Information and stories about economy.

Peru’s Economic Growth
For several decades, the World Bank classified Peru’s economy as one of the fastest-expanding economies. While this is true, this expansion slowed between 2014-2019. This led to an 11.1% drop in economic growth in 2020 as a result of the COVID-19 pandemic. The drop caused job sectors to slow down, though others surged in their place. Despite the fall, there is good news: Peru’s economic growth could increase by 13% at the end of the fiscal year 2021.

What is Economic Growth?

The improvement or decline in the market value of goods or services produced measures economic growth. The more goods and services produced or traded, the more money that goes to the economy. The changes in a country’s Gross Domestic Product (GDP) typically measure economic growth. With economic growth comes increased salaries, job availability and standards of living.

There are two primary methods to improve economic growth: improved goods, both technological and physical (capital) and tools that help increase production. Both avenues traditionally lead to economic growth. In this case, both methods explain why Peru’s GDP had a decline in 2020 and how Peru’s economy has recovered since then.

Peru’s Economic Foundation

Peru’s economy has experienced its ups and downs. The economy is based in the services sector, with telecommunications and financial services being the most significant. Services contribute to 60% of the overall GDP, with industries providing 35% to the GDP. However, reforms in the industry are a result of the changes in the mining industry. As Peruvian industries shrink, the telecommunications and services sectors grow.

Although mining was the primary source of income for Peru’s economy, the industry had the highest recorded fall in production ever. Many mining companies had to minimize the number of workers they could allow at a time in the mines and processing plants. The minimization cut production and output with a 13% reduction in copper production and processing. With the reduction in mining work and production output, other sectors stepped up to fill the job gap and start contributing to Peru’s GDP more significantly than in the past.

Improvements in 2020 and 2021

The downturn in Peru’s economy in 2020 left 27% of the population in poverty, as the World Bank reported. The additional 2 million people who slid into poverty highlighted the growing poverty rate in Peru. However, hope is on the horizon.

Due to the COVID-19 pandemic, the telecommunications sector expanded. Before the COVID-19 pandemic, telecommunications were slow to grow in Peru. Back in 2012, the Peruvian government passed law 29985, explicit approval of the usage of electronic money. Law 29985 showed the government’s willingness to explore technology and expand its place in Peru. However, there were still barriers to the use of e-money. In 2012, many Peruvians still lacked access to the internet, computers, and technology needed to access e-money.

Advantages of Technology

Technology in Peru improved in 2020 when most services, including banking, went remote. The number of individuals using e-money increased by an average of 1,000 new users in specific e-money platforms a month. With new internet platform users and increased internet usage came new jobs and the potential for economic gain.

Historically, increased online usage leads to job opportunities through expanded internet and broadband access, especially in areas that lacked immediate internet access. In 2020 and 2021, there were increases in job openings and hirings in the telecommunications sector across Peru. Jobs in telecommunications filled rapidly in 2021, with the most considerable growth taking place in June 2021.

Expected Economic Growth

Telecommunications and its contributions to Peru’s economy have steadily climbed since 2014. In 2019, telecommunications generated a revenue of approximately $6.3 billion. With the expected economic growth stemming from growing telecommunications, the sector’s contributions to the GDP could be even higher by the end of the year. This could make telecommunications one of the most significant contributors to the GDP in Peru’s service sector.

With the newly opened and added jobs, the Peruvian services and telecommunications sectors have grown. This is allowing the sectors to increase their income and contributions to Peru’s economy. Thus, enabling the GDP to expand and retain economic growth as well. As the market opens and job availability grows, the Peruvian government predicts that Peru’s economic growth will grow by 13%. With Peru’s projected economic growth, there is an excellent likelihood that the poverty rate could shrink at least 1% to 2%, if not more.

Clara Mulvihill
Photo: Flickr

COVID-19 in Thailand
COVID-19 and the economic consequences of its spread have caused greater levels of poverty in Thailand since 2020. Reports determined that the COVID-19 pandemic plunged almost 800,000 people into poverty in 2020. The impact of COVID-19 on poverty in Thailand has primarily manifested as a spike in unemployment. By spring of 2021, Thailand’s job market had 710,000 fewer jobs compared to the previous year. The pandemic also adversely affected tourism flow to the nation, which accounts for about a fifth of GDP and 20% of employment. Thailand’s economy and poverty levels have not experienced such a negative impact since the Asian Financial Crisis of 1997.

Government Initiatives to Mitigate Poverty

The government’s initiative, however, in responding to this crisis has somewhat curbed the pandemic’s potential for further devastation. Authorities were quick to introduce quarantine measures that were effective in containing the virus during most of 2020. Though several waves of infections have exacerbated the impact of COVID-19 on poverty in Thailand, the policy packages were effective in creating fiscal stimulus.

The support ranged from financial assistance for debtors to health-related spending for affected households, including those outside the social security system. Simulations suggest that more than 780,000 additional people could have fallen into poverty in 2020 if the government had not bolstered social support.

Thailand’s Continued Alleviation of Poverty

Thailand’s efficient response to the pandemic is impressive, but not surprising. Since 1988, the country has reduced its poverty levels from 65.2% to 6.2% in 2019, according to the World Bank. Its most effective initiative was to scale up cash transfer programs such that it became one of the largest scale fiscal responses to COVID-19 in the world.

“The crisis in 2020 demonstrated Thailand’s ability to leverage its robust and universal digital ID, sophisticated and interoperable digital platform and a number of administrative databases to filter eligibility for new cash transfer programs,” said Francesca Lamanna, the Senior Economist at the World Bank.

The Current Status of Poverty Levels in Thailand

While the government has responded relatively well, the country continues to struggle as it enters the fourth wave of COVID-19. The official unemployment rate was 2% in the first quarter of 2021 due to COVID-19, with the loss of jobs most concentrated in the services sector. On the one hand, slow vaccination rollout and widespread doubt seem to be stalling recovery. On the other, some infected individuals living below the poverty line may go so far as to violate quarantine rules in order to continue earning much-needed income.

The impact of COVID-19 on poverty in Thailand and its economic dependence on contact-intensive sectors means the continuing waves of infection prolong unemployment, with financially vulnerable groups bearing a disproportionate burden of economic insecurity.

Volunteer Workers Spearhead Poverty Aid Missions

In response to these conditions, the number of volunteers in Thailand has also been surging. Bangkok Community Help is one such organization. It has grown to more than 400 participants since its founding early in the pandemic in 2020. Greg Lange and Friso Poldervaart are two restaurant owners that spearheaded the community initiative after neighbors approached them to inquire if they could use their empty restaurant kitchens to prepare hot meals.

While the scale has transformed considerably, Bangkok Community Help’s main objective remains to assist vulnerable sections of Bangkok through volunteer and donation initiatives. “After [last April and May], we decided to focus more on more long-term projects, like building houses for people, turning a garbage dump into a park, and teaching kids,” Lange and Poldervaart told TimeOut.

Donations vary in scale and source. Individuals may hand out meals they prepared themselves to hungry construction workers, while foreign aid initiatives fund larger-scale operations such as survival packages of preserved goods. Australian Aid paid for rice recently distributed outside of Bangkok’s main port facilities through the Australian Government Aid Program. The program provides small grants in support of local, non-governmental organizations in Thailand.

The New Zealand – Thai Chamber of Commerce, an organization dedicated to promoting commerce between Thailand and New Zealand, donated apples. These organizations have even employed volunteers to bring oxygen tanks to the homes of the infected when hospitals were overcrowded, in the hopes of keeping them alive until a hospital bed becomes available. Bangkok Community Help continues to inspire individual and government action through its aid, opening aid centers and converting unused schools and auditoriums into treatment centers.

Future Possibilities

Looking towards the future of COVID-19’s impact on poverty in Thailand, there are different projections. The devastation of the pandemic is a large-scale issue that called for radical measures, but the methods of mitigation employed may be useful in shifting political focus towards strengthening social support systems in the future. These circumstances have the potential to catalyze an economic reform in Thailand, such that its industries can become more digital.

According to the International Monetary Fund (IMF), the authorities see this as an opportunity to transform tourism from low-cost, high-density travel, to high-end, low-density travel. This would allow for other domestic industries to flourish without wreaking havoc on the country’s economy. It may also be more ecologically friendly, offering greater protection of natural resources on which the tourism industry is dependent. All of these factors have the potential to gradually reduce the number of people living below the poverty line, by strengthening Thailand’s social and fiscal fiber.

– Arahi Fletcher
Photo: Unsplash

Argentina’s Informal Peso
Argentina’s informal peso, its ”dolar blue,” weakened drastically at the end of October 2021 and hit its all-time inflation high. The country’s risk rating increased by 19 points. The economic downturn arrived weeks before Argentina’s November 2021 elections, and economic improvement is long overdue.

What is the Dolar Blue?

The “Dolar Blue” is the unofficial rate of buying or selling physical United States dollars (USD) in an unofficial financial market in exchange for Argentine pesos. The transactions occur without the assistance of a banking institution or government oversight. Many transactions for Argentina’s informal peso occur right in storefronts or in the street.

In October 2021, the exchange rate hit 195 pesos per one USD. The exchange rate is typically greatly valued because this trade rate results in more pesos to the dollars for tourists and vice versa for those looking to use pesos.

In 2019, the Argentine peso lost value during an economic crisis due to suspending debt payments while the debt continues to climb for Argentina. The government had to act quickly to stabilize the peso. Since then, the Argentine government has slowly placed restrictions on the dolar blue to prevent any weakening of the formal peso.

What is a Country’s Risk Rating?

A risk rating is the measurement of the potential for non-payments on international loans that companies made to companies within the country being rated or to the countries themselves. It is the measurement to see how close a country is to defaulting on loans. Typically, the factors that lead to an increased risk rating are out of a countries’ control. However, the risk rating is the calculated risk that international businesses would undertake when dealing with the measured country. The higher the number, the greater the chances of business deals collapsing.

As Reuters reported, the risk rating for Argentina expanded 19 points when Argentina’s informal peso reached its all-time high of 1,672. It is essentially Argentina’s credit rating, but the higher the number, the lower the chance for foreign investment opportunities. This new risk rating could lead international companies or loan businesses to avoid working in Argentina or setting up loans there.

Without additional investment, the job market could have few opportunities to develop new jobs. There is little chance that unemployment rates could decrease.

Why Did this Economic Crash Happen and What Does this Mean for Argentina?

The two main factors causing the current economic crash are the country’s upcoming elections and growing inflation. The majority of surveyed Argentineans’ stated that their largest concern was the economy. Argentina has a history of economic downturn during periods of change in political leadership and growing economic fears. Argentina’s informal peso and formal peso have fallen in the past during periods similar to what the nation is experiencing now.

The drop in Argentina’s informal peso means economic growth has stagnated once again. Financial experts predicted Argentina’s impending devaluation of its formal currency, which appears to have started with the devaluation of its informal peso. With the devalued informal peso, battling inflation rates, four out of 10 Argentines live in poverty and have few means of escape.

Argentineans in poverty are struggling with the prices of necessities and with inflation. This is impacting both formal and informal pesos and the outlook is dour, according to The New York Times. Argentina’s informal peso brought tourists and new businesses to the country to support local Argentine companies and operations. With a destabilized and devalued the informal peso, more Argentineans are at risk of losing income. The devaluation of Argentina’s informal peso and widening country risk signals a long way to go before returning to a stable economy.

Is the Outlook Truly Grim?

The outlook is not entirely dismal. As grim as things look for Argentina economically, there are ways forward with the devalued informal peso.

In September 2021, Argentina reported economic growth. The poverty rate decreased slightly, which came as a pleasant surprise to many. In the first half of 2021, the poverty rate decreased to 42% and shows signs of continuing to decrease. Many did not expect the growth, given the difficulties of the COVID-19 pandemic. However, the growth signals that there is a chance for improvement despite the downturn of the peso and the risk rating.

In the weeks following the elections, the economy is likely to stabilize again. After the 2019 election, while the pesos’ exchange rates were still higher than average, they stabilized briefly. However, the recovery was short-lived due to the COVID-19 pandemic. Since then, the economy has struggled to restabilize. In the days since the COVID-19 pandemic first impacted Argentina, the economy has been slowly stabilizing and working towards recovery.

 After the 2021 November elections, there is a good chance for economic recovery and stabilization. Argentina’s informal peso could recover and the risk rating could decrease. The economy could revitalize with new business and partnerships.

Support for Argentina

Argentina has faced economic issues for several years, but they are not alone and receive help from many organizations, including The Working World (TWW). Brendan Martin founded TWW after witnessing the result of the Argentinean economic difficulties. The efforts on the ground that individuals made to start businesses and launch democratically operated businesses boosted the economy, and TWW decided to continue supporting this trend.

TWW works by partnering with businesses interested in furthering their workers’ rights to make decision-making processes more equitable. The organization designs loan packages to give the loans to pre-set projects that are in the hands of workers and repayment requires minimal interest.

TWW is a registered nonprofit organization in both the United States and Argentina. It understands the various currencies in Argentina, the exchange rates and the impacts both have on the Argentine economy.

Around the time TWW formed in Argentina and began democratizing businesses and stabilizing the workforce, the informal and formal peso stabilized in the exchange rates. Since then, TWW has expanded operations to more countries to transplant these business models and provide job security in countries. One example is Nicaragua or areas hit that hurricanes hit in the U.S. while maintaining some operations in Argentina.

TWW’s work has been invaluable in stabilizing the economy and workforce. The economic difficulties that inflation and political instability caused are manageable, largely because of nongovernmental organizations like The Working World.

– Clara Mulvihill
Photo: Unsplash

House of Trade
House of Trade is a new platform based on an ancient method: bartering. Inspired by the sneakerhead community, the House of Trade offers a fresh take on fashion sustainability while reducing the exploitation of underpaid workforces in developing countries and providing a safe and efficient method for sneakerheads to trade their sneakers.

House of Trade: A Trading App for Sneakers

One of only five startups chosen for the 2021 Covintus National Technology Accelerator program, House of Trade is a trading app for sneakers: an app that allows sneakerheads to use their new or lightly-used sneakers as “closet currency” to trade items with other users. House of Trade facilitates each trade using a mail-in system, ensuring authenticity and trustworthy bartering commerce.

Founded in April 2020 by Chris Holloway and Keren Nimmo, the team behind the scenes at House of Trade represents diversity and supports the colorful world of sneakerhead culture on a weekly YouTube podcast called Kicks of the Trade. The trading platform does not end with sneakers — the team plans to expand the platform to include the trade of a variety of other items, from luxury handbags and watches to streetwear and sports cards.

A Trading App’s Role in Fashion Sustainability

House of Trade reduces fashion consumption by offering its users a solution: the user’s unwanted items can stand as “closet currency” for the items they do want, lessening (or even eliminating) the need to buy factory-new fashion.

The fashion industry has a significant impact on the environment. The industry produces 10% of the world’s carbon emissions, equating to more than all the emissions of “international flights and maritime shipping combined.” In addition, the fashion sector stands as “the second-largest consumer of water worldwide” in a world where 785 million people go without access to clean drinking water. On top of this, the fashion sector contributes to “20% of all industrial water pollution worldwide.”

Pollution is especially detrimental to developing countries where the U.S. fashion industry outsources 97% of manufacturing and where toxic wastewater from factories often ends up in rivers and oceans. For example, in India, a country where the sacred but polluted Ganges River supports one of the most densely populated regions in the world, 88 million people lack access to safe water. One of the contaminants that make the Ganges unsafe is chromium, a compound for dyeing fabrics and tanning leather.

How Outsourcing Fashion Manufacturing Exacerbates Poverty

The outsourcing of manufacturing exacerbates conditions of poverty in countries where exploitative working conditions go unregulated. As an example, Nike as one of the largest makers of footwear globally sold a record 25 shoes every second in 2018. In general, Nike’s sales average 780 million pairs of shoes annually. However, the manufacturing of Nike’s massive product line is outsourced to more than 41 different countries.

By outsourcing to developing countries, Nike and other major sportswear brands can maximize production at minimum costs. But, low overheads for big companies come at a high price for the people who work in the factories. According to the Clean Clothes Campaign (CCC), a worker rights coalition that comprises more than 235 organizations in more than 45 nations, the average salaries of factory workers in Indonesia, Vietnam and Cambodia (countries where Nike contracts much of its manufacturing) are 45%-65% lower than the average “living wage.” To put this into perspective, in March 2020, the Global Living Wage Coalition reported just 7,446,294 VND ($321) as the monthly living wage for a person in urban Vietnam.

House of Trade Offers a Solution to Fast Fashion

Several advocates and unions have called out leading fashion and sportswear companies for prioritizing profits over the well-being of workers, the planet and humanity at large. With these issues coming to the forefront, many consumers across the world aim to make conscientious shopping choices to alleviate these impacts.

At the forefront of fashion industry reform, the House of Trade offers an alternative to factory-new consumerism while ensuring that sneakerheads and fashion enthusiasts have access to the styles, brands and quality they desire. In a “global sneaker resale market” that projections have determined could expand from $6 billion in 2019 to $30 billion by 2030, platforms such as House of Trade are in the ideal position to maximize profits while providing a solution to alleviating the impacts of fast fashion.

– Jenny Rice
Photo: Flickr

Alternatives to Fast Fashion
The fast fashion industry creates inexpensive clothing to keep up with rapidly changing trends. Many brands in the fast fashion industry use cheap labor to produce garments, which often leads to the exploitation of workers and the environment. Fast fashion companies tend to target workers in low-income areas who have limited alternatives for employment. As a result, people in low-income areas are more likely to tolerate the poor, exploitative labor conditions that are prevalent in fast fashion. Microfibers and waste are often byproducts of fast fashion, contributing to water pollution and food chain disruptions, which disproportionately affect impoverished areas. Several alternatives to fast fashion can make consumers’ wardrobes more ethical and sustainable, reducing global poverty at the same time.

5 Alternatives to Fast Fashion

  1. Support local thrift stores. Thrift shopping is a simple and affordable alternative to fast fashion. Thrift shops offer clothes at more affordable prices than fast fashion companies without causing harm to workers or the environment. Individuals can also help second-hand stores thrive by donating clothes. Donating to thrift shops provides a wider range of options for consumers who cannot afford ethical, sustainable fashion elsewhere. Thrift shopping can be a great alternative for people who do not wish to promote poor working conditions in the fashion industry.
  2. Buy, sell and trade clothes online. Internet users can buy, sell and exchange clothes on a plethora of apps and websites. For example, Etsy offers a range of ethical, sustainable, second-hand and handmade clothing at varying prices. Individuals can also use social media platforms like Facebook Marketplace and Instagram to buy, sell and trade used clothing instead of supporting fast fashion brands that exacerbate poverty. Some apps like Depop are specifically designed for people to buy and sell second-hand clothes online, without the hassle of visiting a thrift store in person.
  3. Buy clothes from ethical and sustainable brands. Consumers can still purchase brand new clothes without supporting the fast fashion industry. Clothing companies like Patagonia, Boden and Kotn offer alternatives to fast fashion for people with flexible budgets. For example, through Fair Trade certification, Patagonia supports workers in low-income areas, ensuring that workers receive fair compensation under good working conditions. Patagonia also uses renewable energy for clothing production. Boden uses recyclable packaging, ensures ethical production and pays workers fair wages. Kotn creates clothes with organic materials and maintains fair and safe labor standards. Thousands of ethical, sustainable clothing companies are available to those who can afford them.
  4. Buy timeless, good-quality clothing. People who buy fast fashion may get stuck in a fast fashion cycle. Consumers often purchase cheap, low-quality items from fast fashion companies to keep up with ever-changing trends. As a result, consumers can contribute heavily to poverty and the exploitation of workers. However, clothes from fast fashion companies often wear out and do not remain in style. Individuals who have the financial means can buy high-quality, timeless clothing as alternatives to fast fashion items that only last until the next season.
  5. Learn how to make and repair clothes. Making and repairing clothes can be an affordable, sustainable and ethical alternative to buying from fast fashion brands that intensify global poverty. People who make clothes can select their own materials, keeping an eye out for ethical and sustainable fabric brands. Those who learn to sew can also repair their old clothes instead of buying new ones from fast fashion companies. Between sewing, crocheting and other methods of creating clothes, people can create personalized, unique clothes to wear with the potential of launching their own ethically-sourced businesses.

Reducing Poverty Through Ethical Shopping

Shopping ethically contributes to combating global poverty and environmental degradation. Many fast fashion alternatives exist to help consumers stand up against workplace exploitation in low-income areas. Over time, ethical clothing purchases can make monumental impacts on the lives of people around the world.

– Cleo Hudson
Photo: Unsplash

USAID Programs in Lebanon
USAID Lebanon celebrated World Teacher’s Day 2021 by recognizing the 35,000 Syrian and Lebanese students who received basic literacy and numeric skills through USAID’s summer catch-up program. By partnering with Lebanon’s Ministry of Education, USAID equipped 3,500 teachers with mentorship, curriculum and school supplies. This is just a glimpse of the impact of USAID programs in Lebanon.

USAID Programs in Lebanon

The United States’ relationship with Lebanon began as early as 1951. Since USAID’s commitment to assist Lebanon’s development in 2006, USAID has supported Lebanon with more than $1.3 billion worth of foreign aid. USAID’s work in Lebanon focuses on three main sectors: education, “local development and governance” and economic development. In 2021 alone, USAID contributed $41 million to fund COVID-19 relief and economic development programs in Lebanon. This funding continues to impact the lives of millions amid rising poverty levels in Lebanon.

It is important to note that Lebanon has not always needed this level of support. Once a continental trade center, Lebanon has a rich development history, complete with rising income levels and GDP growth. A 15-year civil war ending in 1990 disrupted the value of the Lebanese pound, creating a snowball effect of economic casualties. With the compounded effects of COVID-19, a global recession and a refugee crisis, 82% of the Lebanese population lives in multidimensional poverty in 2021.

Improving Education in Lebanon

USAID programs in Lebanon focus on improving education systems, acknowledging that education is a proven tool for long-term poverty reduction. The current state of the Lebanese public education system is poor. Noting the dilapidated school infrastructure in Lebanon, USAID aims to provide rehabilitation support to Lebanon by “helping to renovate nearly a third of all Lebanese public schools. “Additionally, USAID is supplying all 256 public high schools with “science lab equipment.” To improve the quality of education, USAID is “training 75 English-speaking teacher trainers from the Ministry of Education on the methodologies of teaching the subjects of English, science and math.”

The Reaching all Children with Education (RACE) program ran from 2013 to 2016. The second phase of the program will reach conclusion at the close of 2021. RACE aims to enhance “access to formal education for 460,000 Syrian refugee children and underprivileged Lebanese children in the country.” RACE’s phase 2 aims to accomplish this “by expanding equitable access to schooling, improving conditions for learning and strengthening management of the education system.”

To promote higher education as a means to decrease poverty, USAID has supplied full university scholarships “to more than 1,300 Lebanese and refugee students.” USAID also helps 12 higher education institutions in Lebanon “to better prepare their graduates” for success in the job market after their studies.

Local Development and Governance

USAID programs in Lebanon work with local governments to build better civil services, increase access to drinking water and modernize technical infrastructure. The water and sanitation program has invested $180 million since 2006 in order to rehabilitate water infrastructure. This program has increased drinking water access for 620,000 Lebanese citizens and 120,000 Syrian refugees. Since 2012, more than 1.3 million Lebanese people have experienced the positive impacts of USAID’s “almost $200 million investment to improve basic services, including renewal back-up power generation and clean water provision.”

Beyond funding, USAID also works to provide local governments with technical training and resources. Through this work, 270,000 individuals experienced increased earnings through job creation and technical development. USAID predicts that the number of beneficiaries will reach 645,000 by 2022.

Economic Growth

Finally, USAID programs in Lebanon provide funding, training and resources to improve economic development. Over the last seven years, $113 million in funding has benefitted more than 20,000 companies, startups and small businesses. Additionally, this assistance has led to the creation of thousands of new jobs and tens of millions of dollars in leveraged funding. By investing in economic development, USAID works to kickstart long-term poverty reduction.

Looking Ahead

By funding education, local governance and economic development, USAID programs in Lebanon improve the lives of millions of impoverished Lebanese people. The programs provide both short and long-term relief, bolstering Lebanon’s ability to bounce back from decades of economic disruptions.

– Aiden Marina Smith
Photo: Flickr

GoodDollar
GoodDollar is both the name of an Israeli cryptocurrency and a not-for-profit company launched in 2020. Cryptocurrency is an immaterial system of money that has secure coding. Additionally, people can exchange it virtually and governments do not control it. Yoni Assia is the mind behind the GoodDollar project and coin (G$), the virtual currency that intends to democratize the economy by working to promote universal basic income and reduce inequality. Universal basic income (UBI) is “a periodic cash allowance given to all citizens… to provide them with a standard of living above the poverty line.” Here is some information about how GoodDollar promotes universal basic income (UBI).

GoodDollar’s Mission

According to Forbes, 80% of the population owns only 6% of the world’s wealth, while the remaining 20% owns the rest. Against this unfair backdrop, GoodDollar is a potential game-changer through how it promotes universal basic income.

Yoni Assia believes that “too many underprivileged people are locked out of opportunities that could take them out of poverty, including access to capital markets and digital work opportunities. Therefore, the GoodDollar project aims to alleviate that by fostering financial inclusion and empowerment around the world.” The creator of GoodDollar is also the founder of eToro, a social trading company and platform, which is responsible for investing $1 million in the new cryptocurrency.

How GoodDollar Works

GoodDollar can benefit anyone who signs up and creates an account (a wallet). For that, people need to record a short video to ensure that they are real humans, not bots, and they can complete the entire sign-up process in less than 5 minutes. There are two groups of users, claimers and supporters. Claimers are people who benefit from free digital cash (G$) without the need to invest any amount, being allowed to claim it every day and use it to pay for goods, services and exchange it with friends. Up to now, 255,000 claimants have received G$180 million, totaling more than $20,000. Supporters are both companies or regular people that believe in the UBI cause and fund a mechanism that generates interest (the DeFi — decentralized finance, protocol).

Interest generates in a blockchain, a kind of extremely safe digital information record system, and becomes the reserve of G$ coins to that undergoes distribution among claimers and supporters. The supporters benefit not only from the interest generated by their initial staked amount, but also the interest generated on top of the previous interest rate. Currently, only small businesses accept G$ coins, and they are not very valuable. However, as more people join the GoodDollar movement, its value will rise.

Hope for GoodDollar’s Growth

“Inequality plagues the world. Let’s solve for it in our future,” is a statement on GoodDollar’s website. The company is still in its early stages, but getting ready to release version 2.0 of the GoodDollar protocol. In the first year of the second version, it plans to distribute around $47,000 worth of G$. AI Multiple’s review on GoodDollar points out that, to grow and make a real difference in its users’ lives, GoodDollar needs to have more supporters and a G$ reserve that grows “faster than the number of claimers.”

The more people use this cryptocurrency, the more valuable it will become. If “a public figure sheds a light on it via their social media platforms or accepts it as a payment method for a business product or service, that could boost its popularity.”

A Promising Future

The Forbes article discusses how basic income distribution could help to reduce the financial inequality that the pandemic exacerbated, and the GoodDollar team has been working hard to make it a reality someday. While the future of the project depends on a combination of factors, blockchain solutions like GoodDollar are undeniably promising and revolutionary economic models.

Tal Oron, GoodDollar project director, hopes that within a few years, “GoodDollar [will distribute] $2 a day per person, and, together, as a global community, without government support, raise hundreds of millions of people above the poverty line.” The way that GoodDollar promotes universal basic income will only benefit people globally.

– Iasmine Oliveira
Photo: Flickr

Economic Diversification in Saudi Arabia
Saudi Arabia’s most prominent industry is the oil and gas industry. The oil and gas industry has made Saudi Arabia extremely wealthy. However, in recent years, the government has decided to diversify the economy. The involvement of more industries in the job market could create more jobs for Saudis. Here is some information about economic diversification in Saudi Arabia.

Oil and Gas in Saudi Arabia

Saudi Arabia provides about 11% of the world’s oil. It is the second-largest oil provider after the U.S. Since 1938 when Saudi Arabia first struck oil, the gross domestic product (GDP) regarding oil and gas has seen mostly positive growth. Conversely, the oil and gas sector makes up 50% of Saudi Arabia’s GDP. The oil and gas sector also makes up 70% of all export earnings. However, some estimates go as high as 90%.

Saudi Aramco is the official oil company in Saudi Arabia. In 2020, Aramco made $229.9 billion USD in revenue and employed 66,800 people. The average salary people receive at Saudi Aramco is $129,083. Even on the lower spectrum, the salary is around $60,000. Good pay creates high competition for any other job market that tries to take off. In addition, creating more jobs that are not in the oil industry is beneficial because people of all skills and education levels can seek employment.

Saudi Arabia’s Dependence on Oil and Gas

In 2016, Saudi Arabia announced a new program called Vision 2030. One of the focuses of this program is economic diversification in Saudi Arabia. Specifically, the goal is to broaden Saudi Arabia’s exports and income possibilities from oil and gas to other necessary avenues like transportation and entertainment.

Economic diversification in Saudi Arabia has already proven to be beneficial because oil prices took a massive hit during the ongoing pandemic. China is one of Saudi Arabia’s largest oil importers. Because of the pandemic decreasing travel, Saudi Arabia’s oil exports to China have drastically decreased as well. In addition, Saudi Arabia’s oil exports to the rest of the world have declined because of the pandemic. The severe decrease in oil exports has contributed to the lowering of its GDP from 0.3% in 2019 to -6.8% in 2020. These numbers show how the reliance on gas and oil is detrimental to Saudi Arabia’s economy.

Diversifying Saudi Arabia’s Economy

The goal for the revamp of Saudi Arabia’s economy is not just about diversity but also about making knowledgeable job growth decisions that make sense for Saudis. The goal is to have an economy that relies more heavily on the private sector than the government. Getting Saudis working in the private sector and creating jobs that match people’s skills will be crucial to the success of this plan.

The government’s plans on achieving economic diversification are to increase foreign investment, increase the amount of small and medium businesses and create jobs by developing what the government is calling mega-projects. Mega-projects and the new jobs could be part of several sectors looking to expand including tourism, transportation, entertainment and others.

While the drop in oil sales has created setbacks in the economic diversification of Saudi Arabia, that has not discouraged the country. Despite COVID-19, Saudi Arabia is determined to continue the diversification process by continuing with already planned projects.

– Shelby Tomassini
Photo: Flickr

COVID-19 in New Zealand
New Zealand is a developed country in the continent of Oceania, with a population of about 5 million inhabitants. Throughout the COVID-19 pandemic, New Zealand has maintained a low number of deaths and cases. The following will present reasons for why New Zealand has had this success, along with ways in how the pandemic affected the country.

Statistics

The total toll of cases of COVID-19 in New Zealand has remained low throughout the pandemic. With a total of 4,352 overall cases and 27 deaths as of September 2021, New Zealand has a fairly low rate of cases.

Since the start of the global pandemic in 2020, New Zealand has been very cautious in taking preventative measures to avoid spreading the virus. The country banned foreigners from entering from China the day after the announcement of the virus, and imposed a 14-day quarantine period for any citizens entering the country. As the course of the pandemic progressed, New Zealand also placed a ban on several other countries where the virus was most prominent. The primary reason for New Zealand’s success in reducing cases was their quick response to preventing the virus and keeping their citizens safe.

In addition to this preventative method, New Zealand’s government has also established a concrete plan in eliminating the virus from their country. This method has once again proven effective in New Zealand due to their quick decision-making. Their elimination plan was in the works as early as July 2020. Though there is no concrete definition for a COVID-19 elimination plan, it is clear that New Zealand prioritized restricting foreigners’ entry into the country, particularly those from high-case countries. As the surveillance of New Zealand’s low COVID-19 case number continues, it is likely that the country will be among the first to re-open completely and successfully.

Economy

The most significant effect of COVID-19 in New Zealand originated in its economy. The primary effect on New Zealand’s economy occurred in its agriculture industry. Since New Zealand is a single island, it is relatively isolated from other major countries, making it reliant on its own resources during crises. However, when the pandemic began, a major problem occurred in its agricultural sector. Firstly, there was a surplus of pigs due to the closure of butcheries and other non-essential meat distributing industries. Following this, around 2.5 million bees because workers were not able to go to their location to feed them.

In addition to these examples, New Zealand’s unemployment rate also reached a maximum of 5.3% during the pandemic, which is now beginning to regulate itself. However, New Zealand’s government has claimed that its intense closure measures will benefit its economy eventually by making it one of the first countries to relieve all restrictions successfully.

In conclusion, New Zealand has successfully implemented COVID-19 restrictions at the beginning of the pandemic, thus making their plan beneficial to their population. Though COVID-19 in New Zealand had taken a toll on the population, their rapid prevention methods ensured their success. There is a significant chance that New Zealand’s economy will quickly recover from the pandemic, leaving other countries to learn from their success.

– Andra Fofuca
Photo: Unsplash

Poverty in Turkey
Conditions seemed to improve for the disadvantaged in Turkey for a decade-long period through the early 2000s. When first elected, President Recep Tayyip Erdoğan purported to lift the country out of the severe economic recession in progress at the time. Unemployment and poverty rates plummeted until 2013 when civil unrest roiled after the Turkish government’s violent response to the Gezi Park protests in Istanbul. Foreign investments in Turkish government bonds fell from 25% in May 2013 to 5% by 2020. Now, Turkey is once again experiencing a poverty crisis. Here are five facts about poverty in Turkey.

5 Facts About Poverty in Turkey

  1. Turkey has been in a financial crisis since 2018. The Turkish lira is devaluing, worth only $0.12 to the U.S. dollar and $0.10 to the euro. The rate of inflation reached 17.53% in July 2021. This means that along with many Turks losing their jobs, they must grapple with the rapidly growing costs of basic necessities. Food inflation alone has increased by 20% since 2020.
  2. COVID-19 is exacerbating poverty in Turkey. About 17 million people out of a population of 81 million lived below the poverty line in 2019. Now, the poverty rate has increased to about 12%. Many Turks are struggling to find employment and cannot pay for accommodation or electricity. These conditions have additionally prevented children from continuing education remotely.
  3. Turks are finding new ways to secure themselves in an unpredictable economic environment. Investments in cryptocurrency, stocks, gold and foreign currency are gaining traction among Turkish people. Many fear losing their savings if they do not take such actions. However, even these methods may be at risk of destabilizing as Turkey’s economic crisis progresses.
  4. It is increasingly difficult for the Turkish government to accept Syrian refugees. This is largely due to the continuing economic crisis and lessening support for Syrian immigration from citizens. The European Union assisted 1.6 million of the most vulnerable refugees through a program called Emergency Social Safety Net. Each family received monthly cash transfers of 120 Turkish lira for each family member. This has also helped the Turkish government manage struggling refugees. Poverty in Turkey is impacting the country’s ability to serve as a safe location for Syrian refugees.
  5. The World Bank is taking steps to respond to increasing poverty rates. In the fiscal year 2020, the World Bank established the Safer Schooling and Distance Education Project, providing $160 million worth of aid. Two new programs added in 2021 include the Emergency Firm Support Project, worth $300 million in aid, and Rapid Support for Micro and Small Enterprises During COVID-19, worth $500 million. The programs aim to preserve jobs for the Turkish people. So far, this fiscal year, the World Bank has given Turkey $1.5 billion in assistance. Many other World Bank projects will continue to mitigate poverty in Turkey.

Looking Ahead

The state of poverty in Turkey is in flux. The country continues to struggle with an economic and refugee crisis in the midst of a pandemic. With the support of the European Union and the World Bank, however, Turkish people in need will have the ability to combat poverty.

– Safira Schiowitz
Photo: Flickr