Information and stories about economy.

E-Commerce Markets in Africa
Africa holds less than 2 percent of the global e-commerce market, but an increase in participation could benefit the continent on a massive economic scale.

In fact, it has been shown that e-commerce allows consumers to connect to businesses as well as to other consumers in order to exchange goods via the Internet. E-commerce benefits global markets by improving efficiency in distribution channels and creating a more prominent market presence for individuals or businesses trying to sell products. For developing countries in Africa, one of the main obstacles in gaining access to e-commerce markets is limited access to banks.

Mobile Money

Globally, roughly 1.7 billion adults remain without access to a financial institution.

In order to alleviate this problem, mobile banking services focus on the high percentage of adults who have mobile phones in Africa. In South Africa, about 90 percent of the adult population owns a mobile device; whereas, Tanzania has the lowest with only about 75 percent of the adult population owning a mobile device.

The integration of mobile banking companies has increased dramatically over the past decade with 135 live mobile monetary services available in 2017. In fact, the number of subscribers in sub-Saharan Africa hit 44 percent in 2017. Mobile banking is attractive to people who do not physically have access to a bank or who do not have a permanent home address. It allows them to set up an account and protect their money electronically while giving them the freedom to interact financially on a global scale through e-commerce.

The Problem of Rural Communities

A smaller density of people lives in rural areas so there is a lower prospective income for operators who wish to set up mobile services in these regions. Roughly 20 percent of the population of sub-Saharan Africa is spread over 70 percent of the land. Consequently, operators in rural communities only secure a revenue of about one-tenth compared to those who work in urban areas.

Since many individuals rely on mobile banking to engage in the global market, reducing this barrier is essential to the continued development of e-commerce markets in Africa. As a result, in 2018, Uganda’s Communications Commission decided to pair with satellite firms Intelsat and Gilat in order to help increase access for those living in two rural communities.

The Prospective Value of E-Commerce Markets in Africa

A study by the McKinsey Global Institute estimates 3.7 trillion dollars (6 percent of GDP) could be added to the developing world’s collective GDP by 2025 due to a growing digital finance sector. It is 80 to 90 percent less expensive for financial institutions to provide mobile banking services than it is to create new physical branches. This method allows financial institutions to penetrate more of the population in developing and rural areas.

The e-commerce market has the potential to grow enormously over the next five years. Although access to financial institutions is an obstacle that many less privileged individuals face, an increase in mobile money services is helping to create parity. Financial inclusion means an upward trend in the global market participation, and through the development of internet-based trade, the global economy will experience more consumers, products and efficient distribution.

Tera Hofmann
Photo: Flickr

Pros of Immigration

While many view immigration as a cultural crisis, the pros of immigration are significant. Immigration is a point of contention as immigrants change the face of a population and bring their own culture with them. Moreover, immigrants receive criticism if they do not fully integrate, by not speaking the country’s primary language. Some people simply feel there’s no room for immigrants. They fear their jobs will be taken or undercut by the low wages some immigrants are willing to work for.

In spite of these concerns, it is undeniable that immigrants infuse much needed vitality into the economy. They build businesses, create jobs and bring new perspectives. Most importantly, welcoming immigrants supports and promotes an international standard of human rights. Everyone should be able to settle somewhere safe, healthy and stable—especially if their native country is not so.

Below is an immigration case study of sorts, demonstrating the economic benefits of immigration in Japan, the U.S., and Western Europe.

Japan

Plagued by an aging population and declining birth rates, immigration provides Japan with a new source of young workers. The Japanese Health Ministry predicts that by 2060, the country’s population will fall to 86.74 million. This is a 40 million decrease since 2010. Currently, 20 percent of Japan’s population is over 65 years old. As a result, this burdens Japan’s shrinking workforce with the funds for their pensions and healthcare. But immigration into Japan ensures the nation’s economy can maintain itself as people retire.

Japan is historically unwelcoming to immigrants, believing peace and harmony to be rooted in homogeneity. As such, the nation’s immigration policy reflects this. Japan only allows a small number of highly skilled workers into the country. This policy has been in place since 1988 to combat labor shortages. However, this is no longer enough to combat Japan’s worsening economy. In 2018, labor shortages in the nation were the highest they had been in 40 years.

However, the pros of immigration in Japan are clear. Without it, Japan faces an incredibly insecure economic future. With no sign of population growth, the nation’s perpetually shrinking workforce will become unable to support its retired citizens. However, immigrants can round out the workforce in Japan. And they can neutralize any economic woes the nation might face in the future by preventing labor shortages.

USA

The cultural and economic contributions immigrants have made to America are vast, overwhelmingly advantageous and long-lasting.

A study done by economists at Harvard, Yale and the London School of Economics found US counties that accepted more immigrants between 1860 and 1920 are doing better today as a result. These counties have significantly higher incomes, higher educational achievement, less poverty and lower unemployment because immigrants provided the low-skilled labor needed to support rapid industrialization. Undeniably, immigrants have always and still continue to increase economic growth in America.

Similarly, immigrants in the U.S. have been integral to innovation and entrepreneurship. Half of all startups in America worth over a billion dollars have been founded by immigrants. Eleven of these startups employ more than 17,000 people in the U.S. Some of these companies, such as Uber and WeWork, have significantly changed American culture. They modify the way Americans live their daily lives. Therefore, the pros of immigration in the U.S. are grounded in the diversity of thought brought by immigrants, necessary to further American innovation and economic growth.

Western Europe

Like Japan, Western Europe is battling an aging population and declining birth rates. Fertility rates are expected to hit zero in the next decade. Consequently, this region may not be able to sustain its expansive social welfare programs as its workforce shrinks and retired populations grow. In Germany, the median age is 47.1 years, the oldest in Western Europe. This is only slightly younger than Japan’s 47.3 years. Besides convincing its native populations to have more children, immigration is their only alternative.

Immigration into Western Europe is an undeniable win for both the immigrants and the host countries. Many new immigrants in Western Europe have escaped unstable regimes, religious persecution, and economic downturn in North African and Middle Eastern countries. Thus, immigrants give the region a younger workforce that is able to sustain the region’s expensive social benefits. In return, Western Europe provides immigrants with jobs, stability, and a safe place to live.

While still a very divisive topic, the pros of immigration lie in its plethora of economic benefits. It is undeniable that immigration has always been the driver of economic growth, despite all of the criticism. Immigration provides immigrants with an alternative to oppressive regimes and other instability, of course. And the pros of immigration for nations absolutely outweigh the cons.

Jillian Baxter
Photo: Pixabay

Where is Sri Lanka
Sri Lanka is a teardrop-shaped island off the southern coast of India. It is home to more than 21 million people, despite consisting of only 25,332 square miles. Its largest city, Colombo, has a millennia-long history as a prominent trading port and is currently a popular tourist destination.

The Democratic Socialist Republic of Sri Lanka was previously a British colony called Ceylon and kept that name until 1972. It is governed by an elected president and unicameral parliament with a prime minister, as well as a judicial branch. The most popular languages are Sinhala, Tamil and English with several other indigenous dialects. The country is overwhelmingly Buddhist with significant Hindu and Muslim minorities and a small number of Christians (primarily Roman Catholic). Religion plays a significant role in the lives of Sri Lankans.

Sri Lankan Civil War

Similar to British rule in Rwanda, the British colonial government favored the Tamil people, an ethnic minority concentrated in the northern and eastern regions. The British gave the Tamil people a position in the colonial government and Sinhalese land. After Sri Lanka gained independence in 1948, the government deported many Tamil people and greatly reduced its power in favor of the Sinhalese majority. Ethnic tensions rose in the following years, exacerbated by differences in religion, income and development. This tension gave birth to the Liberation Tigers of Tamil Eelam or the Tamil Tigers which advocated for an independent Tamil state. In 1983, the Tamil Tigers attacked Sri Lanka government troops, starting a 26-year civil war.

It is estimated that 100,000 people died in the conflict, with atrocities and human rights abuses committed on both sides. The Tamil Tigers are notorious for its use of child soldiers and suicide bombers, forcibly recruiting Sri Lankan civilians or using them as human shields. Accusations have pointed to the Sri Lanka government shelling their own designated safe zones, food distribution lines and hospitals. People have also accused the government of mass rape and ethnic cleansing. Attempts to bring perpetrators to justice have been slow-moving.

A New Economy

Since the end of the war in 2009, Sri Lanka’s economy has grown by 5.8 percent every year. The economy is transitioning from a rural base to an urban manufacturing base, especially in the garment industry. This increasing wealth has expanded the middle class and reduced the poverty rate from 15.3 percent in 2006 to 4.1 percent in 2016. There have also been significant improvements in public health which have paved the way to some of the highest life expectancies in Asia; 72 for men and 78 for women. In less than a decade of peace, Sri Lanka became a development success story.

Political Unrest

Despite the unprecedented economic success, Sri Lanka is not immune to political extremism and unrest. In 2018, president Maithripala Sirisensa fired the prime minister, Ranil Wickremesinghe. The country installed Mahinda Rajapaksa, a former president accused of serious human rights abuses, in his place. Wickremesinghe refused to accept his replacement, effectively giving Sri Lanka two competing prime ministers for several months before being re-appointed. With such recent political unrest in Sri Lanka, it is unlikely that it will reach nonviolent political stability in the near future.

– Jackie Mead
Photo: Flickr

Infrastructure Projects in ArmeniaArmenia is a landlocked country in the Caucuses region, bordered by Azerbaijan and Turkey. Azerbaijan and Armenia have been in a state of frozen conflict since 1994 with things heating up briefly in 2016. Turkey and Armenia have been at odds for around 100 years over the Ottoman Turks treatment of ethnic Armenians throughout the history of the Empire, especially during the First World War. Due to these sour relations, the borders are closed. Armenia is forced to trade through the two other nations that it borders, Georgia and Iran. Many infrastructure projects in Armenia are focused on increasing the ease of the flow of goods between Armenia and Georgian Ports.

Armenia’s most important railroads used to be owned by a Russian company. Now they are in a state of disrepair. These three railroads run to Georgian ports where Armenian trade goods are then shipped to globally. However, further improvements to rail transport have been halted due to expenses. This has been attributed to lower than expected Russian investment in Armenia.

The World Bank

The World Bank has been working with both the government and private sector on infrastructure projects in Armenia. Due to a stagnant economy, much of this is not only aimed at improving the basic living conditions for Armenians but also at increasing job creation. By building and improving infrastructure, the government and the World Banks hopes to create jobs in the construction sector through government and private programs.

For example, in December 2015, the World Bank approved a $55 million local economy and infrastructure project. The project was aimed at both improving municipal infrastructure to increase the standard of living as well as to protect and sustain cultural heritage sites in order to boost tourism. The project end date is in 2021.

The European Bank

Infrastructure projects in Armenia are also funded by The European Bank for Reconstruction and Development. The EBRD has funded 171  projects in Armenia to the tune of 1.24 billion Euros since Armenia joined in 1992. Of the current 309 million Euros the EBRD is funding for projects in Armenia, 21 percent is going towards infrastructure projects. This includes improving municipal and urban transportation infrastructure.

This money is not only going to roads, rails and vehicles but it is also being invested in improving how commuters pay for transportation. This includes modernizing the ticket system. By making it easier and cheaper for people to purchase tickets for buses and trains, more tickets will be bought and fewer people will hop on for a free ride. The EBRD is also financing greener infrastructure projects in Armenia. At least 23 percent of the funding is going towards the energy market.

Paying It Forward

Despite the help with infrastructure projects in Armenia that the country is receiving to boost its economy and infrastructure, the nation is also giving. In 2015, the Armenian government donated 1 million Euros to the Eastern European Energy Efficiency and Environmental Partnership. Although Armenia also receives funding and expertise from this organization, so do many of its lost family of ex-soviet states. Armenia’s 2015 donation possibly went on to light homes in another country facing a similar situation.

Nick DeMarco

Photo: Flickr

Role of STEM in Developing CountriesScience, Technology, Engineering and Mathematics are important for building and maintaining the development of any successful country. From the medical scientists, who develop treatments for diseases, to the civil engineers, who design and build a nation’s infrastructure, every aspect of human life is based on the discoveries and developments of scientists and engineers. The importance of STEM today should not be underestimated as its role is becoming increasingly significant in the future. The technology produced today is altering people’s lives at a rate faster than ever before. Consequently, it is vital for countries seeking to reduce their poverty levels to adopt new scientific research and technology. In doing so, these countries can improve their economy, health care system and infrastructure. As this impacts all aspects of society, the role of STEM in developing countries is of significant importance.

STEM and Economic Progress

STEM education fosters a skill set that stresses critical thinking and problem-solving abilities. This type of skill set encourages innovation among those who possess it. Similarly, a country’s economic development and stability are dependent on its ability to invent and develop new products. Technological innovation in the modern age is only obtainable through the expertise of specialists with knowledge of recent STEM research. Therefore, the role of STEM in developing countries is important because a country’s economy is completely dependent on new developments from technology and science.

Overall, the economic performance of metropolises with higher STEM-oriented economies is superior to those with lower STEM-oriented economies. Within these metropolises, there is lower unemployment, higher incomes, higher patents per worker (a sign of innovation), and higher imports and exports of gross domestic products. According to many experts, this holds true at a national level as well. The world’s most successful countries tend to efficiently utilize the most recent scientific developments and technologies.

In recent years, there is a major increase in the number of science and engineering degrees earned in India. India now has the largest number of STEM graduates in the world, putting the country on the right track for economic development. This has led to widespread innovation in India and a consistent increase in its gross domestic product. The role of STEM in developing countries can thus improve its economy. As of early 2019, India has seen an increase of 7.7 percent in its total GDP.

STEM and Health Care

Over the past 50 years, the Western world has made remarkable progress in medical science. With new breakthroughs developed through vaccinations and treatment, many serious diseases in developing countries are now curable. Common causes of death for children in developing countries are diseases such as malaria, measles, diarrhea and pneumonia. These diseases cause a large death toll in developing countries, but they have been largely eradicated from developed countries through proper vaccinations. As a result, these diseases take a large toll on the children of developing countries. In developing countries, a high percentage of the population is under 15 years of age. As such, it is important to prevent diseases that affect children under 15.

Lately, Brazil has seen an epidemic level of yellow fever which has resulted in numerous deaths. Brazil has addressed this by implementing a mass immunization campaign. In particular, this program will deliver vaccines to around 23.8 million Brazilian citizens in 69 different municipalities. The role of STEM in developing countries with preventable diseases will be vital to improving health and life expectancy rates.

Engineering and Infrastructure

Engineers build, create and design machines and public works to address needs and improve quality of life. Engineers construct and maintain a nation’s infrastructure, such as its fundamental facilities and systems. This includes roads, waterways, electrical grids, bridges, tunnels and sewers. Infrastructure is vital to a country, as it enables, maintains and enhances societal living conditions.

Subsequently, poor infrastructure can seriously hinder a nation’s economic development. This is the case in many African countries. Africa controls only 1 percent of the global manufacturing market despite accounting for 15 percent of the world’s total population. Ultimately, poor infrastructure, such as transportation, communications and energy, stunts a country’s ability to control a larger share of the national market.

Afghanistan has improved its energy infrastructure, using a large portion of the assistance received from the U.S. Through this effort, they have been able to reduce electricity loss from 60 percent to 35 percent. Consequently, they have improved long term sustainability and created a reliable energy system for their citizens. The role of STEM in developing countries is important on a large scale, improving infrastructure to impact their citizens’ daily lives.

STEM and the Future of the World

Societies seeking new scientific knowledge and encouraging creative and technological innovations will be able to properly utilize new technologies, increase productivity, and experience long term sustained economic growth. The developing societies that succeed will be able to improve the living standards of its population. As our world becomes more interconnected, countries prioritizing STEM education and research will make significant advances in alleviating poverty and sustaining economic, cultural and societal growth. Undoubtedly, the role of STEM in developing countries is of significant importance, just as it is in our modern world.

Randall Costa
Photo: Flickr

Fastest Growing EconomiesIt is no secret that developed countries experience a markedly lower incidence of poverty than their developing counterparts. Furthermore, the poverty that these developed countries experience is often not the extreme variety that is endemic to developing regions of the world.

If a country’s level of development can serve as a rough gauge of the magnitude of poverty experienced in the country, then it is worth exploring which economies are growing the fastest and developing at the most rapid pace. Below is the list of the five fastest-growing economies right now using the most recent data with the annual GDP growth rates from The World Bank.

Libya

Annual GDP growth rate of 26.7 percent (2017)

Situated on the Mediterranean Coast of Africa, the large country of Libya recorded a monumental economic GDP growth rate in 2017. The country’s economy is almost entirely driven by oil and natural gas exports, which have pushed the Libyan growth rate to this level. In 2017, oil production reached its peak for the last five years and, in combination with the rise in oil prices, spurred growth.

Since ousting of dictator Muammar Gaddafi in 2011, the country has seen severe political instability with different military groups claiming different regions of the country. However, in the summer of 2018, at meetings led by French President Emmanuel Macron, the main two opposing factions in Libya agreed to hold elections in December. If successful, the elections could lead to stability in this volatile region and give the Libyan more financial and political security.

Guinea

Annual GDP growth rate of 5.8 percent (2017)

Located on Western Africa coast, Guinea’s economy is driven largely by exports of bauxite, high-grade iron ore, gold and diamonds. Furthermore, The CIA World Factbook states that Guinea has the potential to be a major exporter of hydroelectric power due to its river potential. Additionally, the untapped mineral deposits of the country are poised to attract international investment. Guinea has seen a recovery from the severe Ebola crisis, but it is still under the threat of political instability. However, the pieces for a more prosperous Guinea are beginning to fall into place.

Ethiopia

Annual GDP growth rate: 10.2 percent (2017)

Ethiopia, Africa’s 10th largest country, lies on the eastern side of the continent within the horn of Africa. Ethiopia also holds Africa’s second largest population and one of the most dynamic economies in the region. Ethiopia’s GDP consists mostly of the service sector, agriculture and industry, respectively. According to recent estimates, Ethiopia is poised to be the fastest growing economy in sub-Saharan Africa by the end of 2018.

Furthermore, the sustained decade-long growth that country has experienced contributed to a reduction of poverty in the country, with the extreme poverty rate declining from 55.5 percent in 2000 to 33.5 percent in 2011. The government of Ethiopia has recently implemented the 2nd phase of its growth and transformation plan that aims to increase GDP growth and create jobs by a 20 percent expansion of the industrial sector of the economy.

Macau SAR, China

Annual GDP growth rate of 9.1 percent (2017)

Macau, a Special Administrative Region of China, is located off the southern coast of the Chinese mainland.  Macau’s economy is dominated by the services sector and there are little natural resources on the island. The economy of the region is driven primarily by gambling and tourism, and the area mainly serves as a playground to people from the Chinese mainland and to those from Hong Kong.

The economy of Macau is the third richest in the world in terms of GDP per person; however, this wealth does not translate to everyone in the country equally. Officially, the poverty rate is claimed at 2.3 percent, but the charitable organization, Caritas, estimates this percentage to be closer to 10 percent. Macau’s political system is also rampant with corruption, which unfortunately hampers the reduction of poverty.

Maldives

Annual GDP growth rate of 8.8 percent (2017)

The Maldives consists of over 1,190 bordering along the Indian Ocean. Only 188 of the islands are inhabited since the population is concentrated on the larger islands, including the 39 percent of the population living in the capital Malé. The economy of the Maldives is largely driven by tourism, shipping, and fishing. The most recent data on poverty was published in 2009 and it shows the poverty rate to be 15.7 percent improved from 23 percent in 2002.

These emerging economies represent some of the most promising regions on Earth because of their improvement on quality of life. Strong economies are the backbone of both political and social stability and ultimately greater well-being of people. These five countries look poised to fulfill these goals.

– William Menchaca
Photo: Pixabay

10 Contributors to Turkey’s Rising EconomyTurkey has one of the fastest growing economies in the world today. The country’s improvements came after the economic and banking crisis that occurred in 2001. Turkey’s economy is on the rise and will continue to improve over the next several years. Following are 10 aspects that have contributed to the Turkish economy’s growth:

  1. Trade With Africa
    Over the past 15 years, Turkish and African trading has increased over 600 percent to over $17 billion USD. Trading with Africa has brought a substantial amount of money into Turkey and has created countless jobs for the country’s rising economy.
  1. Turkish Airlines and Boeing Deal
    Turkish Airlines has made a deal with Boeing to purchase 25 Boeing 787-9 Dreamliner aircraft, which will help Turkey meet demand in their country. M. İlker Aycı, Turkish Airlines’ Chairman of the Board and the Executive Committee, said, “We are pleased to finalize a landmark agreement that will bring significant benefit to Turkish Airlines and Turkey’s aviation industry.”
  1. Middle Class Growth
    In the past several years, the size of Turkey’s middle class has doubled; it increased from 18 percent to just over 40 percent. This is one of the biggest contributors to Turkey’s rising economy. The growth of the middle class has helped Turkey strive toward becoming an upper-middle income economy.
  1. Growing Tourism
    In the past decade, travel to Turkey has increased tremendously. In 2017 Turkey was ranked the sixth most-visited country and was ranked ninth in income from tourism. Turkey is most visited by Europeans, and tourists frequently visit Antalya, Istanbul and Mugla. These areas make up 70 percent of the places visited in Turkey.
  1. Privatization
    The government of Turkey has been attempting to privatize many sectors in the country. They aim to limit the role of the government to health, education, social security, national defense, and infrastructure. Increasing the size of the private sector has created a highly competitive market that has improved Turkey’s economy. From 1986 to 2003, the revenue for privatization reached only $8 billion; by contrast, revenue from 2004 to 2015 reached approximately $58 billion. In addition to creating a competitive market, privatization has created many jobs throughout the country.
  1. Employment Increase
    1.5 million more people became employed from November 2016 to November 2017 in Turkey, and the labor participation rate of women increased to 33.8 percent. The unemployment rate for the youth in Turkey also decreased by 3.3 percent. This job growth has stimulated the economy and contributed to its growth.
  1. The Turkey Sustainable Cities Program
    The Sustainable Cities program consists of two parts. The first part was approved in 2016, and the second was approved in April of 2018. These programs provide investment financing and technical assistance. The investment financing is used for public projects such as municipalities for water, wastewater, solid waste, energy efficiency and street lighting. The goal of this program is to improve the economic, financial, environmental, and sustainability aspects of cities in Turkey. This will improve Turkish cities while also providing jobs for many people in Turkey.
  1. Increasing Foreign Trade
    Turkey’s exports have continued to increase over the past few years, and the increase is estimated to continue. In 2016, Turkey’s exports totaled $143 billion, and exports are estimated to reach $193 billion by the year 2019.
  1. Contracting Abroad
    The construction sector in Turkey is one of the biggest in the world, just after China. The first foreign project took place in the 1970s, but such projects have increased greatly since then. From 2008 to 2017, Turkey engaged in more than 4,000 construction jobs abroad, equal to approximately $220 billion. This nine-year period accounts for 64 percent of all foreign contracting jobs taken by Turkey in 45 years. The cost of these projects has also increased. In 2008, the average project cost $37 million, but by 2017 this average had risen to roughly $79 million. Contracting abroad has greatly increased jobs and contributed to the rising economy in Turkey.
  1. Rapid Growth
    In 2017, the Turkish economy grew by 7.4 percent, meaning it expanded faster than both India and China. Turkey’s economy was ranked as the fastest-growing economy in the group of G-20 nations.

There are still many improvements to be made throughout the country. However, the country’s growing economy shows the country has made great strides toward becoming an upper-middle income country. The people of Turkey have successfully reduced poverty, decreased unemployment and increased the overall living conditions in their country.

– Ronni Winter
Photo: Flickr

U.S. Benefits from Foreign Aid to Guinea
Guinea is one of the world’s most impoverished countries. More than half of its population lives below the poverty line and 17.5 percent struggle for food security. In 2010, Guinea established its first elected, civilian government. The U.S. benefits from foreign aid to Guinea and its strong economic potential. Assistance with Guinea’s health, stability and effective governance is not only deeply needed by Guinea, but also something from which the U.S. ultimately gains.

Strong Economic Potential

Guinea has rich mineral resources, possessing over half of the world’s bauxite (aluminum ore) reserves. The country is also abundant in high-grade iron ore, diamonds, gold and uranium. The mining sector in Guinea is thus a major part of its economy: about 80 percent of Guinea’s foreign exchanges consist of joint-venture bauxite mining and alumina operations. Compagnie des Bauxites de Guinee (CBG), one of the major two routes for exporting Guinea’s bauxite, is a venture jointly owned by the Government of Guinea, a U.S. company called Alcoa, and an Anglo-Australian company Rio Tinto Group. The other major export force is Chinese conglomerates as well as small and midsize business.

Guinea is also blessed with reliable rainfall, abundant sunshine and natural geography that are favorable for renewable energy. The 240MW Kaleta Dam project, constructed and financed by China, began operating in 2015 and has since more than doubled Guinea’s electricity supply. The country’s climate means that it has great potential for commercial agriculture as well.

Investment Friendly

Pressed to improve development, Guinea has been increasingly open to foreign investment. The country’s government has been depleted of financial resources to improve the economy, especially since the Ebola outbreak in 2014-2015. Meanwhile, enterprises in Guinea are in need of more credit than is available.

In 2016, the government launched a new website via the Investment Promotion Agency of Guinea (APIP). The website is meant to promote transparency and help make investments more smooth. The APIP also offers services to foreign investors, including creating and registering businesses, helping with access to benefits of the new investment code, providing information and research studies to interested investors, etc.

The Guinea government does not allow any foreign investor to own media in the country, but besides that, there are no restrictions discriminating against foreign investors. The U.S. also helped a group of foreign investors in Guinea and the government of Guinea form a liaison in 2015.

Barriers to Overcome

While Guinea has extremely investment-friendly laws, the enforcement of those laws needs a stable political environment and a reliable legal system. It is worth noting the country had its first democratically-elected government in 2010 after the country’s independence in 1958, but state institutions are still recovering from two years of rule by the military junta. It’s also faced a number of security and socio-economic vulnerabilities.

Guinea has a disproportionately large military with serious, deep corruption and human rights abuses. It is also feared by law enforcement because of the potential for military revolt. Even though a panel was formed in 2010 to investigate the violent crushing of tens of thousands of peaceful democracy protesters in 2009, two military commanders that the U.N. revealed to be guilty were able to keep their government positions.

Aid for Stability and Development

U.S. foreign aid would directly address barriers to private sector growth as well as improvement of economic life in Guinea in general. For one thing, the U.S. supported the 2010 election process significantly, which has greatly improved the country’s development prospects.

U.S. foreign aid was restricted in 2008 and 2009 due to the rise of the military coup at the time, but restrictions were lifted after the country’s political transformation. Aid from the U.S. helps improve democratic practices, governance, security sector reform, regional peace and stability, etc. These aspects of society are essential for the alleviation of poverty and the establishment of a solid economic infrastructure. A peaceful Guinea is also viewed as significant for restraining conflict in a region already plagued by political tension and armed struggles.

The Consortium for Elections and Political Process Strengthening, supervised by the USAID, supported the 2015 presidential election and 2018 communal elections. It strengthened Guinea’s Independent National Electoral Commission as well as civil society organizations in monitoring the domestic election.

Ultimately, U.S. foreign aid will assist with areas of life in Guinea that in turn presents a great economic potential for the U.S. In other words, the U.S. benefits from foreign aid to Guinea.

– Feng Ye
Photo: Google

Tanzania's Improving EconomyThe African country of Tanzania has a population of 53 million people, and it is estimated that around 70 percent of its people live in poverty. Although this constitutes a large amount of their population, the economy is improving and poverty is slowly decreasing. In fact, the economy in Tanzania has vastly improved over the last decade, averaging more than 6 percent growth a year. These improvements have come from many changes within the country.

Improvement in Corruption

There was a new government elected in 2015 that promised they would fight corruption within the government. In 2015, around 72 percent of Tanzanians said that corruption has been declining when compared with the previous year. In addition, 71 percent of citizens believe the government is doing a better job fighting corruption overall.

Improvements in Agriculture

Advancements in agriculture over the past few years has also helped Tanzania’s improving economy. Agriculture is one of Tanzania’s leading largest contributors to the GDP, at 30 percent, and it makes up 67 percent of the workforce. USAID has been working in Tanzania to help improve their agricultural sector. They have expanded irrigation and provide better access to the market through the reduction of transport costs for equipment and other important agricultural products. Tanzania has now become more competitive in domestic and regional markets.

Increasing Tourism

Tourism is the number one earner of foreign currency in Tanzania. In 2017, the tourism industry in Tanzania was ranked one of the fastest growing sectors in East Africa. From 2015 to 2016, there was a 15 percent increase in the number of tourists that visited Tanzania. This has helped with Tanzania’s improving economy by providing jobs and bringing in revenue to the country. In 2015, $2.9 billion had been earned from tourism, which was greatly increased by 30.4 percent in 2016 to 3.8 billion.

Growing Urban Middle Class

Around 10 percent of Tanzania’s population is a part of a small urban middle class. Although it is a small percentage of the population, it is growing at a steady rate as a direct result of Tanzania’s improving economy. Over the past few years, this group has gained political influence, purchasing power, and started to demand cheaper electricity, imported goods and improved urban social services and infrastructure. This growing middle class has motivated the government to work harder for their demands as well as for improved conditions throughout the country.

Reforms in Education

Over the past several years there have been many changes and improvements in education in Tanzania. This includes greater access to secondary education for both male and female students. This has had a large impact on Tanzania’s improving economy. Tanzania is one of the only low-income countries that has almost achieved universal access to primary education; however, there are still many obstacles keeping children from getting a good education.

Global Giving is attempting to change the lives of many children in Tanzania by placing technology in their schools to help them master their curriculum. Tanzania’s schools lack all resources, including teachers, which makes it very hard for students to learn, finish school and enter the workforce. Global Giving donates raspberry pi computers that already contain important math and science curriculum, along with tablets, laptops and phones for that can also be used to access the curriculum. Global Giving has improved the quality of education for many students in rural areas in Tanzania, which will improve their quality of life and prepare them to enter into a skilled workforce in their country.

Although there is a lot of work left to be done in reducing poverty and growing the economy of Tanzania, these are some of the important ways that the country has been improving over the past decade. A new government, advancements in agriculture, increasing tourism, a growing middle urban class and reforms in education have all had a positive effect on the economy in Tanzania.

– Ronni Winter
Photo: Flickr

The Economic Benefits of EducationThe notion that education and economic growth hold a relationship with each other is not a new idea. However, what is the extent of this relationship? What role does education play in development? And finally, what are the exact economic benefits of education both in the U.S. and abroad?

The Economic Effects of Education

According to the World Bank, one of the pivotal benefits of education is labor market earnings. Workers with more education earn higher wages than employees with no post-secondary education. Those with only a high school degree are twice as susceptible to unemployment than workers with a bachelor’s degree. Median college-educated workers earn 84 percent more than those with only a high school education. Additionally, workers with some college education but no completed degree earn 16 percent more than only high school trained employees.

Education’s value in the economy is also evident in the notorious fall of manufacturing jobs. The loss of 9.3 million manufacturing jobs among non-college educated workers has been strenuous. However, workers with some college education have gained 2.5 million manufacturing jobs.

There is significant data reflecting the education of the majority of technologically-oriented job holders. In fact, 92 percent of patent inventors have a bachelor’s degree and 92 percent of high-tech companies behind the growth of GDP are college educated as well.

The economic benefits of education are undeniably important to the U.S. In the country alone, GDP has potential to increase by $32 trillion, or 14.6 percent if all students are brought up to basic mastery by the National Assessment of Educational Progress standards. Intensive efforts at test score maximization for students in a handful of states with highest economic performance in the U.S. can increase GDP by $76 trillion over approaching decades. Furthermore, improvements in education according to spending on K-12 schooling is said to reap more improvements from investment than the burden of the cost.

The Return on Investment (ROI) of Education

Above the economic benefits of education is an ROI that investors cannot overlook. The global rate of ROI in schooling is approximately 10 percent for primary education, five percent for secondary education and 16 percent for university education. Social ROI of education for the world is 18.9 percent for primary education, 13.1 percent for secondary education and 10.8 for higher education. Finally, private ROI of education for the world is 26.6 percent for primary education, 17 percent for secondary education and 19.0 for higher education.

It is worth noting that girls have higher ROI for secondary education at 18 percent while boys have 14 percent. However, boys have higher ROI for primary education than girls, 20 percent versus 13 percent. Latin America, the Caribbean and Sub-Saharan Africa have the highest ROI on both social and private education. Overall, another year of education raises earnings by 10 percent a year. The 10 percent ROI for education investments is higher than alternatives: 1.4 percent for treasury bills, 5.3 percent for treasury bonds, 4.7 percent for savings accounts, 3.8 percent for housing and 7.4 percent for physical assets.

Next Steps Forward

The economic benefits of education are clear for the entire globe. Nevertheless, there are further steps to maximizing productivity and reaping even more economic benefits of education.

  1. Increase investment in the quality of primary schooling, given that primary education has expanded exponentially already
  2. Promote educational efficiency in policy through policymakers and government
  3. Reform school management systems and implement more effective performance metrics
  4. Implement more effective and fair approaches to school funding
  5. Report more data on school performance

Education has the power to uplift a country and establish a healthy, efficient economy. It has also played a pivotal role in the increase of productivity and wages amongst workers and proved to be a successful endeavor for investors. Fortunately, there is much more potential within education to help the world to flourish.

– Roberto Carlos Ventura
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