Archive for category: Economy

Information and stories about economy.

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4 Circular Economy Projects Fighting Poverty in Southern Africa 

Circular Economy Projects
Southern Africa faces huge numerous management issues, with South Africa recovering or recycling only 34.5% of its waste in 2017. However, organizations are mobilizing communities to tackle both this issue of waste and poverty through one tactic. Circular economy projects empower disadvantaged communities to clear and upcycle waste, creating income opportunities and helping the environment. Here is some information about some circular economy projects and what they are doing to eliminate poverty in southern Africa.

Wasteland Graced Land Project

Headed by Dreamcatcher Foundation’s Anthea Roussow and University of Brighton waste expert Ryan Woodward, the 2020 Wasteland Graced Land project has helped transform the South African town of Melkhoutfontein into a tourist destination by turning its plastic waste into sellable products. Thanks to a £65,000 grant from the British Council’s Developing Inclusive and Creative Economies, the project has empowered locals to create crafts and souvenirs such as jewelry, toys, mosaics and bowls – all from Melhoutfontein’s waste products. Grant money goes toward paying stipends to crafters and provides a small income for waste collectors, enabling many women and unemployed youth to better provide for their families and develop their business skills.

Flip Flop Recycling Company

Founded by Julie Church in 2005, the Nairobi-based FlipFlop Recycling Company (FFRC) upcycles flip-flops that have washed up on the shores of the Kenyan coast into 100 different products. This includes jewelry – some of which has appeared on the catwalk at Paris fashion week. The company buys flip-flops from women who collect them at the coast, employs workers to wash and repair these flip-flops and pays artisans to rehash the flip-flops into various products which it finally sells to the shop. The FFRC provides communities with business training and multiple income opportunities, employing around 40 people at its Nairobi facility in 2012.

3R Ecopoint Network

3R Ecopoint Network is based in the seaside town of Vilanculos, Mozambique, and is focused on reducing the amount of plastic waste that ends up in the Indian Ocean. However, it has also improved the lives of local waste pickers, who play a vital role in salvaging reusable material yet are socially excluded and often seen as criminals or failures. By setting up secondary collection points which buy recyclable waste and selling this waste to recycling industries, 3R Ecopoint Network has not only reduced waste volumes in Vilanculos but also increased the revenue for waste pickers by 23, 525MZN from 2019-2022. One impacted individual is Teresa Navelane, who is now able to buy basic food items using the income she receives from collecting recyclables.

Watamu Marine Association

Negative perceptions about waste pickers are also an issue in Kenya, where the informal waste management sector continues to suffer without proper infrastructure and government support. The Watamu Marine Association (WMA) assists waste pickers outcast by society by creating a plastic waste value chain running between the local community and tourism industry in Watamu and surrounding areas. WMA has employed 100 waste pickers from disadvantaged backgrounds, who earn a weekly income through the sponsored “Cash 4 Trash” beach clean-ups. This income empowers women and youth to participate in business ventures and improve their living standards.

These four circular economy projects have had a significant impact on the communities they work in. Their continued work should offer livelihoods to many individuals and have an even further effect on the reduction of waste.

– Imogen Scott
Photo: Flickr

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Fidel Ramos’ Legacy of Social and Economic Reforms

Fidel Ramos
Fidel Ramos, a former President of the Philippines who ousted a long-standing dictator, died on July 31, 2022 at the age of 94. Ramos served as a general in the Korean and Vietnam wars and played a major role in turning the Philippines into a pro-democratic country. His accomplishments include uplifting millions of Filipinos and eliminating the Philippines’ historic title as ‘the sick man of Asia.’ Press Trixie Cruz-Angeles told the LA Times that “He leaves behind a colorful legacy and a secure place in history for his participation in the great changes of our country, both as a military officer and chief executive.” Here is some information about Fidel Ramos’ legacy including his economic and social reforms.

Democracy Under Fidel Ramos

The dictatorship and policies under Ferdinand Marcos were crippling for many Filipinos and the country’s economy. Although the unemployment rate fell from 7.1% to 3.9% during the early years of Marcos’ presidency, unemployment rapidly rose again in the mid-1970s when it reached 7.9%. By 1985, two-thirds of the population was poor and at least half, or 27 million Filipinos, lived in extreme poverty.

During Marcos’ administration, Ramos was a key figure, serving as a PC chief. However, in February 1986, Ramos resigned from his post and supported the rebellion, People Power Revolution, after a failed coup. The rebellion ushered in a radical transformation in the Philippines and became a symbol against authoritarian regimes worldwide.

When Aquino rose to the presidency, Ramos was able to prevent her from attempting violent coups. In 1992, the people of the Philippines elected Fidel Ramos as President. His administration successfully implemented many reforms to reduce poverty and bolster the Philippines’ economy.

Economic Reforms Under Fidel Ramos

To combat the aftermath effects of Marcos’ dictatorship, Ramos embraced a “comprehensive reform strategy” to open up the economy, reduce macroeconomic imbalances and address structural rigidities. The IMF has supported this program since 1994 and made considerable progress in boosting the Philippines’ economy.

The program accelerated privatization, recapitalized the central bank and opened numerous sectors to new competition such as banking, telecommunication and the oil sector. The limits on foreign participation loosened in many sectors and the program resulted in the removal of import restrictions. The average import tariff in 2000 was 10%, which was one-third of that in the mid-1980s.

However, powerful interest groups that formed under Marcos’ regime of heavy regulation of the economy and income inequality resisted reforms that would even the playing field. Despite this, Ramos was able to reduce inequalities and spur growth. He cracked down on monopolies in various sectors and privatized some government-owned corporations to boost the annual growth to 5%.

Social Reforms Under Fidel Ramos

During Ramos’ administration, the Philippines saw for the first time emergence of massive, coordinated, nationwide poverty reduction programs. Ramos’ Social Reform Agenda (SRA) integrated the delivery of social services, protection and reforms to the poorest provinces in the Philippines where people could not meet their basic needs. Many heralded this program as the most consultative, reform-oriented and well-targeted poverty platform in the history of the Philippines.

The SRA had clear, defined targets and brought together many NGOs, local agencies and other stakeholders during the development, planning and execution process as they monitored stages of poverty intervention.

Through the Comprehensive and Integrated Delivery of Social Services, the 10 most unmet necessities in the community and sector determined the social services. To accommodate the needs of diverse impoverished communities such as the urban poor, farmers and indigenous peoples, 33 indicators underwent implementation that includes basic survival needs, security and capability. These indicators also helped track progress in poverty. The result of these programs proved to be a success as family poverty incidence fell from 39.9% in 1991 to 31.8% in 1997.

Fidel Ramos’ Legacy

Although Fidel Ramos’ presidency ended in 1998, his policies, legislations and reforms continue to be impactful in the Philippines today. Fidel Ramos’ legacy includes the creation of anti-poverty infrastructure in government bureaucracy. The Social Reform and Poverty Alleviation Act of 1997 adopted the SRA into the Commission’s mandated agenda. In governmental agencies like the Department of Social Welfare and Development (DSWD), there was the widespread adoption of the Minimum Basic Needs Survey, poverty information gathering and resource gathering. The data gathered from these instruments continue to be useful today.

Moreover, the Gender and Development Budget Policy, which mandated the allocation of a minimum of 5% of the government’s budget to Gender and Development programs aiding women, passed in 1992. The Philippines is continuing to incorporate this policy annually and revisions have ensured the policy’s effectiveness.

– Samyukta Gaddam
Photo: Wikipedia Commons

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Argentina’s Economy Minister Resigns

Argentina’s Economy MinisterOn July 2, 2022, Martín Guzmán announced his resignation from his position as Argentina’s economy minister, which he held since December 2019, through a seven-page letter posted on his Twitter account. The decision arrived amid conflict in the government concerning the country’s current economic crisis and Argentinian Vice President Cristina Fernández de Kirchner pushing for Guzmán to leave his position. Guzmán alluded to recent disagreements “within the government coalition” as a reason for his departure. Many members of his team have also resigned.

Guzmán’s Career

On December 6, 2019, Argentine President (then-president-elect) Alberto Fernández designated Guzmán as Argentina’s economy minister. At the start of this career, the newly appointed Brown graduate had his first bill approved by the Senate just 11 days after his first day in office. The bill imposed tax increases in specific areas of the middle and upper class while providing tax benefits to the impoverished.

In early August 2020, the Argentine economy minister struck a deal to restructure $65 billion in foreign bonds. Most notably, the former minister engineered a $45 billion debt deal with the International Monetary Fund (IMF). The agreement aims to “promote growth and protect social programs” to tackle Argentina’s economic crisis.

Before resigning, Guzmán planned to head to France to discuss a $2 billion debt deal with the Paris Club of sovereign lenders.

Argentina’s Economic Crisis

Argentina’s economy has been suffering for decades. In July 2022, many Argentine sovereign bonds were worth as low as 20 cents on the dollar — a stark difference from higher rates in October 2020. Inflation in Argentina is staggeringly high, moving toward 70% by the end of 2022. As of July 2022, one United States dollar is worth about 126 Argentine pesos and this exchange rate is still increasing.

An economic disruptor includes truck drivers’ strikes, which have halted delivery of grain, “one of Argentina’s main imports,” to ports. In addition to the COVID-19 pandemic, the devaluation of the peso and a sizeable foreign debt of more than $323 billion by 2020 have sent Argentina into further economic turmoil.

Alongside these struggles, Argentina’s poverty levels are sharply increasing. Due to the severe inflation, the poverty rate in urban centers stood at 37% in the latter half of 2021 and is expected to increase to 39% after the first six months of 2022. This would equate to 500,000 more impoverished people.

The Economy’s Future

Guzmán’s resignation has raised concerns over the economy’s trajectory, most fearing it will head in an even worse direction. Other concerns regard Guzmán’s IMF deal and whether Argentina can meet these needs without the architect of the deal.

On July 3, 2022, one day after Guzmán’s resignation, President Fernández named Silvina Batakis Argentina’s new economy minister. Batakis previously served as the Secretary of Provinces in the Ministry of the Interior and as economy minister of the Buenos Aires province from 2011 to 2015. This week, she stated her belief in “fiscal balance” and her intention to follow President Fernández’s economic program.

In June 2022, the deal with the IMF that former minister Guzmán crafted underwent its first review. This is a sign that the deal may indeed make progress and ultimately come to fruition. A press release regarding this step stated that the program’s policies “will be critical to support Argentina’s economic recovery.”

There are other solutions and aids to Argentina’s economic crisis besides the appointment of a new economy minister — foreign aid. Amid this instability, at least 48 NGO projects in Argentina aim to improve the lives of the country’s poor. A notable organization is Fundación Integrar (Integrate Foundation). The foundation helps young Buenos Aires and La Pampa citizens living in poverty complete their higher education by providing financial aid and guidance to students. With the help of donations, the foundation has given higher education scholarships to 140 students to date.

In office, Argentina’s new economy minister Batakis will need to address the nation’s high inflation rate and foreign debt along with an increasing poverty rate. Yet, she is not alone in this fight — a deal with the IMF is underway and tens of organizations are serving the country’s poor.

– Sophie Buibas
Photo: Flickr

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2022 Sees a Rise in Public Giving

Rise in Public GivingU.S. inflation reached 9.1% in June 2022, the highest inflation rate in nearly 40 years. An alarming rise in the cost of goods and services paired with stock market volatility reflects ongoing concerns of a burgeoning economic recession. Economists’ forecasts grow bleaker as the government races to tackle historic inflation rates. Even so, 2022 sees a rise in public giving despite mounting economic hardship.

2022 Fidelity Charitable Donor-Advised Funds (DAFs)

According to Fidelity Charitable, the largest grantmaker in the United States, Americans donated a record-high $4.8 billion to Fidelity Charitable accounts within the first six months of 2022. Approximately $128 million of these donations went to Ukrainian relief efforts, providing aid to alleviate the many crises Russia’s invasion of Ukraine caused. Donations to prominent NGOs such as Jose Andres’s Central World Kitchen and the International Medical Corps also increased significantly when compared to previous years.

Fidelity Charitable’s 11% increase in donations is a significant divergence from the norm, as charitable giving is generally the first thing cut from the budget during times of financial duress. The 2008 financial crisis, for example, caused donation rates to plummet by approximately 12%, according to Fast Company.

Recent changes in America’s charitable activity can be attributed to the emerging prominence of Donor-Advised Funds (DAFs). DAFs allow individuals and corporations alike to deposit assets for donations to charity over time. Donors invest their charitable donations in advance, allowing them to tap into these funds later down the road when a crisis unfolds. DAFs are essentially donation reserves that allow donors to access funds that have been already been set aside, thus enabling a steady rise in public giving despite mounting economic hardship.

DAFs Bolster Americans Capacity to Give

DAFs are quite new and have grown in popularity since the financial crisis of 2008. Because DAFs create a ready supply of donations over time, they bolster donors and charities alike against future economic hardships. Rapid economic expansion in the decade since the 2008 market crash boosted general economic confidence and encouraged expansive investment in DAFs, which is translating into elevated levels of giving during times of crisis, according to Fast Company.

The purpose of DAFs is to increase the amount that individuals and corporations are able to give. They are incredibly flexible, allowing individuals to invest cash donations as well as assets such as stocks, bonds, cryptocurrencies, life insurance and retirement funds, according to Nerd Wallet. The versatility of DAFs is part of what makes them so successful, as they provide a plethora of investment options that appeal to everyone from the wealthy elite to the average middle-class American family.

Once an individual invests assets in a DAF, they cannot retrieve their contribution from the fund. This works to prevent individuals or companies from abusing DAFs for their tax-deduction qualities. Sponsoring organization controls DAFs, which controls the assets within DAFs as well as the investment options available to donors, according to Nerd Wallet. Once invested, DAF assets mature or appreciate tax-free until they are donated.

Some sponsor organizations do not have a mandatory distribution date, meaning that a donor can allow their funds to grow as long as they wish before donating. Other sponsor organizations require donors to contribute a portion of their funds to charity regularly in order to avoid fraudulent activity.

DAFs offer various tax benefits, permitting donors to receive tax deductions for their DAF contributions. Tax-related donor benefits contributed to the expansive rise in DAF investment in the past decade, fostering the current rise in public giving despite mounting economic hardship. The tax deductions attributed to DAFs faced criticism in the past as they provide a possible tax shelter for the wealthy. Despite these concerns, DAFs have proven a vital funding source for charities during times of economic volatility by bolstering Americans’ capacity to give.

An Evolution in How Americans Give

Although it is America’s largest DAF sponsor organization, expanding DAF investment is not unique to Fidelity Charitable. The 15th annual DAF report by the National Philanthropic Trust of 2021 analyzes data from 976 charitable DAF sponsor organizations from 2020. The report found that DAF donor grants reached approximately $34.67 billion in 2021, an astonishing 27% increase since 2019.

Additionally, the number of individual DAF accounts within the U.S. reached 1 million for the first time in history. This encouraging increase in charitable investment and DAF donations seems counterintuitive considering the economic austerity imposed by the COVID-19 pandemic. The success of DAFs in 2020 and 2021 reflects the current rise in public giving despite mounting economic hardship.

Experts are confident that donation rates will continue to rise as 2022 persists, surpassing all previous records. Historically, Americans tend to give more during the fourth quarter of the financial year. The President of Fidelity Charitable, Jacob Pruitt, expects this trend to continue, with hopes of surpassing 2021’s year-end record of $10.3 billion, Fast Company reports. These donations will be a pertinent source of aid for low-income nations that are most vulnerable to high inflation rates.

Most DAF sponsor organizations do not have a minimum initial contribution, meaning anyone is welcome to open an account, according to Nerd Wallet. A small initial investment followed by regular deposits will appreciate over time, allowing one to mature their donation reserve at a pace that fits their financial situation. DAFs are an investment, so starting one now will not reap immediate results nor will it provide instant gratification.

If the past few years have taught us anything, it is that the course of life is unpredictable and that there will always be someone, somewhere in need of assistance. DAFs were designed with this reality in mind, enabling charitable individuals to plan ahead and prepare a ready reserve that can be tapped into when the need arises. A small DAF contribution today could translate into a major impact in the future, so there really is no better time to start investing than the present.

– Mollie Lund
Photo: Flickr

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Inflation in Egypt 

Inflation in EgyptIn 2022, inflation has been sweeping across the world like wildfire, and it has impacted the world’s impoverished the most severely. Here is some information about inflation in Egypt.

Inflation on the Rise

Inflation in Egypt rose to 13% in June 2022 from 11% in April 2022, after only seeing an inflation rate of 4.8% at the end of 2021. The Ukrainian war caused an increase in costs of goods which also caused the interest rates in the country to rise. These interest rates were already some of the highest in the world before the increase. These increases in the costs of imported and exported goods have made it much more challenging for the working class of the country to make a living.

There has been an increase in the prices of simple goods like bread, rice and sugar, making it hard for families to sustain themselves, and even things like nuts have moved into the category of luxury for most families. Inflation has affected individual families and Egypt’s economy as a whole as Egypt’s purchasing index contracted for the 18th consecutive month in May which is what caused the country to raise the interest rates for the first time since 2017. This has put a strain on small business owners who sell goods to survive because they no longer can afford to buy the product that they sell.

Humanitarian Impact

The U.S. has donated $30 billion in economic aid to Egypt since 1978 in order to provide stability to the region. USAID’s current plan to help the economy is to reduce the rising cost of food in Egypt. U.S. aid to Egypt reduced by 85% from 1998-2020 from $833 million to $125 million in 2020, however, the Biden Administration has requested $1.43 billion in aid for Egypt in 2022 amid the pandemic and the Ukrainian war.

The world cannot control what goes on in terms of the Russian and Ukrainian war, so the Goal of USAID is to impact the country in as many ways as possible from within. As of April 2022, the Biden Administrations’ funds are to go toward creating more and better jobs and enhancing the role of government officials to help the institutions of Egypt meet the economic needs of their people. Inflation in Egypt has been the cause of many people losing their jobs and so plans created to foster the economy are very relevant and should prove useful. Hundreds of thousands of jobs have emerged since 1978 in Egypt due to U.S. involvement, and that growth could be beneficial to combating inflation in Egypt.

Looking Ahead

The inflation crisis in Egypt is far from over, but the world is taking the proper steps in order to attempt to turn the tides. It may take months or years for one to be able to see the impact of the funds that Egypt received, however, the people of Egypt know that their struggle is not going unnoticed and that can be the spark someone needs to keep pushing for a little bit longer.

– Alex Peterson
Photo: Flickr

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Curbing Inflation in Venezuela

Curbing Inflation in VenezuelaInflation is one of the most significant problems in the world right now, as the global inflation rate rises to 6.7% in 2022, almost double the average of the last decade. This is a consequence of the Russian-Ukrainian war and the effects of the ongoing COVID-19 pandemic. Venezuela, which is one of the most in-need countries in South America has finally come out of one of the longest bouts of hyperinflation in the world after 12 consecutive months of the inflation rate rising below 50%, however, three in four people in the country still lived below the poverty line in 2021. The United States and other major players can still do a lot to help the country and curbing inflation in Venezuela is one of the many solutions necessary to improve poverty and economic stability in the country.

Mounting Challenges in Venezuela

In 2016, Venezuela entered a streak of hyperinflation which is when the rate of inflation increases by more than 50% for 12 consecutive months. In 2022, Venezuela has been able to pull itself out of this downward slide pretty simply. The country ramped up printing money in 2016, which became a real issue at the end of 2017 and caused the recent inflation. This has even been a problem in the United States because innately the more currency circulating, the less each piece of currency will be worth. That, along with deficit spending created one of the worst inflation crises in the world.

The solution to this problem appeared to be just as simple as the cause because as soon as the central government of Venezuela decided to stop printing so much money, the inflation rate eased. Although inflation has been on the decline, poverty has still been on the uptick rising to 76% in 2020. Even though these two statistics would seem to be contradictory there are reasons why simply curbing the inflation in Venezuela is not the end all be all.

Solutions

Curbing inflation in Venezuela is only the first step in a long line in order to help the situation in the country. In June 2022, the U.S. announced more than $314 million in aid to help stabilize Venezuela and the rest of that South American region.

These funds will go to multiple countries and aim to improve education and provide COVID-19 relief along with aid for other basic human needs. These funds will also go toward an effort to help potential migrants leaving the country, fleeing in an attempt to find better financial stability. They will also improve access to health care, which has been a challenge for people to access in Venezuela. As many as 5.4 million people have left the country in 2022 because of the unstable economy.

These funds ensure these people can have safe and productive new lives after leaving the country. Venezuelans will receive access to life-saving humanitarian programs like emergency shelters and obtain health care which has been difficult to access because of Venezuela’s own health care system. The International Rescue Committee (IRC) provided health care to more than 100,000 Venezuelans between 2020 and 2022, and since 2017, the U.S. has donated nearly $2 billion in total to Venezuela and the surrounding region. The humanitarian aid provided to the country has already done a lot to improve the lives of those living there and those attempting to leave. Curbing inflation in Venezuela is a step in the right direction.

Looking Ahead

The inflation crisis is severely affecting the entire world including Venezuela. People are having to leave the countries they call home in search of refuge and the possibility of a better life. A person’s displacement is a life-altering event that can change how they live forever. As more and more countries join in the fight to help Venezuela, hope exists that it will have a bright future.

– Alexander Peterson
Photo: Flickr

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Green Initiatives Reduce Poverty in Ghana

Poverty in GhanaPoverty in Ghana has been reduced, thanks to the tremendous growth of the Ghanaian economy over the past years, but at a hidden cost: the natural resources that undergird this success are being increasingly and perhaps unsustainably, depleted. The increase in the price and production of raw materials such as cocoa, gold and oil have quadrupled the real GDP growth, and cut extreme poverty in Ghana to a Lower Middle-Income Country status, from its previous status as a Low Income Country. Nonetheless, such impressive growth must be balanced with environmental protection in order to prove enduring.

Ghana’s Precarious Dependency on Natural Resources

Residents of the Bia Biosphere Reserve in Ghana are extremely dependent on the forest for their livelihoods. As cocoa farmers, harvesters of wild honey, mushrooms and other non-timber forest products, the people living in the region cannot economically sustain themselves without such natural resources. And yet, environmental depletion has become a serious concern, seeing as local populations rely almost exclusively on the forest’s resources for income. Large corporations also contribute to this degradation: unmanaged solid waste and gold mines result in air, plastic and water pollution, contaminated sites diffuse hazardous chemicals, and general deforestation and overfishing severely strain the biosphere.

Beyond the sheer environmental toll, the economic costs of such overexploitation are immense. The World Bank Ghana Country Environmental Analysis (CEA) estimates that environmental degradation incurs an annual cost of $6.3 billion, equivalent to nearly 11% of Ghana’s 2017 GDP. Air pollution costs nearly $2 billion and causes approximately 16,000 deaths each year. The damage caused by water pollution equates to 3% of the GDP. Land degradation costs over $500 million while deforestation costs $400 million per year. In addition to the immediate economic tolls, the depletion of natural resources inhibits the potential for future growth.

Green Economy Initiatives

In response to the increasingly salient threat of the Ghanian economy’s overdependence on natural resources, local communities have begun working with UNESCO and the Korea International Cooperation Agency (KOICA) to put in place green economy initiatives. The project builds on the Green Economy Scoping Study, performed by the United Nations Environment Programme (UNEP) and the Ministry of Environment, Science, Technology and Innovation (MESTI) between 2012 and 2013. The goal of such initiatives is to uncover income alternatives, as to reduce local populations’ reliance on natural resources for economic survival.

The project, launched in 2013, has thus far identified multiple viable alternatives to depleting natural resources, a few of which include mushroom farming, bee-keeping, snail rearing and palm oil production. According to UNESCO, there have been 235 direct beneficiaries, of which 91 are women, who received training and support as part of the green initiatives to transition to alternative livelihood options. In addition to the direct crafts, the residents also received education in marketing and investing, as to ensure the sustainability of their new businesses.

The green economy initiatives have had tremendous positive impacts on the socio-economic status of local communities, who have since been able to vary their sources of income and avoid environmental depletion. The project attests to the importance and viability of reconciling nature and economy for sustainable growth.

– Emily Xin
Photo: Unsplash

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A Tumultuous Turn for France-Africa Relations

France-Africa RelationsIn 2019, Italy’s deputy prime minister Luigi Di Maio declared that France is “impoverishing African countries” through its commercial and security ties, prompting an inquiry into how current French-Africa relations impact poverty in Africa. As France’s role in Africa dwindles and French President Emmanuel Macron reassesses French-Africa relations, it is essential to explore the impact of French policies on the African people.

History of France-Africa Relations

After the invasion of Algiers in 1830, France initiated more than a century of colonialism in Africa, subjugating millions of Africans to French rule. French colonization changed the shape of African militaries, economies and politics. Most colonies achieved independence during the 1960s. However, France still “detained a sphere of influence in these regions.”

In the post-independence period, French relations with its former colonies became known by the term “Françafrique,” a portmanteau of France and Afrique (the French word for Africa). This term encompasses the economic, political and military relations between Paris and its former African colonies. However, during the 1990s, the idea of Françafrique faced challenges in France. Activists revealed “African emissaries traveling to France with suitcases full of cash seeking, regardless of who won the election, to cement French politicians’ loyalty and support for certain African heads of state,” according to Global Voices.

Nowadays, French attitude and policy shifts may signify an end of Françafrique, as France transitions from neocolonialism to a desire to build mutually beneficial relationships with African nations.

Emmanuel Macron’s New Direction on Africa

President Macron aimed to start a new chapter of France-Africa relations after his speech in Ouagadougou, the capital of Burkina Faso in November 2017. Macron expressed his desire to establish more equal partnerships with African nations in his speech.

In October 2021, the President held firm to this policy shift at the New Africa-France Summit, where he worked with African leaders to redefine France-Africa relations.

In his attempt to revolutionize French influence in Africa, the French President has made unprecedented advances by recognizing France’s negative role in Africa, declaring that colonialism was a “grave mistake,” according to Economist Intelligence.

Economic Dependency

Despite Macron’s hopes, forging an equal partnership between France and Africa is challenging, as France created and controls a relevant African currency: the Communauté Financière Africaine (CFA) franc.

The CFA franc is a regional currency used by nations in the West African Economic and Monetary Union and the Economic and Monetary Community of Central African States. Created in the colonial era, France ensured its use in its sub-Saharan colonies, guaranteeing the fixed rate of CFA franc with the French franc and now with the Euro, according to Carnegie Endowment for International Peace.

Togolese economist Kako Nubukpo criticized the CFA franc because the Central European Bank, instead of a centralized African bank, determines the financial policies that impact this currency, according to Global Voices. France requires African nations to hold 50% to 65% of its foreign reserves in France’s central bank to “guarantee the convertibility of the CFA at a fixed exchange rate,” Global Voices stated.

Additionally, Senegalese economist Ndong Samba Sylla noted that former French colonies that did not have the CFA franc—specifically, Algeria, Morocco and Tunisia—are now “stronger economically than any user of CFA franc,” Global Voices reports.

Military-Driven Security in Africa

Africa also depends on the French military and aid to defend national security, promote political stability and curb threats of terrorism and extremism.

In 2014, France began a military operation in the Sahel, Operation Barkhane, sending 3,000 troops to combat terrorism and maintain regional stability, according to Brookings. France’s military-driven efforts to combat terrorism and instability in Africa are not the most effective, especially since military involvement failed to prevent coups d’état in Chad and Mali, according to Carnegie Endowment.

French Foreign International Development Aid to Africa

Unlike military engagement, French foreign aid is generally well received in Africa, as France remains a top contributor of support for the continent. France has expanded its foreign assistance recently, increasing its international development budget to 0.55% of its GDP. Paris plans to continue this course of increased aid with a 0.7% aid target by 2025.

French foreign aid contributes to humanitarian assistance and economic, social and political development programs. These projects could improve the lives of Africans by cultivating new job opportunities and spurring further economic and technological advancement. One example is the development of a commuter rail line in Nairobi, Kenya, funded by the French government’s contribution of €3 billion.

Targeted foreign aid offers the chance for France to advance meaningful development in Africa while also advancing its diplomatic goals of strengthening French-Africa relations.

Poverty in Africa

According to the World Bank, extreme poverty in Africa fell from 54% in 1990 to 41% in 2015. Despite this seemingly sharp drop in poverty rates, “the number of poor people in Africa has actually increased from 278 million in 1990 to 413 million in 2015.”

Targeted foreign assistance from France may promote job growth, counteracting poverty. For instance, France initiated a project called Choose Africa, giving €2.5 billion to invest in new African businesses, according to France Diplomacy. This project and other French international development projects in Africa could successfully challenge poverty.

Outside of the French government, many nongovernmental organizations fight poverty on the ground, including Médecins Sans Frontières (MSF). Commonly known as Doctors Without Borders in English, MSF is an NGO of French origin focusing on providing medical assistance to those in need. Working in more than 70 countries in 2021, MSF brings health care programs across the globe, with much of their work centered on impoverished Africans.

Even though France-Africa relations remain complex, French foreign aid, coupled with the work of NGOs like MSF and other foreign powers, contributes to the enduring battle to tackle poverty in Africa.

– Michael Cardamone
Photo: Flickr

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The Efforts of USAID Programs in Vietnam

USAID Programs in Vietnam
The U.S. Agency for International Development (USAID) began its relationship with Vietnam in 1989 with programs assisting disabled persons and has expanded its influence on Vietnamese society and its markets. The foreign aid agency primarily focuses on Vietnam’s economic productivity, education systems, health and environment, amongst other pressing issues.

Fostering Economic Growth

USAID programs offer support by improving the business ventures of Vietnamese enterprises and governance capacity. USAID programs are aiming to increase Vietnam’s economy to an upper-middle-income status by 2035 through efforts to increase productivity and competition amongst small businesses, address economic policies and emphasize sustainability.

Existing programs promote global trade and international commerce by stimulating competition in private sectors and developing leadership and management skills for provincial leaders. USAID programs in Vietnam create a further expanding market with small and medium businesses that cooperate with global supply chains. Boosting Vietnam’s trade reach beyond localities creates a more inclusive, productive and accessible market for vulnerable populations.

Efforts to increase sustainability go hand-in-hand with USAID’s environmental protection programs. Shifting reliance on renewable energy sources has been a goal of USAID in partnership with Vietnam Urban Energy Security (VUES) to stimulate investments and commercialization. The focus on sustainability and economic growth aims to provide opportunities for vulnerable populations in poverty to gain access to business ventures that can bring social mobility and stability.

Health and COVID-19 Recovery

USAID invested more than $1 billion in Vietnamese health assistance programs to prevent and treat infectious diseases such as HIV/AIDS, tuberculosis and zoonotic diseases in the past 20 years. Global health security projects aim to train health workers, monitor possible health threats from animals and/or contagions and prepare appropriate responses to public health emergencies that may arise in the future. For example, the One Health Workforce project will provide training at universities for almost 1,700 students in various health care disciplines – not only enhancing the job force with academic opportunities and skills for the next generation but also improving the health security of the country.

Vietnam has also received $23.4 million in COVID-19 assistance including vaccine doses, ventilators, emergency response systems and health facilities. USAID’s MOMENTUM project addressed low immunization rates and a lack of accessibility to COVID-19 vaccine doses in provinces without properly trained medical health professionals and resources due to geographic and socio-economic barriers.

In the first six months of its implementation, the program trained almost 4,000 staff members and placed 716 mobile vaccination sites in mountainous provinces that otherwise experienced neglect in terms of health security amid the pandemic.

Higher Education System Modernization

One step USAID programs in Vietnam are taking to provide access to knowledge and skills required for socio-economic prosperity is focusing on improving academic opportunities. USAID recognizes that in order to improve Vietnam’s status from its current standing as a lower-middle income country, the labor force would benefit from modernization and advancement in skills to keep up with an ever-changing job market.

The government is appropriating funds and creating partnerships between Vietnamese universities and American higher education institutions like Indiana University to improve academic quality, research and innovation in the Southeast Asian country. American universities will give nearly 150,000 Vietnamese students the opportunity to pursue academic endeavors that reflect the future of the job market through academic partnerships and socio-economic growth within the country.

USAID programs in Vietnam have reflected the strengthening relationship between the United States and Vietnamese governments with financial investments and support that could benefit the economy on local and international levels. Economic support, educational advancements and emergency relief that the U.S. provided could allow Vietnam to eventually become an independent and thriving country.

– Nethya Samarakkodige
Photo: Pixabay

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The Impact of COVID-19 on Poverty in Albania

The Impact of COVID-19 on Poverty in Albania
The 2020 pandemic lockdowns hit Albania, a nation still struggling to cope with the effects of a once-in-a-century earthquake from just the year before, extremely hard. The impact of COVID-19 on poverty in Albania resulted in acute economic and social challenges but targeted fiscal policies and international aid suggest a hopeful future for the Balkan state.

Impact on the Most Vulnerable Sectors

Albania’s economy relies heavily on micro, small and medium enterprises (MSMEs), which comprise more than 85% of the private sector’s formal employment. Its reduced size increased its fragility in the face of the earthquake and the pandemic made it difficult for MSMEs to access loans and use insurance policies. MSMEs’ hardships meant a significant drop in tax returns for the government and increased unemployment in the lower socio-economic sectors.

In 2019, one-third of the Albanian population lived on less than $5.50 a day, making it the nation with the highest rate of poverty out of all the Western Balkan states. COVID-19 ended up increasing the poverty rate by 4%, which is equivalent to additional 112,000 people living in poverty.

The impact of COVID-19 on poverty in Albania is especially hard for women. Not only did more women face an increase in unpaid domestic labor compared to men, but 97.5% of women-led firms are in the MSME category, Financial Protection Forum reports. In addition, a 2020 U.N. Women report found that women between 25-44 years old living in urban areas were at the highest risk of unemployment.

International Response

This dual economic and social blow to women’s livelihoods required urgent action to prevent this vulnerable group from falling into long-term unemployment. The United Nations Development Program (UNDP) addressed the issue of the impact of COVID-19 on poverty in Albania through a series of small projects for women in Tirana and other municipalities. The projects also targeted the promotion of equal family gender roles along with measures to combat domestic violence and offer psychological support to victims.

The UNDP aided other at-risk groups as well. From teletherapy services for disabled persons to employment promotion for ethnic minorities, the UNDP provided localized efforts to address problems raised by the pandemic.

The French Agency for Development (AFD) also continued its projects to increase Albanian women’s access to economic opportunities and further the fight for gender equality. The AFD’s foreign aid is part of an initiative to lead Albania towards fulfilling the social criteria needed for entry into the EU.

Albania’s cultural sector also needs help to recover from the impact of COVID-19. Lockdowns and travel restrictions gravely damaged the industry as it relies heavily on events and tourism. Along with MSMEs, the cultural sector plays a significant role in the economy, generating 2.95% of Albania’s GDP.

Wide-Reaching Solutions

These severe impacts on two of Albania’s most lucrative sectors, MSMEs and culture, needed to be curbed as soon as possible while addressing the state’s high pre-pandemic poverty rate. The Albanian government thus implemented a fiscal stimulus of about 3.5% of its gross domestic product (GDP). Through welfare support, tax relief and credit schemes the government alleviated the burden on the private sector and policies on credit installments curtailed impacts on new businesses.

Only 18% of Albanian firms reported using digital platforms to adapt to the pandemic, suggesting that the government efforts were the primary aid to alleviate the pandemic’s impact. The cultural sector, however, stands out. The Ministry of Culture founded the National Digitalization Center. Apart from that, 87.5% of institutions and enterprises in the cultural sector reported moving part of their business to virtual platforms, UNESCO reported.

The government also alleviated the impacts of the fall of the euro. The Bank of Albania promoted the lek’s stability and increased transparency in transactions involving foreign currencies. The European Commission and European Central Bank contributed financial aid to stabilize the banking system and provide euro support, LSE reported.

These sweeping measures were effective in helping the nation bounce back in the post-pandemic period. Despite rising inflation levels and supply chain disruptions, both the real wage and the minimum wage increased in 2021. Most significantly, the poverty rate dropped to 22% in 2021.

Looking Ahead

In 2021, the Council of Europe Development Bank (CEB) agreed to loan Albania €60 million to “mitigate the effects of COVID-19.” The loan aims to aid individuals especially vulnerable to the pandemic and help close the €570 million gap created in 2020. The loan and government measures may thus offset the impacts of COVID-19 on poverty in Albania through sustainable growth.

The impacts of COVID-19 on poverty in Albania were challenging, touching the most vulnerable sectors of the economy and exacerbating social challenges for women. However, the government’s wide-reaching economic reforms successfully curbed the pandemic’s economic impact on the industries and continued decreasing the nation’s poverty rate. International aid from the UNDP, EU and CEP was crucial in helping complement the government efforts by addressing the pandemic’s social impacts. This continued aid can continue to help Albania lower its poverty rate.

– Elena Sofia Massacesi
Photo: Unsplash