Archive for category: Economy

Information and stories about economy.

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Strengthening Education in Brazil

Strengthening the Education System in BrazilBrazil, South America’s largest country with a population of 216.4 million, shows mixed results in education. Student performance declined in the latest Programme for International Student Assessment (PISA), conducted by the Organization for Economic Cooperation and Development (OECD). Despite this, illiteracy rates dropped from 6.1% in 2019 to 5.6% in 2022, indicating some improvement in basic education. The country is experiencing increased outbound student mobility, driven by rising tertiary enrollments. Projections suggest Brazil will rank among the top five nations globally for total tertiary enrollments by 2035 despite an aging population. To address these ongoing challenges, the OECD and other organizations are collaborating to enhance Brazil’s education system.

Brazil’s Education System and Socioeconomic Progress

Education in Brazil is a guaranteed social right under the Federal Constitution, providing free public access at all levels. The education system is divided into basic and higher education. Basic education encompasses early childhood, primary and lower secondary and upper secondary education. Compulsory education begins at age 4 with pre-school and continues for 14 years through the end of upper secondary education. Historically, Brazil’s economic growth has benefited from favorable demographics and robust commodity prices. This growth, coupled with specific policies, has significantly improved living standards. Between 2003 and 2014, these efforts lifted more than 29 million people out of poverty, reduced child mortality by 73% from 1990 to 2011 and broadened access to basic education.

OECD’s 5 Steps to Strengthen Brazil’s Education System

  1. Impact of COVID-19 on Brazil’s Educational Funding. COVID-19 significantly affected Brazil’s economy, resulting in reduced education spending. The OECD criticizes the rigidity of this funding, which merely satisfies spending requirements without addressing effectiveness. The organization recommends a more flexible, outcome-focused approach to funding. According to the OECD, increased investment in education would substantially improve the quality of education that students receive.
  2. Enhancing the Teaching Profession in Brazil. To enhance Brazil’s education system, the OECD recommends upgrading the teaching profession. This upgrade should include better salaries, career progression and working conditions for teachers. The organization also suggests that new teachers pass a licensing test and receive induction support during their early years to ensure they have adequate training.
  3. Improving Teacher Effectiveness and Student Outcomes. Boosting student outcomes involves enhancing teachers’ effectiveness in the classroom. This could include proper teacher training and skill improvements in areas such as classroom management. Providing incentives, such as promotions and performance-based payments, can also motivate teachers.
  4. Creating a Positive School Environment. There is a need for improvement in handling bullying and harassment on school grounds, with appropriate punishments for offenders. Schools should strive to create a positive environment for both students and teachers to improve well-being and learning outcomes, reducing the risk of dropouts.
  5. Supporting Disadvantaged Students and Preventing Dropouts. Disadvantaged students should receive continuous support from early childhood education until they complete their education. To address dropouts, teachers should focus on supporting the weakest and least motivated students, possibly through individual teaching and tutoring. Students at risk should also receive additional funding and support to remain in education.

Looking Ahead

Brazil’s commitment to advancing its education system reflects the country’s efforts to prepare for future socioeconomic challenges. Prioritizing innovation, equity and effective resource allocation can potentially address long-standing disparities in education. By fostering collaborative partnerships and emphasizing strategic improvements in education, Brazil aims to create opportunities for all students, supporting both national development and individual growth.

– Indira Smith

Indira is based in Manchester and focuses on Global Health for The Borgen Project.

Photo: Flickr

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Poverty Reduction in Vietnam: Economic Growth and Challenges

Poverty Reduction in VietnamOver the last three decades, poverty reduction in Vietnam has experienced unprecedented success. The Doi Moi Reforms in 1986 have been a success story in what was once one of the poorest nations. This progress continues today. With the average distance of the poverty line shrinking, upward mobility is widespread and welfare programs and public investment continue to improve lives. Despite these successes, there are remaining challenges. There are still many people living in transient poverty, and some areas of multi-dimensional poverty require solutions. For instance, gender equality, ethnic, minorities and rural communities bear the brunt of Vietnam’s current challenges.

Economic Growth

Poverty reduction in Vietnam is largely attributed to the reforms of the 1980s. Key Changes were incentives to diversify agrarian production, opening trade to the global market and domestic investment which contributed to exports and job creation in urban areas, according to the UNDP report. The income these policies generated drove the improvement of domestic services and improved quality of living.

The 2022 World Bank report found that the Low and Middle low-income country poverty rate dropped from 16.8% to 5% in 2010-2020. In the same decade, the size of the middle class has tripled from 7.3 million people in 2010 to 22.6 million people in 2020. Health outcomes have also improved. Vietnam’s universal health index is higher than global averages at 73, and infant mortality rates fell from 32.6 per 100 births in 1993 to 16 in 2022.

In 2015, the government implemented a National Target Program to reduce deprivation in some remote rural areas and regions where incomes have not risen as fast as in other areas. They are continuing to develop them into 2025, according to the UNDP report. These programs include the New Rural Development program, which aims to improve critical services for rural communities, such as education, health, transport, water supply, security, communication and more.

The impact of Foreign direct investment (FDI) should not be ignored either. After joining the World Trade Organization in 2007, formal jobs with foreign-owned enterprises opened up in the manufacturing sector. There were 2 million more manufacturing jobs in 2020 than in 2018, and 1.9 million had formal work contracts. Showing a link between FDI and an increasing number of jobs with higher wages, according to the World Bank report.

Addressing Inequality and Ethnic Minorities

These are encouraging trends and the economic achievements are monumental. However, poverty is dynamic, and despite these successes, most households are still vulnerable to transient poverty. For the majority, their households can be driven below the poverty line by a sudden change in their conditions. Sixty percent of households are vulnerable to income poverty, especially in rural regions. For instance, during the COVID-19 Pandemic, 73.3% of Vietnamese lost income, UNDP reports.

Children without access to technology suffered the most significant learning losses during lockdowns. The poorest regions of Vietnam, which are usually remote and mountainous, are disproportionately home to ethnic minorities. While ethnic minorities represented 6%-13% of Vietnam’s population in 2020, they accounted for 21%-42% of the nation’s poor, according to the World Bank report. These disparities indicate that ethnic minorities benefit the least from Vietnam’s poverty reduction efforts and are most vulnerable to conditions of poverty.

The government has focused on tailored plans to support ethnic minorities with central funding through National Targeted Programs (NTPs) to test innovation on a local level. The 4M initiative, (meet-match-mentor-move) aims to enable ethnic minority women to break their isolation by introducing them to non-agricultural markets like e-commerce, social media and multi-stakeholder networks, UNDP reports. Knowing production and business methods, these women have expanded their markets and enterprises, benefiting around 13,000 women.

NTPs can support interaction among government bodies and communication between government agencies and local authorities to test new solutions to poverty reduction in remote areas. For instance, incorporating digital technologies at a grassroots level, as they did with the 4M initiative and digitizing poverty reduction services targeting remote communities to reduce administrative costs and service time.

Steps Going Forward

According to a survey of the NTP-National Rural Development, much of NTP spending was on socio-economic infrastructure, but targeted household programs may lift the remaining poor above the poverty line. The concentration of poverty among ethnic minorities in rural areas also calls for NTPs which target these communities directly, ensuring access to resources, investment and digitization.

While challenges remain, particularly for ethnic minorities and vulnerable communities facing climate risks, Vietnam’s commitment to poverty reduction offers hope for continued progress. Poverty reduction in Vietnam is one of the three NTPs in 2021-2025. By adjusting the multidimensional poverty line, 10 million more people are eligible for government social assistance. Aim for a 1.5% annual reduction in MDP International cooperation and an adaptive approach to policy will be essential to ensure that Vietnam can continue its journey toward a more equitable and sustainable future.

– Jonathan King

Jonathan is based in London, UK and focuses on Global Health and Politics for The Borgen Project.

Photo: Pexels

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Green Jobs and Economic Growth in Low-Income Countries

Economic Growth in Low-Income CountriesA green economy could be defined by three characteristics: low-carbon, socially inclusive and resource-efficient. Focusing on renewable energy, sustainable agricultural practices and opening new horizons for eco-friendly industries, the green economy holds the potential to serve as a powerful tool for boosting economic growth in low-income countries. Using investments as a focal point, green economies target renewable energy such as solar power, wind power and hydrogen to grow employment and income as well as prevent loss of biodiversity. By integrating environmentally sustainable practices into these key sectors, nations that adopt a green economy could create jobs and mitigate long-term poverty.

Green Jobs as a Catalyst for Economic Opportunity

In many low-income countries, poverty as a result of unemployment is a widespread issue, particularly in rural areas. In this case, the green economy presents itself as an occasion to diversify job markets and offer employment opportunities in areas that have not yet been brought to mainstream industries. By expanding into sectors such as renewable energy, sustainable agriculture and waste management, green jobs create a stronger bond with the social sphere of communities instead of just an environment-based one.

The renewable energy sector alone could offer significant job creation potential as the installation, operation and maintenance of solar power systems, wind turbines and hydroelectric systems require skilled workers in both urban and rural communities. These jobs could provide stable income and improve the lives of many by reducing dependency on costly alternatives such as imported fossil fuel-based energy and thus, increasing energy affordability on a larger scale. In the past decade, employment in renewable energy has nearly doubled, reaching a whopping 13.7 million in 2022, an increase from a total of 7.3 million in 2012.

Sustainable Agriculture

For many low-income economies, agriculture is the backbone of society. Smallholder farmers produce at least one-third of the world’s food, yet many of them continue to face poverty due to escalating issues such as outdated farming practices, environmental degradation and poor yields. In Rwanda, projects such as Land Husbandry, Water Harvesting and Hillside Irrigation (LWH) have positively contributed to a wider socioeconomic understanding of the need for agroforestry projects. The LWH has improved crop yields and land degradation, leading to an increase in incomes for smallholder farmers. This has also significantly alleviated poverty concerns as well as strengthened food security in local areas.

Thus, for the agriculture sector, green jobs can provide solutions to these issues by creating and encouraging sustainable farming methods that raise productivity and prevent environmental degradation. Investing time and effort into methods such as organic farming, agroforestry and soil conservation as well as into training smallholder farmers the value of these practices is a step towards improving long-term land fertility and crop yields.

Boosting Local Economies

Increasing interest in eco-friendly industries offers another opportunity to reduce poverty in low-income countries as these industries focus on sustainable manufacturing and construction. Activities such as these are labor-intensive and difficult to outsource, meaning they create local job opportunities.

With the right training, green industries require a diverse range of skills that workers—from technicians and engineers to managers and urban planners—can develop to adapt to the demand for environmentally responsible products. An example of this is the World Bank’s Energy Efficiency Improvement in Commercial and Industrial Sectors (VEEIE) project based in Vietnam. This project works towards helping local factories to adopt energy-efficient technologies to reduce costs and increase productivity. This project contributes to the creation of green jobs that have employed local workers to carry out installation and maintenance-related services in this industry.

Economic Growth in Low-Income Countries

Green jobs have already shown considerable success in addressing unemployment-driven poverty. In Kenya, for example, solar energy projects such as the Green Mini-Grid Program have successfully used incoming investments to create jobs in rural areas. By employing local workers who are in charge of installing, operating and carrying out maintenance for the solar energy products, this initiative provides affordable access to energy as well as employment opportunities for those in need.

Green jobs have the potential to significantly contribute to economic growth in low-income countries by providing a wider range of economic opportunities at the local level. Sectors such as renewable energy, sustainable agriculture and eco-friendly industries hold the potential to contribute to long-term economic growth, job creation and providing relief for those that live under poverty. With the appropriate policies, training programs and investment in the green economy, low-income countries can stimulate local economies and play a central role in economic well-being, environmental preservation and poverty reduction.

– Mashal Aman

Mashal is based in Kyoto, Japan and focuses on Business and Technology for The Borgen Project.

Photo: Flickr

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Traid: Fighting Fast Fashion

Traid“Fast fashion” reflects the rapid production, consumption and often disposal of clothing garments. It has become intrinsic to consumerist culture; trendy purchases cheap prices and constant wardrobe overhauls are common practices. Brand and company marketing through social media, prints, billboards and even people themselves exacerbate the desire to consume more and more. However, the glamour, cheap pricing and cultural normalization of the fashion fanfare have made it easy for consumers to turn a blind eye to the dark sides of garment manufacturing. The industry largely supports systemic exploitation, child labor and environmental degradation, and perpetuates poverty amongst those already struggling to live. The current reality of fast fashion is bleak, but numerous organizations and initiatives are rising to challenge the system and push consumers and companies to make more ethical choices in fighting fast fashion.

Traid

Traid is a U.K.-based charity retailer that collects and curates second-hand clothes for retail in charity shops. Globally, it funds causes that empower those involved in clothing production, including farmers and garment workers. It has several inspiring projects, including its 2024 initiative in Benin, in collaboration with Pesticide Action Network U.K. and OBEPAB (a Benin-based organization promoting organic agriculture). Traid has committed £336,382 to this 18-month project to improve incomes, health and soil quality for thousands of cotton farmers in Benin.

Cotton farmers often work in hot temperatures and engage in labor-intensive work for long hours with little breaks. They face exposure to harmful pesticides, which can cause health issues but continue to be used to keep yield production high and remain competitive with other farmers.

The Traid project has worked to build the capacity of smallholder farmers through education and the deployment of “Farmer Field Schools.” The organization has strengthened transnational supply chains for local farms and positively promoted Benin’s organic cotton, according to its website.

Consequently, organic cotton farmers have earned more than triple the net income of conventional farmers, and there has been a much higher rate of female inclusion. Not only has the physical health of the farmers improved through reduced pesticide exposure, but their financial, social and emotional health has vastly improved.

GoodWeave

Looking to the area of garment production, a notable non-profit is GoodWeave, founded in 1994, which endeavors to stop child labor in global supply chains. Goodweave works to expose hidden supply chains, empower workers and protect workers’ rights. It also operates a certification system where through its logo certification, it assures consumers that those particular products are free from child labor.

Employing approximately 75 million factory workers worldwide, the fashion manufacturing industry has no small reach. Of these workers, less than 2% make a living wage, often struggling with poverty and barely covering basic living costs like food. The working conditions are also often unsafe – cramped conditions, poor regulations on equipment and lack of ventilation.

GoodWeave has funded rescue and rehabilitation centers that have had transformative impacts on children’s lives. To date, GoodWeave has restored freedom to 10,868 children and provided 99,526 children with direct access to education.

In Nepal, for example, its Hamro Ghar home is populated by young individuals previously exploited and abused in the textiles industry, now with the opportunity to pursue education and break the cycle of poverty and exploitation.

Labour Behind The Label

Labour Behind the Label takes a more lobbying and activism approach to fighting fast fashion. This organization builds solidarity between garment makers and consumers. This helps to breach the socio-spatial difference formed through the production line, which increases consumers’ connection with those who make their clothes and the conditions they endure. Activists from all angles can then collectively lobby companies to improve worker rights.

The organization contributes to the fight against exploitation in the fashion industry, and campaigns for the instigation of a living wage. Its successes so far have seen U.K. retailers sign the “Bangladesh Accord on Fire and Building Safety” to protect workers’ safety, as well as ensuring that victims of the Rana Plaza disaster in 2013, whereby a factory tragically collapsed due to unsafe conditions, have access to long-term compensation. Its policy work and campaigning are significant contributors to ensuring workers’ health, equity and safety.

Looking Forward

The fast fashion industry has, in some instances, become an exploitative and destructive entity, prioritizing money over welfare. However, it does not have to remain this way, thanks to the work of the organizations that are fighting fast fashion. Taking action through political and social activism, advocacy, policy change and spending consumer money more ethically can work to reinvent existing labor chains into fair and just production lines.

– Rebecca Barry

Rebecca is based in Manchester, UK and focuses on Good News and  Technology for The Borgen Project.

Photo: Flickr

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Economic Growth in El Salvador: Key Areas

Economic Growth in El SalvadorEl Salvador, once known for its high crime rates and violence, is now witnessing a remarkable transformation. The nation’s economy has significantly improved, contributing to peace and stability. This article explores five key ways of economic growth in El Salvador: an increase in tourism, a surge in foreign investments, substantial infrastructure development, the implementation of rehabilitation and social programs, and the growth of entrepreneurship and small and medium enterprises. These changes are paving the way for a brighter future for El Salvador, highlighting the profound economic benefits of a more stable society.

Tourism

El Salvador has experienced significant growth in tourism in recent years, highlighting its appeal as a travel destination. Reforms in public security and government efforts to improve safety have resulted in a safer environment for tourists. According to the World Travel and Tourism Council (WTTC), El Salvador has had an exponential growth of 157% during the first six months of 2023 compared to previous years. The organization forecasts El Salvador to be the leading country in international tourism in Latin America in 2024. Improvements in public security have created a more favourable environment for tourism, contributing to the country’s economic growth and sustainable development in the tourism sector.

Foreign Investments

El Salvador has seen a noticeable increase in foreign investments, reflecting growing confidence in the country’s economic potential. As the country has become safer, international businesses and investors have started to take a big interest in the opportunities available. This surge of foreign capital has stimulated economic growth which could create more jobs. This has opened the door for sustainable economic progress, positioning El Salvador as an attractive destination for future investments. A recent report by the Central Reverse Bank reflects a notable surge in foreign investments in the first three months of 2024; investments from abroad increased by 8%. El Salvador’s economy expanded by $14.33 million more than in 2023.

Infrastructure Development

El Salvador’s government has made significant strides in several major projects, including the construction of a new international airport and a port in La Unión. These projects are at various stages of development, alongside the modernization of road infrastructure and the health care system with new hospitals and roads. These achievements reflect the government’s commitment to the country’s development and set the stage for a more prosperous and stable future in El Salvador.

Entrepreneurship and Small and Medium Enterprises

The reduction of violence in El Salvador could significantly impact entrepreneurship and the growth of small and medium enterprises (SMEs). According to the Bloomberg article based on Moody’s Investors Service information, the decrease in crime could encourage local companies to increase their investments. This is largely due to the implementation of the Territorial Control Plan (PCT) and the Exception Regime by the government, which has restored peace of mind and confidence among both the population and business owners. With more than 64,000 terrorists captured and one of the lowest homicide rates in the world, the safer environment has allowed SMEs to prosper, contributing to the country’s economic growth and creating new opportunities for employment and development.

Community Development Programs

The government, in collaboration with organizations like the Peace Corps, is providing training in entrepreneurship, employability skills, financial management and life skills. These programs aim to empower communities, especially the youth and women, to take advantage of new economic opportunities. By focusing on these areas, El Salvador is promoting economic security and mobility, ultimately contributing to the nation’s growth and stability.

Conclusion

To conclude, economic growth in El Salvador illustrates the significant effects of stability and growth on national prosperity. The boost in tourism, rise in foreign investments, extensive infrastructure improvements, community development programs and the expansion of entrepreneurship and small businesses are key factors driving this transformation. These developments not only emphasize El Salvador’s potential but also set the stage for a brighter and more prosperous future, pointing out the substantial benefits of a stable and succeeding economy.

– Maria Urioste

Maria is based in Maspeth, NY, USA and focuses on Good News for The Borgen Project.

Photo: Unsplash

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Poverty and Terrorism: How Economic Inequality Fuels Extremism

How Poverty Fuels TerrorismThe link between poverty and terrorism is complex, involving economic, political and social factors that drive individuals toward extremism. Economic hardship can create environments where extremist groups thrive, as they often exploit the vulnerability of impoverished communities to gain followers. When individuals lack access to stable employment, education and necessities, the appeal of joining extremist movements increases as these groups often promise income, food and social belonging. Understanding the connection between poverty and terrorism is crucial for crafting effective counterterrorism strategies that address root causes rather than just symptoms.

Economic Hardship as a Driver of Extremism

Studies indicate that poverty-stricken regions are more susceptible to terrorism due to the economic vulnerability of their populations. With limited job opportunities and scarce resources, extremist groups can lure impoverished individuals with promises of financial support and security. For instance, research from the United Nations Development Programme (UNDP) found that economic factors played a significant role in driving individuals to join extremist groups. Poverty and unemployment create a fertile environment for radicalization as individuals seek stability and hope in regions where governmental support is lacking.

Social Marginalization and Lack of Education

Poverty often coincides with a lack of educational opportunities, which further exacerbates vulnerability to extremist ideologies. Without access to education, individuals are more susceptible to radical propaganda, as they may lack the critical thinking skills to resist extremist narratives. Alongside this, poor education systems can create a failure to address poverty and unemployment. Addressing educational inequality can be a significant tool in reducing susceptibility and root causes of extremist recruitment.

Political Instability and Weak Institutions

Economic hardship is often intertwined with political instability, as poverty-stricken regions frequently lack robust institutions capable of maintaining law and order. In regions with weak governance, extremist groups can step in to provide services such as food distribution, security and basic health care, essentially becoming a de facto government. This creates a power vacuum that extremist groups exploit, using economic incentives to gain loyalty and recruit members. For instance, areas like the Sahel region in Africa have seen an increase in terrorism partly due to the inability of local governments to provide essential services.

Displacement and Refugee Crises

Poverty exacerbates displacement, which in turn fuels terrorism by creating large populations of vulnerable, dislocated individuals who may turn to extremism out of desperation. The United Nations Refugee Agency (UNHCR) reports that displaced populations face extreme economic hardship, often living in dire conditions with limited access to food, shelter and safety. Extremist groups, recognizing this desperation, target refugee camps and displaced communities to recruit new members with promises of stability and sustenance. Compared to only a decade ago, the number of refugees worldwide has more than tripled. Making it more important than ever to address the basic needs of displaced populations to reduce the risk of extremist recruitment.

Economic Development as a Tool Against Terrorism

Countering terrorism requires a multidimensional approach that includes addressing poverty through economic development programs. By investing in job creation, education and infrastructure, governments and international organizations can reduce the appeal of extremist groups. The United Nations advocates for initiatives that focus on youth employment and educational programs that offer alternatives to terrorism. In Africa and the Middle East, for example, initiatives that promote vocational training have helped safeguard youth against extremist ideologies by providing economic opportunities outside of radical groups.

Conclusion

The relationship between poverty and terrorism highlights the need for holistic counterterrorism strategies that address socioeconomic factors. Tackling poverty, improving educational access, strengthening governance and supporting displaced populations are all crucial steps in reducing the appeal of extremist ideologies. Furthermore, by addressing these underlying issues, the global community can work toward a future where economic stability undermines terrorism’s grip on vulnerable populations.

– Harriet Conway

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

Photo: Flickr

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Fragility and Rule of Law in CAR

Fragility and Rule of Law in CARThe Central African Republic (CAR) is a landlocked country in sub-Saharan Africa and has a population of 6.1 million, ranking among the lowest on the human capital and development indices. Poverty in CAR is widespread, with nearly 70% of its population living in extreme poverty. Its history of conflict and political displacement has undermined economic growth for several reasons, such as reduced business investments. The country suffers from fragility. Its weak government has limited legitimacy and struggles to provide basic public services, including the rule of law. Fragility and the rule of law in CAR need addressing.

Politics, Violence and Economy

CAR has a long history of instability, state disintegration and political violence. It straddles the Sahel region, with a majority Muslim population, while savanna communities are mainly Christian. The conflict has regularly broken out between the Muslim ex-Seleka rebels and the Christian anti-balaka rebels. In 2013, Seleka rebels stormed the capital, Bangui and the country descended into a brutal civil war that continues in some parts of the country.

CAR suffers acutely from gender-based violence (GBV) against women and girls, recording 23.644 cases of GBV in 2022. Inadequate food and water resources, poor health care and weak housing infrastructure exacerbate tensions within households. These challenges, along with socio-cultural norms that are unfavorable to women, have led to sub-optimal survival strategies.

An unstable economy also influences fragility in CAR. Its government has failed to provide basic public goods, including water, food and health care. Poor education and job insecurity have stunted its growth. CAR has a rich endowment of natural resources but has not benefited due to mismanagement. According to the World Bank, the country has also suffered from flooding, fuel shortages and declining international timber trading. These challenges risk an already fragile economy.

Solutions

MINUSCA is a multidimensional United Nations peacekeeping operation set up by the Security Council in 2014. Its mission is to assist CAR in building national stability. It prioritizes the country’s security, rule of law, human rights and political crisis. MINUSCA provides military and police services from regions such as Rwanda to handle disarmament, demobilization and reintegration in CAR.

Cooperazione Internazionale (COOPI) focuses on supporting victims of GBV in CAR. Women and girls gather in a welcoming home in Bangassou where they are encouraged to participate in activities such as knitting and patternmaking, providing them with psychosocial support.

Pelvia, an 18-year-old girl spoke about the positive effect COOPI has had on her life. She spoke about the skills she has learned and how they have provided her with an income to buy necessities that she would otherwise be unable to afford. Pelvia is also glad for the company and support of the other women and girls who have shared similar traumatic experiences, UNOCHA reports.

Economic Growth

CAR receives most of its financial aid from the International Monetary Fund (IMF). In June 2024, the IMF approved an extended $25 million disbursement to continue the push for economic growth in CAR. The aid has been distributed to assist the economy and sustain priority spending on basic public services. The IMF forecasts that CAR’s economy will grow by 1.4% in 2024.

Looking Ahead

Fragility and rule of law in CAR are improving. The country has a long road to stability but there are positive forecasts for its future. 

The Economist Intelligence reports that the country’s economic activity will continue to rise over the next few years, with help from the IMF’s funded program. Whilst many areas of CAR are still overrun by rebel groups, the government, with assistance from Russian and Rwandan forces, has control over several major cities, including the capital. This allows for a more stabilized political structure and open rule of law in these areas.

– Millie Trussler

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

Photo: Flickr

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Projects in Tunisia Combat Food Insecurity and Boost the Economy

Projects in TunisiaOn March 15, 2024, the World Bank’s Board of Directors approved two loans worth $520 million to strengthen Tunisia’s economy. The loans will be used for two projects aiming to address and combat food insecurity and reduce regional inequalities in Tunisia. High unemployment, a five-year drought and the nation’s dependence on agricultural imports have amplified inflation rates and led to many food shortages in the country.

The Emergency Food Security Support Project (PAUSAT) will have a range of objectives that will help combat the food insecurity problem while also strengthening Tunisia’s economy and self-sufficiency. Meanwhile, the second loan will focus on the Tunisia Economic Development Corridor Project. This will address the urban infrastructure along the Kasserine – Sidi Bouzid – Sfax corridor.

PAUSAT

This project will help to strengthen Tunisia’s economy by increasing resilience to future food crises. This is by supplying short-term agricultural inputs for farmers to guarantee the next cropping season. A difficult cereal harvest of 2023 contributes to the string of droughts that Tunisia has suffered. By focusing on long-term solutions, this project will also provide barley and climate-resilient seeds to small-scale farmers and milk producers.

This assistance will help to rebuild Tunisia’s economy as it aims to prevent future agricultural challenges. With 30% of children aged less than 5 and 32% of pregnant and breastfeeding women having been affected by malnutrition, the economy is not Tunisia’s only focus. Ensuring access to bread for impoverished and vulnerable households is one of PAUSAT’s short-term objectives.

PAUSAT also aims to combat food insecurity in the short term by offering the vulnerable percentage of the population bare necessities such as bread. With women making up 46%-51% of the family farm labor force and are also 50% of Tunisia’s rural population, PAUSAT’s supply of soft wheat and barley to local markets will also help reduce food insecurity and prevent malnutrition among children and pregnant women.

Tunisia Economic Development Corridor Project

The Kasserine–Sidi Bouzid–Sfax corridor faces regional economic disparities that this project seeks to address. By adding 65 km of new roads and 117 km of feeder roads, the initiative aims to enhance accessibility to inter-regional areas, facilitate business financing and improve mobility for Tunisia’s rural population. The creation of these feeder roads and roadworks will benefit small and medium-sized enterprises (SMEs) and encourage small businesses to open up further.

The Tunisia Economic Development Corridor Project also benefits households that depend on roads. By improving mobility and expanding access to more regions, the enhanced rural infrastructure enables isolated households in the countryside to reach nearby towns and cities more easily. Significantly, this connectivity opens up new employment opportunities, allowing access to businesses and fostering the growth of new SMEs.

Toward a More Connected, Well-Fed Future

Tunisia continues to face extremely challenging conditions regarding cereal harvests, droughts and rural mobility. These two new loans bring new hope as they commit to two projects dedicated to fighting food insecurity and strengthening the economy of Tunisia. By addressing important issues with these two projects, Tunisia will be able to provide both long and short-term solutions for a more sustainable and self-sufficient future.

– Chelsey Saya McCloud

Chelsey is based in Southampton, Hampshire, UK and focuses on Good News and Technology for The Borgen Project.

Photo: Pixabay

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Innovations in Poverty Eradication in Kuwait

Poverty Eradication in Kuwait
Despite Kuwait’s wealth and robust welfare system, poverty eradication in Kuwait remains a pressing issue, particularly among expatriates. While every Kuwaiti citizen get support from the government, with no reports of poverty in the country from the World Bank, expatriates—who remit approximately $4 billion annually—face stark inequalities. Many low-income foreign workers live in conditions that could be considered below the poverty line, despite labor laws meant to protect their rights. These workers often endure overcrowded housing, abuse, non-payment of salaries, and limited access to basic services. Although every expatriate is supposed to arrive with a guaranteed job, thousands live jobless in the country, contributing to a growing sense of neglect and exploitation.

Dilapidated areas, begging and the exploitation of household helpers have tarnished Kuwait’s image. Despite discussions around eliminating the sponsorship system, the issue persists, with companies exploiting loopholes and underpaying workers. Strikes, unpaid wages and the need for charitable donations for basic necessities reflect the failure to enforce labor protections, according to Times Kuwait. While there should be no poor people in Kuwait by law, the reality for many expatriates tells a different story. In response, poverty eradication in Kuwait has become a priority, with several innovative programs focused on expanding social protection, fostering public-private partnerships, empowering youth, managing water resources and addressing energy poverty. Each initiative reflects Kuwait’s commitment to poverty eradication despite its wealth.

Expanding Social Protection Programs

Kuwait has expanded its social protection programs under Public Assistance Law 12/2011, administered by the Ministry of Social Affairs (MOSA). These programs provide financial assistance, health care and education to vulnerable groups such as the elderly, widows, orphans and low-income families. Since its implementation, the law has supported thousands of families, ensuring basic living standards and contributing to poverty eradication in Kuwait. In line with SDG 1 (No Poverty), MOSA’s initiatives have supported 2,030 families locally and 316,701 poor families abroad, while employing 14,518 previously unemployed youths, according to a 2019 report. Collaboration with organizations like Bayt Al Zakat has also strengthened poverty eradication in Kuwait, particularly through housing subsidies and health care services for vulnerable groups.

Expanding Public-Private Partnerships

Public-private partnerships (PPPs) are a key component of poverty eradication in Kuwait. The Kuwait Authority for Partnership Projects (KAPP) oversees initiatives like the Shagaya Renewable Energy Park, which generates clean energy and creates job opportunities, according to a 2019 report. By reducing energy costs, this project helps low-income families afford utilities, contributing to poverty eradication. These partnerships highlight the private sector’s role in supporting poverty eradication in Kuwait, leveraging private resources to benefit public welfare and improve living conditions for marginalized communities.

Clarified Youth Empowerment Initiatives

Youth empowerment is vital to poverty eradication in Kuwait. Initiatives like the 2018 SDG workshops, organized by the International Youth Federation (IYF), aim to foster leadership and innovation among young Kuwaitis. These workshops equip participants with the skills to address poverty at the community level. By creating social enterprises that offer affordable education and health services, young Kuwaitis contribute directly to poverty eradication efforts in their neighborhoods. Empowering the youth to actively participate in poverty eradication in Kuwait is essential for building a more equitable future.

Water Desalination Initiatives

Kuwait’s efforts in poverty eradication are closely tied to its water management strategies, particularly given the nation’s challenges with low groundwater levels, which renew at a rate of less than 70 mm per year. To address this, Kuwait has increasingly depended on cross-border groundwater and, more importantly, established seawater desalination facilities. Desalination now accounts for 93% of Kuwait’s drinking water, providing a vital resource for its growing population and urbanization. By ensuring access to clean water, desalination plays a key role in poverty eradication in Kuwait, supporting both domestic needs and irrigation for agricultural development. This strategy not only alleviates the strain on natural resources but also fosters economic stability, which is essential for long-term poverty eradication in Kuwait.

Decent Work and Economic Growth

Kuwait’s focus on decent work and economic growth is critical for poverty eradication in Kuwait, particularly as the country transitions away from its heavy reliance on the oil sector. Fluctuations in oil prices have historically impacted Kuwait’s GDP, as seen when the GDP per capita dropped from $10,113 in 2012 to $9,208.8 in 2016 due to a decline in oil prices. Furthermore, the employee per capita share of GDP decreased from $85,200 to $75,640 over the same period.

To mitigate such risks and reduce the vulnerability of its economy, Kuwait established the Kuwait Direct Investment Promotion Authority (KDIPA) in 2013 to attract both local and foreign investment. This move not only diversifies income sources but also fosters economic resilience, thereby contributing to poverty eradication in Kuwait. Moreover, The Public Authority of Manpower (PAM), established in 2017, supports small and medium entrepreneurs, streamlines access to government tenders and promotes equitable employment. PAM enforces laws requiring at least 4% of staff in private companies to be persons with disabilities and collaborates on vocational training for women in low-income households. These efforts diversify the economy, foster inclusivity and strengthen economic resilience, crucial for poverty eradication in Kuwait.

Conclusion

Kuwait’s comprehensive approach to poverty eradication includes expanded social protection programs, public-private partnerships, youth empowerment, and technological solutions. By focusing on community engagement and sustainability, the country is making significant strides in reducing poverty and improving the quality of life for its vulnerable populations. These efforts underscore Kuwait’s commitment to poverty eradication and addressing social inequalities despite its considerable wealth.

– Laila Alaya

Laila is based in Abuja, Nigeria and focuses on World News and Technology for The Borgen Project.

Photo: Flickr

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Reducing Poverty Via Social Entrepreneurship in Indonesia

Social Entrepreneurship in IndonesiaThe largest economy in Southeast Asia, Indonesia, has achieved impressive economic growth in the last decade, with a steady gross domestic product (GDP) growth rate after overcoming the effects of the Asian financial crisis in 1998. However, a significant portion of the country’s population is still living in poverty. As of March 2024, Indonesia’s poverty rate stood at 7.09% for the urban region and 11.79% for the rural area. In total, more than 25 million Indonesians are living below the national poverty line.

Social Entrepreneurship in Indonesia

Social entrepreneurs or entrepreneurs who pursue innovative ideas with the potential to solve a community problem, can contribute to poverty reduction in Indonesia. As of 2018, there were an estimated 34,205 social enterprises in Indonesia, including nongovernmental organizations (NGOs), cooperatives and micro, small or medium businesses. The study also found that young people are strongly represented in social enterprises, suggesting the increasing popularity of social entrepreneurship among young people and the growth potential of social entrepreneurship in the future. Social enterprises in Indonesia are mostly in the creative industry (22%), followed by the agriculture and fisheries industry (16%) and the education sector (15%).

Social entrepreneurship in Indonesia can support business opportunities and economic development in the country. Researchers found that amid economic crises like the COVID-19 pandemic, social entrepreneurship plays an important role in encouraging the creation of existing and new social entrepreneurial business opportunities to help solve economic development problems. Besides, social entrepreneurship also contributes to sustainable environmental policies in Indonesia. Research on green space development in Indonesia suggests that social enterprises serve as catalysts for ecological impact, effectively converting community perceptions that favor sustainability into sustainable practices.

Facilitating Positive Changes

For instance, Azzura Solar, a social enterprise co-founded by Hemant Chanrai, is a social enterprise that focuses on solar energy and empowers communities with its businesses. The Bright Future Program (BFP) of the company installs solar panels for the population in the Marga Mulya area of North Jakarta, a more impoverished region of the country with limited access to electricity. The enterprise developed its own indigenous, low-cost system that not only promotes access to electricity for needier populations but encourages the reuse of drinking bottles. The receivers of the services can pay what they can afford, with the rest of the cost covered by sponsors and Azzura Solar.

Javara, on the other hand, focused on assisting local indigenous farmers to earn their livelihood from traditional agricultural products. Through ethical partnerships with farmers, fishers and food artisans, the enterprise brings biodiversity-based food products from rural Indonesia to a broader market. With a wide range of products from honey and coffee to pasta, the company has exported sustainable agricultural products in Indonesia to 33 countries on five continents.

Looking Forward

Policymakers in the Indonesian government have promoted social enterprises mainly through financial assistance and training. The Kredit Usaha Rakyat (KUR) Program, for instance, has been in place to provide bank loans to small businesses in Indonesia since 2007. The Beginner Entrepreneur Program also provides funds for young entrepreneurs with training certificates from the Ministry of Cooperatives and Small and Medium Enterprises.

The ProKUS program in 2021 assisted impoverished and vulnerable families with activities and social and business approaches to prevent and overcome social risks after the COVID-19 pandemic. The program collaborated with social workers and 26 business mentors to incubate social enterprises across 33 districts of the country, improving entrepreneurship skills for the recipients.

With significant government commitment and existing successes, social entrepreneurship in Indonesia is a highly promising solution that can promote poverty reduction in the country. By further promoting social entrepreneurship, the government can empower the local community and contribute to sustainable development in the long term.

– Wangruoxi Liang

Wangruoxi is based in Ann Arbor, MI, USA and focuses on Business and New Markets for The Borgen Project.

Photo: Pexels