Archive for category: Economy

Information and stories about economy.

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Alleviating Poverty in Lebanon

Poverty in Lebanon
According to the United Nations, Lebanon is facing a significant economic crisis, with nearly three-quarters of the country living below the poverty line as of September 2021. This staggering poverty rate warrants assistance from the international community.

Lebanon’s Poverty in Numbers

In a 2019 report, the U.N. found that “between 2019 and 2020,” poverty in Lebanon rose “from 28% to 55%.” When looking at multi-dimensional poverty, the situation is even more severe. According to the World Bank, multi-dimensional poverty ratings look to “understand poverty beyond monetary deprivations,” by including six key indications: “education, health, public utilities, housing, assets and property as well as employment and income.” Lebanon’s multidimensional poverty rate almost “doubled from 42% in 2019 to 82% in 2021.” Furthermore, about a third of the Lebanese population has no access to adequate health care, a fact that is especially concerning in the wake of the COVID-19 pandemic. According to the U.N., close to 25% of the country could not meet their nutritional food needs by the close of 2020.

Additionally, by August 2021, Lebanon reached a record high unemployment rate of more than 35% — a sudden surge from the single-digit average throughout the past decade. With this crisis, the value of the Lebanese lira has also decreased by almost 80% against the U.S. dollar as a result of extreme inflation and economic deterioration.

Lebanon’s Deteriorating Economy

Investigations show Lebanon’s economic crisis could date back to the early 2010s, although the primary detriments of the surge appear at the beginning of 2019. Although there is no evidence that COVID-19 was a direct cause of this crisis, its effects certainly did not aid the economy when exports slowed immensely, thus stalling the country’s primary export industries. Additionally, World Bank experts predict that Lebanon’s economy may decline by 10.5% by the close of 2021.

Lebanon’s corrupt banking sector shares the blame for the country’s economic crisis. It lent the Lebanese government close to 75% of its deposits in early 2019. The result of this was “extreme bankruptcy.” Additionally, the political turmoil in Lebanon played a contributing role to instability — the nation had no official leader between 2014 and 2016. Experts believe the economic crash was inevitable with no proper leadership. According to an article by the Middle East Institute, Lebanon’s economy could see a decline “from $60 billion in 2018 to $15 billion” by the end of 2021.

World Bank Assistance

Despite how dire Lebanon’s situation may appear, hope is on the horizon. In January 2021, the World Bank Group announced the approval of “a $246 million new project to provide emergency cash transfers and access to social services to approximately 786,000 [impoverished] and vulnerable Lebanese” facing the impacts of both the economic crisis and COVID-19.

This initiative, the Emergency Crisis and COVID-19 Response Social Safety Net Project (ESSN), will also help implement “social safety nets” to improve the nation’s resilience and recovery in the face of “future shocks” or crises. To help people living in extreme poverty, the ESSN project will provide cash assistance to these individuals for 12 months. Additionally, the ESSN will provide a “top-up cash transfer” to 87,000 Lebanese children aged 13-18 to cover the costs of education, including uniforms, supplies and remote learning resources.

Lebanon’s economic crisis brings suffering to countless citizens. However, the World Bank’s ESSN poverty alleviation project has the potential to provide essential relief to the most vulnerable citizens, ultimately reducing overall poverty in Lebanon.

– Andra Fofuca
Photo: Flickr

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Agricultural Success in Zimbabwe

Agricultural Success in Zimbabwe
Zimbabwe, a landlocked country located in southern Africa, is experiencing improvements in the nation’s economy after “facing its worst economic crisis in a decade.” This crisis is the result of a drought as well as the impacts of the COVID-19 pandemic. Following this difficult period, however, the recent upswing in the economy is largely due to agricultural success in Zimbabwe. If this trend continues, the future looks promising for Zimbabwe and its citizens.

Agriculture in Zimbabwe

The economy in Zimbabwe, specifically in rural areas, is primarily reliant upon agriculture. The agricultural sector employs approximately 60%-70% of the population and is responsible for 40% of all export revenue. Due to this dependency, when agriculture in Zimbabwe struggles, the rest of the economy suffers as a result.

The Economy in Zimbabwe

In the past two years, Zimbabwe has endured a significant economic recession due to the COVID-19 pandemic and ongoing drought. In 2020, the GDP decreased roughly 10% and inflation increased from about 227% to a staggering 622.8%. However, more stable weather conditions now pave the way for agricultural recovery in Zimbabwe, which, in turn, is now fostering economic improvement.

Tafadzwa Gamanya, a small farmer in rural Zimbabwe, has had a productive season for his crops due to the end of the drought. “This year is much better for us here,” Gamanya tells VOA. “We had good rains. We have enough water to irrigate our crops until the next rain season.”

Confirming these favorable conditions, the Zimbabwe Meteorological Services Department reports that Zimbabwe is witnessing statistically average to above average amounts of rainfall during this crop season. The support of the government also plays an integral role —  government initiatives “ensured that farmers had adequate inputs on time for the 2020/21 cropping season.”

During December 2020 and January 2021, some parts of the region experienced “wet spells,” greatly contributing to the significant crop yield. The farmers welcome this change in comparison to the drought that previously ravaged the nation.

Minimizing Food Insecurity

Along with economic improvements, agricultural success in Zimbabwe reduces food insecurity in the nation. The country notes that the 2021 harvest is “capable of feeding” the entire population of 14.65 million people over the course of “the next year.”

The 2021 maize harvest is so large that, in May 2021, agricultural authorities placed a ban on importing the crop. This stands in stark contrast to Zimbabwe’s $298 million expenditure on maize imports during the 2019-2020 drought season. These savings are tremendously helpful to the Zimbabwean economy.

The Road to Recovery

As rains begin to stabilize and businesses are able to recover from the impacts of COVID-19, World Bank experts anticipate that Zimbabwe’s GDP may climb to 3.9% by the close of 2021. Bringing even more hope to the nation, experts predict that Zimbabwe’s GDP may rise by 5.1% in 2022 if the pandemic or other factors do not interfere with current trends.

After a difficult two-year recession, Zimbabwe’s economy is finally on the road to recovery. While businesses are beginning to rebound following the most severe impacts of COVID-19, agricultural success in Zimbabwe is further contributing to economic improvement. The nation’s GDP is growing and the number of food-insecure Zimbabweans is shrinking. While there remains room for progress, Zimbabwe’s current economic course shows that the nation is heading in the right direction.

– River Simpson
Photo: Flickr

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A New Initiative to Combat Poverty in Afghanistan

New Initiative to Combat Poverty in Afghanistan
Afghanistan is on the brink of disaster. Immediately after the United States’ exit from Afghanistan in August 2021, the Taliban assumed full power, seizing the nation’s capital, Kabul. Just months later, the United Nations Development Programme (UNDP) estimated that Afghanistan’s $20 billion economy could shrink by 20%, plunging the nation further into poverty. However, the international community is not turning a blind eye. Instead, UNDP has launched a new initiative to combat poverty in Afghanistan.

UNDP Launches ABADEI

In October 2021, UNDP launched the Area-based Approach for Development Emergency Initiatives, also known as ABADEI. ABADEI is a new initiative to combat poverty in Afghanistan and is a part of a broad effort to “operationalize a basic human needs approach within the complex and fast-evolving context of Afghanistan.” UNDP explains the ABADEI strategy best, stating that ABADEI “provides an articulation of investments in basic services, livelihoods and community resilience that complement humanitarian efforts by helping households, communities and the private sector cope with the adverse effects of the crisis.”

Specifically, ABDEI has the backing of a Special Trust Fund for Afghanistan. UNDP created this special trust fund in October 2021 to provide cash assistance to Afghans in dire need, independent of a third party. Germany was the first country to financially commit to the trust fund, pledging nearly $60 million. The trust fund has since grown to more than $170 million in December 2021.

ABADEI, then, is the strategy that directs the flow of the money. Under the ABADEI initiative, program coordinators will implant funds into the community in four main ways.

4 Main Funding Channels

  1. Allotting grants to microbusinesses. A 2019 OECD report on private sector development and entrepreneurship in Afghanistan estimates that entrepreneurs and small and medium enterprises (SMEs) account for nearly 99% of businesses in the country. The report also states that “with foreign assistance declining and the country still struggling to attract private investment from abroad, Afghan entrepreneurs and SMEs will have to be the engines for much of the needed development.” This first goal particularly seeks to assist women-owned businesses as women face disproportionate impacts of poverty during times of crisis. Under ABADEI, program coordinators will distribute cash in local currency and assess needs with the help of local community leaders. The U.N. hopes that the direct injection of cash will help keep local economies from collapsing.
  2. Cash-for-work projects. The second goal of the initiative is to provide “short-term income to the unemployed.” USAID data from November 2021 indicates that nearly 40% of Afghans endure poverty. In 2020, before the Taliban took over, unemployment stood at slightly less than 12%. Although there is no official number for the rising unemployment rate, reports indicate that people are resorting to selling their own possessions to survive.
  3. Financial support to at-risk populations. The director of the U.N. Food and Agriculture Organization, Qu Dongyu, states that women, young children and the elderly are at risk of starvation during the winter in Afghanistan. To mitigate these impacts, ABADEI seeks to provide a “temporary basic income” to the at risk-populations of Afghanistan.
  4. Strengthening natural disaster resilience. Afghanistan is prone to natural disasters including flooding, earthquakes, landslides and droughts. ABADEI will help Afghanistan mitigate such disasters by funding the “rehabilitation of canals” and other “flood protection” strategies to safeguard farming land from the destruction of floods. By preemptively protecting farmland, ABADEI aims to reduce the risk of increasing food insecurity in the nation.

Looking Ahead

Achim Steiner, a UNDP administrator, said at a press conference that “ABADEI is a concrete contribution to the efforts of the United Nations to protect the hard-won development gains achieved over the past 20 years and prevent further deterioration of Afghanistan’s fragile local economy.” Though the future of Afghanistan is unclear and the country faces numerous challenges, ABADEI stands as a new initiative to combat poverty in Afghanistan, marking an integral first step in the international community’s efforts to safeguard the well-being of Afghans after the Taliban takeover.

– Richard Vieira
Photo: Flickr

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Peru’s Economic Growth Predicted to Exceed 13%

Peru’s Economic Growth
For several decades, the World Bank classified Peru’s economy as one of the fastest-expanding economies. While this is true, this expansion slowed between 2014-2019. This led to an 11.1% drop in economic growth in 2020 as a result of the COVID-19 pandemic. The drop caused job sectors to slow down, though others surged in their place. Despite the fall, there is good news: Peru’s economic growth could increase by 13% at the end of the fiscal year 2021.

What is Economic Growth?

The improvement or decline in the market value of goods or services produced measures economic growth. The more goods and services produced or traded, the more money that goes to the economy. The changes in a country’s Gross Domestic Product (GDP) typically measure economic growth. With economic growth comes increased salaries, job availability and standards of living.

There are two primary methods to improve economic growth: improved goods, both technological and physical (capital) and tools that help increase production. Both avenues traditionally lead to economic growth. In this case, both methods explain why Peru’s GDP had a decline in 2020 and how Peru’s economy has recovered since then.

Peru’s Economic Foundation

Peru’s economy has experienced its ups and downs. The economy is based in the services sector, with telecommunications and financial services being the most significant. Services contribute to 60% of the overall GDP, with industries providing 35% to the GDP. However, reforms in the industry are a result of the changes in the mining industry. As Peruvian industries shrink, the telecommunications and services sectors grow.

Although mining was the primary source of income for Peru’s economy, the industry had the highest recorded fall in production ever. Many mining companies had to minimize the number of workers they could allow at a time in the mines and processing plants. The minimization cut production and output with a 13% reduction in copper production and processing. With the reduction in mining work and production output, other sectors stepped up to fill the job gap and start contributing to Peru’s GDP more significantly than in the past.

Improvements in 2020 and 2021

The downturn in Peru’s economy in 2020 left 27% of the population in poverty, as the World Bank reported. The additional 2 million people who slid into poverty highlighted the growing poverty rate in Peru. However, hope is on the horizon.

Due to the COVID-19 pandemic, the telecommunications sector expanded. Before the COVID-19 pandemic, telecommunications were slow to grow in Peru. Back in 2012, the Peruvian government passed law 29985, explicit approval of the usage of electronic money. Law 29985 showed the government’s willingness to explore technology and expand its place in Peru. However, there were still barriers to the use of e-money. In 2012, many Peruvians still lacked access to the internet, computers, and technology needed to access e-money.

Advantages of Technology

Technology in Peru improved in 2020 when most services, including banking, went remote. The number of individuals using e-money increased by an average of 1,000 new users in specific e-money platforms a month. With new internet platform users and increased internet usage came new jobs and the potential for economic gain.

Historically, increased online usage leads to job opportunities through expanded internet and broadband access, especially in areas that lacked immediate internet access. In 2020 and 2021, there were increases in job openings and hirings in the telecommunications sector across Peru. Jobs in telecommunications filled rapidly in 2021, with the most considerable growth taking place in June 2021.

Expected Economic Growth

Telecommunications and its contributions to Peru’s economy have steadily climbed since 2014. In 2019, telecommunications generated a revenue of approximately $6.3 billion. With the expected economic growth stemming from growing telecommunications, the sector’s contributions to the GDP could be even higher by the end of the year. This could make telecommunications one of the most significant contributors to the GDP in Peru’s service sector.

With the newly opened and added jobs, the Peruvian services and telecommunications sectors have grown. This is allowing the sectors to increase their income and contributions to Peru’s economy. Thus, enabling the GDP to expand and retain economic growth as well. As the market opens and job availability grows, the Peruvian government predicts that Peru’s economic growth will grow by 13%. With Peru’s projected economic growth, there is an excellent likelihood that the poverty rate could shrink at least 1% to 2%, if not more.

– Clara Mulvihill
Photo: Flickr

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Impact of COVID-19 on Poverty in Thailand

COVID-19 in Thailand
COVID-19 and the economic consequences of its spread have caused greater levels of poverty in Thailand since 2020. Reports determined that the COVID-19 pandemic plunged almost 800,000 people into poverty in 2020. The impact of COVID-19 on poverty in Thailand has primarily manifested as a spike in unemployment. By spring of 2021, Thailand’s job market had 710,000 fewer jobs compared to the previous year. The pandemic also adversely affected tourism flow to the nation, which accounts for about a fifth of GDP and 20% of employment. Thailand’s economy and poverty levels have not experienced such a negative impact since the Asian Financial Crisis of 1997.

Government Initiatives to Mitigate Poverty

The government’s initiative, however, in responding to this crisis has somewhat curbed the pandemic’s potential for further devastation. Authorities were quick to introduce quarantine measures that were effective in containing the virus during most of 2020. Though several waves of infections have exacerbated the impact of COVID-19 on poverty in Thailand, the policy packages were effective in creating fiscal stimulus.

The support ranged from financial assistance for debtors to health-related spending for affected households, including those outside the social security system. Simulations suggest that more than 780,000 additional people could have fallen into poverty in 2020 if the government had not bolstered social support.

Thailand’s Continued Alleviation of Poverty

Thailand’s efficient response to the pandemic is impressive, but not surprising. Since 1988, the country has reduced its poverty levels from 65.2% to 6.2% in 2019, according to the World Bank. Its most effective initiative was to scale up cash transfer programs such that it became one of the largest scale fiscal responses to COVID-19 in the world.

“The crisis in 2020 demonstrated Thailand’s ability to leverage its robust and universal digital ID, sophisticated and interoperable digital platform and a number of administrative databases to filter eligibility for new cash transfer programs,” said Francesca Lamanna, the Senior Economist at the World Bank.

The Current Status of Poverty Levels in Thailand

While the government has responded relatively well, the country continues to struggle as it enters the fourth wave of COVID-19. The official unemployment rate was 2% in the first quarter of 2021 due to COVID-19, with the loss of jobs most concentrated in the services sector. On the one hand, slow vaccination rollout and widespread doubt seem to be stalling recovery. On the other, some infected individuals living below the poverty line may go so far as to violate quarantine rules in order to continue earning much-needed income.

The impact of COVID-19 on poverty in Thailand and its economic dependence on contact-intensive sectors means the continuing waves of infection prolong unemployment, with financially vulnerable groups bearing a disproportionate burden of economic insecurity.

Volunteer Workers Spearhead Poverty Aid Missions

In response to these conditions, the number of volunteers in Thailand has also been surging. Bangkok Community Help is one such organization. It has grown to more than 400 participants since its founding early in the pandemic in 2020. Greg Lange and Friso Poldervaart are two restaurant owners that spearheaded the community initiative after neighbors approached them to inquire if they could use their empty restaurant kitchens to prepare hot meals.

While the scale has transformed considerably, Bangkok Community Help’s main objective remains to assist vulnerable sections of Bangkok through volunteer and donation initiatives. “After [last April and May], we decided to focus more on more long-term projects, like building houses for people, turning a garbage dump into a park, and teaching kids,” Lange and Poldervaart told TimeOut.

Donations vary in scale and source. Individuals may hand out meals they prepared themselves to hungry construction workers, while foreign aid initiatives fund larger-scale operations such as survival packages of preserved goods. Australian Aid paid for rice recently distributed outside of Bangkok’s main port facilities through the Australian Government Aid Program. The program provides small grants in support of local, non-governmental organizations in Thailand.

The New Zealand – Thai Chamber of Commerce, an organization dedicated to promoting commerce between Thailand and New Zealand, donated apples. These organizations have even employed volunteers to bring oxygen tanks to the homes of the infected when hospitals were overcrowded, in the hopes of keeping them alive until a hospital bed becomes available. Bangkok Community Help continues to inspire individual and government action through its aid, opening aid centers and converting unused schools and auditoriums into treatment centers.

Future Possibilities

Looking towards the future of COVID-19’s impact on poverty in Thailand, there are different projections. The devastation of the pandemic is a large-scale issue that called for radical measures, but the methods of mitigation employed may be useful in shifting political focus towards strengthening social support systems in the future. These circumstances have the potential to catalyze an economic reform in Thailand, such that its industries can become more digital.

According to the International Monetary Fund (IMF), the authorities see this as an opportunity to transform tourism from low-cost, high-density travel, to high-end, low-density travel. This would allow for other domestic industries to flourish without wreaking havoc on the country’s economy. It may also be more ecologically friendly, offering greater protection of natural resources on which the tourism industry is dependent. All of these factors have the potential to gradually reduce the number of people living below the poverty line, by strengthening Thailand’s social and fiscal fiber.

– Arahi Fletcher
Photo: Unsplash

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Argentina’s Informal Peso Hit New Low

Argentina’s Informal Peso
Argentina’s informal peso, its ”dolar blue,” weakened drastically at the end of October 2021 and hit its all-time inflation high. The country’s risk rating increased by 19 points. The economic downturn arrived weeks before Argentina’s November 2021 elections, and economic improvement is long overdue.

What is the Dolar Blue?

The “Dolar Blue” is the unofficial rate of buying or selling physical United States dollars (USD) in an unofficial financial market in exchange for Argentine pesos. The transactions occur without the assistance of a banking institution or government oversight. Many transactions for Argentina’s informal peso occur right in storefronts or in the street.

In October 2021, the exchange rate hit 195 pesos per one USD. The exchange rate is typically greatly valued because this trade rate results in more pesos to the dollars for tourists and vice versa for those looking to use pesos.

In 2019, the Argentine peso lost value during an economic crisis due to suspending debt payments while the debt continues to climb for Argentina. The government had to act quickly to stabilize the peso. Since then, the Argentine government has slowly placed restrictions on the dolar blue to prevent any weakening of the formal peso.

What is a Country’s Risk Rating?

A risk rating is the measurement of the potential for non-payments on international loans that companies made to companies within the country being rated or to the countries themselves. It is the measurement to see how close a country is to defaulting on loans. Typically, the factors that lead to an increased risk rating are out of a countries’ control. However, the risk rating is the calculated risk that international businesses would undertake when dealing with the measured country. The higher the number, the greater the chances of business deals collapsing.

As Reuters reported, the risk rating for Argentina expanded 19 points when Argentina’s informal peso reached its all-time high of 1,672. It is essentially Argentina’s credit rating, but the higher the number, the lower the chance for foreign investment opportunities. This new risk rating could lead international companies or loan businesses to avoid working in Argentina or setting up loans there.

Without additional investment, the job market could have few opportunities to develop new jobs. There is little chance that unemployment rates could decrease.

Why Did this Economic Crash Happen and What Does this Mean for Argentina?

The two main factors causing the current economic crash are the country’s upcoming elections and growing inflation. The majority of surveyed Argentineans’ stated that their largest concern was the economy. Argentina has a history of economic downturn during periods of change in political leadership and growing economic fears. Argentina’s informal peso and formal peso have fallen in the past during periods similar to what the nation is experiencing now.

The drop in Argentina’s informal peso means economic growth has stagnated once again. Financial experts predicted Argentina’s impending devaluation of its formal currency, which appears to have started with the devaluation of its informal peso. With the devalued informal peso, battling inflation rates, four out of 10 Argentines live in poverty and have few means of escape.

Argentineans in poverty are struggling with the prices of necessities and with inflation. This is impacting both formal and informal pesos and the outlook is dour, according to The New York Times. Argentina’s informal peso brought tourists and new businesses to the country to support local Argentine companies and operations. With a destabilized and devalued the informal peso, more Argentineans are at risk of losing income. The devaluation of Argentina’s informal peso and widening country risk signals a long way to go before returning to a stable economy.

Is the Outlook Truly Grim?

The outlook is not entirely dismal. As grim as things look for Argentina economically, there are ways forward with the devalued informal peso.

In September 2021, Argentina reported economic growth. The poverty rate decreased slightly, which came as a pleasant surprise to many. In the first half of 2021, the poverty rate decreased to 42% and shows signs of continuing to decrease. Many did not expect the growth, given the difficulties of the COVID-19 pandemic. However, the growth signals that there is a chance for improvement despite the downturn of the peso and the risk rating.

In the weeks following the elections, the economy is likely to stabilize again. After the 2019 election, while the pesos’ exchange rates were still higher than average, they stabilized briefly. However, the recovery was short-lived due to the COVID-19 pandemic. Since then, the economy has struggled to restabilize. In the days since the COVID-19 pandemic first impacted Argentina, the economy has been slowly stabilizing and working towards recovery.

 After the 2021 November elections, there is a good chance for economic recovery and stabilization. Argentina’s informal peso could recover and the risk rating could decrease. The economy could revitalize with new business and partnerships.

Support for Argentina

Argentina has faced economic issues for several years, but they are not alone and receive help from many organizations, including The Working World (TWW). Brendan Martin founded TWW after witnessing the result of the Argentinean economic difficulties. The efforts on the ground that individuals made to start businesses and launch democratically operated businesses boosted the economy, and TWW decided to continue supporting this trend.

TWW works by partnering with businesses interested in furthering their workers’ rights to make decision-making processes more equitable. The organization designs loan packages to give the loans to pre-set projects that are in the hands of workers and repayment requires minimal interest.

TWW is a registered nonprofit organization in both the United States and Argentina. It understands the various currencies in Argentina, the exchange rates and the impacts both have on the Argentine economy.

Around the time TWW formed in Argentina and began democratizing businesses and stabilizing the workforce, the informal and formal peso stabilized in the exchange rates. Since then, TWW has expanded operations to more countries to transplant these business models and provide job security in countries. One example is Nicaragua or areas hit that hurricanes hit in the U.S. while maintaining some operations in Argentina.

TWW’s work has been invaluable in stabilizing the economy and workforce. The economic difficulties that inflation and political instability caused are manageable, largely because of nongovernmental organizations like The Working World.

– Clara Mulvihill
Photo: Unsplash

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House of Trade Alleviates Impacts of Fast Fashion

House of Trade
House of Trade is a new platform based on an ancient method: bartering. Inspired by the sneakerhead community, the House of Trade offers a fresh take on fashion sustainability while reducing the exploitation of underpaid workforces in developing countries and providing a safe and efficient method for sneakerheads to trade their sneakers.

House of Trade: A Trading App for Sneakers

One of only five startups chosen for the 2021 Covintus National Technology Accelerator program, House of Trade is a trading app for sneakers: an app that allows sneakerheads to use their new or lightly-used sneakers as “closet currency” to trade items with other users. House of Trade facilitates each trade using a mail-in system, ensuring authenticity and trustworthy bartering commerce.

Founded in April 2020 by Chris Holloway and Keren Nimmo, the team behind the scenes at House of Trade represents diversity and supports the colorful world of sneakerhead culture on a weekly YouTube podcast called Kicks of the Trade. The trading platform does not end with sneakers — the team plans to expand the platform to include the trade of a variety of other items, from luxury handbags and watches to streetwear and sports cards.

A Trading App’s Role in Fashion Sustainability

House of Trade reduces fashion consumption by offering its users a solution: the user’s unwanted items can stand as “closet currency” for the items they do want, lessening (or even eliminating) the need to buy factory-new fashion.

The fashion industry has a significant impact on the environment. The industry produces 10% of the world’s carbon emissions, equating to more than all the emissions of “international flights and maritime shipping combined.” In addition, the fashion sector stands as “the second-largest consumer of water worldwide” in a world where 785 million people go without access to clean drinking water. On top of this, the fashion sector contributes to “20% of all industrial water pollution worldwide.”

Pollution is especially detrimental to developing countries where the U.S. fashion industry outsources 97% of manufacturing and where toxic wastewater from factories often ends up in rivers and oceans. For example, in India, a country where the sacred but polluted Ganges River supports one of the most densely populated regions in the world, 88 million people lack access to safe water. One of the contaminants that make the Ganges unsafe is chromium, a compound for dyeing fabrics and tanning leather.

How Outsourcing Fashion Manufacturing Exacerbates Poverty

The outsourcing of manufacturing exacerbates conditions of poverty in countries where exploitative working conditions go unregulated. As an example, Nike as one of the largest makers of footwear globally sold a record 25 shoes every second in 2018. In general, Nike’s sales average 780 million pairs of shoes annually. However, the manufacturing of Nike’s massive product line is outsourced to more than 41 different countries.

By outsourcing to developing countries, Nike and other major sportswear brands can maximize production at minimum costs. But, low overheads for big companies come at a high price for the people who work in the factories. According to the Clean Clothes Campaign (CCC), a worker rights coalition that comprises more than 235 organizations in more than 45 nations, the average salaries of factory workers in Indonesia, Vietnam and Cambodia (countries where Nike contracts much of its manufacturing) are 45%-65% lower than the average “living wage.” To put this into perspective, in March 2020, the Global Living Wage Coalition reported just 7,446,294 VND ($321) as the monthly living wage for a person in urban Vietnam.

House of Trade Offers a Solution to Fast Fashion

Several advocates and unions have called out leading fashion and sportswear companies for prioritizing profits over the well-being of workers, the planet and humanity at large. With these issues coming to the forefront, many consumers across the world aim to make conscientious shopping choices to alleviate these impacts.

At the forefront of fashion industry reform, the House of Trade offers an alternative to factory-new consumerism while ensuring that sneakerheads and fashion enthusiasts have access to the styles, brands and quality they desire. In a “global sneaker resale market” that projections have determined could expand from $6 billion in 2019 to $30 billion by 2030, platforms such as House of Trade are in the ideal position to maximize profits while providing a solution to alleviating the impacts of fast fashion.

– Jenny Rice
Photo: Flickr

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5 Alternatives to Fast Fashion

Alternatives to Fast Fashion
The fast fashion industry creates inexpensive clothing to keep up with rapidly changing trends. Many brands in the fast fashion industry use cheap labor to produce garments, which often leads to the exploitation of workers and the environment. Fast fashion companies tend to target workers in low-income areas who have limited alternatives for employment. As a result, people in low-income areas are more likely to tolerate the poor, exploitative labor conditions that are prevalent in fast fashion. Microfibers and waste are often byproducts of fast fashion, contributing to water pollution and food chain disruptions, which disproportionately affect impoverished areas. Several alternatives to fast fashion can make consumers’ wardrobes more ethical and sustainable, reducing global poverty at the same time.

5 Alternatives to Fast Fashion

  1. Support local thrift stores. Thrift shopping is a simple and affordable alternative to fast fashion. Thrift shops offer clothes at more affordable prices than fast fashion companies without causing harm to workers or the environment. Individuals can also help second-hand stores thrive by donating clothes. Donating to thrift shops provides a wider range of options for consumers who cannot afford ethical, sustainable fashion elsewhere. Thrift shopping can be a great alternative for people who do not wish to promote poor working conditions in the fashion industry.
  2. Buy, sell and trade clothes online. Internet users can buy, sell and exchange clothes on a plethora of apps and websites. For example, Etsy offers a range of ethical, sustainable, second-hand and handmade clothing at varying prices. Individuals can also use social media platforms like Facebook Marketplace and Instagram to buy, sell and trade used clothing instead of supporting fast fashion brands that exacerbate poverty. Some apps like Depop are specifically designed for people to buy and sell second-hand clothes online, without the hassle of visiting a thrift store in person.
  3. Buy clothes from ethical and sustainable brands. Consumers can still purchase brand new clothes without supporting the fast fashion industry. Clothing companies like Patagonia, Boden and Kotn offer alternatives to fast fashion for people with flexible budgets. For example, through Fair Trade certification, Patagonia supports workers in low-income areas, ensuring that workers receive fair compensation under good working conditions. Patagonia also uses renewable energy for clothing production. Boden uses recyclable packaging, ensures ethical production and pays workers fair wages. Kotn creates clothes with organic materials and maintains fair and safe labor standards. Thousands of ethical, sustainable clothing companies are available to those who can afford them.
  4. Buy timeless, good-quality clothing. People who buy fast fashion may get stuck in a fast fashion cycle. Consumers often purchase cheap, low-quality items from fast fashion companies to keep up with ever-changing trends. As a result, consumers can contribute heavily to poverty and the exploitation of workers. However, clothes from fast fashion companies often wear out and do not remain in style. Individuals who have the financial means can buy high-quality, timeless clothing as alternatives to fast fashion items that only last until the next season.
  5. Learn how to make and repair clothes. Making and repairing clothes can be an affordable, sustainable and ethical alternative to buying from fast fashion brands that intensify global poverty. People who make clothes can select their own materials, keeping an eye out for ethical and sustainable fabric brands. Those who learn to sew can also repair their old clothes instead of buying new ones from fast fashion companies. Between sewing, crocheting and other methods of creating clothes, people can create personalized, unique clothes to wear with the potential of launching their own ethically-sourced businesses.

Reducing Poverty Through Ethical Shopping

Shopping ethically contributes to combating global poverty and environmental degradation. Many fast fashion alternatives exist to help consumers stand up against workplace exploitation in low-income areas. Over time, ethical clothing purchases can make monumental impacts on the lives of people around the world.

– Cleo Hudson
Photo: Unsplash

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USAID Programs in Lebanon

USAID Programs in Lebanon
USAID Lebanon celebrated World Teacher’s Day 2021 by recognizing the 35,000 Syrian and Lebanese students who received basic literacy and numeric skills through USAID’s summer catch-up program. By partnering with Lebanon’s Ministry of Education, USAID equipped 3,500 teachers with mentorship, curriculum and school supplies. This is just a glimpse of the impact of USAID programs in Lebanon.

USAID Programs in Lebanon

The United States’ relationship with Lebanon began as early as 1951. Since USAID’s commitment to assist Lebanon’s development in 2006, USAID has supported Lebanon with more than $1.3 billion worth of foreign aid. USAID’s work in Lebanon focuses on three main sectors: education, “local development and governance” and economic development. In 2021 alone, USAID contributed $41 million to fund COVID-19 relief and economic development programs in Lebanon. This funding continues to impact the lives of millions amid rising poverty levels in Lebanon.

It is important to note that Lebanon has not always needed this level of support. Once a continental trade center, Lebanon has a rich development history, complete with rising income levels and GDP growth. A 15-year civil war ending in 1990 disrupted the value of the Lebanese pound, creating a snowball effect of economic casualties. With the compounded effects of COVID-19, a global recession and a refugee crisis, 82% of the Lebanese population lives in multidimensional poverty in 2021.

Improving Education in Lebanon

USAID programs in Lebanon focus on improving education systems, acknowledging that education is a proven tool for long-term poverty reduction. The current state of the Lebanese public education system is poor. Noting the dilapidated school infrastructure in Lebanon, USAID aims to provide rehabilitation support to Lebanon by “helping to renovate nearly a third of all Lebanese public schools. “Additionally, USAID is supplying all 256 public high schools with “science lab equipment.” To improve the quality of education, USAID is “training 75 English-speaking teacher trainers from the Ministry of Education on the methodologies of teaching the subjects of English, science and math.”

The Reaching all Children with Education (RACE) program ran from 2013 to 2016. The second phase of the program will reach conclusion at the close of 2021. RACE aims to enhance “access to formal education for 460,000 Syrian refugee children and underprivileged Lebanese children in the country.” RACE’s phase 2 aims to accomplish this “by expanding equitable access to schooling, improving conditions for learning and strengthening management of the education system.”

To promote higher education as a means to decrease poverty, USAID has supplied full university scholarships “to more than 1,300 Lebanese and refugee students.” USAID also helps 12 higher education institutions in Lebanon “to better prepare their graduates” for success in the job market after their studies.

Local Development and Governance

USAID programs in Lebanon work with local governments to build better civil services, increase access to drinking water and modernize technical infrastructure. The water and sanitation program has invested $180 million since 2006 in order to rehabilitate water infrastructure. This program has increased drinking water access for 620,000 Lebanese citizens and 120,000 Syrian refugees. Since 2012, more than 1.3 million Lebanese people have experienced the positive impacts of USAID’s “almost $200 million investment to improve basic services, including renewal back-up power generation and clean water provision.”

Beyond funding, USAID also works to provide local governments with technical training and resources. Through this work, 270,000 individuals experienced increased earnings through job creation and technical development. USAID predicts that the number of beneficiaries will reach 645,000 by 2022.

Economic Growth

Finally, USAID programs in Lebanon provide funding, training and resources to improve economic development. Over the last seven years, $113 million in funding has benefitted more than 20,000 companies, startups and small businesses. Additionally, this assistance has led to the creation of thousands of new jobs and tens of millions of dollars in leveraged funding. By investing in economic development, USAID works to kickstart long-term poverty reduction.

Looking Ahead

By funding education, local governance and economic development, USAID programs in Lebanon improve the lives of millions of impoverished Lebanese people. The programs provide both short and long-term relief, bolstering Lebanon’s ability to bounce back from decades of economic disruptions.

– Aiden Marina Smith
Photo: Flickr

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GoodDollar Promotes Universal Basic Income

GoodDollar
GoodDollar is both the name of an Israeli cryptocurrency and a not-for-profit company launched in 2020. Cryptocurrency is an immaterial system of money that has secure coding. Additionally, people can exchange it virtually and governments do not control it. Yoni Assia is the mind behind the GoodDollar project and coin (G$), the virtual currency that intends to democratize the economy by working to promote universal basic income and reduce inequality. Universal basic income (UBI) is “a periodic cash allowance given to all citizens… to provide them with a standard of living above the poverty line.” Here is some information about how GoodDollar promotes universal basic income (UBI).

GoodDollar’s Mission

According to Forbes, 80% of the population owns only 6% of the world’s wealth, while the remaining 20% owns the rest. Against this unfair backdrop, GoodDollar is a potential game-changer through how it promotes universal basic income.

Yoni Assia believes that “too many underprivileged people are locked out of opportunities that could take them out of poverty, including access to capital markets and digital work opportunities. Therefore, the GoodDollar project aims to alleviate that by fostering financial inclusion and empowerment around the world.” The creator of GoodDollar is also the founder of eToro, a social trading company and platform, which is responsible for investing $1 million in the new cryptocurrency.

How GoodDollar Works

GoodDollar can benefit anyone who signs up and creates an account (a wallet). For that, people need to record a short video to ensure that they are real humans, not bots, and they can complete the entire sign-up process in less than 5 minutes. There are two groups of users, claimers and supporters. Claimers are people who benefit from free digital cash (G$) without the need to invest any amount, being allowed to claim it every day and use it to pay for goods, services and exchange it with friends. Up to now, 255,000 claimants have received G$180 million, totaling more than $20,000. Supporters are both companies or regular people that believe in the UBI cause and fund a mechanism that generates interest (the DeFi — decentralized finance, protocol).

Interest generates in a blockchain, a kind of extremely safe digital information record system, and becomes the reserve of G$ coins to that undergoes distribution among claimers and supporters. The supporters benefit not only from the interest generated by their initial staked amount, but also the interest generated on top of the previous interest rate. Currently, only small businesses accept G$ coins, and they are not very valuable. However, as more people join the GoodDollar movement, its value will rise.

Hope for GoodDollar’s Growth

“Inequality plagues the world. Let’s solve for it in our future,” is a statement on GoodDollar’s website. The company is still in its early stages, but getting ready to release version 2.0 of the GoodDollar protocol. In the first year of the second version, it plans to distribute around $47,000 worth of G$. AI Multiple’s review on GoodDollar points out that, to grow and make a real difference in its users’ lives, GoodDollar needs to have more supporters and a G$ reserve that grows “faster than the number of claimers.”

The more people use this cryptocurrency, the more valuable it will become. If “a public figure sheds a light on it via their social media platforms or accepts it as a payment method for a business product or service, that could boost its popularity.”

A Promising Future

The Forbes article discusses how basic income distribution could help to reduce the financial inequality that the pandemic exacerbated, and the GoodDollar team has been working hard to make it a reality someday. While the future of the project depends on a combination of factors, blockchain solutions like GoodDollar are undeniably promising and revolutionary economic models.

Tal Oron, GoodDollar project director, hopes that within a few years, “GoodDollar [will distribute] $2 a day per person, and, together, as a global community, without government support, raise hundreds of millions of people above the poverty line.” The way that GoodDollar promotes universal basic income will only benefit people globally.

– Iasmine Oliveira
Photo: Flickr