190 million people are out of work, a rise of more than 2.5 million from last year. In addition, approximately 165 million people found employment, but in an insufficient amount of hours to garner wages to support themselves. These numbers pale in comparison to the 5.7 billion working-age people across the world but they concern economists nonetheless.

To compound the issue, the International Labor Organization said that vulnerable employment is on the rise as well, as people that do have jobs may find themselves out of one in the near future. A 2018 report estimated that nearly 1.4 billion workers lived in the world in 2017, and expected that 35 million more would join them by 2019.

The Implications

A rise in global unemployment, like that which the U.N. report on global unemployment forecasts, assuredly has an impact on global poverty. More people out of work necessarily means more people struggling to make ends meet. The World Economic and Social Outlook places this trend in a bigger context. Labor underutilization, meaning people working fewer hours than they would like or finding it difficult to access paid work, combined with deficits in work and persisting inequalities in labor markets means an overall stagnating global economy, according to the report.

Hope for the Future

First of all, stagnation is not a decline, and a trend of one year to the next does not necessarily indicate a predestined change for the years ahead. In fact, the World Bank points toward statistics that it issued at the end of the year to support the claim that every year, poverty reduces. In 2019, nearly 800 million people overcame extreme poverty from a sample of only 15 countries: Tanzania, Tajikistan, Chad, Republic of Congo, Kyrgyz Republic, China, India, Moldova, Burkina Faso, the Democratic Republic of the Congo, Indonesia, Vietnam, Ethiopia, Pakistan and Namibia. Over a 15-year period, roughly from 2000 to 2015, these 15 countries showed the greatest improvements in global poverty, contributing greatly to the reduction of the global rate of people living on $1.90 a day or less to below 10 percent. Additionally, efforts by organizations such as the International Development Association have funded the needs of the 76 poorest countries to the tune of $82 billion, promoting continued economic growth and assisting in making them more resilient to climate shocks and natural disasters.

While the U.N. report on global unemployment forecasts a hindrance to these improvements, hope is far from lost. The fight against global poverty continues with plenty of evidence of success and optimism for the future.

– Alex Myers
Photo: Flickr

Investment in RwandaThe commonly held belief on Chinese investment in African countries is that China is only interested in exploiting the continent for its mineral resources and establishing a sycophantic relationship with some of the world’s most vulnerable developing nations. However, the investment in Rwanda makes little sense if short term profit and influence are the country’s only motives. Rwanda lacks the natural resources that its neighbors have. Furthermore, its population will only yield a small number of consumers of Chinese goods in the future. Motivations aside, China’s investment is helping to develop the country in ways that will positively impact the lives of the country’s poor.

Rwanda’s Rapidly Improving Infrastructure

The investment in Rwanda has had no bigger impact than in the area of infrastructure with projects that include the construction of hotels, schools, hospitals and multi-thousand capacity stadiums in the underdeveloped eastern province. China also constructed 80 percent of the country’s roads, beginning with a loan of 250 million yuan in 2009. This equals about $36,040,200 million.

In the short term, the Chinese have reduced the cost of construction and have created jobs for local people according to Qinghai Liu, A Chinese expert in the research on China’s investment in Africa. Evidence exists to support her claim as well. One example is the construction of the Administrative Office Complex located in the capital city of Kigali. The Chinese builders employ some 260 Rwandan employees and provide them training in construction skills.

China is also funding an agriculture technology center to help improve Rwanda’s farming. Construction has also extended into real estate. Chinese enterprises are building 4,500 villas and apartments in Vision City for an emerging middle class. Recently, the Chinese embassy donated building materials for housing for the most vulnerable families.

The Tradeoff

The Rwandan government has found a willing investment partner in China whose aid is not preconditioned on democratization, liberalization and privatization. Rwanda has even modeled its development on China, lacking an emphasis on personal and social freedoms. Should Rwanda be unable to pay its debts, it is unclear what China might do to make good on its investment. Sri Lanka is the only country to have defaulted on its loans with China in the past. China seized the economically vital port of Hambantota in a response that remains controversial to this day.

Though there are obvious political and social concerns that come with the investment in Rwanda, the poor are benefiting. There is evidence that China is playing a concrete role in helping to lift Rwandans out of poverty. In big and small ways, China is helping Rwanda in its development, and not just the rich are benefiting.

Caleb Carr
Photo: Google

Facts About Living Conditions in Nauru
Situated in the Pacific Ocean to the northeast of Australia, the Republic of Nauru is the smallest island nation in the world. Phosphate mining has rendered 80 percent of the island unhabitable and devoid of arable land. Phosphate deposits depleted in the 1980s and Nauru’s economy stagnated, transitioning the country from fiscally self-sustaining to externally dependent. The country’s history, economy and foreign relationships interlace with—and have shaped many aspects of—Nauruan life, as evidenced by the top 10 facts about living conditions in Nauru.

Top 10 Facts About Living Conditions in Nauru

  1. Population: Nauru’s population is approximately 11,000. Ninety percent are indigenous to the island, almost half of the population are under the age of 24 and 3.5  percent are 65 and older. Although the country’s landmass is only eight square miles, Nauru is one of the world’s most densely populated countries.
  2. Colonialism: Nauru remained under colonial authority until gaining independence in 1968. For example, Germany annexed it in 1888, Japan occupied it in WWII and the United Nations (U.N.) subsequently placed Nauru under Australian administration. The nation only became of economic interest to colonial powers after the discovery of phosphate deposits in the late 19th century.
  3. Australian-Nauru Relations: Nauru sought damages from Australia in 1989 for “rehabilitation of the phosphate lands.” Before WWII, Germany and the United Kingdom split mining profits, and following the war, Australia and the United Kingdom divided revenues. The Hague sided with Nauru and the two countries settled in 1993 with Australia agreeing to pay $56 million AUD that year and another $50 million AUD over the next two decades. Australia continues to be Nauru’s greatest source of economic stimulus, its contributions making up 20 percent of the national GDP.
  4. Economy: Phosphate mining and production is integral to Nauru’s economy and continues to be the country’s most valuable resource. Phosphate is one of the key plant nutrients to make food crop fertilizer. Additionally, phosphate mines are an essential source of employment. A national economic crisis occurred in the 80s when Nauru exhausted existing deposits. Secondary mining did resume in 2005, but Nauru’s government estimates that reservoirs will be barren by 2030. Other niche industries have recently emerged, including immigration taxation and licensing commercial fishing. The Republic of China (ROC) and Nauru signed a fishing cooperation accord in 2004 to strengthen trade relations between the two countries. Renewed in 2016, the cooperation accord provides funds to improve Nauru’s fishing industry and promotes sustainable fishing practices.
  5. The Pacific Solution Policy: In 2001, Nauru became one of two Australian off-shore regional processing centers for refugees and asylum-seekers in an arrangement called the Pacific Solution policy. In exchange, the Australian Government would provide $1 million AUD annually for its operation, immediately pay $16.5 million AUD for infrastructure and provide increased access to Australian education and additional maritime security. Facilities closed from 2007 to 2012 due to international objections, including indefinite detention times and evidence of abuse; however, despite criticism, operations have since recommenced.
  6. Employment: Following the economic downturn in the 1980s, Nauru did not significantly diversify its industries, unemployment levels increased and the country became heavily dependent on external economic stimulus. For example, the uptick in employment levels in 2012 was the result of regional processing centers reopening. Facilities directly provided 500 jobs, and indirectly generated substantial ancillary employment opportunities; next to Nauru’s government, Australia is the country’s second-largest source of employment.
  7. Health Care: Nauru was one of seventeen countries in 2016 that, proportionate to its economy, spent over 10 percent of its GDP on health care. The Marshall Islands spent the most at 23.3 percent and Monaco spent the least at 1.7 percent. Despite this, many Nauruan’s develop noncommunicable diseases, specifically, obesity, diabetes and cardiovascular disease. Although obesity remains an issue in Nauru, it has made progress as male diabetes rates have declined 1 percent over the past decade and high blood pressure levels have decreased for both genders by 6 percent.
  8. Poverty: Nauru is officially a middle-upper-income nation, and previously, it was the wealthiest country per capita. However, a 2018 U.N. report showed that a quarter of Nauruans live in “basic need” poverty, too poor for the cost of food and access to necessities such as clean water, health care and education. The same 2018 report noted that Nauru had no instances of food insecurity, however.
  9. Education: Education in Nauru is free and mandatory until the age of 18. Eighty percent of Nauruan children enrolled in early and primary education in 2015, but only half that number attended secondary school. The Government addressed truancy in 2016, an ongoing concern for students in Nauru, by enacting the Nauru Education Assistance Trust Scheme (NEATS). NEATS incentivizes students to attend school by providing them with $5 a day to set aside for adulthood and help them establish businesses or purchase homes when they graduate. Following NEAT, school attendance increased by 11 percent from 2016 to 2018.
  10. National Sustainability: Nauru is confronting the significant damage that phosphate mining caused. The government acknowledges that it is an economically volatile and diminishing commodity. For example, the ROC and Nauru’s 360 Project is an initiative that encourages national self-sufficiency in areas such as vocational training, transitioning to solar energy and specialized forms of agriculture; the latter is to mitigate reliance on imported goods. The United Arab Emirates has aligned with Nauru to achieve similar efforts, providing financial aid for Nauru to establish its first solar energy plant, which opened in 2016.

These top 10 facts about living conditions in Nauru reveal that its history is complex. The country’s remote location, limited economic opportunities and increasing dependence on foreign investment—usually politically contingent for all countries—continue to impact the Nauruan population. However, ongoing U.N. involvement and foreign relationships with countries like Australia and the ROC, are working to address Nauru’s long-term social issues.

– Annabel Fay
Photo: Wikipedia Commons

economic growth in Guyana
Guyana discovered oil off its coast in 2015 and is on the brink of major economic growth. According to the International Monetary Fund (IMF), the projected economic growth in Guyana for 2020 is 86 percent. The projected growth rate is high for 2020 due to ExxonMobil’s oil find in the Caribbean Sea in 2015, which brought hope for change to poor Guyanese. For 2019, GDP growth was 4.4 percent, almost double from the previous year, and the 86 percent projected growth by the IMF shows an increased interest in the development of Guyana. Oil production in 2020 and in the future could bring economic growth in Guyana and add thousands of jobs.

A Potential Future in Oil

Guyana found an estimated 3.2 billion barrels of oil off its coast, with oil production beginning in late December 2019. More than 1,700 Exxon employees are working on extracting oil from Stabroek Block, the oil reservoir, and transporting oil to the Liza Destiny, a storage and offloading vessel. About 50 percent of the 1,700 workers are Guyanese. Exxon expects to produce 120,000 barrels of oil a day in 2020 and estimates 750,000 barrels a day by 2025. The 2025 estimated production would position the South American country in the top 30 countries for oil production. The 750,000 barrels a day estimate would be more oil than India produced daily in 2018. This is one reason for the IMF’s projection of a high growth rate for Guyana, as oil could transform the economy.

Uses of Future Revenue

Oil production in 2020 is exciting Guyanese about the possibilities of changing the country and its people. President David Granger commented, “Every Guyanese will benefit from petroleum production. No one will be left behind.” Guyana’s GDP per capita is about $8,100, which ranks among the lowest in the world. With oil now in production, there is potential to improve its lagging infrastructure and low income. Guyana only has about 500 miles of paved roads, yet almost 2,000 miles of unpaved roads. The President stated that oil could transform the developing country and improve life for hundreds of thousands of Guyanese.

Guyana’s government expects oil revenue of $300 million in 2020 and $5 billion for 2025. This could further enhance economic growth in Guyana and bring the possibility of distributing the money to lagging sectors. In 2019, the government spent $2 billion in its infrastructure. This included constructing or upgrading roads, bridges, highway lights and drains. The East Coast of Demerara Road Widening Project affects more than 100,000 of Guyana’s 777,000 population. Guyana approved about $500 million for the project that focuses on upgrading roadways along the coast. Most of the population resides near the coast and along the Demerara River. Guyana could not only use oil revenue to further develop Guyana but also to add jobs, as the ExxonMobil operation is already showing.

The Impact of Guyanese Oil Revenue

There is steady economic growth in Guyana, as one can witness from its GDP rising from 2.1 percent in 2018 to 4.4 percent in 2019. The IMF’s projected 86 percent growth rate for Guyana in 2020 expresses big expectations for the South American country. Although Guyana’s potential future wealth is good news, the developing country will need support in transforming its newfound wealth into positive change for its people. Every poor country that strikes oil does not always manage natural resources well, yet with the right tools and guidance, Guyana could reduce its 35 percent poverty rate by adding jobs and transforming into a developed economy.

– Lucas Schmidt
Photo: Wikipedia Commons

Vietnam's Economic Development Costs
Once one of the world’s poorest nations, Vietnam is now gaining global attention for having one of the fastest-growing economies, subsequently lifting millions out of poverty. From a country where most of the people rely solely on rudimentary agricultural production to secure livelihood and use the majority of lands for farming, Vietnam is now undergoing a process of rapid industrialization and urbanization. It is at the crucial stage of transition from poverty to prosperity, allowing many to enjoy higher standards of living than ever before. However, the nation is paying tremendously for Vietnam’s economic development costs from rapid economic growth. The surging energy consumption, pollution from industrialization and urbanization process and the nonrestrictive environmental legislation are taking tolls on the environment and the natural assets of Vietnam.

Energy Consumption

The demand for energy is surging in response to the massive economic growth of Vietnam, impacting Vietnam’s economic development costs. Energy consumption in Vietnam tripled just over the past decade and many anticipate that the demand will increase by 8 percent annually until 2035. To meet the increasing energy demand, Vietnam is relying substantially on coal for energy supply due to its affordability. The coal share of the total energy supply grew from 14 percent to 35 percent in 15 years. Currently, 20 coal-fired plants are in Vietnam and the government plans to increase the number of coal plants to 51 by 2050. Vietnam’s dependence on coal is raising concerns as it is seriously harming the environment and public health. A study revealed that existing coal plants can cause as many as 25,000 premature deaths annually.

Facing a rapid rise in pollution, Vietnam is making great efforts in developing renewable sources of energy such as hydropower, solar and wind energy as alternatives to coal. Vietnam’s energy plans now include a renewable energy development strategy. The Ministry of Industry and Trade has recently offered incentives for renewable energy by paying solar projects between 6.67 and 10.87 cents per kWh.

A report in 2017 suggests that renewable energy could generate 100 percent of Vietnam’s power by 2050. However, in the short-term, it is difficult for other renewable energy to challenge coal as the main supplier of energy. Coal is still the most affordable option available at the moment for Vietnam to meet its surging energy demand.

Water and Air Pollution

The country’s industrial production has grown 15 percent annually in the last decade. However, rapid industrialization is polluting Vietnam’s water sources and air. Only 25 percent of industrial wastewater receives treatment, while the rest, estimated at 240,000 cubic meters of wastewater daily, discharges directly into lakes and rivers without treatment. The quality of air in urban areas is also deteriorating severely in recent years as a result of traffic and industrial activities. A report in 2013 showed that Hanoi’s air pollution received grades from unhealthy to hazardous for more than 265 days of the year. The level of nitrogen dioxide (NO2) concentration was 1.3 times above the permitted levels in Hanoi, and twice the permitted levels in Ho Chi Minh City. This is detrimental to the public, especially children and the elderly.

The government and communities have started to pay more attention to addressing industrial pollution. Customers and associates are boycotting violating manufactures. Banks are also adjusting policies to avoid those clients on the environment blacklist, making it more difficult for those companies to access funding. The Vietnamese government has drafted a National Action Plan on Air Quality Management for the period of 2020 to 2025, including the plan to reduce 20 percent of NOx, Sox and particulate matter emitted by chemicals, fertilizer and petroleum production facilities. It is also drafting a separate National Technical Regulation on Emissions for the Steel Industry and the Environmental Law that includes air quality management requirements.

Vietnam’s Reforms

Vietnam has been pursuing reforms and investments to promote green growth and sustainable development with the support of the World Bank. Many projects have achieved notable results in promoting this sustainability agenda and mitigating the high environmental cost of Vietnam’s rapid economic growth. The Vietnam Renewable Energy Development Project has successfully expanded the usage of renewable energy, generating nearly 10 percent of Vietnam’s power. The Vietnam Industrial Pollution Management Project has significantly improved compliance with wastewater treatment regulations in four industrial zones in Vietnam. The percentage of industrial zones compliant with wastewater treatment regulations grew from less than 30 percent to 72 percent between 2012 and 2018.

This information about Vietnam’s economic development costs shows that despite many challenges still facing the country, the government is taking great strides to promote sustainable development with attention to ecological conservation. Raising public awareness and support for environmental conservation while strengthening the capacity for environmental development planning through legislation and investment is crucial in this stage of Vietnam’s economic development.

Minh-Ha La
Photo: Flickr

 

 

Haiti's Earthquake 10 Years Later
January 12, 2020, marked the 10th anniversary of the 7.0 magnitude earthquake that devastated Port-au-Prince, the capital of the small Caribbean nation of Haiti. People have taken time to remember what happened a decade ago, with one Haitian-American residing in Boston commenting, “I’m in pain. I’m in pain inside of me. Even my bones hurt me because of what’s happening in my country. We are human beings like everybody else, we have to live a life like everybody else.” Haiti has undeniably suffered greatly, but there is hope after Haiti’s earthquake 10 years later.

The Devastating Aftermath of the Disaster

The quake also impacted Haiti’s neighboring country, the Dominican Republic. Two aftershocks followed with a magnitude of 5.9 and 5.5., making it the worst natural disaster the country has seen in modern times. Haiti is located above two of the earth’s tectonic plates, the North American and the Caribbean plates, making it prone to large earthquakes. At the beginning of 2010, many news outlets covered the aftermath of the disaster, leaving much of the world shocked.

Between 220,000 to 300,000 people lost their lives in the 2010 quake, 122 of them American citizens, leaving 300,000 more injured and 1.5 million displaced from their homes. Nearly 4,000 schools suffered damage or complete eradication. This resulted in an estimated $7.8 to $8.5 billion in damage.

The disaster left many people with families living in Haiti anxious, wondering if their loved ones had survived the catastrophe. Others fled the country in search of a better life elsewhere. Jean-Max Bellerive, the Prime Minister of Haiti at the time of the earthquake called it “the worst catastrophe that has occurred in Haiti in two centuries.”

Foreign Aid Comes to the Rescue

In the midst of what seemed like the absence of hope, many Haitians prayed for help. Within a few days, foreign powers from all over the world responded, willing to aid the survivors with their needs. Within a day, President Obama stated that the United States would provide their “unwavering support” for the people of Haiti pledging $100 million in financial support.

Members of the Marine Corps and the U.S. Navy arrived in the country to assist the survivors of the earthquake with their medical needs. Outside of the United States, the European Commission promised $4.37 million in aid. In Asia, the South Korean and Indian governments provided $1 million in aid, and the Japanese government granted $5 million. Japan also donated a total of $330,000 value in tents and blankets for those without shelter.

Doctors and aircrafts supplied with food and water swarmed in quickly from countries such as Sweden, Brazil, Israel and Venezuela. It seemed as if the entire world had its eyes on Haiti. People all across the globe prayed for the relief Haitians needed to rebuild their lives and recover from such a traumatic event.

Haiti 10 Years Later

Despite the overwhelming efforts from foreign powers across the world in the aftermath of the earthquake, the earthquake has impacted Haiti even 10 years later. While the world has still not forgotten the 2010 earthquake, relief efforts often diminish because there are more recent natural disasters that require attention. When remembering the anniversary of such events, especially ones that occurred in impoverished nations, it is important to remember that relief efforts should not cease once mass media outlets elect to move on to new events.

Even before the earthquake, Haiti was the poorest country in the Western Hemisphere, with about eight out of every 10 citizens living in poverty. Six years after the earthquake, Hurricane Matthew affected Haiti in early October 2016, the most powerful storm to affect the country in decades and resulting in almost $2 billion in damage.

In the 2000s, hurricanes like but not exclusive to Hurricanes Ike and Hanna, also affected Haiti resulting in flooding and hundreds of lives lost. Haiti’s economy is highly susceptible as a result of its location and the possibility of earthquakes and hurricanes. Because each disaster results in such high costs in damage when a majority of its people already live on only $2 a day, this poses a significant problem in providing a long-term solution for Haitians in need.

As of January 2020, many Haitian children face malnutrition due to high levels of food insecurity and infections, resulting in the deaths of infants, ages 2 and under. Many mothers also still face complications in childbirth resulting in death.

Much of these statistics do not appear to be promising on the surface, appearing as it virtually nothing has changed in a decade despite support from foreign powers during the country’s time of need. However, Haitians still refuse to discard their efforts for a better and more prosperous Haiti. In 2019, many Haitians protested the government and President Jovenel Moise. Haitians say that while citizens are “used to political and economic crises,” the cost of necessities such as food, gas and education has gone up significantly. These protests have continued into January 2020.

Reach Our World and the World Bank

Others around the world have also not given up on their efforts to create a stronger Haiti, even after Haiti’s earthquake 10 years later. Reach Our World is one of the missionary groups that visited Port Au Prince shortly after the 10th anniversary of the quake from January 17 to 22, 2020. As of January 8, 2020, ongoing contributions from the World Bank, consisting of 20 projects, have grossed $866.46 million.

Therefore, while the mass media outlets do not commonly cover the continuing political and economic tensions existing after Haiti’s earthquake 10 years later, many advocacy groups and world powers have not forgotten about the work that the world still needs to accomplish to help further the nation and its people. In order to become more successful in such efforts, it is imperative to be consistent and not wait until another natural disaster strikes to contribute to relief efforts so that the people of Haiti can achieve a stronger and brighter future.

A. O’Shea
Photo: Flickr

How Everest is Affecting NepalThe country of Nepal is often an afterthought to Mt. Everest, the mountaineering mecca of the world and the tallest peak. Unfortunately, tourism to Mt. Everest is affecting Nepal through the unstable economy it brings and sanitation concerns. The environment and the permanent residents of the mountain must be considered.

Tourism-based Economy

Throughout most of the cold war, Mt. Everest was closed on the Tibetan side and highly restricted within Nepal. Only climbers who were accompanied by scientists could climb. However, in 1993, the government relaxed the rules and regulations surrounding the mountain. Travel and adventure agencies began to crop up. They sell the dream, the ultimate bucket list item of summiting Everest.

Now, more than 7 percent of Nepal’s economy depends on the three months of March, April and May when people come from across the globe to take their shot at summiting one of the world’s seven wonders.  People from all across the world come to the region of Khumbu, located at the base of the mountain and home to the indigenous Sherpas. Between tourists and Nepali people coming from other areas to work, the population climbs from 40,000 to a staggering 700,000 people. However, this tourism-based economy is unstable and leaves many Nepali excluded from the enterprise.

Impact on Nepali People

Though this tourism boom has helped the Nepali government, its impact on the Nepali people is very isolated. The main benefactors are those connected to the few popular tourist attractions in the country, mainly Kathmandu and Everest. Tourism to Everest is Affecting Nepal. It is having a negative impact on sanitation in Khumbu. Climbers leave heaps of trash at camps, which becomes increasingly more difficult to remove as elevation rises. As the ice melts on the mountain, it washes the trash and human waste down into the villages bellow, creating an unsanitary environment and physical destruction from flooding.

However, despite these health and safety risks, the Nepali government has declined to stop tourism for any given time. While they have made some clean-up efforts throughout the past few years, sanitation continues to be an issue on the mountain and in the villages below.

Keeping the Mountain Clean

To help mitigate some of the impact made by tourists, organizations like KEEP (Kathmandu Environmental Education Program) have made efforts to educate both the Nepali people and tourists on how they can better care for the mountain and minimize their footprint. KEEP is a non-profit organization that works to conserve the mountains of Nepal. It has started programs in Eco-tourism, environmental awareness and rural community development.

In August of 2019, Nepal announced a ban of single-use plastics on the mountain, which will significantly reduce the amount of plastic waste that will be left behind by climbers. Additionally, in 2019 the country released the decision to make getting a climbing permit more difficult.

Economy or Environment?

The Nepali government is trying to decide what should and can be done about conserving Everest and other mountains in the country. If they limit the number of climbing permits allotted, it would improve the health of the mountain. However, it would take away money and a significant number of jobs from the Nepali people. Money from Everest has allowed people from one of the poorest countries in the world to send their children to secondary schools outside of the country. It has allowed people to create their own businesses. Also, it has fostered incomes for the Sherpas that far exceeds that of the average Nepali person.

Tourism-based income is unstable in the long run because it only provides a steady income for a short period of time. However, in the short term, it provides people with better living. Everest is affecting Nepal negatively in many ways, but the positives it brings cannot be ignored. It is difficult to know what to do about the issues tourism to Everest is causing when its short-term benefits have such a strong impact on the people of Nepal. Work is being done, but just like the trek to summiting Everest, this will be a long and challenging road for the Nepali people and government.

Emma Hodge
Photo: Flickr

Brazil’s Economic Recession
Brazil began the 21st century on an almost exclusively positive note. Before Brazil’s economic recession, people included it in the same conversation as Russia, India, China and South Africa, leaders of the developing world and countries poised to make considerable economic gains in the decades to come. The first years of the 2000s reinforced that perception, as Brazil’s economy continued to grow and expand. This prompted a bid for both the 2014 FIFA World Cup soccer tournament and the 2016 Olympic Games. In 2007, FIFA granted Brazil the event, and in 2009, the International Olympic Committee announced Rio de Janeiro as the host for the 2016 Games.

Economic Depression

These highly visible international events combined with the emergence of Brazil in the international arena seemed to legitimize the country’s efforts. However, after Dilma Rousseff took over for the highly popular Luiz Inácio Lula da Silva, government spending ballooned, partly due to the infrastructure required to host international sporting events. Under her direction, Brazil suffered its worst economic depression on record.  The government’s spending, combined with mismanagement of inflation, a decrease in consumer spending and the sharp decline in oil prices in 2015, produced a two-year slide that embodied Brazil’s economic recession, and poverty naturally increased as a result of all of these factors.

 This sharply contrasts with the efforts that Lula da Silva undertook to mitigate poverty and economic hardship as the leader of Brazil’s Workers’ Party, lifting 36 million people out of poverty. In a resounding success for him and Rousseff, by 2014, unemployment reached its record low, the U.N. removed Brazil from its Hunger Map, and the number of people living during Brazil’s Economic Recession in poverty dropped to 5.2 million. In 2017, however, more than 14 million people found themselves homeless and in extreme poverty, according to the World Bank’s definition of less than $1.90 U.S. a day. The situation was more grave than just poverty and homelessness, as a study conducted between 2012 and 2017 intimately linked the effects of Brazil’s economic recession and poverty with adult mortality. It found that there was an uncanny correlation between the state unemployment rate and the mean municipal mortality rate.

Reasons for Brazil’s Economic Recession

How did a country with such promise and success completely reverse course and regress so quickly, resulting in Brazil’s economic recession and poverty? Dilma Rousseff increased public spending upon entering office in 2011, raising the minimum wage and promoting expanded lending by the state’s banks. Simultaneously, the central bank’s discount rate dropped, sparking inflation which Rousseff exacerbated by cutting sales tax and lowering prices on food, gasoline and bus fares. One entity hurt most by this was Petrobras, the Brazilian state-run oil company, as investments stalled. Rousseff boosted wages to combat inflation, but this did not work. Inflation outpaced wages and resulted in inhibited consumer spending. When oil prices fell in 2015, the dollar strengthened and companies cut production and jobs as the currency-the real-collapsed, increasing the expense of imports and further raising inflation. To make matters even worse, Brazil experienced a political crisis in the midst of this, as the government impeached Dilma Rousseff for improperly moving government funds between budgets, and threw Lula da Silva in jail for corruption.

Looking Forward

The peak of the crisis came in 2017, and the economy recovered to its 2014 level, but experts caution against optimism. A BBC article in May 2019 identified four things wrong with the Brazilian economy, recession and poverty. It said that no economic recovery lies on the horizon, unemployment still runs rampant at 12.7 percent, the election of Jair Bolsonaro did not bring the anticipated market rally and the fiscal deficit still grows. It looked in May like the worst would occur, as the country’s Gross Domestic Product shrank by 0.2 percent during the first quarter of 2019, even though it aligned with the forecasted 0.5 percent annual growth.

 Much to the relief of many, the second quarter provided a rebound of 0.4 percent, a surprise to those most knowledgeable in Brazil. Little consolation came to President Bolsonaro, though, as his reform agenda did not produce the immediate results he had hoped. Still, his administration intends to focus on reforms to pensions and the government’s overall structure, to the praise of the International Monetary Fund. The IMF said that these reforms could boost the Brazilian GDP by 2.4 percent in 2020 and that Brazil could make more improvements with an opening of the country’s tariff and non-tariff barriers and a commitment to closing the infrastructure gap. Reuters agrees that the future of Brazil as an economy and emerging market hinges on fiscal reforms, that will hopefully put the last five years of Brazil’s economic recession and poverty behind them and return to the pace that Lula and Rousseff set.

– Alex Myers
Photo: Flickr

Ghana's Poverty Rate
Ghana is a West African country that has made considerable progress in reducing poverty. Ghana’s poverty rate gradually lowered since the 1990’s. Poverty reduced from 52.6 percent in 1991 to 21.4 percent in 2011. Ghana slashed its poverty rate by more than half and became a middle-income country in 2011. The three reasons for this huge reduction are economic growth, diversification and education development.

Poverty Reduction in Ghana: 3 Keys to Success

  1. Economic Growth: Ghana’s 2017 GDP growth rate was about 8.4 percent, which was the seventh-fastest GDP growth rate in the world. The economy is developing quickly, as the country sets a few policy barriers to investment and trade in relation to other African countries in the region. Due to the few barriers, investment in natural resources such as oil and gold are common. Gold alone brings about 48 percent of the country’s revenue and is one of the main reasons for economic growth. Gold production amounted to about 590,000 ounces in 1990 and increased to 4.6 million ounces in 2018. As of 2018, Ghana is number seven in the world for gold production.

    Oil is also an important export but is relatively new. The oil sector is less than 10 years old, yet is growing at a rapid rate. In 2017, more than 500 million barrels were produced from the Sankofa fields. Ghana’s growth averaged about 4 to 5 percent in the 1990’s and has gradually increased over time. Thanks to steady growth, Ghana’s poverty rate was 21 percent in 2012, which is less than half the African average of 43 percent.

  2. Diversification: Oil and gas are two areas that helped diversify the economy and reduce Ghana’s poverty rate by creating jobs and increasing wages for those transitioning out from low-wage occupations and into more lucrative fields. The service industry is 57 percent of GDP and remains the largest sector and another important area in Ghana’s growth. The service sector also employs about 40 percent of the population.

    Agriculture still employs a little more than a quarter of the population, yet the service and manufacturing sectors have steadily grown since 1991. Developing economies are mainly agriculture-dependent economies. As a middle-income country, the amount of the population employed by Ghana’s manufacturing and service sector expresses transitioning into a developed and stable economy. In 2008, employment in agriculture was 52.5 percent and reduced to 33 percent in 2018. Service employment rose from 33 percent in 2008 to 47 percent in 2018. In only 10 years the service sector has grown 14 percent. The industry grew 4 percent during that same time period. Telecommunications and tourism are two services that helped grow the service sector.

  3. Focus on Education: A better educated and trained country leads to more opportunities. The number of people in Ghana’s workforce without education dropped from 41 percent in 1991 to 21 percent in 2012. Almost 90 percent of children attend school, which is a big difference from other African countries. Only 64 percent of Nigerian children attend school. Ghana spends about 8 percent of its budget on education, which is more than the United Nation’s 6 percent benchmark. For reference, the U.K. spends a little more than 6 percent on education. Ghana’s progress in education began with the U.N.’s millennium development goals that the U.N. set in 2000, and it developed at such a fast rate because it pushed for education.

Ghana’s poverty rate slashed in half thanks to education development, diversification and fast economic growth. The economy is still strong despite its 2015 recession. The economically diverse and natural resource-rich Ghana has made tremendous progress in poverty reduction and is projected to continue reducing its poverty rate in the future.

Lucas Schmidt
Photo: Flickr

China's Protests Affect its Poverty and Economy
As protests in Hong Kong have continued to escalate between protesters and China’s ruling Communist Party, each side appears to become increasingly distant from the other. The term One China is not new, but what is new is the number of protests that have occurred and the amount of support that it is receiving from citizens. The protests in Hong Kong began to occur in April 2019 following an extradition bill that would have allowed the extradition of the citizens of Hong Kong to the mainland. Here is how China’s protests affect its poverty and economy.

Tourism and the Economy

In Hong Kong’s top tourist area Tsim Sha Tsui, many shop workers tend empty shops waiting for consumers. This district holds an assortment of luxury hotels, restaurants and boutiques that attract tourists. In recent months, however, it has seen an inverse of traffic as shoppers occupy it less and protesters occupy it more. At the beginning of 2019, businesses started to struggle from the strained U.S. and Beijing trade war. In the months following, the economic state worsened and the protesting has lasted for months to date.

Similar to the tourism business, other industries across the region have felt comparable effects from the protests as well. A large number of startup companies are beginning to consider other areas like Singapore for future operations. Some economists believe that China may be one step closer to a recession as GDP has decreased. Select industries are seeing a decline rate in the double-digits from previous years.

Immigration

As the economy of China has been on the decline for months, immigrants from the mainland have moved to Hong Kong at high rates for the past 10 years. Estimates determine that between 60 to 70 percent of China’s population came from the mainland. In 2017, approximately 40 percent of immigrants from the mainland to Hong Kong were living under the poverty line.

Success So Far

Chinese leaders have held a goal to eliminate national poverty for several years now. Even with the protest and political tension that the region is facing, it still seeks to eradicate poverty. In the last seven years, nearly a billion citizens have risen from their impoverished status. In 2018, official counts determined that there were only 16 million people living below the poverty line. If the country continues at the rate it has been going, there will be just a few million people still in poverty by the end of 2019.

Distractions or Support

People have made numerous cases against the middle class, the largest class in the country. Some believe that this initiative has drowned out other issues that impact the nation. Topics such as extreme poverty and class status are beyond the realm of politics and legislation that people typically see. Another claim is that the economic frustrations of China’s citizens are pushing the protest to expand. What initially was about an extradition bill also serves as an opportunity for protesters to speak out about their concerns.

In the last decade, China has reduced the number of people living in poverty substantially, however, it has been occurring at a decreasing rate. In recent months, the discussion of China relates to the increasing rate of protests in Hong Kong. Many people have taken notice of how China’s protests affect its poverty and economy. The nation’s finances have been a point of interest as numbers fail to match those of previous years.

Kimberly Debnam
Photo: Flickr