Archive for category: Economy

Information and stories about economy.

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Tackling Poverty With Remittances in India

Remittances in IndiaIn India, remittances – money transfers from non-resident Indians (NRIs) to family members residing within their home country – are crucial to the nation’s economy and the overall reduction of poverty. As of 2023, India was ranked as the highest remittance recipient country in the world, with a total remittance inflow of $125 billion that year alone. Transfers have been received internationally, ranging from neighboring countries (Pakistan, Bangladesh) to distant Western nations (United States, United Kingdom). 

The Impact of Remittance

India’s extremely high population and political conflicts have subjected the country and its citizens to poverty for decades. When India gained independence from British Rule in 1947, the poverty rate was at an estimated 80%. Today, however, approximately 15% of Indian residents live in extreme poverty. Although this vast improvement may be accredited to the implementation of a full democracy, remittances have played a large role in driving internal growth.

NRIs have helped India combat poverty and greatly improve its GDP since the 1990s. Remittance money was one of the factors that prevented a serious recession following the Gulf War, which had damaged India’s trade with both the West and the Middle East.

Economic Initiatives

Since then, the continued flow of remittances has allowed banks and banking systems to improve significantly. Additionally, with NRIs being required to obtain income high enough to be able to sustain themselves and afford remittances, education has become one of the primary objectives of India’s continued development. Highlighting education has served to place a focus on schooling and reduce child labor, as children are deemed to be more useful as students overseas than as workers. 

Changing Public Policy

India has continued to encourage NRIs through public policy. The Emigration Act of 1983 was passed to protect the exploitation of Indian workers overseas for 18 specific countries and to assist them with travel, which gave them additional rights to make the process of sending money home even easier. More than 370,000 Indians used this Act in 2022 to emigrate to one of these 18 countries.

International Benefits

India can contribute to its sustainable development goals such as innovation because the amount of money earned via remittance is so high. Unlike many other countries, both the upper and lower classes can emigrate to a different country and succeed in sending money back to their families. NRIs serve as a boon to the United States in that many of them are highly skilled, highly educated workers. According to the Pew Research Center, NRIs tend to make more than double in salary in comparison to other nationalities [?]. 

Conclusion

Remittances in India play a large and positive part in India’s economy. They help Indians stay connected worldwide, and motivate travel, trade, and education. Remittance is vital to help keep the economy afloat, which the government has recognized through public policy.

– Varsha Pai
Photo: Pexels

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Addressing the Decline in the Madagascar Economy

Madagascar EconomyMadagascar is a large island country situated in the Indian Ocean. While its population is growing, one cannot say the same for its economy. The island nation is grappling with a dire economic crisis led by a troubling downturn in GDP. This article delves into the factors contributing to the unsettling decline in the Madagascar economy.

Political Instability and Economic Consequences

Madagascar has faced several political crises over the past few decades, leading to a lack of stable governance and consistent economic policies. From 2008-to 2013, the Malagasy government experienced the most extended period of political uncertainty. Consequently, this led to a lack of recognition from the global community. Since then, it has faced ongoing battles which have deterred foreign investors. Hence, the Madagascar economy has struggled to attract the foreign capital essential for development, causing a detrimental impact on GDP.

Agriculture

The country’s unique biodiversity and rich ecosystems have also suffered from economic decline. Madagascar is no stranger to environmental challenges, including deforestation and soil erosion. In 2022, Madagascar suffered from extreme droughts, which led to mass food insecurity for 1.6 million people. Since then, subsequent flooding and clones have left agriculture heavily impacted.

The decline in agricultural output, a critical component of Madagascar’s economy, has exacerbated natural disasters and environmental challenges. Reduced crop yields and disrupted farming practices have hit hard, leading to food scarcity and an increase in the cost of living for Malagasy citizens. 

The Global Economic Impact of COVID-19

The pandemic’s global reach has not spared Madagascar. The country’s economy relies heavily on exports, particularly in the textile and mining sectors. The slowdown of international trade and economic uncertainty stemming from the pandemic severely curtailed Madagascar’s economic growth. Reduced demand for exports and disruptions in supply chains resulted in a GDP of 7.1% and 9.8% income per capita. Approximately 1.8 million people in 2020 fell below the international poverty line.

Consequences of the Economic Downturn 

The steep decline in Madagascar’s GDP has triggered a host of consequences. A rise in poverty rates is one of the most pressing concerns, as livelihoods are threatened and access to basic necessities becomes increasingly challenging for the population. Social unrest is also rising due to economic desperation and political frustration. Furthermore, Madagascar is facing a growing humanitarian crisis as food insecurity deepens and access to health care becomes more limited.

Going Forward

The Madagascar economy as a result of the COVID-19 pandemic. Despite being enriched with abundant rare minerals, precious stones, fishing resources and extensive fertile land, the nation struggles with poverty. Even though Madagascar has great potential, it has not experienced substantial economic growth since gaining independence from France. 

The Madagascar Development Fund (MDF), which formally began in 2008, is a nonprofit organization that focuses on improving the everyday lives of people in Madagascar. As of 2017, the organization has funded 225 projects that helped improve health care and sanitation, education access, clean water and more.

With support and assistance from non-governmental organizations such as the MDF, the country can make gradual strides toward positive economic development.

– Sophie Higham
Photo: Flickr

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China and United States Support Venezuela’s Poverty Reduction Program

Venezuela's Poverty Reduction ProgramSupported by China’s International Poverty Reduction Center, President Nicolás Maduro of Venezuela announced Venezuela’s new poverty reduction program to combat inequality and tackle extreme poverty. The partnership came after President Nicolás Maduro’s trip to China earlier this year, in September, where the Venezuelan president met with President Xi Jinping in Beijing to develop economic ties. 

The result of the meeting led to the agreement of the “all-weather strategic partnership” between the two nations. These include the 31 new bilateral cooperation agreements focusing on developing the Venezuelan economy in various sectors such as oil, tourism and the renewed investment for the country’s national electric grid that has remained stagnant due to a lack of financial support. Moreover, the agreement will increase Venezuelan exports to China, such as avocados and coffee, to strengthen the nation’s economy. The launch of the new “Social Equality and Happiness Mission” will be closely supported by China’s International Poverty Reduction Center, with President Maduro emphasizing that Venezuela’s poverty reduction program will adapt to Venezuela’s culture and needs. 

Poverty and the Economic Crisis in Venezuela

The decision came in response to the country’s increasing economic decline and subsequent severe rise in poverty. In 2010, 32.5% of Venezuela’s population lived in poverty, whereas 8.8% lived in extreme poverty. However, as the decade progressed, the number of Venezuelans suffering from poverty climbed to 92.3%, and those suffering from extreme poverty made up 63.7% of the country’s population following trade sanctions against Venezuelan state oil companies from the United States.

The sanctions proved detrimental to the Venezuelan economy as it remained dependent on prominent oil exports. This contributed to the nation’s hyperinflation and increased national debt to 159.47% of Venezuela’s Gross Domestic Product (GDP). As of 2021, while 90.82% of the nation’s population suffer from poverty, extreme poverty impacts 67.97% of Venezuelans, which means that food shortages impact six out of 10 households across the nation and a drastic increase in the number of Venezuelan refugees fleeing to neighboring Latin American countries such as Colombia. In 2023, the minimum wage in Venezuela is at 130 bolívares, equivalent to $5. This drastic cut in wages and social benefits led to widespread strikes from workers in public sectors, particularly the education sector.

Financial Support to Venezuela

Therefore, the worsening crisis in Venezuela has led to increased foreign aid. In addition to China, the United States has offered substantial financial support for the South American nation. As of March 17, 2023, the United States has announced an additional $171 million to their existing support since 2017 in an attempt to address the humanitarian crisis.

Among the new budget announced, $83.4 million will provide emergency food assistance. Furthermore, $31 million will ensure the country’s development through bridging vital relationships with neighboring states such as Colombia and Ecuador. Moreover, $56.1 million will be dedicated to building integration programs, focusing primarily on marginalized groups such as women and children.

As of 2023, the United States has supported Venezuela in poverty reduction efforts, such as Venezuela’s poverty reduction program, through a total of $2.8 billion investment into essential needs such as access to food, water, health care and rebuilding the country’s economy.

– Remigius Kim
Photo: Pixabay

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Instability in Ghana’s Economy Impacts Poverty

Ghana's Economy
Ghana is a western African country situated on the coast of the Gulf of Guinea. More than half of the country’s GDP comes from the services sector, one-fifth comes from agriculture, and about one-fourth lies in industry. Though the nation possesses many major resources, like coal and gold, Ghana’s economy is suffering from a high debt burden and inflation. Thus, working-class individuals and those in poverty suffer as the prices of common goods rise, making it difficult for people to purchase necessities. According to the World Bank, “Simulations suggest that, in 2022, nearly 850,000 Ghanaians were pushed into poverty due to rising prices and the loss in purchasing power.”

Inflation in Ghana

In July 2023, Ghana experienced a significant inflation rate of 43.1%, marking an increase from the previous four months. The primary driver of this inflation was the soaring food prices, with food inflation rising from 54.2% to 55%. Additionally, non-food prices also saw an increase.

Furthermore, Ghana is grappling with a historically high level of public debt, nearly equivalent to the country’s Gross Domestic Product (GDP). In response to these pressing economic challenges, Ghana sought and secured a $3 billion bailout loan from the International Monetary Fund (IMF) in December 2022.

Despite Ghana’s economic struggles, inflation has improved slightly since last year’s peak. In 2022, the cedi, Ghana’s local currency, lost more than half its value compared to the U.S. dollar. To cope with inflation, the Bank of Ghana increased interest rates, which hurt businesses and households that relied on borrowed funds. Consumers and businesses are still suffering from the ramifications of last year’s economic catastrophe.

Impact on Civilians

Citizens are facing heightened financial challenges as essential commodity prices continue to rise. Lower-income families grapple with the increasing costs of rent, school fees and food. Businesses, too, encounter difficulties as fluctuating prices for goods make investments more uncertain. This economic instability impacts various aspects of people’s lives.

Poor government spending has also resulted in mounds of debt. Government entities now owe thousands of contractors money, which puts those workers at a loss. For example, many teachers face months of back pay, making it even more difficult to purchase everyday goods. Inflation has also diminished consumers’ purchasing power, shown through the prices of goods like maize: 159 kg cost 300 cedis in 2021, compared with the current price of 650 cedis. Maize is a prime example of a staple grain in Ghana that has increased significantly in price.

Causes of Economic Struggles

There are many contributing factors to Ghana’s economy, but the nation was not always struggling. When President Nana Akufo took power in 2017, inflation decreased significantly from 15.4% to 7.9%. By 2019, Ghana had the world’s fastest-growing economy and was described by the World Bank as “Africa’s shining star.” That same year, Ghana’s budget deficit was reduced to 5% of the GDP.

Some argue that the COVID-19 pandemic and Russia’s invasion of Ukraine drove inflation. However, many economists attribute much of the issue to poor government decisions, including excessive borrowing from the Bank of Ghana.

Hope for the Future

Numerous organizations are actively engaged in addressing Ghana’s economic challenges. More than 24 aid groups, which include Oxfam, Christian Aid, Caritas Ghana, ActionAid and Debt Justice, have collaboratively called on international creditors to reduce a portion of Ghana’s debt. In a joint letter signed by these organizations, they highlight the direct impact of the debt crisis on the people of Ghana. Ghana’s substantial debt burden has led to inflated prices, which, in turn, have made it increasingly challenging for many families to meet their basic needs.

The U.S. is also doing its part to assist Ghana. In March 2023, Kamala Harris announced that the U.S. pledged $100 million in assistance. The government has also requested another $139 million from Congress for aid to Ghanaians. The aim is to put these donations into efforts to lower some of the costs of commodities like food and fuel.

While Ghana’s economy is still suffering, the fact that inflation is lower this year than last gives hope for the future.

– Lindsey Osit
Photo: Pexels

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The Steps Toward Malawi Debt Restructuring

Malawi Debt
Malawi is a country located in Southeast Africa. Boasting natural beauty and a rich culture, Malawi has a diverse landscape. The nation has been incredibly resilient in recent years, continuing to grow and persevere through economic challenges. Malawi has had a complex debt situation for decades. To try and support its development goals, Malawi borrowed money. The country now faces an extreme debt burden, putting the citizens in unsafe, vulnerable positions. This debt halts Malawi’s economic and social development.

Debt History

In 1964, Malawi gained its independence from Britain. The country’s debt journey began soon after that, in the 1970s, when it started borrowing money to fund social programs and new infrastructure projects. The first loans to the country came from Western banks and numerous government programs. 

Malawi’s economic stability relies heavily on agricultural exports. So, when interest rates started to rise, and the price of exports dropped, debt began to build up quickly. In the 1980s and 1990s, about $100 million of debt payments departed from Malawi each year. As the debt kept adding up, Malawi was scrambling to find solutions. The economy started to decline significantly, prompting their decades of struggle with debt. 

To combat this, the IMF and World Bank started the Heavily Indebted Poor Countries (HIPC) initiative to help developing countries with debt. This initiative allows governments to regain 100% debt relief from the African Development Fund, World Bank and IMF. In 2006, the HIPC initiative authorized Malawi to get $2.3 billion of debt canceled. Annual debt repayment improved, and the conditions for citizens did, too. Now, Malawi could focus money on social programs instead of repaying debt.

Current State

The struggle with debt began again around 2015. As export prices decreased, Malawi looked to borrow money to support themselves. Malawi has few options for increasing revenue besides agriculture, so as droughts rose and sustainability declined, the country ran into trouble. Malawi was hit hard by the COVID-19 pandemic, too. Restrictions and lockdowns furthered the economic burdens. Most agricultural movements stopped, and many citizens lost their jobs. Extreme poverty rose, as did food insecurity. To bounce back from the pandemic, Malawi reached out for help. 

In 2023, Malawi currently has $1.2 billion owed in external debt. The country owes $495 million to the African Export-Import Bank and $337 million to the Trade and Development Bank. These two make up the bulk of money Malawi owes. The others include the Export-Import Bank of China and the Export-Import Bank of India. For a developing country, this is a large amount of debt to repay. However, Malawi is optimistic about the restructuring of this debt.

Future Plans

Malawi has a plan for taking care of its debt. The Malawi finance minister announced on September 5, 2023, that he was optimistic about Malawi’s debt restructuring. The country seeks a new IMF loan by the end of the year. The African Export-Import Bank and the Trade & Development Bank have already signed the restructuring. Malawi still needs the India and China Export-Import banks to sign to guarantee the IMF loan. 

The minister stressed the resilience Malawi has built these last few years and the difficulties they have overcome. The country continues to break through despite unforgiving conditions. The main setback that Malawi faces now is a need for more foreign currency.

The IMF has tirelessly supported Malawi and sent a team to work with the government. The IMF has implemented new programs for debt restructuring in Malawi. One strategy that the IMF proposed was adopting market reforms. Doing this would stabilize their debts and allow economic growth.

Malawi is gaining momentum with restructuring the debt and is hopeful it will continue. Malawi’s debt-to-GDP ratio currently stands at 73%. By adopting new strategies and gaining support from international organizations, Malawi could restructure its debt sustainably and efficiently.  

– Madison Rogers
Photo: Flickr

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Turks and Caicos’ Economy: Affecting the Majority

Turks and Caicos' Economy
The Turks and Caicos’ economy is seemingly the jewel of the Caribbean. The islands counted 405,000 tourists in 2021, which is quite low for overall numbers. However, compared to their population the islands ranked 2nd in the world for the number of tourists per resident — a staggering 8.9. With such a profitable industry driving the territory, the outlook for the residents should appear incredibly promising. This is not the case.

About 22% of the population is living under the $1.90 per day global poverty line. Around 60% of households aren’t able to consistently pay for essential items such as food and bills. Unemployment is at just under 10%, with the rural population influencing a large amount of the rate. Here is why it is one of the most sought-after destinations suffering so much from inequality.

An Over-Reliance on Tourism

The success of the tourism industry almost entirely drives Turks and Caicos’ economy. While, for the majority of the territory’s existence, this has been profitable, the COVID-19 pandemic highlighted how structurally dependent the Islands are. 

In 2018, Turks and Caicos gained $787 million from visitors on vacation. Despite having a population of only 45,000, this number was 2% of the revenue for the entirety of the Caribbean. It also made up nearly 70% of Turks and Caicos’ GDP for the year. 

The COVID-19 pandemic completely halted the progress Turks and Caicos made to become one of the most desirable tourist spots in the world. Around 2 million tourists dropped to only 370,000 in just one year. This global event exposed the glaring holes in the economy of the Islands. 

Only $7.8 million worth of exports were transferred in 2021. The main categories for exports are mollusks, crustaceans, polyacetals and processed tobacco — none of which even generated $1 million alone. Imports totaled $286 million; petroleum, vehicles and meat are some of the biggest and most expensive imports. 

Turks and Caicos’ Economy is incredibly fragile and over-reliant on one specific industry and with the incredibly high risk of natural disasters in the region, an over-reliance on a sector that requires perfect weather and facilities is a precarious situation to be in. 

The People Affected

The citizens of the Turks and Caicos Islands, also known as Belongers, have experienced a population boom over the last two decades, partly due to increased migration from neighboring Haiti. Of these migrants, around 50% live in poverty or at high risk of lowering below the line. 

Many of these Haitians live on Providenciales Island, the third largest of the archipelago. The overpopulation of that island has caused a lack of work opportunities and poor living conditions including housing infrastructure and access to health care. 

An occupation that usually generates a large percentage of jobs is farming. However, due to the lack of arable land across all of the islands, less than 100 people work in agriculture — only 15 of whom are full-time workers. Due to the low income generated by all of the exported goods, there are not any jobs there either to allow financially vulnerable people to train for. 

As mentioned previously, natural hazards are a serious issue on the islands, and not only for monetary reasons. More than 20% of the population was affected by the hurricane season in 2008, exactly not what people suffering from poverty need. 

Children are one of the most affected groups on the islands, with both Belongers and migrants facing similar issues. Children from all age groups often drop out of school to try and support their families with short-term work to supply some extra money to afford necessities, leading to a lack of basic education and employable skills. 

Solutions

The main attempt to aid the thousands of people living in poverty is the development of new sectors across the islands. Turks and Caicos’ economy may lack diversity now, but there is an opportunity for technology to flourish on the islands. The government has created plans to improve technological infrastructure to draw in business in addition to already appealing low tax rates. 

One main goal is to install a second fiber-optic cable across the territory to increase the capacity of the network and give remote workers a reliable connectivity service to not only invite business but to essentially create luxury resorts that a worker never has to leave, generating even more growth to the tourism industry. 

These plans are in the National Physical Development Plan (NPDP), published in 2020. Other plans from this document include using hydroponic technology to increase farming capacity across North Caicos and utilizing the Blue Economy to produce more effective fishing practices, create even more desirable leisure activities and invest in biotechnology from seaweed. 

Turks and Caicos’ economy is a relatively small and unstable one. However, the population of the territory allows for minor changes to make large impacts. Further development into new, exciting industries will generate foreign investment, with the poorest on the islands only succeeding with greater opportunities and improved living conditions. 

If everything goes as planned and tourism stays a constant driver of GDP, the most vulnerable living on the beautiful archipelago will have the greatest prospect of hope out of almost any island in the world.

– Oliver Rayner
Photo: Flickr

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Tourism Boosts Lebanon’s Economy Amid Summer Revival

Lebanon's Economy
Lebanon’s economy experienced a remarkable upswing this summer, thanks to the revival of tourism in the country. The tourism sector has emerged and has always been a pivotal player, breathing new life into the nation’s financial prospects and increasing the potential for poverty reduction in Lebanon.

Increased Tourism in Lebanon

Efforts to implement security measures in the region have cultivated a modest sense of confidence among travelers, drawing a heightened influx of international visitors to Lebanon. Expert estimates and statements from tourism authorities substantiate the sector’s expansion, resulting in amplified tourism receipts and economic advantages.

Local businesses, encompassing hotels, restaurants and transportation services, flourish by attending to the increasing count of tourists exploring Lebanon’s rich cultural heritage, historical landmarks and breathtaking natural landscapes. This influx of visitors has also resulted in job creation, further contributing to economic growth and poverty reduction among locals. This is significant considering a report by Human Rights Watch in 2022 that 36% of people in Lebanon lived in extreme poverty.

Insights from Jean Abboud, president of the Association of Travel & Tourist Agents in Lebanon, reveal that Beirut’s International Airport has witnessed a notable surge in travelers. This trend has remained consistent since the end of June, with passenger numbers averaging between 15,000 and 18,000 individuals daily. Particularly noteworthy is the peak occurring on June 25, when the airport’s terminals bustled with 20,000 passengers in a single day.

This surge in passenger traffic paints a vivid picture of Beirut reclaiming its popularity and appeal on the global travel stage. The numbers indicate a renewed preference for Beirut as a favored entry point, reigniting the city’s role as a hub of international connections. By facilitating the smooth movement of people across borders, Beirut’s airport takes on a pivotal role in revitalizing the local tourism and travel sector. This sector holds immense significance for the nation’s economy and cultural exchanges.

How Tourism is Boosting Lebanon’s Economic State

In 2022, Walid Nassar, serving as the minister of tourism in a caretaker capacity, presented data revealing that Lebanon welcomed more than 1.72 million visitors during the previous summer, contributing a significant $5 billion through their collective expenditures. At a conference held in Dubai in May, Nassar projected that the upcoming year would see an even more substantial influx of tourists, primarily during the summer season, with an estimated minimum of 2.2 million visitors. Nassar’s estimations suggest this surge in visitor numbers will play a key role in generating revenue of at least $9 billion for the nation, thereby contributing to poverty reduction in the country.

Tourism’s resurgence has not only bolstered Lebanon’s economy but also extended economic opportunities to various regions, reducing disparities and promoting inclusivity. By attracting visitors to lesser-known areas, local communities benefit from the increased economic activity. To maintain the momentum, it is crucial to prioritize sustainable practices and the preservation of Lebanon’s cultural heritage. This ensures the long-term growth and stability of the tourism industry.

Looking Ahead

Lebanon’s economy experienced a much-needed boost, thanks to the revival of tourism during the summer months. The increased number of visitors has had a positive impact on various sectors, leading to economic growth and job creation. However, sustaining this growth requires continued investments in tourism infrastructure and the promotion of sustainable practices. As Lebanon embraces this summer revival, it has the potential to create a more stable and prosperous future for its citizens and communities, further solidifying its position as a favored destination on the global tourism map.

– Kassem Choukini
Photo: Wikipedia Commons

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Economic Improvements in Jamaica

Economic Improvements in Jamaica
Following the COVID-19 pandemic, Jamaica’s economy grew after its gross domestic product suffered a 10% decrease. It has done so by producing goods, such as food, beverages and tobacco, with the help of the goods and by self-producing industries such as restaurants, fishing, transportation, communication, construction, hotels, mining, agriculture and forestry. As a result of this, the country garnered its eighth consecutive period of economic growth during the March quarter of 2023, advancing 4.2% year-on-year after making it toward 3.8% growth during the previous quarter. Here is some information about the economic improvements in Jamaica.

Current Growth

After the 2022–2023 fiscal year had passed, the Bank of Jamaica Governor, Richard Byles, reported that the country’s economy grew in the range of 4% to 5.5% and that this outturn is up to par with the outcome that was said to come true by the institution itself. In addition to this, Byles has commented that the economic growth could be indicated by the estimated outturn for the period between the months of January and March 2023, which had a faster growth rate that quarter, ranging between 3.5% and 4.5%, than the period that had the previous fastest growth rate between October and December 2022, where 3.8% was recorded instead.

Predictions about Jamaica’s Future Economic State

Byles added that there were indications that the economy would continue to grow for the April to June 2023 period as a result of the advancements in agriculture and manufacturing production that support the resumption of production at the JAMALCO alumina plant. He further stated that as of May 18, 2023, Jamaica’s gross international reserves remained at a decent rate of $4.7 billion and that the Jamaican dollar increased in value against the U.S. dollar by 0.4%, in contrast to a 3.3% loss over the same time last year. He also commented that the Bank of Jamaica has so far sold $398.3 million through its foreign exchange intervention trading, the B-FXITT program, and an additional $10 million to certain state firms, including Petrojam, resulting in a net purchase of $470.3 million when offset by the bank’s purchases that it made.

How Economic Improvements in Jamaica are Occurring

Byles also stated that despite recent volatility in the banking industry abroad, the domestic financial system is strong with appropriate capital and liquidity. He added that the gross reserves will continue to be adequate in the medium term. Furthermore, he noted that deposit-taking institutions have maintained compliance with prudent liquidity standards and that the quality of the system’s loan portfolio has remained stable in itself.

Conclusion

To continue to combat the economic downturn and ensure economic improvements in Jamaica, Jamaica has progressively integrated climate change adaptation into its policy framework and reinforced its social protection system, which has led to an increase in fairness, a decrease in poverty and a better social structure.

– Deon Roberts
Photo: Flickr

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4 Ways Bangladesh is Combating Poverty

Bangladesh is Combating Poverty
Bangladesh is a lush South Asian country that some presume to be developing slowly along with other areas of South and Southeast Asia. In fact, the opposite is true: Bangladesh is a beautiful blueprint for how to build a country and lift citizens out of poverty. Its GDP has grown the most out of any country in the last 10 years, and it has cut the number of people living below the national poverty line in half from 2000 to 2016. While it is an amazing success story, 35 million people are still living below the poverty line and the country must continue to use an arsenal of poverty-fighting initiatives to eliminate poverty in Bangladesh. Here are four ways Bangladesh is combating poverty.

Fighting for Breath 

In the 1970s, with help from The Bangladesh Rural Advancement Committee (BRAC), Bangladesh slashed child mortality. By identifying diarrhea as the leading cause of child deaths and then widely administering Oral Rehydration therapy, it helped reduce the death rate from 180 in 1,000 to 53 in 1,000 by 2011. 

However, child mortality has continued in Bangladesh, and Pneumonia is a major killer, involved in one in five child deaths. Fighting for Breath is a global initiative that UNICEF spearheaded to eliminate pneumonia deaths in Bangladesh. By working to get Bangladesh up to global health standards (in terms of government spending and quality of care) as well as targeting underlying causes such as poor drinking water and sanitation, Fighting for Breath saves lives and stops child mortality and poverty. 

BRAC

As mentioned above, the Bangladesh Rural Advancement Committee is a global NGO now operating as simply BRAC. Since its masterful health initiative in the 70s, it pioneered the Graduation Program in Bangladesh, which has four goals: meeting basic needs, income generation, social empowerment and financial support and savings. As of 2022, it has used this model to help 2.1 million households out of extreme poverty in Bangladesh alone. 

BRAC operates under the philosophy that “people should be the subject, not the object of development programs.” Those ideals have helped them combat poverty in Bangladesh and across the globe. 

Fostering Education

A key pillar in reducing global poverty is widespread education, and Bangladesh is no stranger to this facet. Within a decade, Bangladesh has made incredible strides in education. An astounding 98% of elementary-aged children are receiving formal education. Also, according to the United States Agency for International Development (USAID), “The country has achieved…gender parity in equal access to education.” 

Although Bangladesh still struggles with equitable education for minority populations, there are USAID programs in place to tackle this issue. A chief aim is to promote awareness for minorities and people with disabilities. USAID further fought poverty with education by creating 100 classroom-based libraries in 2022. 

How Bangladesh is Combating Poverty With a Booming Economy

A major facet that has Bangladesh on pace to exit the U.N.’s Least Developed Countries List by 2026 is its expanding economy. A strong garment and textile industry and a growing energy sector have uplifted people from poverty. Textiles comprise 80% of the country’s exports and employ 4 million people. Additionally, 100% of Bangladesh’s population has access to electricity. Agriculture has also been a backbone to alleviating poverty, reducing the poverty rate by almost 70% within five years. Support from the World Bank to modernize 1.8 million agricultural houses also displays how a growing Bangladesh has mitigated poverty. The economy did take substantial hits from the COVID-19 pandemic, but its strong economy and fast-growing sectors have been pillars of making a difference. 

Looking forward, there are still many steps to eliminate poverty besides the other efforts Bangladesh is combating poverty with, but the country paints a resilient success story in how to present a continued effort to reduce poverty.

– Aditya Arora
Photo: Flickr

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5 Facts About Poverty in the Caribbean

Poverty in the Caribbean
The Caribbean is a region in the mid-Atlantic Ocean composed of island nations known for their easy-going lifestyle and beautiful weather. The Caribbean has everything that a tourist looking for the perfect beach vacation could want; from historical landmarks to world-renowned beaches and more, the Caribbean is a popular choice for vacationers of all preferences.

However, like many tourist destinations, the Caribbean has economically successful tourist towns bordering impoverished villages. The region boasts mansions of the world’s ultra-wealthy but also houses an astounding number of the world’s extremely poor. Despite the wealth that a healthy tourism industry can bring to a country and a people, many inhabitants of the Caribbean’s island nations experience extreme poverty. Here are five facts about poverty in the Caribbean.

5 Facts About Poverty in the Caribbean

  1. The Caribbean is one of the poorest regions of the world. Currently, about 32% of people in the Caribbean live below the poverty line. While one in three below the poverty line is already too many, it is not the highest rate of poverty in the world. However, because of the lack of economic growth, poverty in the Caribbean is worsening, and the Caribbean is on track to become the poorest region in the world as soon as 2050.
  2. Haiti is the poorest country in the Caribbean. Overrun by gangs, damaged by natural disasters and vulnerable to corruption, Haiti is a fragile nation. The economy often experiences crashes and has had an average of 2% negative growth over the last four years. Because of their weak economic state, people are ransacked by extreme poverty without hope of leadership or guidance from the government.
  3. Poverty in the Caribbean causes two challenges that ultimately lead to increased amounts of trafficking and other crimes — unemployment and institutional weakness. Unemployment in the Caribbean is high, averaging more than 7% across all of the countries, so many have to find ways to generate income other than a traditional job. In addition to relatively unsteady labor markets, Caribbean countries often suffer from corrupt or otherwise weak governments and unstable economies. Because these institutions are unreliable, Caribbean persons often have to resort to crime and trafficking to make money and stay out of extreme poverty.
  4. The massive dip in tourism that COVID-19 brought on shocked Caribbean economies and halted growth, even in the wealthier countries. Tourism makes up nearly a quarter of the Caribbean’s total GDP. The Caribbean depends on tourism to create jobs and continue the cycle of money in and out of the country. Because the pandemic nearly eliminated travel in all parts of the world, the Caribbean suffered from a huge cut in income for many consecutive months during the height of the pandemic. This hit to the economy increased poverty in all Caribbean countries, even those who had previously been on the road to economic success, including Barbados and Jamaica.
  5. The Caribbean depends on foreign investment to keep its economy alive. In 2021, Latin America and the Caribbean received nearly $143 billion in foreign investment. The COVID-19 pandemic decreased foreign investment because main investors like the U.S., the U.K. and Canada shifted resources from foreign investment to their domestic fights against the pandemic. An unforeseen lack of foreign aid shocked the Caribbean economy and caused many to fall below the poverty line. Since 2020, foreign aid has steadily increased but has not yet reached pre-pandemic levels and poverty rates have remained high.

Looking Ahead

Although the Caribbean is one of the poorest regions in the world with weak institutions, trafficking issues and challenges from COVID-19, the tourism industry offers these countries opportunities for economic growth. As long as the natural beauty of the region can be preserved, the Caribbean can expect a steady and even growing tourism sector that creates jobs and brings money into local economies. This sector has the power to bolster the entire region’s economy and decrease the poverty rate in many island nations.

– Suzanne Ackley 
Photo: Flickr