Archive for category: Economy

Information and stories about economy.

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The Impact of Coronavirus On the Global Economy

Impact of Coronavirus
Over the past several months, the outbreak of the fast-spreading pandemic of coronavirus or COVID-19 has taken the world by storm. In efforts to stop the pandemic from spreading and provide aid to the sick, many countries are closing borders and imparting quarantine policies on citizens. Not only is the coronavirus taking lives, but it is also heavily impacting the global economy in terms of billions of dollars. 

Efforts to Curb COVID-19

Currently, the WHO has reported 234,073 confirmed global cases and 9,840 deaths from the coronavirus. This pandemic is extremely contagious and spreads through respiratory fluids, which is why it is important to cover the mouth when coughing and washing hands frequently. The CDC recommends washing hands every hour for at least 20 seconds.

International governments are also closing borders and canceling flights to slow the impact of coronavirus. Further, people from CEOs to politicians and regular citizens are promoting social distancing. All over the world, authorities are telling people to only leave home when necessary like to buy groceries, travel to work, exercise or receive medical care. In Jordan, curfews exist that are punishable with jail time if people do not abide by them. Meanwhile, the United Kingdom is asking retired doctors and medical professionals to help fight the outbreak.

Organization Action

Organizations are also taking action to fight the outbreak. Organizations like the Gates Foundation, Wellcome and the Mastercard Impact Fund are contributing large sums to support economically impacted communities. The Gates Foundation and Wellcome have donated up to $50 million, and the Mastercard Impact Fund has committed up to $25 million. The CEO of Apple, Tim Cook, has announced the company will donate to “groups on the ground” that are in specific contact with those ill. Specific to the Gates Foundation, its initial donation is a part of the $100 million it has committed to help fight the outbreak and provide aid relief.

Additionally, the co-founder of Alibaba, Jack Ma, has donated $14.4 million to help develop a vaccine to reduce the impact of coronavirus. Ma has provided $5.8 million to support two Chinese government research organizations in tackling vaccine production. The rest of the funds are going towards prevention protocols. According to the latest CDC situation report, the first vaccine trials are in progression. Furthermore, the WHO has set up an international study in many countries to compare different treatments.

Impact on the Global Economy

From a financial standpoint, the pandemic is slowly weakening the global economy and will continue to do so until the situation is under control. So far, the impact of COVID-19 is billions of dollars of government money to go towards aid needs, prevention technology and protection measures. Estimates determine that the impact of coronavirus will have cost nearly $2 trillion by the end of 2020. However, some countries like the U.S. are already receiving billions of dollars in bailouts.

With an abundant amount of action per nation, generous donations and hard-work from medical professionals, it is the hope of many that the pandemic will soon take a more positive turn. It is important to take adequate measures to stay safe during the pandemic. Safety precautions allow a slower spread and provide medical professionals and the health care system time to reduce the impact of the virus. Additionally, these measures will aid in providing therapeutic resources and developing vaccines. 

– Sarah Mobarak
Photo: Flickr

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UN Report on Global Unemployment

UN Report on Global Unemployment
Global unemployment plays a key role in global poverty. After all, the logic goes that employment leads to prosperity, even if little by little. Development economists proclaim the efficacy of providing jobs, however low paying, as the means to the end of escaping poverty, regardless of location. There is some evidence for this. According to the Brookings Institute, increasing work rates impacted poverty most, with education being second. With that said, a recent U.N. report on global unemployment clouds the future of international job growth since, for the first time in nearly a decade, the global unemployment rate has risen.

Previous Global Unemployment Rise

In 2008 and 2009, the Great Recession hamstrung the United States economy in the worst way since the Great Depression nearly 70 years prior. Unemployment soared, reaching 13.2 percent nationally and 5.6 percent globally. Between 2008 and 2009, the last time the U.N. reported on global unemployment rate increases, it increased by nearly a full percentage point, according to the World Bank. The stock market crash in the United States and Europe clearly caused this, but thankfully the rate recovered and surpassed the 2009 point in 2019, returning to about 4.9 percent.

Reasons for the Present Situation

A U.N. report on global unemployment in January 2020 indicated that this rise in the global unemployment rate was due largely to trade tensions. The United Nations said that these conflicts could seriously inhibit international efforts to address concerns of poverty in developing countries and shift focus away from efforts to decarbonize the global economy. Due to these strains, the report claims that 473 million people lack adequate job opportunities to accommodate their needs. Of those, some 190 million people are out of work, a rise of more than 2.5 million from last year. In addition, approximately 165 million people found employment, but in an insufficient amount of hours to garner wages to support themselves. These numbers pale in comparison to the 5.7 billion working-age people across the world but they concern economists nonetheless.

To compound the issue, the International Labor Organization said that vulnerable employment is on the rise as well, as people that do have jobs may find themselves out of one in the near future. A 2018 report estimated that nearly 1.4 billion workers lived in the world in 2017, and expected that 35 million more would join them by 2019.

The Implications

A rise in global unemployment, like that which the U.N. report on global unemployment forecasts, assuredly has an impact on global poverty. More people out of work necessarily means more people struggling to make ends meet. The World Economic and Social Outlook places this trend in a bigger context. Labor underutilization, meaning people working fewer hours than they would like or finding it difficult to access paid work, combined with deficits in work and persisting inequalities in labor markets means an overall stagnating global economy, according to the report.

Hope for the Future

First of all, stagnation is not a decline, and a trend of one year to the next does not necessarily indicate a predestined change for the years ahead. In fact, the World Bank points toward statistics that it issued at the end of the year to support the claim that every year, poverty reduces. In 2019, nearly 800 million people overcame extreme poverty from a sample of only 15 countries: Tanzania, Tajikistan, Chad, Republic of Congo, Kyrgyz Republic, China, India, Moldova, Burkina Faso, the Democratic Republic of the Congo, Indonesia, Vietnam, Ethiopia, Pakistan and Namibia. Over a 15-year period, roughly from 2000 to 2015, these 15 countries showed the greatest improvements in global poverty, contributing greatly to the reduction of the global rate of people living on $1.90 a day or less to below 10 percent. Additionally, efforts by organizations such as the International Development Association have funded the needs of the 76 poorest countries to the tune of $82 billion, promoting continued economic growth and assisting in making them more resilient to climate shocks and natural disasters.

While the U.N. report on global unemployment forecasts a hindrance to these improvements, hope is far from lost. The fight against global poverty continues with plenty of evidence of success and optimism for the future.

– Alex Myers
Photo: Flickr

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RIMAC and The Economy in Croatia

Economy in Croatia
While beautiful, Croatia is not the most affluent in terms of economic standards. As of 2015, 19.5 percent of the Croatian population was below the poverty line. The financial crash of 2008 stunted the development of gross domestic product the country experienced since 1998. The convergence gap widened by 3 percent, launching the country into a recession. Luckily, RIMAC and its car, the Concept Two, is impacting the economy in Croatia in a positive way by offering Croatian’s jobs and allowing Croatia to compete in the international market.

Croatian Economic Slump

Various key issues lead to a poor economy in Croatia including labor shortages, minimal pay, lack of adequate education and subsequent lack of skill. Such domestic problems are integral to why many Croats are unable to find opportunities that match up to wealthier Western European countries such as the United Kingdom, Germany, Sweden and/or Switzerland. According to the Croatian Employers Association (HUP), firms in Croatia are unable to fill some 30,000 jobs. Most of these openings exist in the tourism industry, making up at least 20 percent of Croatia’s gross domestic product.

Potential for a Great Economy

Despite the current state of the economy in Croatia, an emerging market may turn it around. Croatia, along with many other European Union member states, has benefited from the integration and trade of modern goods and services, specifically in technology.

Concept Two’s Impact

In 2018, a zoomer of a car sped onto the world’s tech radar at the Geneva Motor Show called the Concept Two. This car may support the development of a thriving economy in Croatia. Some have deemed the vehicle as “alive with technology,” elevating the bar as the fastest electric car around the globe.

The CEO of RIMAC, Mate Rimac, developed the lightning-fast vehicle. Mate Rimac began the development roughly 10 years ago when he turned his gas-powered vehicle into an electric car. The CEO has also discussed his desire to create opportunities in Croatia, “a country where people usually emigrate from,” to keep citizens from leaving. Further, Mate Rimac has already hired individuals of 22 different nationalities to work at his company.

The company manufactures all components of the Concept Two in-house. With the pricey, technologically loaded unit selling for more than $2 million, the average Croat would not be able to afford such a speedster. although, this hefty price tag could bring in a large influx of stimulation for the economy in Croatia.

RIMAC’s Impact

According to recent reports, the manufacture and production of the Concept Two are now employing many. The company has listed 429 full-time employees as of October 2018. Prior to this report in 2017, a venture capital funding organization noted the availability of 100 new jobs at RIMAC. These efforts have resulted in a growth of nearly double.

Further, the European Investment Bank (EIB) notes RIMAC as a good investment. In 2018, the EIB provided a direct loan to expand the research and development department, in part due to RIMAC introducing jobs and growth of the economy in Croatia.

Investment in Innovation

Often, the best way a country can improve the national economy is to grow business that can compete on an international level. Countries in the Baltic have been able to improve the internal business climate by increasing competition at the global playing field. One can promote allowing businesses to start and grow through investment in innovation, much like the Concept Two with RIMAC. One of the most productive methods to increase economic growth is through research and development in modern technology.

Companies like RIMAC should improve the business climate and economy in Croatia. With enough investment and support, companies with bravery and innovative force have the potential to be a major player in promoting Croatia into the international economy.

– Robert Forsyth
Photo: Wikimedia

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The Transform Africa Summit

The Transform Africa SummitThe Transform Africa Summit is a global forum that SMART Africa created in 2013 in Kigali, Rwanda. The summit is an annual event that brings together global and regional government officials and international organizations and businesses that meet to discuss how to shape and sustain Africa’s digital future. Here is more information about the Transform Africa Summit.

Purpose

The purpose of the summit is to further push Africa into a knowledge economy where member states are able to become more competitive on a global scale by increasing innovation and boosting job opportunities and improvements in sectors such as health care, education and agriculture. Overall, it strives to transform African cities into smart societies. The summit has had five editions since 2013, the last of which Kigali, Rwanda hosted in May 2019.

What is SMART Africa?

SMART Africa is both a solution and a commitment from African Heads of State and Government to grow the continent’s socio-economic developments and create affordable access to broadband. The overall goal is to increase Africa’s lagging economy through systems such as information and communications technologies (ICT).

Within SMART Africa is the Alliance, a group of 24 countries representing over 600 million people, that works to implement and maintain the pillars of the SMART Africa Manifesto and make sure its vision moves into action. These pillars include Policy, Access, e-Government, Private Sector/Entrepreneurship and Sustainable Development. These pillars further break down into four enablers that ensure the effective establishment of economic growth and job creation.

Previous Summits

More than 1,200 delegates attended the first summit in 2013, including top executives from groups such as Facebook and Google. The 2013 summit resulted in the creation of the SMART Africa Manifesto, which was the first time Africa planned to put the private sector first and create a more open economy through ICT and advanced telecommunication. The 2018 summit hosted in May showcased the continent’s first Transform Africa Economic Forum which proposed ways to boost Africa’s economy by connecting cabinet secretaries with business leaders for collaboration.

The 2019 summit focused on the theme of “Boosting Africa’s Digital Economy.” This summit culminated in efforts to engage business leaders and high net worth investors in areas where collaboration and investment opportunities were possible, mainly in public-private partnerships. The newest summit is scheduled for April 2020 in Conakry, Republic of Guinea and projections determine that it should host over 4,000 participants from around the world.

Key Ideas

One of the unique features of the Transform Africa Summit is the member state’s drive to put the private sector first, which could further increase investments and productivity. Prior to the summit, Africa previously underdeveloped this notion. Through digitalization and creating a “One Africa Network,” leaders of the summit hope to rid Africa of the vast fragmentation that exists between countries.

Also central to the summit’s mission is to bring Africa from merely being a consumer of ICTs to its own producer. By operating on the premise of shared prosperity, creating supportive policies and doing away with monopolies, Africa can take great strides toward developing a successful knowledge-based economy.

Transformations

All four summits have been incredibly successful in ushering in connectivity in African cities and villages. All 53 governments of the African Union have accepted the SMART Africa Manifesto. This is a huge leap from the seven original members. Also successful was the push for the “One Africa Network” which paved the way for the adoption of the African Continental Free Trade Area Agreement and proposed the establishment of a single market for all goods and services in 54 countries, a feat that would not have happened without SMART Africa’s digital push.

The 2018 summit noted that Africa’s mobile usage had increased to 80.8 percent, falling just behind 99.7 percent usage at the world level. Summit leaders also noted how new technology prices were able to go down due to the rise of technology that was popping up.

Overall, the Transform Africa Summit has created a more connected, open and successful economy for Africa. Africa has experienced job increases, industry expansion and economic growth since the original creation of the SMART Africa Manifesto in 2013 and its implementation by members of the African Alliance. The World Economic Forum speakers projected that numbers for 2020 will show that Africa’s consumer spending will be over $1.4 trillion.

– Laurel Sonneby
Photo: Flickr

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Reducing Poverty in Honduras

Reducing Poverty in Honduras
Honduras is a Central American country with a poverty rate of about 49%. Although it is among the poorest countries in Central America, Honduras has the second-highest growth rate in Central America and is beginning to transform its economy, reduce poverty and mitigate corruption. The International Monetary Fund (IMF), USAID and the Government of Honduras (GOH) are working together to improve livelihoods in Honduras.

Country Development Cooperation Strategy

Honduras is aware of its current problems with crime, food insecurity, poverty, political instability and corruption. This is why the GOH asked USAID for help, forming the USAID/Honduras Country Development Cooperation Strategy (CDCS). The three main goals of the CDCS involve increasing security to vulnerable populations in high-crime areas, reducing poverty in Honduras and improving transparency and accountability in the government.

Widespread violence and income inequality are two major reasons Hondurans flee to other countries. The most at risk of both violence and income inequality are those in poor areas, such as the slums that are prevalent in Western Honduras. The CDCS project began in 2015 and ends on December 22, 2020. So far, homicides per 100,000 people decreased from 87 in 2011 to 44 in 2017 and poverty lessened slightly.

To combat mass migrations out of their countries, Honduras and its neighbors El Salvador and Guatemala presented a strategy called Alliance for Prosperity. The Alliance for Prosperity states that economic growth is a possible solution to crime and poverty, both of which lead to people fleeing to safer countries, including the U.S.

IMF and Honduras

In 2019, Honduras received $311 million from the International Monetary Fund. Honduras stated the money is precautionary and will support the government’s goal of economic stability and institutional reform. The economic program also involves stabilizing the public electricity company, which has been struggling with debt. The economy has been stable since 2018. GDP growth has remained around three to five percent from 2017 to 2019, which is higher than the GDP growth average of Central America.

Part of the $311 million will also go toward easing the national debt and improving infrastructure. Infrastructure job growth could have a positive outcome in reducing poverty in Honduras, as the agriculture industry occupies most of the country where income is low. Political corruption, a weak economy and violence have made it difficult for Honduras to develop out of its agriculture-based economy.

The IMF also provided financial assistance to Honduras in 2014, which helped to improve the country’s spending habits and reduce its debt. Honduras’ debt makes up approximately 40% of its GDP, which the nation is focused on eliminating through economic growth.

A Stable Economy for the Future

Progress is occurring in reducing poverty in Honduras. The country’s goals of reducing poverty, increasing economic growth and improving government transparency have the potential to transform the economy. Poverty reduced from 82.1% in 1990 to 50.3% in 2017 through economic growth, yet poverty remains very high. Assistance by the IMF, USAID and other parties have helped further Honduras’ goals of transforming the economy and reducing the poverty rate in both rural and urban regions.

– Lucas Schmidt
Photo: Flickr

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China’s Investment in Rwanda

Investment in RwandaThe commonly held belief on Chinese investment in African countries is that China is only interested in exploiting the continent for its mineral resources and establishing a sycophantic relationship with some of the world’s most vulnerable developing nations. However, the investment in Rwanda makes little sense if short term profit and influence are the country’s only motives. Rwanda lacks the natural resources that its neighbors have. Furthermore, its population will only yield a small number of consumers of Chinese goods in the future. Motivations aside, China’s investment is helping to develop the country in ways that will positively impact the lives of the country’s poor.

Rwanda’s Rapidly Improving Infrastructure

The investment in Rwanda has had no bigger impact than in the area of infrastructure with projects that include the construction of hotels, schools, hospitals and multi-thousand capacity stadiums in the underdeveloped eastern province. China also constructed 80 percent of the country’s roads, beginning with a loan of 250 million yuan in 2009. This equals about $36,040,200 million.

In the short term, the Chinese have reduced the cost of construction and have created jobs for local people according to Qinghai Liu, A Chinese expert in the research on China’s investment in Africa. Evidence exists to support her claim as well. One example is the construction of the Administrative Office Complex located in the capital city of Kigali. The Chinese builders employ some 260 Rwandan employees and provide them training in construction skills.

China is also funding an agriculture technology center to help improve Rwanda’s farming. Construction has also extended into real estate. Chinese enterprises are building 4,500 villas and apartments in Vision City for an emerging middle class. Recently, the Chinese embassy donated building materials for housing for the most vulnerable families.

The Tradeoff

The Rwandan government has found a willing investment partner in China whose aid is not preconditioned on democratization, liberalization and privatization. Rwanda has even modeled its development on China, lacking an emphasis on personal and social freedoms. Should Rwanda be unable to pay its debts, it is unclear what China might do to make good on its investment. Sri Lanka is the only country to have defaulted on its loans with China in the past. China seized the economically vital port of Hambantota in a response that remains controversial to this day.

Though there are obvious political and social concerns that come with the investment in Rwanda, the poor are benefiting. There is evidence that China is playing a concrete role in helping to lift Rwandans out of poverty. In big and small ways, China is helping Rwanda in its development, and not just the rich are benefiting.

– Caleb Carr
Photo: Google

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Top 10 Facts About Living Conditions in Nauru

Facts About Living Conditions in Nauru
Situated in the Pacific Ocean to the northeast of Australia, the Republic of Nauru is the smallest island nation in the world. Phosphate mining has rendered 80 percent of the island unhabitable and devoid of arable land. Phosphate deposits depleted in the 1980s and Nauru’s economy stagnated, transitioning the country from fiscally self-sustaining to externally dependent. The country’s history, economy and foreign relationships interlace with—and have shaped many aspects of—Nauruan life, as evidenced by the top 10 facts about living conditions in Nauru.

Top 10 Facts About Living Conditions in Nauru

  1. Population: Nauru’s population is approximately 11,000. Ninety percent are indigenous to the island, almost half of the population are under the age of 24 and 3.5  percent are 65 and older. Although the country’s landmass is only eight square miles, Nauru is one of the world’s most densely populated countries.
  2. Colonialism: Nauru remained under colonial authority until gaining independence in 1968. For example, Germany annexed it in 1888, Japan occupied it in WWII and the United Nations (U.N.) subsequently placed Nauru under Australian administration. The nation only became of economic interest to colonial powers after the discovery of phosphate deposits in the late 19th century.
  3. Australian-Nauru Relations: Nauru sought damages from Australia in 1989 for “rehabilitation of the phosphate lands.” Before WWII, Germany and the United Kingdom split mining profits, and following the war, Australia and the United Kingdom divided revenues. The Hague sided with Nauru and the two countries settled in 1993 with Australia agreeing to pay $56 million AUD that year and another $50 million AUD over the next two decades. Australia continues to be Nauru’s greatest source of economic stimulus, its contributions making up 20 percent of the national GDP.
  4. Economy: Phosphate mining and production is integral to Nauru’s economy and continues to be the country’s most valuable resource. Phosphate is one of the key plant nutrients to make food crop fertilizer. Additionally, phosphate mines are an essential source of employment. A national economic crisis occurred in the 80s when Nauru exhausted existing deposits. Secondary mining did resume in 2005, but Nauru’s government estimates that reservoirs will be barren by 2030. Other niche industries have recently emerged, including immigration taxation and licensing commercial fishing. The Republic of China (ROC) and Nauru signed a fishing cooperation accord in 2004 to strengthen trade relations between the two countries. Renewed in 2016, the cooperation accord provides funds to improve Nauru’s fishing industry and promotes sustainable fishing practices.
  5. The Pacific Solution Policy: In 2001, Nauru became one of two Australian off-shore regional processing centers for refugees and asylum-seekers in an arrangement called the Pacific Solution policy. In exchange, the Australian Government would provide $1 million AUD annually for its operation, immediately pay $16.5 million AUD for infrastructure and provide increased access to Australian education and additional maritime security. Facilities closed from 2007 to 2012 due to international objections, including indefinite detention times and evidence of abuse; however, despite criticism, operations have since recommenced.
  6. Employment: Following the economic downturn in the 1980s, Nauru did not significantly diversify its industries, unemployment levels increased and the country became heavily dependent on external economic stimulus. For example, the uptick in employment levels in 2012 was the result of regional processing centers reopening. Facilities directly provided 500 jobs, and indirectly generated substantial ancillary employment opportunities; next to Nauru’s government, Australia is the country’s second-largest source of employment.
  7. Health Care: Nauru was one of seventeen countries in 2016 that, proportionate to its economy, spent over 10 percent of its GDP on health care. The Marshall Islands spent the most at 23.3 percent and Monaco spent the least at 1.7 percent. Despite this, many Nauruan’s develop noncommunicable diseases, specifically, obesity, diabetes and cardiovascular disease. Although obesity remains an issue in Nauru, it has made progress as male diabetes rates have declined 1 percent over the past decade and high blood pressure levels have decreased for both genders by 6 percent.
  8. Poverty: Nauru is officially a middle-upper-income nation, and previously, it was the wealthiest country per capita. However, a 2018 U.N. report showed that a quarter of Nauruans live in “basic need” poverty, too poor for the cost of food and access to necessities such as clean water, health care and education. The same 2018 report noted that Nauru had no instances of food insecurity, however.
  9. Education: Education in Nauru is free and mandatory until the age of 18. Eighty percent of Nauruan children enrolled in early and primary education in 2015, but only half that number attended secondary school. The Government addressed truancy in 2016, an ongoing concern for students in Nauru, by enacting the Nauru Education Assistance Trust Scheme (NEATS). NEATS incentivizes students to attend school by providing them with $5 a day to set aside for adulthood and help them establish businesses or purchase homes when they graduate. Following NEAT, school attendance increased by 11 percent from 2016 to 2018.
  10. National Sustainability: Nauru is confronting the significant damage that phosphate mining caused. The government acknowledges that it is an economically volatile and diminishing commodity. For example, the ROC and Nauru’s 360 Project is an initiative that encourages national self-sufficiency in areas such as vocational training, transitioning to solar energy and specialized forms of agriculture; the latter is to mitigate reliance on imported goods. The United Arab Emirates has aligned with Nauru to achieve similar efforts, providing financial aid for Nauru to establish its first solar energy plant, which opened in 2016.

These top 10 facts about living conditions in Nauru reveal that its history is complex. The country’s remote location, limited economic opportunities and increasing dependence on foreign investment—usually politically contingent for all countries—continue to impact the Nauruan population. However, ongoing U.N. involvement and foreign relationships with countries like Australia and the ROC, are working to address Nauru’s long-term social issues.

– Annabel Fay
Photo: Wikipedia Commons
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Oil Find and Economic Growth in Guyana

economic growth in Guyana
Guyana discovered oil off its coast in 2015 and is on the brink of major economic growth. According to the International Monetary Fund (IMF), the projected economic growth in Guyana for 2020 is 86 percent. The projected growth rate is high for 2020 due to ExxonMobil’s oil find in the Caribbean Sea in 2015, which brought hope for change to poor Guyanese. For 2019, GDP growth was 4.4 percent, almost double from the previous year, and the 86 percent projected growth by the IMF shows an increased interest in the development of Guyana. Oil production in 2020 and in the future could bring economic growth in Guyana and add thousands of jobs.

A Potential Future in Oil

Guyana found an estimated 3.2 billion barrels of oil off its coast, with oil production beginning in late December 2019. More than 1,700 Exxon employees are working on extracting oil from Stabroek Block, the oil reservoir, and transporting oil to the Liza Destiny, a storage and offloading vessel. About 50 percent of the 1,700 workers are Guyanese. Exxon expects to produce 120,000 barrels of oil a day in 2020 and estimates 750,000 barrels a day by 2025. The 2025 estimated production would position the South American country in the top 30 countries for oil production. The 750,000 barrels a day estimate would be more oil than India produced daily in 2018. This is one reason for the IMF’s projection of a high growth rate for Guyana, as oil could transform the economy.

Uses of Future Revenue

Oil production in 2020 is exciting Guyanese about the possibilities of changing the country and its people. President David Granger commented, “Every Guyanese will benefit from petroleum production. No one will be left behind.” Guyana’s GDP per capita is about $8,100, which ranks among the lowest in the world. With oil now in production, there is potential to improve its lagging infrastructure and low income. Guyana only has about 500 miles of paved roads, yet almost 2,000 miles of unpaved roads. The President stated that oil could transform the developing country and improve life for hundreds of thousands of Guyanese.

Guyana’s government expects oil revenue of $300 million in 2020 and $5 billion for 2025. This could further enhance economic growth in Guyana and bring the possibility of distributing the money to lagging sectors. In 2019, the government spent $2 billion in its infrastructure. This included constructing or upgrading roads, bridges, highway lights and drains. The East Coast of Demerara Road Widening Project affects more than 100,000 of Guyana’s 777,000 population. Guyana approved about $500 million for the project that focuses on upgrading roadways along the coast. Most of the population resides near the coast and along the Demerara River. Guyana could not only use oil revenue to further develop Guyana but also to add jobs, as the ExxonMobil operation is already showing.

The Impact of Guyanese Oil Revenue

There is steady economic growth in Guyana, as one can witness from its GDP rising from 2.1 percent in 2018 to 4.4 percent in 2019. The IMF’s projected 86 percent growth rate for Guyana in 2020 expresses big expectations for the South American country. Although Guyana’s potential future wealth is good news, the developing country will need support in transforming its newfound wealth into positive change for its people. Every poor country that strikes oil does not always manage natural resources well, yet with the right tools and guidance, Guyana could reduce its 35 percent poverty rate by adding jobs and transforming into a developed economy.

– Lucas Schmidt
Photo: Wikipedia Commons

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Vietnam’s Economic Development Costs

Vietnam's Economic Development Costs
Once one of the world’s poorest nations, Vietnam is now gaining global attention for having one of the fastest-growing economies, subsequently lifting millions out of poverty. From a country where most of the people rely solely on rudimentary agricultural production to secure livelihood and use the majority of lands for farming, Vietnam is now undergoing a process of rapid industrialization and urbanization. It is at the crucial stage of transition from poverty to prosperity, allowing many to enjoy higher standards of living than ever before. However, the nation is paying tremendously for Vietnam’s economic development costs from rapid economic growth. The surging energy consumption, pollution from industrialization and urbanization process and the nonrestrictive environmental legislation are taking tolls on the environment and the natural assets of Vietnam.

Energy Consumption

The demand for energy is surging in response to the massive economic growth of Vietnam, impacting Vietnam’s economic development costs. Energy consumption in Vietnam tripled just over the past decade and many anticipate that the demand will increase by 8 percent annually until 2035. To meet the increasing energy demand, Vietnam is relying substantially on coal for energy supply due to its affordability. The coal share of the total energy supply grew from 14 percent to 35 percent in 15 years. Currently, 20 coal-fired plants are in Vietnam and the government plans to increase the number of coal plants to 51 by 2050. Vietnam’s dependence on coal is raising concerns as it is seriously harming the environment and public health. A study revealed that existing coal plants can cause as many as 25,000 premature deaths annually.

Facing a rapid rise in pollution, Vietnam is making great efforts in developing renewable sources of energy such as hydropower, solar and wind energy as alternatives to coal. Vietnam’s energy plans now include a renewable energy development strategy. The Ministry of Industry and Trade has recently offered incentives for renewable energy by paying solar projects between 6.67 and 10.87 cents per kWh.

A report in 2017 suggests that renewable energy could generate 100 percent of Vietnam’s power by 2050. However, in the short-term, it is difficult for other renewable energy to challenge coal as the main supplier of energy. Coal is still the most affordable option available at the moment for Vietnam to meet its surging energy demand.

Water and Air Pollution

The country’s industrial production has grown 15 percent annually in the last decade. However, rapid industrialization is polluting Vietnam’s water sources and air. Only 25 percent of industrial wastewater receives treatment, while the rest, estimated at 240,000 cubic meters of wastewater daily, discharges directly into lakes and rivers without treatment. The quality of air in urban areas is also deteriorating severely in recent years as a result of traffic and industrial activities. A report in 2013 showed that Hanoi’s air pollution received grades from unhealthy to hazardous for more than 265 days of the year. The level of nitrogen dioxide (NO2) concentration was 1.3 times above the permitted levels in Hanoi, and twice the permitted levels in Ho Chi Minh City. This is detrimental to the public, especially children and the elderly.

The government and communities have started to pay more attention to addressing industrial pollution. Customers and associates are boycotting violating manufactures. Banks are also adjusting policies to avoid those clients on the environment blacklist, making it more difficult for those companies to access funding. The Vietnamese government has drafted a National Action Plan on Air Quality Management for the period of 2020 to 2025, including the plan to reduce 20 percent of NOx, Sox and particulate matter emitted by chemicals, fertilizer and petroleum production facilities. It is also drafting a separate National Technical Regulation on Emissions for the Steel Industry and the Environmental Law that includes air quality management requirements.

Vietnam’s Reforms

Vietnam has been pursuing reforms and investments to promote green growth and sustainable development with the support of the World Bank. Many projects have achieved notable results in promoting this sustainability agenda and mitigating the high environmental cost of Vietnam’s rapid economic growth. The Vietnam Renewable Energy Development Project has successfully expanded the usage of renewable energy, generating nearly 10 percent of Vietnam’s power. The Vietnam Industrial Pollution Management Project has significantly improved compliance with wastewater treatment regulations in four industrial zones in Vietnam. The percentage of industrial zones compliant with wastewater treatment regulations grew from less than 30 percent to 72 percent between 2012 and 2018.

This information about Vietnam’s economic development costs shows that despite many challenges still facing the country, the government is taking great strides to promote sustainable development with attention to ecological conservation. Raising public awareness and support for environmental conservation while strengthening the capacity for environmental development planning through legislation and investment is crucial in this stage of Vietnam’s economic development.

– Minh-Ha La
Photo: Flickr

 

 

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Haiti’s Earthquake 10 Years Later

Haiti's Earthquake 10 Years Later
January 12, 2020, marked the 10th anniversary of the 7.0 magnitude earthquake that devastated Port-au-Prince, the capital of the small Caribbean nation of Haiti. People have taken time to remember what happened a decade ago, with one Haitian-American residing in Boston commenting, “I’m in pain. I’m in pain inside of me. Even my bones hurt me because of what’s happening in my country. We are human beings like everybody else, we have to live a life like everybody else.” Haiti has undeniably suffered greatly, but there is hope after Haiti’s earthquake 10 years later.

The Devastating Aftermath of the Disaster

The quake also impacted Haiti’s neighboring country, the Dominican Republic. Two aftershocks followed with a magnitude of 5.9 and 5.5., making it the worst natural disaster the country has seen in modern times. Haiti is located above two of the earth’s tectonic plates, the North American and the Caribbean plates, making it prone to large earthquakes. At the beginning of 2010, many news outlets covered the aftermath of the disaster, leaving much of the world shocked.

Between 220,000 to 300,000 people lost their lives in the 2010 quake, 122 of them American citizens, leaving 300,000 more injured and 1.5 million displaced from their homes. Nearly 4,000 schools suffered damage or complete eradication. This resulted in an estimated $7.8 to $8.5 billion in damage.

The disaster left many people with families living in Haiti anxious, wondering if their loved ones had survived the catastrophe. Others fled the country in search of a better life elsewhere. Jean-Max Bellerive, the Prime Minister of Haiti at the time of the earthquake called it “the worst catastrophe that has occurred in Haiti in two centuries.”

Foreign Aid Comes to the Rescue

In the midst of what seemed like the absence of hope, many Haitians prayed for help. Within a few days, foreign powers from all over the world responded, willing to aid the survivors with their needs. Within a day, President Obama stated that the United States would provide their “unwavering support” for the people of Haiti pledging $100 million in financial support.

Members of the Marine Corps and the U.S. Navy arrived in the country to assist the survivors of the earthquake with their medical needs. Outside of the United States, the European Commission promised $4.37 million in aid. In Asia, the South Korean and Indian governments provided $1 million in aid, and the Japanese government granted $5 million. Japan also donated a total of $330,000 value in tents and blankets for those without shelter.

Doctors and aircrafts supplied with food and water swarmed in quickly from countries such as Sweden, Brazil, Israel and Venezuela. It seemed as if the entire world had its eyes on Haiti. People all across the globe prayed for the relief Haitians needed to rebuild their lives and recover from such a traumatic event.

Haiti 10 Years Later

Despite the overwhelming efforts from foreign powers across the world in the aftermath of the earthquake, the earthquake has impacted Haiti even 10 years later. While the world has still not forgotten the 2010 earthquake, relief efforts often diminish because there are more recent natural disasters that require attention. When remembering the anniversary of such events, especially ones that occurred in impoverished nations, it is important to remember that relief efforts should not cease once mass media outlets elect to move on to new events.

Even before the earthquake, Haiti was the poorest country in the Western Hemisphere, with about eight out of every 10 citizens living in poverty. Six years after the earthquake, Hurricane Matthew affected Haiti in early October 2016, the most powerful storm to affect the country in decades and resulting in almost $2 billion in damage.

In the 2000s, hurricanes like but not exclusive to Hurricanes Ike and Hanna, also affected Haiti resulting in flooding and hundreds of lives lost. Haiti’s economy is highly susceptible as a result of its location and the possibility of earthquakes and hurricanes. Because each disaster results in such high costs in damage when a majority of its people already live on only $2 a day, this poses a significant problem in providing a long-term solution for Haitians in need.

As of January 2020, many Haitian children face malnutrition due to high levels of food insecurity and infections, resulting in the deaths of infants, ages 2 and under. Many mothers also still face complications in childbirth resulting in death.

Much of these statistics do not appear to be promising on the surface, appearing as it virtually nothing has changed in a decade despite support from foreign powers during the country’s time of need. However, Haitians still refuse to discard their efforts for a better and more prosperous Haiti. In 2019, many Haitians protested the government and President Jovenel Moise. Haitians say that while citizens are “used to political and economic crises,” the cost of necessities such as food, gas and education has gone up significantly. These protests have continued into January 2020.

Reach Our World and the World Bank

Others around the world have also not given up on their efforts to create a stronger Haiti, even after Haiti’s earthquake 10 years later. Reach Our World is one of the missionary groups that visited Port Au Prince shortly after the 10th anniversary of the quake from January 17 to 22, 2020. As of January 8, 2020, ongoing contributions from the World Bank, consisting of 20 projects, have grossed $866.46 million.

Therefore, while the mass media outlets do not commonly cover the continuing political and economic tensions existing after Haiti’s earthquake 10 years later, many advocacy groups and world powers have not forgotten about the work that the world still needs to accomplish to help further the nation and its people. In order to become more successful in such efforts, it is imperative to be consistent and not wait until another natural disaster strikes to contribute to relief efforts so that the people of Haiti can achieve a stronger and brighter future.

– A. O’Shea
Photo: Flickr