Archive for category: Economy

Information and stories about economy.

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How Starbucks is Fighting Global Poverty

Coffee Economics: How Your Cup of Starbucks is Fighting Global PovertyStarbucks is fighting global poverty. Their website boasts that they are “making coffee the world’s first sustainable product to improve the lives of at least 1 million people in coffee communities around the world”. How does this pertain to global poverty? It is simple – of the world’s poorest countries, many are also the top producers of coffee. Brazil, Vietnam, Colombia, Indonesia, and Ethiopia are the top 5 producers of coffee in the world. These 5 countries additionally experience some of the highest poverty rates in the world. Starbucks has undertaken the mission of giving back to those who laid the groundwork for what has made their business so successful for 50 years, the coffee farmers.

Global Farmer Fund

With the goal of turning coffee into a sustainable product, in 2008, Starbucks founded the Global Farmer Fund Program. Starbucks founded this program to aid coffee farmers in developing countries. Before the launch of the program, Starbucks actually provided its first loan to a farming project in Mexico in the year 2000. This first loan allowed Starbucks to see the effect that such a program could have for farmers in need in developing countries. At the inception of the program, Starbucks pledged to provide $20 million to coffee farmers in need. In 2015, Starbucks committed to providing an additional $30 million, raising the Global Farmer Fund to a $50 million-valued program. According to Starbucks, “By providing access to capital, farmers have the ability to make strategic investments in their infrastructure, offering the stability they need to manage ongoing complexities so that there is a future for them and the industry”.

Fairtrade International

In order to meet their sustainability goals, Starbucks also partnered with Fairtrade International. Fairtrade International’s website boasts, “We transfer wealth back to farmers and workers in developing countries who deserve a decent income and decent work. We are the leading independent global movement for trade justice, and we are still the most recognized and trusted sustainable trading standard in many leading markets.” Fairtrade International makes sure that coffee farmers are getting paid fairly for their work, and in return, farmers adhere to environmental and labor standards set by the organization.

Fighting Poverty

The production of coffee plays a major role in the global economy, particularly in regions that are home to many living below the poverty line. Sustainable coffee production allows for an ethical and lasting source of income that has the potential to not only lift many out of poverty but keep them above the poverty line for generations to come. With Starbucks supporting fair trade agreements, they are protecting the integrity of their company at the root, while also improving the lives of coffee farmers in developing countries. Support for companies that implement programs, such as the Global Farmers Fund, and acknowledgment of the impact they are making shows Starbucks is fighting global poverty with sustainable poverty reduction.

– Michelle M. Schwab
Photo: Unsplash

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Made in China 2025 Aims to Reduce Poverty

Made in China 2025Over the last few decades, the Chinese economic miracle has astounded pundits across the globe. When reforms began in 1978 under Deng Xiaoping, China accounted for about 5% of the world economy. In 2020, that figure was more than 17% and rising quickly, second only to the United States. During the same period, extreme poverty was effectively erased, down from a high of 90% in 1981. The Made in China 2025 initiative aims to reduce poverty even further and ignite economic growth so that China can avoid the middle-income trap.

Poverty and the Middle-Income Trap in China

In some ways, many of these figures paint an inaccurate picture of the Asian giant. China is wealthy but its population is enormous, meaning that average incomes remain relatively low. In the United States, GDP per capita is almost four times higher than China’s. Furthermore, Chinese economic growth is slowing. Ballooning levels of debt and an aging population create worry for Beijing, even as the Communist Party celebrates its 100th anniversary. Economists fear that China could fall into the middle-income trap, a situation where rising wages for developing countries erode their manufacturing advantage but their innovative sectors remain too small to compensate.

Radical Planning for a Radical Problem

In 2015, preempting these concerns, Chinese leadership announced the Made in China 2025 initiative, hoping to move the nation up the value chain. As Harvard University explains it, the strategy intends to “secure China’s position as a global powerhouse in high-tech industries.” Furthermore, “the aim is to reduce China’s reliance on foreign technology imports and invest heavily in its own innovations in order to create Chinese companies that can compete both domestically and globally.” If China succeeds, it will create a blueprint for other developing countries in Africa and Asia to bypass the middle-income trap and liberate their populations from the grips of poverty.

Made in China 2025 outlines 10 key industries that the nation must master if it seeks to move up the value chain.

  1. Information technology
  2. Robotics
  3. Aerospace equipment
  4. Pharmaceuticals
  5. Medical equipment
  6. Electrical equipment
  7. Farming
  8. Railway equipment
  9. New energy vehicles
  10. Ocean engineering

From artificial intelligence to quantum computing, China has poured billions into developing cutting-edge technology. The U.S. administration cast the effort as an attempt to displace U.S. technological leadership, sanctioning Chinese companies from doing business with their suppliers in the United States. In reality, much of the motivation behind the Chinese initiative stems from a more basic goal: lifting the nation out of poverty and inspiring other nations to do the same.

Avoiding the Middle-Income Trap

The middle-income trap that confronts China is daunting as only a few countries have ever escaped its grasp. Most prominent were the Asian Tigers — South Korea, Taiwan, Hong Kong and Singapore — economies that defied the odds and delivered decades of sustained growth. But, many have failed to replicate the Asian Tigers’ success. Nations like Brazil and South Africa became mired in the middle-income trap, unable to escape the hard ceiling.

The danger for developing countries around the world is a run-in with the same fate. Before COVID-19, African nations were fast-growing. The World Bank predicted that many would reach middle-income status by 2025. But, upon achieving this milestone, they would encounter the same middle-income trap that Brazil and South Africa once faced. If this occurred, the region could be forever stuck in a grey zone, one where poverty would be reduced but not eliminated.

Looking to China

China offers a solution. If nations can move up the value chain with enough speed, they can escape the middle-income trap. Governments can help. The Communist Party has poured billions of dollars into research and development for Made in China 2025, creating some of the world’s largest technology companies in the process. African and Asian nations can do the same on their path to development.

Of course, investment has its downsides. Corruption takes a significant toll on the ability of a government to distribute funds in an appropriate manner. Tackling this problem will not be easy or simple, but a roadmap to success has been laid. With the rise of Asia and Africa in the decades ahead, countries have a chance to crush poverty and increase welfare for billions of people.

– Zachary Lee
Photo: Flickr

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The New National Payments System in Somalia

National Payments System in SomaliaThe Somali government recently secured support from the International Monetary Fund (IMF) and World Bank to create a central payments system that will aid in rebuilding Somalia’s economy. Millions of Somalis have suffered for the preceding two decades as a result of insufficient economic infrastructure. The combination of economic distress due to widespread counterfeiting, displacement as a result of climate-related pressures and the ensuing threat of al Shabaab, an al-Qaeda affiliated terrorist organization, has left Somalia decimated. The national payments system in Somalia presents a glimmer of hope in the fight against widespread poverty in Somalia.

National Payments System

A national payments system simply refers to the infrastructure within a specified country or locality that allows for commercial and financial transactions to occur. This includes a network of banks and a messaging and routing system. The system protects the information and transactions of the public, secures their finances and acts as an avenue into the global economy. A national payments system is essential to the efficacy of national economies and their involvement on a global financial scale. Until recently, Somalia existed without a national payments system. Domestic financial transactions largely used the U.S. dollar given the prevalence of counterfeit currency in the use of Somali shillings and that little to no domestic financial infrastructure was in place. This financial foundation hamstrung the Somali people and economy to the whim of exterior powers that provided such infrastructure in its most rudimentary form. During this period, Somalia has been in civil war, riddled with environmental decay and stifled by the threat of al Shabaab. All of the aforementioned conditions created an economic situation in which 64% of the population lives in absolute poverty in Somalia. The national payments system presents a monumental step toward economic progress.

What the Future Holds

With the introduction of a national payments system in Somalia, the Central Bank of Somalia Governor Abdirahman M. Abdullahi stated that “the impact on the economy will be unprecedented. It will boost trade and business… and will enable more financial inclusion in a secure and safe manner.” The Central Bank of Somalia has also issued its first Visa card and its first mobile phone-centered financial system. During this time, the government has additionally increased its regulation and production of the Somali shilling. All these financial advancements have boosted the IMF’s predictions of Somali economic growth to 2.9% in the next year.

Further Humanitarian Developments

In addition to the progress brought by the national payments system in Somalia, the Somali government has recently passed election and healthcare reform bills to increase equity in their political and social infrastructure. The National Elections Security Committee, a newly founded governmental body, has begun work on a new initiative to guarantee that at least 30% of the electorate consists of Somali women. The committee has additionally begun numerous programs to protect election integrity and voter privacy. Support from international bodies ranging from the World Bank to the IMF is essential to the efficacy of domestic progress in Somalia. On the other hand, it is important to note from where the motivation for such changes has arisen. It was not international groups that began the charge for Somali advancement. Rather, the impetus for this progress came from domestic pressure, not foreign assistance. Through the example that Somalia set, one can easily grasp the potential for self-sufficient humanitarian growth. All the changes are recent and will hopefully be immediately impactful in the global and domestic effort to end poverty in Somalia. – Jonah Issac Stern Photo: Flickr
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The Downfall of Romanian Gymnastics

Nadia Comaneci
The dynasty of Romanian gymnastics dates back to the 1976 Montreal Summer Games when Nadia Comaneci earned the first perfect score in gymnastics for her uneven bars routine. Her success kickstarted a legacy of greatness for other Romanian teams in future games.

Fast forward 40 years and the story changed significantly. In 2016, the Romanian team’s fifth-place Olympic qualifying finish terminated their ability to defend their country’s four-decades-long medal streak in the sport. The sole athlete to represent Romania in women’s gymnastics was Catalina Ponor who competed on the floor and balance beam apparatuses but failed to win a medal.

The downfall of Romanian gymnastics is not due to a lack of talent or ability. Rather, it is due to a combination of economic factors that make Olympic glory less lucrative than in years past.

The History of Romania’s Economy

From the mid-1970s to the late 1980s, Romanian communist dictator Nicolae Ceauşescu held a firm grip on the country’s economy. Unlike other Eastern European nations, Ceauşescu felt the best way of controlling the economy was to dictate individual economic transactions and freedom.

In a 1974 speech, he stated that “To give everyone the freedom of spending society’s money on whatever, and however, it might strike one’s mind—this is not possible. We have a planned economy. Nobody has the right to build or produce what is not provided for by the Plan. “The practices of restrictive employment cards and decreased labor movement made individual economic growth difficult to attain.

The Reward of Winning

Each country differs in its rewards for Olympic champions. In 2016, the BBC reported that Romanian athletes earn $79,000 and a monthly income for life if they win gold.

As of 2021, the minimum wage in Romania is just under 500 EUR. Just 10 years ago, it was less than half of the current average.

The prize for winning gold is still relatively high in comparison to the minimum income in Romania. However, the reward may not be worth the cost of lifelong dedication and, at times, abuse.

Abuse in Romanian Gymnastics

The downfall of Romanian gymnastics was inevitable. Just in 2021, Olympic coaches Bela and Martha Karolyi received accusations of abusing Romanian and American gymnasts as early as the 1960s.

In particular, the previously mentioned Nadia Comaneci was one of the athletes who experienced abuse. She was “starved to the point of developing eating disorders, slapped and denied medical treatment,” according to The Washington Post. Romanian author Stejarel Olaru’s book, “Nadia and the Securitate,” further details her abuse.

Olaru further detailed the abuse, saying that “the girls ate toothpaste before going to bed – this is how hungry they were. In some cases, they talked about drinking water from the toilet tank in secret because they were often not allowed to drink water.”

The Karolyis defected to U.S. in 1981. Bela coached all-around gold medalist Mary Lou Retton and the 1992 U.S. national team. Martha coached the gold-medal-winning 1996 U.S. national team.

The Current State of Romania’s Economy

Since 2019, the primary economic focus has been on, according to the World Bank, “strengthening Romania’s institutions, advancing poverty reduction and promoting shared prosperity” through:

  1. Providing equal opportunity for success.
  2. Growth within the private sector.
  3. Prevention of economic shocks.

The International Bank for Reconstruction and Development (IBRD) allocated almost $2 billion. This money went to various sectors such as education, health and the environment.

The Reimbursable Advisory Services (RAS), a World Bank program, dedicated another $114 million for “improved strategic planning and budgeting, evidence-based policymaking, protection of the vulnerable, disaster risk management, human development and strengthened capacity for monitoring and evaluation.”

The Advisory Services and Analytics (ASA) program, also through the World Bank, funds projects such as the inclusion of the minority ethnic group Roma, development of the business sector and improved infrastructure.

The Connection to Gymnastics

The improved economic situation in Romania allows for the average Romanian citizen to achieve moderate economic comfort. If a Romanian wants to succeed economically, they can now attain it through more traditional means such as working or acquiring an education.

Simply put, there is less of a need to dedicate life to sports like gymnastics to live a comfortable life. The wider range of economic opportunities and the abuse that plagued the lives of 1970s Romanian gymnasts like Comaneci attributed to the downfall of Romanian gymnastics.

– Jessica Umbro
Photo: Flickr

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How Vietnam Improved Its Economy

How Vietnam improved its economy
Vietnam has seen a tremendous amount of growth in various sectors over the past three decades. This growth is largely due in part to economic reforms that have undergone implementation in the country. Before the reforms, Vietnam remained one of the poorest countries in the world. However, it has since grown to become a country with a lower-middle income. The GDP of Vietnam grew tremendously between 2002 and 2018 by increasing 2.7 times. Even in the face of the worldwide COVID-19 pandemic, the economy of Vietnam has been able to remain steadfast and resilient through trying times. Here is some information about how Vietnam improved its economy.

The Doi Moi Reforms

The Doi Moi reforms that the government implemented in 1986 helped Vietnam improved its economy. Under these reforms, Vietnam as a country took three significant steps as a country that would help improve the economy. The first of these steps was embracing free trade.

For many years, Vietnam has entered into various free trade agreements with numerous nations. One includes ASEAN, which Vietnam became a part of back in 1995. Vietnam and the U.S. partnered together by signing a free trade agreement in 2000, and seven years later, Vietnam joined the World Trade Organization. By joining these institutions and forming these alliances, Vietnam has been able to reduce the number of tariffs on imports coming into the country and exports leaving the country.

Making Changes

The second step that the Doi Moi reforms took to better the economy was implementing deregulation and making it cheaper for companies to conduct business within Vietnam. One way this occurred was through the enactment of the Law on Foreign Investment which passed in 1986. This law allowed companies from foreign countries to come into Vietnam to conduct business. Over the years, this law underwent revisions numerous times to better accommodate investors.

This law has improved Vietnam’s competitiveness tremendously over the years. In 2006, Vietnam’s global competitiveness ranked at 77. Only 11 years later in 2017, Vietnam ranked at 55 in world competitiveness. Lastly, the Doi Moi reforms aimed at improving human capital in Vietnam and improving the country’s infrastructure.

To improve the human capital of Vietnam, the government decided to prioritize education within the country. Better education is a must for Vietnam due to its ever-growing population. A larger population means more jobs and citizens must receive quality education to perform them. Infrastructure has been vitally important for the growth of Vietnam’s economy as well. Making sure that all citizens have access to internet services is important for a country due to the technological needs of the modern age.

How It Helps

Vietnam improved its economy due largely to the Doi Moi reforms. Today, the economy of Vietnam continues to flourish. In 2020, during the midst of the COVID-19 pandemic, Vietnam’s economy expanded by 2.9%. Compared to other countries at the time, this growth rate was among the highest in the world.

Since 2010, the poverty rate in Vietnam has slowly declined each year. In 2012, the poverty rate was at 40.8%. By 2018, the poverty rate fell almost by 20%, leaving it at 23.1%. As it currently stands, the Vietnamese economy continues to stay strong and grow.

– Jacob E. Lee
Photo: Flickr

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Pro-Democracy Protests in Cuba

Protests in CubaJuly is an especially notable month in Cuban history. Cuba witnessed its largest mass protests in July 1994, when thousands protested due to a major economic crisis that the fall of the Soviet Union brought on. Now, on the weened of July 10, 2021, thousands of Cubans protested in the streets of its major cities due to food shortages, extreme inflation and authoritarian communist rule. The COVID-19 pandemic has only made extreme poverty and repressive government rule worse on the island. Many Cubans at the protests spoke out about starving and having no basic survival resources.

How Age Influences Cubans’ Views on the Communist Government

The recent protests in Cuba are much more complicated than they first appear. According to a man who refused to identify himself in fear of retaliation, younger Cubans tend to vehemently oppose the communist regime due to the lack of food, medicine and electricity. A 17-year-old protester said that the population was protesting because they were hungry and poor. The man noted how there is a lack of resources on the island. Cuban President Miguel Diaz-Canel announced over a nationwide television broadcast that the protests needed to end. He called on the communists to deliver a “revolutionary response” to the destabilization of the island.

In response to Diaz-Canel’s message, older Cubans, in support of the government and the military and police, blocked off young anti-government protesters in their attempt to occupy vital parts of Havana. Pro-government supporters, some armed with wooden clubs, expressed their ties to Cuban patriotism and supported the security officials in quelling the anti-government protests. Pro-government supporters accused the younger protesters of taking a stand against communism by working as paid mercenaries for the United States. The U.S. spends approximately $20 million annually to support “democracy promotion” in Cuba.

How and Why the Protests Happened

Both economic and health crises largely drive the protests in Cuba. The COVID-19 pandemic and economic measures that the communist government took have made many Cubans’ living situations dire. Throughout 2020, Cuba held the pandemic in check, however, recently, virus cases increased rapidly. Cuba reported 6,750 new cases and 31 new deaths on July 11. However, opposition groups note that the true statistics are most likely much worse. Many Cubans have reported that their relatives died at home without receiving the care they needed to have a chance at survival by citing medical negligence.

The Cuban tourism industry has come to a standstill since the beginning of the pandemic, consequently creating a massive hole in the Cuban economy. Hyperinflation, electricity blackouts, food shortages and a lack of everyday necessities are widespread throughout the island. Economic reforms at the start of 2021 increased worker wages while also causing a major spike in prices. Cuban economists, including Pavel Vidal, believe that prices could rise in Cuba by as much as between 500% and 900% within the next few months. Cuban banks additionally stopped accepting cash deposits of U.S. currency. Many economists viewed this as the most severe restriction put on U.S. currency since the rule of Fidel Castro.

Internet access and mobilizing young people through Twitter, Facebook and Instagram were essential in getting the protests started. In 1994, very few Cubans living outside of Havana knew that protests were taking place. Young Cubans have expressed their disdain for the communist regime on social media for years. The Cuban regime has deactivated the internet on the island to stop the unrest.

US Officials’ Response and Cuba’s Future

President Biden called the protests in Cuba a clarion call for freedom and noted that Americans wholeheartedly support Cubans in their fight for freedom. The acting assistant secretary for the state for western hemisphere affairs, Julie Chung, expressed her support in a tweet commending the peaceful protests and Cuban concerns with the multiple crises they face.

Foreign aid to Cuba from the United States and the international community has been minimal in recent years and throughout the islands’ history. This is because the communist leaders would take all of the money and resources for themselves while refusing to distribute them to people in need. The $20 million the U.S. currently spends to support democracy promotion efforts in Cuba is a start. To liberate the Cuban people and end extreme poverty on the island, the United States and the international community need to do whatever they can to help keep the protests going.

– Curtis McGonigle
Photo: Wikipedia Commons

 

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5 Ways Morocco’s Economy is Recovering

Morocco's EconomyPreviously, a myriad of tourists had visited Morocco to explore its diverse culture, food, landscapes, history and people. However, due to the COVID-19 pandemic, the nation has faced a devastating economic crisis. Without its regular influx of tourists or traveling diaspora, Morocco is in the depths of a recession for the first time since 1995. The government is working to ensure that Morocco’s economy can recover from the pandemic.

5 Ways Morocco’s Economy is Recovering

  1. The Mohammed VI Investment Fund: In November 2020, King Mohammed VI established a $1.6 billion economic plan to revive Morocco’s economy due to the economic crisis that the COVID-19 pandemic brought on. Shortly afterward, the International Finance Corporation, as part of the World Bank Group, officially announced its support for the Moroccan Ministry of Economy and Finance’s efforts to boost the country’s economy.
  2. Moroccan Transportation Companies Decrease Prices: In June 2021, King Mohammed VI announced that all transportation companies must make tickets more affordable for Moroccans living abroad. The announcement targeted airlines such as Royal Air Maroc, which dropped flight ticket prices by more than 50% globally. Within a few days of the announcement, flights were being booked much faster than before. During the first week of discounted airline ticket prices, 195,547 people traveled to Morocco.
  3. Other Discounts for Tourists: Airline discounts are not the only thing Morocco’s economy is relying on to attract travelers. All forms of transportation in Morocco, from car rentals to train and bus tickets, have decreased in price. Additionally, 30% of hotel prices have decreased.
  4. More Visitors: International travel restrictions drastically affected tourism, causing a 78% deficit in the sector’s revenue in the first quarter of 2021. In response, the Moroccan government established a new economic plan that specifically targeted revenue from tourism. Now, tourism is surging more than it ever has since the onset of the COVID-19 pandemic. In 2019, 12 million tourists visited Morocco, half of whom were Moroccans living abroad. From June to September 2021, Morocco will see 72% of the visitors it saw in the same period in 2019, or around 3.5 million travelers.
  5. Rapid Tourism Sector Rebound: Morocco’s tourism sector suffered a loss of $7.2 billion in 2020. The COVID-19 pandemic hit small businesses and tourism hotspots hard, especially during national lockdowns. However, these businesses are benefiting from the country’s new economic plan. Travel reopenings are also catalyzing Morocco’s economic recovery.

Laudable Economic Growth

Despite the effects of COVID-19 on Morocco’s economy, the World Bank ranked it 53rd out of 190 countries for ease of doing business in 2020, reflecting its laudable economic achievements within merely a decade. With King Mohammed VI’s plan in place, the country’s setbacks hardly seem significant. The restoration of Morocco’s economy is underway and the country’s effervescent tourism sector is back on the rise.

– Nora Zaim-Sassi
Photo: Flickr

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Community Development Programs in Togo

Community Development Programs in Togo
Togo, a country located in West Africa, has a population of more than 8.2 million. Since 1998, the country has created many community development programs. Its first Agence d’Appui aux Initiatives de Base (AGAIB), which is a Grassroots Initiative Support Agency, was in the Maritime region. AGAIBs aims to help communities develop more income-generating activities and community infrastructures. In 2001, four more AGAIBS began. Since then, the country has continued establishing different community development programs that target impoverished populations. Here is some information about community development programs in Togo.

Poverty in Togo

The United Nations considers Togo one of the Least Developed Countries (LCD) and a Low Income Food Deficit Country (LIFDC). It is one of the poorest countries in sub-Saharan Africa. As of 2018, more than 50% of the population was living below the poverty line. The government’s National Development Plan for 2018-2022 has aimed to promote social and infrastructure services to reduce poverty and improve the overall quality of life. Although the country has high poverty rates, its economy has continued to grow.

Togo’s Economic Development

In the past five years, Togo’s gross domestic product (GDP) has averaged 5.5% growth. The country’s government has created public investment programs to help alleviate demand. Agricultural production and trade have also contributed to this GDP growth. Agriculture makes up 40% of the GDP and more than 60% of employment in Togo. Due to the COVID-19 pandemic, economic momentum could slow as a result of trade tensions and the threat of security. However, its economy still performed well in 2019 with an estimated GDP growth rate of 5.3%. Economists predict that Togo’s GDP growth rate declined to 1% in 2020. Despite this stunt in economic growth, the government and other global partnerships have helped Togo fund different community development programs to reduce poverty rates.

Community Development Programs Fight Poverty Through Microprojects

A microproject is a small-scale project that looks to improve a specific aspect of life for a targeted population. Togo’s Projet de Développement Communautaire (PDC), which began in 2008, is working to improve access to social services for impoverished populations through microprojects in various communities. Its goal was to fund 350 micro-projects in different sectors, like education and health. This project also sought to develop more income-generating activities. PDC was very successful and many consider it Togo’s first big community development program since 1998. After the 2008 global food crisis, PDC provided solutions, specifically agricultural tools, to help alleviate starvation and improve food security. This community project also provided funding to 233 groups to partake in various economic activities in different impoverished communities. The project officially ended in 2013, but still impacts the country today.

Emphasis on Education

PDC helped fund a school feeding program. In 2018, this project reached 85,000 primary school children in 308 schools. One year later, the project increased its availability by 5%, reaching 91,000 children in 314 schools in 2019. Other community development projects have created school canteen programs. These programs not only employ more citizens but also allow for impoverished children to get an education. At least 36,000 children receive benefits from this program. As a result, dropout rates in primary and secondary education have decreased. Although they focus specifically on education, education-community development projects work to reduce poverty in Togo since increasing education allows for more future economic opportunities.

An Expanded Version of PDC

The Community Development and Social Safety Nets Project (PDCplus) formed in 2012, four years after the initial PDC began. Togo’s government and the World Bank help fund this project that works to improve the social and economic situations of impoverished populations in the country. Its strategy, known as the strategy for accelerated growth and the promotion of employment (SCAPE), worked to increase community participation and involvement in the program’s microprojects.

PDCplus completed its mission in 2017. In total, it created 346 micro-projects to improve social infrastructures, 208 micro-projects to develop more income-generating activities, 305 schools with school canteen programs and 196 school buildings. PDCplus was successful like its predecessor PDC, showing how Togo’s community development programs continue to work to reduce poverty rates in the country. The government has continued developing new projects that are similar to PDC and PDCplus due to their successes. As a result, the country has made progress toward mitigating its poverty levels through similar programs.

The Involvement of Impoverished Communities

These community development programs seek to increase citizen participation, specifically through microprojects that provide training for community members. The Borgen Project spoke with Dr. Theresa Davidson, a professor and Sociology Program Director at Samford University. She mainly focused on how participation in these programs could impact how effective they are: “If community development is a process that is led by the people there, it will likely be more effective […] because they know what they need.”

These impoverished populations know how these projects will impact their community. Projects like PDC and PDCplus are so impactful in alleviating poverty since its microprojects worked within these communities and relied on their participation. The active involvement of communities with PDC helped make these community development programs so successful in reducing poverty rates. New projects that the government has created need to continue community participation in order to be as successful as its predecessors.

There are many nonprofit organizations in Togo that seek to expand on the progress that these community development programs made. One nonprofit, Education Leadership Community Development, known as EDULCOD Togo, works to improve quality and accessibility to education for impoverished populations. The mission of this organization echoes outcomes from PDC and PDCplus.

This West African country has created many community development programs. PDC and PDCplus have been its most successful projects. These programs range from microprojects aimed at improving social infrastructure and involvement to improving accessible education and feeding programs. Although it ended more than a decade ago, Togo’s government is continuing to enact similar projects to improve its economy. Overall, the community development programs are reducing poverty rates in Togo.

– Mia Banuelos
Photo: Pixabay

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Economic Development in Nicaragua Set to Improve Through Education

Economic Development in NicaraguaEconomic development in Nicaragua has encountered issues that have slowed the country’s development. Nicaragua declared itself an independent country in 1821. However, it has directly felt the crippling effect of economic issues from the onslaught of crimes. As recently as 2020, Nicaragua was recognized as a critical threat location for crime by the Overseas Security Advisory Council. Nicaragua has also encountered natural disasters. As of November 2020, Hurricane Eta and Hurricane Iota, Category 4 and 5 hurricanes respectively, caused more than $740 million in damage.

However, even with mounting external and internal pressure, economic development in Nicaragua has shown potential for improvement. This change is based on securing educational opportunities that turn into growth in economic projects. Private organizations have created community centers and offered low- and middle-income citizens better access to education. Such organizations have also created jobs by amplifying the reach of renewable energy, agricultural irrigation expansion and fortification of infrastructure.

Nicaraguan Poverty

Nicaragua has faced an uphill battle in economic growth due to its criminal and poverty-stricken background. The conflict between rival gangs within the country exacerbates this issue. This instability has also caused a decline in economic fortitude. Moreover, inflation has reached undeniably high levels, and people have left Nicaragua in droves to pursue better economic opportunities. The people left behind continue to suffer from a lack of proper healthcare and education.

Education Improves Economic Development

The educational system within Nicaragua is adjacent to the poverty level. Children within the educational system find themselves facing the challenge of completing school due to a wide range of reasons. A recent study from the USAID reported that an estimated 72% of Nicaraguans do not finish secondary school, leaving them likely to be impoverished. In addition, more than 18% of teachers do not have more than primary school education. This creates a new generation of unprepared Nicaraguan citizens.

The correlation between educational attainment and job development is significant. It is the bridge that keeps many Nicaraguans in impoverished income brackets. With the constant issues that many lower-income Nicaraguan students face, there has been an increase in steering them toward an attainable educational path and improving educational success.

Formative Ways of Change

Outside help from the U.N. and the U.S. has created a shift in economic and educational development in Nicaragua in recent years. Organizations such as Save the Children and the World Bank have supported the upturn of educational prowess within Nicaragua. Save the Children has created an infrastructure for educational access by establishing toll roads and paving new ones. Additionally, the World Bank has established more community centers with creative and technical workshops to teach and fortify skills. The skills taught include knowledge of irrigation, infrastructure fortification and a new era of clean and renewable energy.

The organizations have also increased job development and commercial development projects from the private sector. These development projects have provided more job opportunities within the industries of agricultural irrigation, the fortification of infrastructure, renewable energy and the reinforcement of trade.

Projects of this magnitude were given more than just a prime objective with the World Bank portfolio. Such projects totaled more than $400 million for nine planned projects. These projects include the enhancement of telecommunications, roads, education, health and insurance for natural disasters. Two credits have already been passed together, worth more than $100 million, to combat COVID-19 and help those most affected by hurricanes.

The Nicaraguan educational system has had a rise in scholars coming through the ranks to create an ever-growing class of job-ready individuals. Problems of organized crime and violence have troubled Nicaragua in the past, but there is hope to establish a better economic system that can create many more jobs and lead Nicaragua to a better future. Organizations like the World Bank and Save the Children are instituting an educational and job pathway for young and experienced Nicaraguan citizens alike to create a more prosperous Nicaragua.

– Mario Perales
Photo: Unsplash

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Growing Industries Improve Lesotho’s Economy

Growing Industries Improve Lesotho's EconomyThe small kingdom of Lesotho lies in the middle of South Africa, completely landlocked within its mountainous regions. When Lesotho gained its independence from the United Kingdom in 1966, it was established as a parliamentary constitutional monarchy. A majority of the country lives in poverty, relying on subsistence farming and the economy of its much larger neighbor, South Africa. Struggling to stand alone as a country vastly overshadowed by South Africa, four factors contribute to increases in Lesotho’s economy. Industries, such as diamond and textiles, are working to bring the country out of poverty and increase its GDP.

Private Sector-Led Economic Growth

Part of Lesotho’s economic growth can be attributed to the promotion of businesses and industries that are not under the direct control of the government. This initiative was supported more fully by the World Bank Board of Executive Directors, who approved $13.4 million donated to the government of Lesotho to assist with its promotion.

According to the World Bank, “the Second Private Sector Competitiveness and Economic Diversification Project (PSCEDP II) will help improve the business environment through the continued facilitation of reforms to reduce the time and cost associated with doing business in Lesotho, provide easier access to finance, make trading across borders simpler and provide streamlined, accessible and efficient government to business services in order to attract private investment and boost growth.” The PSCEDP II is already seeing growth through economic diversification and an improved business environment, which is crucial for Lesotho’s economy.

The Diamond Industry

The discovery of diamonds made a large impact on the economy of Lesotho, as some of the world’s most valuable diamonds have been discovered there. Mining for diamonds began in the mid-20th century, but a lack of decent finds made the mines close. However, the mines reopened in 2004 when new technology helped increase diamond discovery and the country’s overall GDP. Through the use of diamond exportation, revenue has drastically helped assist the economy of Lesotho. In 2011, diamonds constituted 31% of Lesotho’s total exports.

Additionally, operators of the mines aim to assist local communities. The Letseng mine, world-famous for its priceless diamonds, set aside $300,000 in 2014 to help its local community. This money funded projects to increase living conditions and provide survival training for herd boys. Not only is the diamond industry extremely beneficial for the economy of Lesotho, but it is also beneficial for the local communities and areas surrounding the mines.

The Textile Industry

Starting with a handful of textile factories originating in the 1990s, the textile industry has now become one of the largest employers of Lesotho people, with approximately 50,000 jobs available to communities. The textile industry holds thousands of jobs, primarily for women who account for 80% of employees within the industry. Between 2014 and 2019, the manufacturing sector of Lesotho’s economy grew 34%. Consequently, this increase allowed for a tripling of textile exports sent out to South Africa. By providing thousands of jobs to people, especially women, the poverty levels have eased and the GDP has increased significantly. With the assistance of the textile industry, the increased exportation of products is healing and strengthening the economy of Lesotho.

The Highlands Water Development Project

Lesotho and South Africa created and signed a plan concerning Lesotho’s exceedingly large water resources. This infrastructure project would benefit both countries in the transferring of water and the production of hydroelectricity. The initiative began in 1986 to help Lesotho’s electricity production independence. In addition, Lesotho would gain revenue by providing water to South Africa.

Moving water from the Orange River toward the Atlantic, this project includes the building of five dams and approximately 200 kilometers of tunnels to transport water to South Africa and produce electricity for Lesotho in three distinct phases, the last of which was to be completed in 2020. With this project, approximately 2,000 million cubic meters of water are transported from Lesotho to South Africa every year. This initiative has already helped improve the economy of Lesotho and save money through the production of hydroelectricity.

The assistance of these four factors is working to change the economy to alleviate the impacts of poverty throughout Lesotho. If growth continues with the assistance of private sector-led promotion, the diamond and textile industries and the Highlands Water Development Project, significant hope remains for this small country.

– Allie Degner
Photo: Flickr