Information and stories about economy.

Kwenda Social Program
The Kwenda social program is an initiative that the government of Angola launched to address the country’s social and economic challenges. Angola is a resource-rich country, but it has struggled with poverty and inequality for decades. The Kwenda social program aims to reduce poverty and promote social welfare through a range of measures that target vulnerable populations.

Angola’s Economic Struggles

Angola is the largest oil supplier in sub-Saharan Africa. Oil production accounts for about half of Angola’s GDP, more than 70% of the Angolan government’s revenue and more than 90% of Angola’s exports. The health and economic crisis due to the COVID-19 pandemic coupled with the subsequent drop in oil prices further crippled Angola’s struggling economy and exacerbated poverty levels.

Impressively, Angola’s government took swift action and unraveled the Kwenda social program in response to the economic strain on the population. The premise on which the Angolan government formulated the initiative is poverty relief for the country’s “poorest and most vulnerable.” The program became the first cash transfer initiative to deliver financial assistance through digital deposits. What makes the Kwenda social program unique is that along with its focus on economic relief, it provides human development and economic activities and aims to help 1.6 million families, 60% of whom are female-headed.

In terms of land area, Angola is “one of the largest countries in Africa,” with almost 70% of the population living within cities. However, that also means that a considerable chunk of the population lives in remote areas. Angolans living in these parts of the country face limitations due to debilitated infrastructure and a lack of public transportation.

This presented a significant challenge to the Angolan government during the economic crisis because the government could not easily reach a major portion (about 88%) of the rural population suffering from multidimensional poverty.

Benefits of the Kwenda Social Program

The Kwenda social program addresses the difficulties in reaching rural populations by combining digital tools with physical cash distribution. Furthermore, the Angolan government has established community centers in exceptionally remote communities with community workers to help facilitate physical cash deliveries to the poverty-stricken. These community centers play an integral role in collecting grievances from the local population, administering and implementing the program and providing health and educational services for disadvantaged youth.

One of the segments of the Angolan population that the Kwenda social program has particularly helped is women. This is because women lead many of the households (60%) that the Angolan government aims to help through the program. Another target group of people receiving financial benefits from the Kwenda social program is the elderly population. More than 10,000 elderly people receive cash transfers as a result of the program.

The Angolan government is not the only financier of the initiative. Of the $420 million set aside for the Kwenda social program, the World Bank is funding $320 million. Additionally, in 2022, the World Bank issued a statement of praise regarding the Kwenda social program. In 2021, the initiative completed more than 300,000 digital transfers to beneficiaries. Additionally, by January 2022, the Angolan government had registered more than half a million families into the program. Of those families, nearly half, 247,000, had collected one cash transfer at minimum.

Looking Ahead

The Kwenda social program is a significant initiative that has the potential to transform the lives of vulnerable populations in Angola. The program is based on a comprehensive and integrated approach that addresses the root causes of poverty and inequality. The program has already had a significant impact on the lives of thousands of households and has helped to promote social inclusion and women’s empowerment. With continued support from the World Bank, the government and other stakeholders, the program has the potential to bring about impactful and lasting change that can build a more inclusive and prosperous social fabric in Angola.

– Aemal Nafis
Photo: Flickr

Poverty in the Niger Delta
The Niger Delta sprawls its oily tentacles throughout the southern coast of Nigeria. Spread over 256,000 kilometers, the 10th largest oil reservoir in the world comprises fields of industrial piping. Oil accounts for 89% of Nigerian exports, yet the region has significant poverty. Big oil makes off with the profits of Nigerian labor, fleecing the nation of its natural wealth and leaving behind a trail of economic and environmental devastation. Shell alone has spilled 17.5 million liters of oil into the region since 2011, laying waste to arable farmland and poisoning groundwater. The Market Development in the Niger Delta Program (MADE) and The Foundation For Partnership Initiatives in the Niger Delta (PIND) are working to drain the quagmire of poverty in the Niger Delta.

Poverty in the Niger Delta

Nigeria only fully embraced democracy in the last decade, with the first peaceful democratic succession occurring in 2015. Nigeria’s Human Development Index (HDI) rose by 13.1% between 2005 and 2015, yet Nigeria is still the 152nd least-developed nation on earth. The population in extreme poverty in the Niger Delta is the largest on earth. About 76.5% of Nigerians live on less than $3.10 a day as of 2009 and one-quarter of children are working. The crux of the issue is that the success of the Nigerian economy is intrinsically bound to oil prices and is subject to the terms of big oil. Until the Nigerian economy is diversified at the individual level, poverty in the Niger Delta will continue to thrive.

The Foundation For Partnership Initiatives in the Niger Delta Against Poverty

PIND is a charitable NGO whose programs “identify, catalyze and leverage opportunities, jobs and incomes… promoting peace and equitable economic growth in Nigeria’s Niger Delta region.” The year 2021 was busy for PIND. Programs targeting issues ranging from youth prospects to women’s rights saw excellent progress toward ending poverty in the Niger Delta.

In 2021, PIND educated 12,199 Nigerian farmers with modern agricultural practices and technologies, incentivizing farmers to invest a total of ₦745.19 million ($1.6 million). PIND also collaborated with the Edo GIS department to map, border and secure arable agricultural land for provincial farmers.

The NGO trained 23 fishermen in Awoye with modern fishing techniques. PIND provided practical demonstrations, equipment and supply links for further purchases. PIND also demonstrated modern fish processing techniques. As a result, primary business owners in the Niger Delta purchased 20 ovens, enabling businesses to increase sales.

In association with A4&T power solutions, PIND facilitated 4,130 people from 650 households and 230 businesses in the Ondo region with access to renewable solar electricity.

An initial cohort of 631 youths graduated from the Youth Employment Pathways program in Delta State in 2021. These youths received training in “technical and vocational skills training across four intervention sectors of ICT, building construction, agriculture and services.” About 232 graduates attained apprenticeships, 161 started businesses and 112 secured paid employment.

In 2021, PIND produced 13 conflict reports to influential community leaders “to facilitate targeted interventions to mitigate emerging conflict issues in the (Delta) region.” In combination with the reports, 51 ‘peace actors’ took 48 actions to resolve conflicts in the Niger Delta region.

PIND collaborated with the Centre for Gender and Development Studies of the University of Port Harcourt to launch an advocacy program to end sexual violence and the ritualistic sacrifice of women and girls in the Niger Delta.

The Market Development in the Niger Delta Program Alleviating Poverty

The Market Development in the Niger Delta Program (MADE), by DAI, is another project alleviating poverty in the deprived Niger Delta region. Its mission is to “tackle fundamental social and economic development problems caused by inefficient markets, ineffective governance, and instability.” Between 2013 and 2020, MADE achieved the following milestones:

  • MADE leased with 551,521 independent farmers, providing them with ‘commercial incentives.’ About 389,441 of these farmers increased productivity and 307,722 experienced at least a 15% increase in income. This represents more than $55 million of the profits that MADE generated.
  • MADE influenced “36 lead firms across five sectors… to invest in 1,982 agricultural inputs, fisheries, poultry and palm oil.” MADE also orchestrated the training of 100,000 independent farmers by inspiring 50 more companies to train impoverished Nigerians. Training enables primary business owners to become more efficient and forge meaningful trade relationships with large corporations.
  • MADE led nine corporations to invest $10 million in 33,000 vulnerable people and human rights abuse victims in the Niger Delta.

MADE and PIND programs have made significant inroads into poverty in the Niger Delta. Agricultural knowledge-sharing endeavors and modern machinery workshops allow impoverished Nigerians to forge successful businesses and livelihoods. Facilitating investment by independent farmers and large corporations affords impoverished Nigerians the prospect of financial autonomy. MADE and PIND promote human rights, peace, democracy, youth prospects, women’s rights and financial development, addressing the root causes of poverty in the Niger Delta with emphatic efficiency.

David Smith
Photo: Wikipedia Commons

India’s Economy
India’s government outlined major economic formalization within the next 10 years. Formal economies create new tax incentives and remove financial burdens an informal economy leaves in place. Informal economies have left in place jobs with no benefits. They can create significant pay gaps between those in informal economies and formal economies. The latest step in formalizing the economy is formalizing the “mom-and-pop” shops, thus creating boosted tax bases and increasing a taxpayer database to remove further economic burdens from the poorest Indians.

Formal Versus Informal Economies

An informal economy or informal economic sector is common worldwide in developing nations. An informal economy or sector is a type of market, job or business that can generate reliable revenue but the government does not properly tax or track. From their offset, informal economies seemed promising, especially to the workers, as they promised a reliable transition between a developing nation and a nation with a solid and robust economy. Instead, as many informal sectors have yet to formalize, they and their workers are putting extra strain on the economy without paying fair taxes.

The COVID-19 pandemic devastated the informal economy workers. In most cases, an informal economic worker works on a case-by-case basis, such as cab and bus drivers in Africa or market vendors. The informal workforce predominantly defines work done on a one-to-one transactional case. The informal economy has been necessary for an economic transition to find areas with sustainable economic growth. However, economic growth, job opportunities, and income possibilities remain low if those areas remain informal.

Workers in informal economic sectors tend to be poorer and have fewer chances to create an upward financial movement for themselves. The continuance of an informal sector or business separates workers from tax benefits, government resources and assistance as needed. As a whole, this can limit the potential upward mobility for an entire region or nation, limiting sustainable economic growth and leaving poverty rates higher than they would be if an economy were to formalize.

Why is India Formalizing its Economy?

India has been aiming to formalize its economy for years, and current Prime Minister Narendra Modi is spearheading the efforts. PM Modi and his government are formalizing India’s economy through sweeping policy changes that can keep workers safe and markets flexible while decreasing poverty rates as access to government assistance improves. Formalizing India’s economy is not an easy task, with a great deal of pushback coming from the informal work sectors, but for long-lasting economic growth, the government began taking small steps in the formalization process.

About 93% of India’s workforce works in its informal economy. When the COVID-19 pandemic hit, and citizens in informal work positions lost most, if not all, of their income, they had to turn to government assistance, forcing a formalization process that proved beneficial for all. Between 2019 and 2021, India’s poverty rate dropped from 55% to 16%, an impressive economic recovery aided by Modi’s push for formalizing India’s economy.

Formalizing India’s economy has been a long time coming, and the government is determined to capitalize on the improvements made during the pandemic and create stable, sustainable growth that benefits all Indian citizens.

The Latest Formalization Steps

The latest steps in formalizing India’s economy include expanding the Goods and Services Tax (GST). PM Modi originally introduced the GST to formalize the economy and plans to expand the GST for the small “mom-and-pop” stores. Expanding the GST is not the first step India has taken to formalize the sector of small corner stores. India’s government implemented zero Merchant Discount Rates (MDRs) on all digital financial transactions for stores earning less than Rs 20,000 a month.

Expanding the GST will bring additional businesses under the tax umbrella to lighten economic burdens on others and other businesses that may have heavier taxes as compensation for the remaining untaxed businesses. Formalizing India’s economy brings the mom-and-pop stores government assistance as needed, as many suffered due to shutdowns during the COVID-19 pandemic, and business-to-customer (B2C) interactions minimized. With the GST’s growth, the Indian government wants to use private and public databases to track the development of B2C interactions to understand each region’s economic growth and stability.

Formalizing India’s economy is necessary for lifting millions of citizens out of poverty, creating jobs that can last generations and bringing tax and government benefits to all citizens. PM Modi and his government are striving to support their citizens in unprecedented ways in India. Expanding the Goods and Services Tax is one of many ways to build national economic strength.

– Clara Mulvihill
Photo: Flickr

Sri Lanka's Debt Crisis
Sri Lanka’s debt crisis has become the latest point of geopolitical contention. The country experienced extreme economic hardship during the COVID-19 pandemic, leaving it unable to pay billions of dollars worth of debt to private and government creditors. Following an unprecedented defaulting of its debts and a political crisis that saw the president resign and the prime minister’s office raided, Sri Lanka stands on the precipice of an economic and humanitarian catastrophe. With the United States, Russia, India and China all weighing in, the world’s monetary eyes have turned toward the struggling island nation.

A Closer Look at Sri Lanka’s Collapse

Sri Lanka’s debt ballooned over the last few years due to domestic crises and an unfavorable economic situation. Relying primarily on exports to feed an ever-growing deficit, the country’s situation took a turn for the worse when pandemic supply shocks and tourism dried up foreign revenue, causing blackouts along with food and energy shortages. Unsurprisingly, political turmoil quickly followed suit, ending with the ousting of President Rajapaksa and the ascension of Wickremesinghe to office. Now, Sri Lanka has nearly no foreign reserves and a 119% debt-to-GDP ratio.

If the macroeconomic situation seems dire, it pales in comparison to the suffering of Sri Lanka’s poorest citizens. Between 2021 and 2022, poverty rates increased by half to 25.6%, pushing 2.7 million more people into the grips of poverty. Additionally, inflation in Sri Lanka hit a record high of 73.7% in October 2022. With the world’s economy expected to shrink over the next year, Sri Lanka’s predicament threatens to worsen as its crisis deepens.

Sri Lanka’s Creditors

Underlying these pressures are private and public groups using Sri Lanka as a pawn on the international stage. China accounted for close to 10% of Sri Lanka’s debt by April 2021 but refuses to negotiate the amount owed, insisting on “a two-year moratorium” instead. India, China’s competition in the region, offered Sri Lanka an emergency $4.4 billion in credit, attempting to woo the island nation away from its traditional source of funding. The International Monetary Fund (IMF) says it will only consider a relief package if Sri Lanka can come to an agreement with its main creditors.

In addition, private banks have played hardball with Sri Lanka, exacerbating the current crisis. These organizations collectively hold half of Sri Lanka’s debt, lending to the island nation at an exorbitantly high-interest rate. Renowned economists, such as Thomas Piketty, note that many of these companies knew Sri Lanka would be unable to repay its debt but chose to offer it loans regardless. His conclusion is that risky lending must bear the consequences.

Debt Assistance

Although some economists like Piketty champion cancellations of Sri Lanka’s debt, a more moderate solution does seem plausible. The IMF showed more openness to an emergency loan as talks with China and India continued. Provided Sri Lanka passes austerity and anti-corruption measures, the IMF said in September 2022 that it would be willing to give $2.9 billion in funding. Vitally, this aid would allow the country to purchase much-needed medical equipment and food. Private creditors also demonstrated a willingness to restructure Sri Lanka’s debt, pending approval from President Wickremesinghe.

Domestically, Sri Lanka’s president stressed the importance of weathering the economic storm. Urging his fellow countrymen forward, President Wickremesinghe stated that as pay raises for civil servants come into effect “the public would become prosperous, with income sources increasing. The interest rate can be reduced. In another three years, present incomes can be increased by 75%.” Indeed, inflation will likely decrease from 45% in 2022 to 23% in 2023 and only 8% in 2024.

Foreign Aid to Help During Sri Lanka’s Debt Crisis

Amid Sri Lanka’s debt crisis, it is important not to lose sight of those most affected by the country’s economic woes: its people. Given the dire condition of food, fuel and supplies, immediate aid provides the most tangible form of assistance. In June 2022, USAID announced almost $6 million worth of humanitarian aid to Sri Lanka on top of assistance worth close to $12 million a month prior. The funding will “provide cash assistance, short-term jobs, and agriculture supplies such as seeds directly to crisis-affected people to meet their basic needs,” the USAID website says.

Meanwhile, the United Nations raised $79 million to relieve food and medicine shortages in Sri Lanka. Through its Humanitarian Needs and Priorities Plan, the U.N. aims to help about 3.4 million Sri Lankans in need of aid.

With increased aid and pressure from the international community to resolve the crisis, a resolution to the crisis appears, if not imminent, at least plausible. Although this provides scarce comfort to the 6.3 million Sri Lankans that food insecurity has affected as of September 2022, it is an important step in the right direction while humanitarian organizations address the needs of struggling people on the ground.

– Samuel Bowles
Photo: Pixabay

Impact of COVID-19 on Poverty in Bahrain
Just like many other countries in the world, the impact of COVID-19 on poverty in Bahrain was considerable. The nation’s GDP shrank 6.9% due to the pandemic during the third quarter of 2020 when compared with 2019. In comparison to other Gulf states, Bahrain performed slightly worse as Qatar had an economic output of -3.7% and the UAE’s economy shrank by 6.1% in 2020. Though there are no definitive poverty estimations, other indicators point toward an overall increase in poverty in Bahrain during the pandemic.

Reaction to COVID-19

During its worst period, daily new COVID-19 cases in Bahrain rose to 8,000 at the start of February 2022. Bahrain had more than 60,000 active cases by February 7, 2022. As of February 12, 2023, Bahrain has suffered a total of 700,835 COVID-19 cases and 1,544 COVID-19 deaths.

Just like many other governments around the world, Bahrain implemented lockdowns as a countermeasure to the rising COVID-19 infections. By choosing this method to curb the COVID-19 cases in the country, the government of Bahrain effectively brought the country to a standstill. The government halted/restricted the activity of shopping malls, restaurants and cafes, gyms, cinemas, sports events and more.

As a result, both consumption and production in Bahrain dropped. Bahrain’s trade during COVID-19 declined considerably. In fact, “trade with the largest economy in the region,” Saudi Arabia, decreased by 2.1% within the “first nine months of 2020.” Furthermore, trade with Kuwait and the UAE dropped by 15.4% and 21% respectively.

With Bahrain’s unemployment rising to 9.4% in 2020, the government announced an economic stimulus package in March 2020 worth 4.3 billion Bahraini dinars to support the country’s citizens due to the effects of the lockdowns.

The government aimed to keep the private sector afloat and ensure employees continued to receive their salaries for three months. The stimulus package also covered the cost of electricity and water bills for three months and absolved all tourism-related businesses from tourism levies, among other measures. Overall, the stimulus package aimed to reduce the potential increase in poverty in Bahrain due to COVID-19. However, financial worries for Bahrain due to the economic impact of COVID-19 on poverty in Bahrain led to more financial aid from fellow Gulf Arab states Saudi Arabia, Kuwait and the UAE.

Oil Dependency

As a Gulf State, it comes as no surprise that Bahrain has significant oil reserves. However, unlike other nations in the Middle East, Bahrain has not diversified its economy. While significant effort went into reducing Bahrain’s dependence on oil prices, oil and gas revenue still accounted for about 75% of government funds in 2016.

Oil prices fluctuate regularly, and as a result, the Bahraini economy has struggled when oil prices drop. The result has been an irregular growth in Bahrain’s budget deficit. The impact of COVID-19 exacerbated Bahrain’s circumstances and the World Bank stated, “lower oil prices since 2014 had widened fiscal and external imbalances and intensified macroeconomic vulnerabilities.”

Due to the COVID-19 outbreak and subsequent financial impact, Bahrain announced drastic spending cuts in April 2020. According to Al Jazeera, the Gulf Island cut expenditure by up to 30% across ministries and government agencies. Cuts across the board at the government level can affect those on lower incomes more than any other section of the population as many rely on government-run social safety nets to stay financially afloat.

Poverty in Bahrain

Though no official poverty estimates exist that would indicate an increase in impoverishment in Bahrain amid the pandemic, a UNDP “Assessment of the Socio-economic Impacts of COVID-19 on Bahrain” shows a decline in living standards, indicative of poverty. A survey shows that Bahrainis and Bangladeshis living in Bahrain “suffered considerable amounts of self-reported economic distress, in the form of job losses and decreased income.”

However, positively, Bahrain’s unemployment rate reduced from 7.7% in 2021 to 5.4% in 2022. In comparison to other Arab nations, Saudi Arabia’s unemployment rate rose to 9.9% in 2022 and the UAE’s unemployment rate rose to 3.4% in 2021.

Bahrain’s ongoing oil dependence and the effects of government-imposed restrictions during COVID-19 have led to economic instability in the nation. The Bahraini government’s decision to add roughly $470 million to its budget in 2020 to cover potential emergency pandemic spending likely limited the impact of the pandemic on the Bahraini economy.

The stimulus package propelled economic activity and put Bahrain on track to recover from the pandemic. By 2021, Bahrain’s GDP had seen an increase of 2.2%. Diversification of the economy will improve economic stability in Bahrain, especially amid recovery from the impact of COVID-19 on poverty in Bahrain.

– Josef Whitehead
Photo: Flickr

Zimbabwe Since Mugabe
Zimbabwe, officially the Republic of Zimbabwe and formerly recognized as Rhodesia. Zimbabwe is a landlocked nation in southern Africa bordering South Africa to its south and Zambia to its north. The nation gained independence in 1980 after a long period of colonial rule. Similarly to South Africa, Zimbabwe suffered a period of white-dominated rule in which the country suffered severe human rights violations, especially to the majority black population.

One of the longest-sitting leaders in modern times, some considered Robert Mugabe to be a revolutionary hero. Having led the Zimbabwe African National Union-Patriotic Front (ZANU – PF) and ousted the minority white government of Zimbabwe, Mugabe became the leader of the nation. Serving as President from 1987 to 2017. At first, many in Zimbabwe may have felt optimistic about Zimbabwe’s future, but after 30 years of economic stagnation and rampant hyperinflation, a military coup ultimately ousted President Mugabe. His dismal leadership of Zimbabwe’s economy and reports of many human rights violations are the main reasons for his departure. Here is some information about Zimbabwe since Mugabe.

The Economy

Unfortunately for President Mnangagwa, his predecessor left Zimbabwe in economic peril. With Mugabe gone, there was much elation at the prospect of a new leader in Zimbabwe, with many finally believing that the worst may be behind them. Mnangagwa promised the people of Zimbabwe economic prosperity and more democracy. The President stated at ZANU – PF headquarters that “No one is more important than the other. We are all Zimbabweans. We want to grow our economy. We want jobs.”

However, economic prosperity has yet to come, with some in the nation believing that Zimbabwe since Mugabe has actually worsened. Zimbabwe’s inflation problem seems to have continued under the new leadership, having a 557.2% inflation rate in 2020. However, 2021 saw a 458.66% decline in inflation to 98.55%.

The problem with hyperinflation is that the Zimbabwean dollar is effectively worthless, making it very hard for the economy to grow as foreign imports will simply be far too expensive. Many in Zimbabwe prefer using the U.S. dollar, whereas the South African Rand is the most common. However, the GDP per Capita in Zimbabwe was $1,774 in 2021, a 29.23% increase from 2020.

Poverty in Zimbabwe requires attention. The poverty rate in Zimbabwe was 85% in 2019, a 0.9% increase from 2017, the year Mugabe left the presidency.

Indicating that in the nearly six years since Mugabe, the government has been unable to make any significant change to poverty in the nation. Alongside a disturbingly high poverty rate, the country has an estimated 90% of the citizens either unemployed or work informally to make a living.

Human Rights

Perhaps unsurprisingly, with Mnangagwa being a member and leader of the ZANU – PF party, the same party as former President Mugabe and the only party in power since the ending of the white minority rule in Zimbabwe, human rights in Zimbabwe continue to be an issue in the nation.

Mnangagwa promised change in Zimbabwe, however, according to Human Rights Watch (HRW) the situation continued to decline in 2020 under President Mnangagwa. According to HRW, more than 70 critics of the government were abducted and tortured in 2020. The HRW stated that “Security forces also continued to commit arbitrary arrests, violent assaults, abductions, torture and other abuses’ against anyone critical of the government.”

With Human Rights violations such as these, it is fair to suggest that not much has changed in Zimbabwe since Mugabe. As ex-President Mugabe received criticism for corruption and silencing of critics. 

Government Reaction to Human Rights

Under the leadership of Mnangagwa, Zimbabwe only repealed one law from the Mugabe era. Critics have suggested the government’s slow implementation of its commitment to political reform shows its lack of interest to re-engage with the international community. Instead, the party with a stranglehold of the politics in the nation would rather pursue the continuation of power in Zimbabwe. Al Jazeera spoke to a Zimbabwean citizen who said that “Under Mugabe, things were getting bad. It’s the same group of people (in power) essentially.”

The government however refutes this, suggesting that Mnangagwa has managed to stabilize the currency and committed to opening up the country for business. While the future certainly looks dim for Zimbabwe since Mugabe, there are some glimmers of hope. Zimbabwe actually has the second-largest platinum deposit in the world. The nation also has a significant amount of gold with more than 4,000 recorded gold deposits found so far in Zimbabwe. While the country’s mining sector in the Great Dyke has been inefficient up until now, the government aims to grow its platinum exports considerably.

Looking Ahead 

The potential of Zimbabwe’s mining sector could be huge, generating more revenue, creating new foreign investment opportunities and long-lasting well-paid jobs for Zimbabwean citizens. If done correctly, the government in Zimbabwe may be able to significantly reduce severe levels of unemployment and rampant poverty.

 – Josef Whitehead
Photo: Flickr

Economic Development of Bangladesh
After gaining independence in 1971, Bangladesh was described as a “basket case” and a collapsing and fragile state as it emerged from the war as the second poorest country in the world. At the time, Bangladesh was a war-torn agrarian economy with a number of human development challenges with dwindling productive assets and weak infrastructure. However, Bangladesh proved the international community wrong as they emerged victorious and resilient in their pursuit of economic development, particularly after the 1974 famine.

The World’s Fastest-Growing Economy

Economic development in Bangladesh in the past 50 years has been impressive, with GDP per capita rising to $2,734 in 2021 from $134 in 1971. Bangladesh quickly recovered from the aftermath of its War of Independence as one of the poorest countries in the world to achieve a steady growth rate, even during the times of the COVID-19 pandemic. Over the past two decades, extreme poverty has significantly declined by more than half, dropping from 34% in 2000 to just 11% in 2022. In addition, other key indicators of human well-being, such as maternal mortality rates, life expectancy and primary and secondary education attainment have also shown significant improvement.

One important factor is that almost all children go to school, with the primary school net enrolment rate at 97%. Moreover, more women continue to enroll in schools, and thus enter the workforce, contributing to growth in a wide range of economic sectors. Consequently, maternal mortality cases decreased significantly from 2000 to 2017, from 434 live births per 100,000 to 173.

Even during the COVID-19 pandemic, Bangladesh still found a way to prosper. Households saw improvements in regard to coping strategies and food security amidst the pandemic, and according to self-reported surveys, families residing in poor and slum areas of Dhaka and Chittagong experienced substantial improvement in their food security. This was linked to an increase in employment opportunities observed between two rounds of surveys conducted. Survey results also indicated a general improvement in the labor market and employment situation in 2022.

How Did They Do It?

There were several factors that contributed to the economic development of Bangladesh, particularly in the agricultural sector of the country. Following the birth of the nation in the 1970s, Bangladeshi scientists helped successfully implement innovations in crop varieties that made the country self-sufficient in food. Advancements in sustainable food production practices, despite the difficulties posed by frequent flooding, have been instrumental in combating hunger, poverty and malnutrition.

Furthermore, Bangladesh became the second largest exporter of ready-made garment (RMG) products in the world which greatly increased employment in the manufacturing sector. The growth of RMG also benefitted female labor, as the number of women entering the workforce increased to 35% in 2021, from 21% in 1990.  Clean energy also became more accessible for the 8.2 million people living in the rural parts of Bangladesh, with every home having access to electricity. These improvements led to increases in immigration and the nation saw an increase in economic contributions from migrant workers.

Partnership with the World Bank

In 1972, the World Bank saw potential in Bangladesh, beginning a partnership by investing a $50 million credit. This turned into more than $38 billion in financing for economic development in Bangladesh over the following years. Today, the World Bank is Bangladesh’s largest external funder. The decision to continue funding centered around Bangladesh’s impressive achievements and the necessary actions required to maintain Bangladesh’s progress toward its goal of becoming an upper-middle-income country by 2031.

Despite these accomplishments, the current challenges of high inflation and declining foreign exchange reserves challenge the notion of stable macroeconomic performance in the country. Furthermore, concerns persist about the nature of growth and its impact on the population. Roughly 24.3% of the population struggles to fulfill basic necessities and the wealthiest 5% hold 27.8% of the nation’s income.

Nonetheless, the impressive economic development and poverty reduction in Bangladesh are inspiring. However, to achieve high-income status and meet the Sustainable Development Goals (SDGs), significantly increased efforts toward inclusive growth are necessary.

– Noura Matalqa
Photo: Flickr

State of Poverty in India
As India is on track to become the most populated country in the world by the end of the year, many eyes are on the South Asian country in regard to its progress in eliminating poverty. Despite having suffered from chronic poverty for much of its modern history, India has made much progress in raising its poorest over the past few decades. Though factors such as the COVID-19 pandemic have complicated things, India continues to make great strides in its bid to eliminate poverty within its borders.

This Century’s Progress

In the past few decades specifically, the fight against poverty in India has come a long way. Since 2005, an estimated 415 million people have risen out of poverty in India – an impressive feat, considering that the country has a total population of 1.4 billion today. It has a diverse economy, which includes industries such as agriculture and handicrafts. Thanks to a well-educated population of English speakers, India has gained a global foothold in massive modern sectors such as information technology services and software workers. This increase in economic prosperity has given many of India’s poorest opportunities to rise out of poverty.

Old and New Challenges

Despite this amazing progress over the past 20 years, several hurdles remain in the fight against poverty in India. There are 229 million Indians who still live in poverty, which is the largest number of poor people in a single country anywhere in the world. In addition to this, the urban-rural divide of poverty remains very pronounced; as many as 21.2% of India’s rural-living citizens live in poverty, which contrasts with the much smaller 5.5% of impoverished urban dwellers. To put it into perspective, 205 million of India’s 229 million impoverished citizens live in rural areas, according to Mint. When developing strategies to fight poverty in any location, considering the rural-urban divide is a must.

Though India’s economy has remained steadily robust, COVID-19 had a strong impact on the country – particularly on those living in poverty. The pandemic caused India’s economy to contract by a hefty 6.6% in the fiscal year 2020-21. Particularly, COVID-19 hit hard the informal sector which employs 90% of Indians. The dampening effect on India’s economy has made a significant impact on the country’s most poor and vulnerable households especially.

Looking Forward

Thankfully, even with the challenges that COVID-19 and chronic economic equality still pose today, the fight against poverty in India continues its upward momentum. Much of this is thanks to its economic growth; in 2022, it overtook the U.K. to become the fifth-largest economy in the world. According to other reports, it could also overtake Germany and Japan by 2029 to become the third-largest economy in the world. As the country’s economy continues to grow and stabilize, more opportunities will arise for its poorest residents to climb the economic ladder and rise out of poverty.

Despite many challenges, both institutional and from outside forces, poverty in India has been decreasing at a steady rate, thanks to the country’s booming economy and a continued global awareness of the need to end poverty. As it stands, the current state of poverty in India shows several more hurdles remain in ending its impoverishment, but the horizon looks hopeful for India’s poorest.

– Elijah Beglyakov
Photo: Flickr

Nepal’s Economic Recovery
Nepal, a landlocked nation famous for the mountainous range of the Himalayas on its borders, has been working to restructure its economy, bring new opportunities to its citizens and decrease poverty rates. Historically, Nepal’s poverty rates have been incredibly high, currently leveling at about 25%, with a heavy reliance on agriculture, lacking education and infrastructure, and many more variables that have stunted and limited economic growth for decades. Many feared that Nepal’s economy was on its way to economic collapse and crisis. Instead, Nepal has recently had some of its most promising improvements during the COVID-19 pandemic.

Nepal’s Economic Burdens and Poverty Exacerbators

The factors increasing Nepal’s poverty rates are numerous. One of the greatest is Nepal’s reliance on agriculture. Agriculture serves as Nepal’s primary source of income and food. Such farming practices are known as “subsistence farming, and 68% of Nepal practices subsistence farming. Agriculture is responsible for one-third of Nepal’s Gross Domestic Product (GDP). It connects employees ranging from farmers to small-business merchants and large-scale international traders. Nepal is vulnerable to severe droughts and flooding, resulting in a vicious cycle that upsets the agriculture sector and limits production, income and the food available per family.

A wide class divide has also exacerbated Nepal’s poverty challenges, as the education system in Nepal has exemplified. Nepal’s education system has been slowly expanding to reach the rural regions, specifically the Kathmandu region, where the public and private sectors are integrating to be more inclusive for children of all ages. Net enrollment in schools is up to 97%, but more than 770,000 children are still unable to obtain a comprehensive education as many areas do not have schools or the ones that do exist are understaffed. Minimalized education perpetuates regional poverty, limiting upwards economic progression.

Nepal’s Economic Recovery

Economists have feared that Nepal is due for an economic crisis similar to the one that Sri Lanka experienced in 2022. Sri Lanka’s economy slid into a crisis due to extremely high external debt, a tremendous trade deficit and overwhelming inflation. The crisis is increasing poverty rates, about 25% in Sri Lanka, with the urban poverty rates tripling since 2021. The government is struggling to restructure the economy and take control of the rising poverty rates and joblessness, but Nepal’s economy is not on the same track.

Nepal’s external debts have much lower interest rates than Sri Lanka’s, and the government has implemented new transparent and efficient policies that concentrate efforts on local infrastructure changes. Despite the challenges regarding Nepal’s reliance on agriculture, agriculture became a savior for the nation after the economy lost income from tourism and external support systems. Nepal’s economic recovery would not be possible without the changes to its debt or agriculture system.

The Asian Development Bank (ADB) predicts that Nepal’s economy will again experience a year of modest improvement for the fiscal year 2023, with further decreases in poverty, meaning Nepal’s economic recovery was not temporary. The government has tightened restrictions on imports and exports to ensure the economy remains stable. The new restrictions created new reliances on agriculture, forcing the government to invest extra efforts in the agriculture system’s impact locally before returning to expanding trade externally. The pauses allow the government to take stock of its depleted foreign currency reserves before deciding which allies to renew, strengthen or end.

Improvement to Education in Nepal

Nepal’s education system has improved as the COVID-19 pandemic forced the schools to reconfigure their newly developed teaching styles and practices. The pandemic’s pauses in everyday life presented Nepal with the opportunity to implement new teaching programs nationwide. The original interruption of the COVID-19 pandemic in daily life slowed the pace at which Nepal can reach the United Nation’s Sustainable Development Goals (SDG). The government aimed to hit benchmarks by 2022 to exemplify the progress in academia throughout Nepal, but the new plans restructured the older outline for the education goals. The alterations to the Nepalese education system can provide new academic opportunities for an education that can lift children out of poverty.

Despite Nepal’s economic strife in years past, the COVID-19 pandemic was a window of opportunity for the government to restructure the nation’s reliance on agriculture and deficient education system and reconfigure trade deals with international allies. Nepal’s economic recovery shows that the country is nowhere near an economic crisis, as the private sector may have feared, but it is on a stronger path to recovery than ever before.

– Clara Mulvihill
Photo: Flickr

Honey Pride Arua
Honey Pride Arua, a private organization started in 2015 by Sam Aderubo offered an innovative approach to inclusive economic development across the region of Arua, Uganda. Specializing in honey, the organization aims to construct sustainable markets for beekeeping and production, alongside raising awareness amongst local farmers of the commercial potentials of beekeeping.

A comprehensive program offers education on all aspects of beekeeping and the honey production process, from apiary management to the packaging and distribution of goods. Through this, the organization enables existing local farmers and anyone with a desire or interest to enter into beekeeping to convert their hobbies into economic output, sustaining themselves and their families.

The Effects

As Betty Ayikoru, a local beekeeper and councilor outlined beekeeping benefits communities in more ways than selling honey. Honey Pride Arua has grown commercially in the scale of operations and income, but what is more significant is the effect this has on the surrounding community and stakeholders.

Today working with more than 1,700 farmers – 30% women and 60% youth, the organization makes emphasis on targeting marginalized members of the community. A holistic and immensely effective approach in addressing local unemployment by gearing their project to those in the community most likely to be unemployed, or equipped on average with lower prospects.

Honey Pride is also noted for the inclusion and support of refugees in economic activity for local development. Arua, in Northern Uganda, is a region largely populated with refugees compared to other parts of the country. Honey Prides’ inclusivity played a key role in gaining external funding from the United Nations Capital Development Fund (UNCDF).

Stable markets offer stable incomes and Honey Pride’s activity has helped local farmers put children through school, financially sustain households and their families, as well as offering a nutritious element to their diet, according to a U.N. News podcast.

Previously it was difficult to find a reliable market with stable prices to sell one’s honey in Arua. However, prospects for beekeepers have drastically changed since Honey Pride entered the industry. Delivering on one of its central tenets, a stable honey market has emerged across the region. A kilogram of honey in 2015 was worth 3,500 Ugandan Shillings, today the market price is around 7,000 Shillings per kilogram. Encouraging statistics motivates many young members of the community to venture into beekeeping.

Another noteworthy aspect of Honey Pride’s operations is the efficiency of its practices. The organization works to eliminate waste by offering excess produce and residue to the community to fertilize local gardens and land, as well as feed livestock, according to a U.N. News podcast.

Investment

The most significant challenge to the organization has been financial. As Sam Aderubo himself states in the podcast, “finance is the lifeline of a business.” The organization in its early years, like most small Ugandan businesses, was unable to get investment from commercial banks. Aware of its social impacts and inclusivity practices focused on a community-benefit model, the UNCDF found a worthy beneficiary, investing over $117,000 to help Honey Pride Arua reach a certain threshold at which it will begin to attract investment from larger commercial banks and private equity firms.

This came in the form of loans for processing equipment and operations, alongside technical assistance and support in designing a sustainable and viable business model. Through these efforts, Honey Pride procured the likes of professional filtering equipment, an electric honey press for the extraction process and eight honey settling tanks each with a capacity of 1,000kg, UNCDF reported.

A direct impact of such measures saw a substantial increase in output from three to five tonnes per month post-investment, which, according to UNCDF, in 2021 amounted to a monthly increase in income by over $8,000.

Following the successful implementation of these loans in growing the organization, in the case of Honey Pride, several private equity firms have since displayed an interest in investing, offering a blueprint for further upscaling and aligning the company for greater success in the future, according to the U.N. News podcast.

What the Future Holds

Further expansion and entry into new markets is the next step for Honey Pride, having met international standards with its product. With increases in output and income, Honey Pride can begin to invest more in outreach and marketing, further consolidating the stability of local markets in addition to developing foreign ones as well.

Looking ahead, Honey Pride Arua aims to implement a program to equip local farmers or those with a desire to venture into beekeeping with the required equipment and facilities. This way, it is helping to establish more local beekeeping businesses that return on the investment they received from Honey Pride through their yield. An innovative, circular model of business. As Honey Pride grows commercially, its inclusive practices and reach spread, benefiting ever greater numbers of people.

– Bojan Ivancic
Photo: Unsplash