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February 5, 2018
05 Feb 2018

The Changing Income Gap in China

income gap in chinaThe Chinese economy has grown tremendously and continues to expand, bringing fortune to the country and its people. Destination sites are seeing this expansion via an increase of Chinese tourists. The growth is exciting as the generations change from barely surviving to having expendable income. However, there is still an income gap in China that must be faced. Anyone traveling from the city to the countryside can see the disparity in wealth.

The Chinese economy really started to make a turnaround when Deng Xiaoping became the country’s leader in 1978. He began implementing major economic reforms that caused the economy to boom in such a way that its growth averages around 10 percent a year. This average is three times higher than the development of any other country. These economic reforms changed China so quickly and brought so much wealth to the country that the world began to take notice. China began purchasing and buying in other countries and became the world’s biggest exporter in 2009.

While this brought huge amounts of wealth into the country and changed many people’s lives, it also left others behind. In 2016, only 1 percent of Chinese citizens held over one-third of Chinese wealth while the poorest quarter held only 1 percent of Chinese wealth. A look at cities versus the countryside reveals the income gap in China. A visit to one of China’s great cities such as Beijing, Shanghai or Xi’an reflects China’s great innovation, but a quick drive to the countryside will find ramshackle homes that have been poorly repaired with cheap scraps.

This disparity can seem overwhelming and appear that, despite China’s prosperity, many are left in poverty. Thankfully, this is not necessarily the case; the poverty rate decreased from 26.7 percent in 1998 to 13.8 percent in 2010. China’s growing economy also means a growing middle class. From 2002 to 2012, China’s middle class grew by over 25 percent. However, this quick growth has caused a great migration into cities, which has left some cities ill-equipped to handle the large influx in population, and the countryside with little financial stability or ability to maintain infrastructure, as well as shooting up the cost of living in urban areas.

As of 2016, people living in cities made 2.7 times more on average than those in the country. The main problem of inequality lies with geography. Restrictions have been put in place that prevent or limit those living in the countryside from relocating or selling their homes. However, despite these problems, the incomes of those in the countryside have grown tremendously during the last four years. The current leader, Xi Jinping, has put particular pressure on various areas of business and government to clamp down on corruption, which has had a positive impact on breaching the inequality between citizens, as well as improving healthcare, education and welfare.

The income gap in China does still exist, but the redistributive policies have reined in the corruption and created an awareness for those with little social mobility. Rural areas are still lagging behind, but if one thing is true, it is this: lives are improving. Chinese citizens are able to travel, the middle class is growing and the government is taking notice of inequality. While China still has some steps to take, the last 30 years have shown how dramatically China can progress and use policy to enhance its citizens’ lives.

– Natasha Komen

Photo: Good Free Photos

in China, Economy, Global Poverty, Inequality /by /#permalink
February 2, 2018
02 Feb 2018

Economic Impact of Refugees on Neighboring Countries

impact of refugees on neighboring countries
Refugees taking asylum within other countries’ borders affect the economy of the host country and surrounding countries. People fleeing usually choose neighboring countries of their homeland, some of these being lower-income developing countries. While the effects are varying, several outcomes influence the economy of the host country in a positive manner and indirectly act as an economic impact of refugees on neighboring countries.

 

Education for Refugees

One such outcome is the development of education for refugees. This provides education for children in the host country that originally could not obtain such an opportunity. The use of international aid organizations has furthered the building of schools and training of teachers. These organizations seek to invest in the host countries development to ensure that the needs of the refugees are met, and thus bolstering that country’s economy.

Each individual person seeking asylum also brings a skill from home to the new country. As unemployed refugees come, there are a variety of skills and occupational backgrounds that are also brought — for instance, doctors, lawyers, nurses and carpenters. This influx of vocational skills can alleviate issues of a demographic crisis or an in-country population decrease.

 

Refugee Economic Status

Establishing desirable economic status as an individual provides an economic gain to the country and allows refugees to more easily integrate or move into other surrounding countries. An economic gain to the host country in the form of a working-class can result in positive economic impacts on neighboring countries.

Economic stimulus for the host country can further be developed through local food purchase, non-food items such as shelter materials, disbursements made by aid workers and assets brought by refugees. Purchasing products from neighboring countries is another of the positive impact of refugees on neighboring countries.

 

Refugee Strain on Infrastructure and Foreign Aid

A large influx of refugees to host countries does strain the country’s current economic infrastructure and call for emergency financial assistance. In a case study done on the 1999 Kosovar refugees, the International Monetary Fund and the World Bank estimated that host countries needed $52 to $188 million to appropriately deal with humanitarian needs. To accomplish this, these countries often look to developed countries to provide foreign aid.

Foreign aid given by countries can help increase the host country’s economy while also providing a peaceful presence to aid the in-need nation. Aid simultaneously benefits the receiving countries economy and the giving-country’s future economic gain and presence in foreign affairs.

Although hosting a large population of refugees can create a burden (especially on developing countries), the positive impact of refugees on neighboring countries is extremely apparent. These benefits provide an incentive to give asylum to those fleeing from conflict.

– Bronti DeRoche

Photo: Flickr

in Economics, Economy, Global Poverty, Refugees, Refugees and Displaced Persons /by /#permalink
November 29, 2017
29 Nov 2017

How Technology is Helping Economies in Developing Countries


The Internet and other advances in communication technology have helped make the spreading of globalization even quicker. For developing countries, access to technology can have many benefits —  one such improvement being the boost of a nation’s economy. Other ways that technology is helping economies in developing countries is by reducing the costs of production, encouraging growth of new business and advancing communication.

An issue that developing countries must bypass is prioritizing technology innovation, not just adapting to technology. Another issue is that the distribution of technology needs to be equal across a country; so far the poor have not been able to have the same amount of access to technology. It is important for organizations to monitor technology and to encourage innovations and job creation in order to solve these issues.

One organization that works to do just that is Broadband for Good, a group that gives internet access to rural areas and encourages programs to utilize the technology in creating progress in communities.

When technology is used correctly it can be extremely helpful in furthering the prosperity of economies. One such example of technology creating a positive impact to the economy is in regard to India — the Self-Employed Women’s Association uses SMS to send agricultural workers messages about commodity prices. This information helps farmers determine best places to sell their produce. Farmers who participated in this program have said that they have been able to sell their products over wider areas, which has increased their incomes.

Another example, also in India, is the Hand in Hand Partnership (HIHP). The HIHP is an organization that provides women with mobile devices so that they can launch their own tech-driven businesses. The HIHP helps train and provide technical support for these women. By encouraging women to innovate ideas instead of just giving them technology, HIHP is helping to better the economy in a sustainable and long-term way.

Other countries successful in creating businesses are Nigeria, Egypt and Indonesia. Thirty eight percent of these countries’ gross domestic product (GDP) was generated by micro-entrepreneurs. In a 2011 World Bank report, figures showed that small businesses like these create new jobs and generate new ideas — both of which are great for helping economies.

– Deanna Wetmore

Photo: Flickr

in Developing Countries, Economy, Global Poverty, Technology /by /#permalink
November 15, 2017
15 Nov 2017

Quest for Women’s Empowerment in Sri Lanka Continues

Women’s Empowerment in Sri LankaOn November 2, the World Economic Forum released the 2017 Global Gender Gap Report. The report did not reflect well on the state of women’s empowerment in Sri Lanka.

The Global Gender Gap Report grades 144 countries on their progress toward attaining gender equality in four areas: Economic Participation and Opportunity, Educational Attainment, Health and Survival and Political Empowerment. Sri Lanka has been declining from its position in the top 20 since 2010. The country slipped from closing 74.6 percent of the gender gap in 2010 to 66.9 percent this year.

The country’s gap in Economic Participation and Opportunity increased because it failed to improve conditions of wage inequality for similar work. Additionally, Sri Lanka now ranks 86th among 144 countries in the gender gap in Educational Attainment.

In Political Empowerment, Sri Lanka ranked 65th. The country compensated for low scores on the Women in Parliament and Women in Ministerial Positions indicators with high marks on the Years with a Female Head of State indicator. Sri Lanka has had a female head of state for 21 out of the last 50 years.

Despite these discouraging statistics, efforts to advance the state of women’s empowerment in Sri Lanka persist. Aitken Spence PLC, Jetwing Hotels Ltd., MAS Holdings (Pvt.) Ltd. and the Sri Lanka Institute of Nanotechnology (Pvt.) Ltd. have signed on as partners of Women’s Empowerment Principles.

Developed through a partnership between U.N. Women and the United Nations Global Compact, the two organizations designed the principles to help companies review existing policies and practices and establish new strategies to promote women’s empowerment.

The principles include:

  • Establishing high-level corporate leadership for gender equality
  • Treating all women and men equitably at work by respecting and supporting human rights and non-discrimination
  • Securing the health, safety and well-being of all female and male workers
  • Promoting education, training and professional development for women
  • Implementing enterprise development and employing supply chain and marketing practices that empower women
  • Nurturing equality through community initiatives and advocacy

Participating companies must measure and publicly report their progress toward achieving gender parity.

In addition to economic measures, non-government organizations are implementing social programs to enhance women’s empowerment in Sri Lanka. Emerge Centre for Reintegration is the newest program sponsored by the Emerge Lanka Foundation, which supports survivors of sexual abuse aged 10-18. For 12 years, the foundation has helped countless exploited young women by providing training in life, financial and professional skills. Now, through the Centre for Reintegration, it offers assistance to young women who are over 18 as they face the challenging transition stage from living in shelters to thriving on their own.

Enabling women to participate fully in communities builds stronger economies, helps attain internationally agreed upon objectives for development and sustainability and improves the quality of life for women, men, families and communities. The work being done in Sri Lanka can help counter its decreasing rankings and ensure empowerment for all women.

– Heather Hopkins

Photo: Flickr

in Economy, Empowerment, Global Poverty, Sri Lanka, Women and Female Empowerment /by /#permalink
November 10, 2017
10 Nov 2017

Uzbekistan’s Poverty Rate

Uzbekistan Poverty RateAfter separating from the Soviet Union in 1924, Uzbekistan is finally getting its economic footing. This country has struggled with transitioning to a market economy, but it has finally found a solution. Because of this, Uzbekistan’s poverty rate has slowly been decreasing over the years. It has declined from 33 percent in 2004 to its current rate of just 12.8 percent in 2017.

Although Uzbekistan has successfully decreased its poverty rate, the country still faces the challenge of creating more jobs to keep the poverty rate down. Many urban cities – where most of the population live – lack adequate employment opportunities. An unsteady unemployment rate, high cost of basic necessities such as food and low wages are major factors contributing to the poverty rate in Uzbekistan.

Uzbekistan boasts 92.3 points out of 100 for food production stability and 88.5 points for quality, meaning the country does not have a problem producing high-quality food products. The problem is that the low wages plus the high cost of food mean many residents cannot afford to buy this high-quality food. In fact, 75 percent of the population has a low income. Because of this, the country reports high rates of iron, folic acid and vitamin A deficiencies in its citizens living in poverty.

Thanks to the overall economic growth, decrease in unemployment and rise in the labor force have contributed to the decrease in the Uzbekistan poverty rate. In fact, the GDP has steadily increased in the last decade. In 2016, the GDP was estimated at $67.22 billion, a rise from 2014’s $63.067 billion.

Uzbekistan’s poverty rate now ranks seventh compared to its neighbors. It follows countries such as Afghanistan (39.1 percent), Armenia (29.8 percent), and Georgia (20.1 percent).

Although Uzbekistan has a long way to go to completely eradicate poverty, Uzbekistan’s poverty rate has significantly decreased over the years. Continuing to create suitable jobs for urban residents while increasing the GDP will help the country maintain its steady poverty decline.

– Amira Wynn

Photo: Flickr

in Economy, Uzbekistan /by /#permalink
November 4, 2017
04 Nov 2017

Social Impact and the Green Bond Market

Green Bond MarketWhat if there was a way to invest money and change the world? The global green bond market may be the answer.

The potential of these bonds to facilitate global change is irrefutable. Green bonds are similar to other fixed-income instruments in their financial attractiveness but they are unique in their ability to provide a positive social and environmental impact.

The capital raised is dedicated to programs that benefit the environment and encourage more prosperity within nations, such as delivering clean water, promoting renewable energy sources and increasing efficiency.

Developed and developing countries alike face rising financial challenges from changing climate conditions and environmental hardships, but often it’s the poorest nations that suffer most. The green bond market finances many life-changing development strategies that support sustainable development, focusing on poverty reduction and inclusive growth. They are innovative financial tools to finance railways, roads, airports, buildings and energy and water infrastructures, while simultaneously achieving positive returns for the environment and society.

The green bond market has seen explosive growth and increased attention from investors in recent years. Launched by multilateral institutions less than a decade ago, green bonds have seen a 38 percent increase in the first half of 2017 compared to the year prior.

The Climate Bond Initiative, an international nonprofit focused on this niche, estimates that the total amount of green bonds issued in 2017 could reach upwards of $150 billion; this is a monumental increase from the $3 billion worth of green bonds that were issued in 2012.

This surge in interest can be explained by an increased desire by consumers to invest in an impact-driven market; this has caused a record number of public and private entities to join or issue green bonds.

The number, and nature, of the financial players involved in the green bond market have also contributed to the rapid growth. Development banks, such as the World Bank and the European Investment Bank, large corporations, including Apple and Intesa and sovereign states, like Poland and France, have all emerged in the green bond market.

Individual projects by each green bond issuer carry great reach. Just one project by the World Bank to improve sustainable water management in Brazil benefits 2.6 million people and provides 164,000 people with improved sanitation, enhancing the overall quality of life.

The interest that the green bond market has sparked is helping to change how investors think about their investments and how issuers think about the projects that they finance. So long as investors continue to ask questions about the expected social and environmental impacts of their investments, green bonds will continue to build a meaningful new capital market, providing financial support for environmental and sustainability initiatives around the world.

– Jamie Enright

Photo: Flickr

in Economics, Economy /by /#permalink
November 2, 2017
02 Nov 2017

Hunger in Guinea-Bissau

Hunger in Guinea-Bissau
Hunger in Guinea-Bissau is a fact of life. Slightly less than triple the size of Connecticut, Guinea-Bissau is a small West African nation of a mere 1.7 million people. Unfortunately, Guinea-Bissau is also among the world’s poorest countries, with exports in 2016 totaling a mere $163 million. Of this figure, approximately 80 percent of exports come from cash crops, specifically cashews. As a result of the economy relying on cash crops, therefore, over two-thirds of Bissau-Guineans live below the poverty line.

With much of the nation’s food being exported, rather than consumed, hunger in Guinea-Bissau is a pressing issue. One in 10 people in Guinea-Bissau is food insecure, with the figure being as high as half of people in rural areas. According to the World Food Programme, hunger in Guinea-Bissau is plagued by three key factors: political instability, irregular rainfall and fluctuating rice and cashew prices on the global market.

 

Politica and Hunger in Guinea-Bissau

 

Guinea-Bissau’s political struggles stem from the current president’s dismissal of prime minister Domingos Simoes Pereira, a politician popular among the people for his work with Western leaders donating to Guinea-Bissau. The national parliament has not met in over a year, and the instability has caused severe issues with access to electricity and water. By prolonging water shortages as a result of political deadlock, Guinea-Bissau struggles to properly irrigate its crops and feed struggling communities. Resolving the deadlock is critical to solving other more pressing matters.

Of course, the issue of water shortages is not helped by irregular rainfall patterns that have likely emerged as a result of climate change. As the nation’s prime exports are agriculturally-based, it is clear that reliable weather patterns are vital to sustaining not only the economy, but the very survivability of the people, as hunger in Guinea-Bissau will only worsen if crops continue to fail. An acute lack of rainfall will also lead to the spread of desertification.

With little industry in the country, even by African standards, Guinea-Bissau is among the most vulnerable countries to the negative effects of climate change, especially given the country’s reliance on agricultural goods to support both the economy and themselves. Sustainable and responsible water usage practices must be undertaken when water is once again made available after the resolution of the political stalemate.

Finally, there is the issue of fluctuating prices. Despite the suspension of donor flows into the country following the dismissal of Pereira, Guinea-Bissau’s economy actually grew at approximately 5 percent in the past two years. With two-thirds of the nation reliant on cashew exportation, however, price shocks to the international cashew market are capable of crippling entire communities and worsening issues of hunger in Guinea-Bissau. In order to combat this extreme vulnerability, the country must diversify its economy far beyond cashew production and exportation, and eventually beyond agriculture as well.

The situation is desperate, but not hopeless. In order to reduce and eventually eradicate hunger in Guinea-Bissau, the first issue to address must be that of the controversial political deadlock in the capital. In doing so, more urgent issues can be addressed by political leaders. The implementation of sustainable water practices and diversification of the entire national economy will alleviate the suffering of communities across the small West African nation and prevent them from happening in the future.

– Brad Tait

Photo: Flickr

in Economy, Global Poverty, Guinea-Bissau, Hunger, World Food Programme /by /#permalink
October 29, 2017
29 Oct 2017

African Development Bank Group’s Global Strategies


A large part of poverty strategies is implementing some kind of spur in economic growth. This kick-start can be a gateway to social and economic reform in some of the poorest countries in the world, eventually leading to self-sustainability. The African Development Bank Group has made it their mission to place poverty reduction back into the hands of Africans and to create a stimulus that can enable the extremely poor in reducing their poverty scores.

The African Development Bank Group was born out of three different economic groups in Africa. It has set a plan that began in 2013, targeted to reach major benchmarks by 2022. The group has recognized that Africa has begun a transformative journey and progressed greatly over the last decade, yet this progress remains markedly uneven in some areas of the continent. This particular organization relies on a few major objectives to help lift regional member countries out of poverty, while staying congruent with ideals and values. The group first aids by mobilizing and allocating a country’s resources, then provides advice and guidance on technical aspects for development efforts. The African Development Bank Group has also laid out 17 sustainable development goals in order to achieve its mission. These goals include food security measures, sanitation, healthcare, sustainable energy use and procurement, social equality across gender and age gaps, economic growth and stability and ecological preservation plans.

The holistic approach to poverty reduction through economic growth and sustainability is what sets apart the African Development Bank Group. While taking advantage of models such as the World Bank and Multilateral Development Banks, The African Development Bank Group is able to remain primarily domestically-reliant and position itself in such a way as to gain more traction as the 2022 goal nears. Balance sheet optimizations have been a key focus in doing so, as projects continue to be carried out in both the private and public sectors through multilateral funds involving developed countries. The group’s procurement procedures – unlike other bank methods – involve strict standards. These include investments in member countries whose approval processes ensure that procurements are in line with the values and mission of The African Development Bank Group.

– Casey Hess

Photo: Flickr

in Africa, Banks, Economy, Food Security, Global Poverty /by /#permalink
October 21, 2017
21 Oct 2017

The Issue of Overfishing in Saint Pierre and Miquelon

Overfishing in Saint Pierre and MiquelonThe French islands of Saint Pierre and Miquelon are located off the coast of Newfoundland and have a population of about 5,533, according to July 2017 data. It is estimated that about 90 percent of inhabitants live on St. Pierre, while a smaller population lives on Miquelon. The islands focus largely on the fishing industry and have for over a century, but overfishing in Saint Pierre and Miquelon has led to Canada imposing a long-term closure of the industry, causing a negative ripple effect on the economy of the islands.

The overfishing in Saint Pierre and Miquelon started when the United States repealed Prohibition in 1933. The islands’ thriving economy decreased dramatically and forced the laborers to turn back to fishing. Since then, Saint Pierre and Miquelon has constantly been fishing, leading to the overfishing problem.

In addition to the issue of overfishing in Saint Pierre and Miquelon, there has been a decline in the number of ships using the Saint Pierre harbor. This could be due to the weather and natural environment of the islands. Surrounding the islands are “treacherous currents and fog [that] have contributed to hundreds of shipwrecks off Saint Pierre and Miquelon.”

The four-mile strip of water between Saint Pierre and Miquelon is called “The Mouth of Hell” by the local fisherman because of the strong currents that have contributed to about 600 shipwrecks near the islands. The residents of Saint Pierre and Miquelon have used this to their benefit, as they can add to their earnings from fishing somewhat by salvaging the wreckage.

Dealing with overfishing in Saint Pierre and Miquelon has not been easy for the residents of the islands, but there has been some progress with sustainability and trying to stabilize the island’s economy, as the residents have turned to other kinds of seafood fishing such as crab fishing. They have slowly developed other types of agricultural farming, including vegetables, poultry, cattle, sheep and pigs. The government of Saint Pierre and Miquelon is also working to grow its tourism industry. With the hope of more tourism on the islands, a more sustainable way of fishing and more farming, Saint Pierre and Miquelon’s prospects are looking brighter and more stable.

– Jennifer Lightle

Photo: Flickr

in Canada, Economy, Global Poverty, Overfishing, Saint Pierre and Miquelon /by /#permalink
October 20, 2017
20 Oct 2017

How to Help People in Brunei

How to Help People in Brunei DarussalamBrunei is a small nation located in the northern coastal area of the island of Borneo, which also encompasses parts of Malaysia and Indonesia. Brunei’s territory extends itself through an area of 5,765 kilometers of land, where about 423,000 citizens live.

How to help people in Brunei is not an easy question to answer at first glance. The fact is that despite its size, Brunei’s economy is considered to be one of the best performing in the world.

The country mainly exports liquefied gas and crude oil across the globe; natural gas and petroleum represent 60 percent of the country’s economy. Brunei’s extended forest territory allows it to produce abundant amounts of non-renewable resources and energy.

In spite of Brunei’s level of productivity, the issue of how to help people in Brunei remains because, despite the country’s great wealth, the social and political system causes difficulty for Brunei’s citizens.

As an absolute monarchy led by Sultan Hassanal Bolkiah, freedom of speech has been limited within the media, including radio, television, and print, as well as for citizens.

In 2014, Brunei adopted sharia law, a list of laws based on the religion of Islam. Consisting of three phases, two of which have to be yet implemented, sharia law is currently enforced among Brunei’s citizens.

The only approved phase for the moment includes prison sentences for what most developed first world countries would consider minor. Pregnancy outside marriage, failing to attend Friday prayers, propagating religion other than Islam, among other offenses, are severely punished with prison sentences or fines.

Organizations such as the United Nations have spoken out regarding Bolkiah’s intentions, but despite commenting on the sultan’s ideas for the future of Brunei, the country remains part of the United Nations due to providing free medical care, education and more to its citizens.

Boycotts of the Beverly Hills Hotel and other properties that Bolkiah owns have been enacted by numerous international companies to put pressure on the sultan to repeal sharia law. Celebrities such as Ellen DeGeneres and Elton John have taken up the issue to bring awareness to the inequality and discrimination that is currently taking place in Brunei.

How to help people in Brunei is a social issue rather than an economic one. Brunei is a country that violates human rights every day and no organizations are actively fighting against it. The imposition of sharia law in Brunei is continuous and awareness is key in order to eradicate such human rights violations.

– Paula Gibson

Photo: Flickr

in Brunei, Economy, Global Poverty, Human Rights, Religion /by /#permalink