Archive for category: Economy

Information and stories about economy.

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10 Facts About the Recession in Iran

10 Facts About the Recession in Iran

Iran, a southwest Asian nation of over 81 million people, currently struggles with a dire recession. Iranians face a combination of inflationary pressures and economic stagnation, known as stagflation. Listed below are 10 facts about the recession in Iran:

10 Facts About the Recession in Iran

  1. Sanctions – The recent resumption of U.S. sanctions has taken a large toll on Iran’s economy. Sanctions contributed to a gross domestic product contraction of 3.93 percent in 2018 after a GDP growth of 3.73 percent the previous year. The sanctions particularly target oil exports, Iran’s primary revenue stream. A BBC report states that Iran’s oil trade has lost $10 billion in the past six months because of sanctions.
  2. Oil Dependency – Iran contains the fourth most crude oil reserves in the world, which has led to a volatile economy based on petroleum. Oil was a boon to Iran’s economy in 2016, a year in which the country witnessed a 12.52 percent GDP growth. However, as the World Bank notes, this success rapidly diminished to approximately 3.8 percent growth in 2017 as petrodollars became rarer.
  3. Ambiguous Poverty Line – Poverty is difficult to fight because Iran’s government cannot decide on a poverty line. The Iran Observer stated in 2017 that various government representatives define absolute poverty differently. Iranian Vice President of Economic Affairs Mohammad Nahavandian estimated 10 million Iranians live in poverty while, Parviz Fattah, head of the Khomeini Relief Foundation, claims the number is closer to 20 million.
  4. High Unemployment – Iran currently suffers from an unemployment epidemic, particularly among the educated youth. A mere 14,000 new jobs appeared yearly for the 700,000 youth entering the market between 2006 and 2011. Now, the Brookings Institution reports that college-educated men aged 25 to 29 years have a 34.6 percent unemployment rate, and women of the same group have a 45.7 percent rate.
  5. Emigration – One result of Iran’s employment dilemma is the mass emigration of skilled labor from the country. There is a surplus of skilled labor without the necessary demand, so educated Iranians flee the country for new opportunities. CNN Business reports that Iran’s Science Minister, Reza Faraji Dana, admitted 150,000 skilled Iranians had fled the nation in 2014 for this reason.
  6. High Cost of Living – The cost of living in Iran between 2018 and 2019 has skyrocketed alongside rapid inflation. According to the BBC, the Iranian rial has lost 60 percent of its value in the past year. Housing costs and medical attention have risen by 20 percent and especially harm the poorest individuals.  In March 2019, a Statistical Centre of Iran report also showed a 57 percent increase in white meat prices and a 37 percent uptick in dairy costs for average citizens.
  7. Increasing Poverty – As employment and affordable goods become scarcer, more Iranians fall into poverty. The Brookings Institution estimates that poverty remained at roughly 10 percent nationally in 2011, but it has risen since then. Research by the Foundation for Defense of Democracies found that it rose as high as 38 percent in the Sistan and Balouchistan provinces between 2016 and 2017. The threat of insulated urban areas succumbing to poverty displays the problem’s magnitude. Qom, the renowned traditional center of Islamic clerical training, suffered from a 30 percent poverty rate in 2017.
  8. Relief International Helps – Relief International is one nongovernmental organization mitigating the recession’s effects and preventing the economic crisis from deepening. Originally founded by Iranian-Americans in 1990 as “The Iran Earthquake Relief Fund,” RI focuses on cash assistance for flood victims and training local NGOs. The floods in the Golestan province have exacerbated hard times, and RI’s instant cash assistance will help 2,000 families from slipping into poverty. RI also hopes to have an indirect effect on poverty reduction by training 20 Iranian NGOs in efficient service to the poor.
  9. Amenities Expanded – Despite the recession, most Iranians have access to basic amenities due to government efforts post-1984. The Brookings Institution charts that in 1984, below 80 percent of citizens had electricity or plumbing. The government realized the issue stemmed from underdeveloped rural areas and immediately provided funding. It was an incredibly successful campaign that brought Iranians universal electricity and plumbing by 2000. These efforts continue today, spawning progress in the midst of recession and delivering baths to nearly 100 percent of Iranians by 2017.
  10. Improving Efficiency – Iran’s government is acting to make the economy more efficient, and there are many recommendations available for enhancing fiscal stability. An International Monetary Fund consultation with Iran in 2015 congratulated the government on widening the revenue stream by implementing simple direct taxation. Recommendations included expanding employment for women and increasing privatization, both of which should unlock new productivity for the economy.

The above 10 facts about the recession in Iran show that many hurdles still block the country’s growth. However, the steady increase in access to amenities displays economic progress within the recession and the IMF’s recommendations provide viable solutions to stagflation. Continued improvements will service the poor and provide a path to Iran’s economic stability.

– Sean Galli
Photo: Flickr

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An Update on Living Conditions in Paraguay

Living Conditions in Paraguay

Paraguay, a country located in central South America, is bordered between Argentina, Bolivia, and Brazil. Being a more-homogenous country, most of the population are of European and Guaranί ancestry. Guarani is a South American Indian group that lived mainly in Paraguay, which spoke a Tupian language. Many Paraguayans can understand Guarani rather than Spanish, which allowed the official language to become Guarani in 1992. With the growth of exportation, Paraguay has continued to thrive in others as well. Among the list of advancements in Paraguay are economic growth, health care, the country becoming Malaria free, and many technological advancements, that have allowed the country into today’s world.

Economic Growth and Living Conditions in Paraguay

When the economy grows, the lowering of extreme poverty goes hand-in-hand. For the past 15 years, extreme poverty has “fallen by 49 and 65 percent, respectively.” In 2018, however, Paraguay’s economic growth suffered in the second half of the year due to the “performance of the main trading partners, especially Argentina” and has continued to weaken since the recent drought, impacting agricultural products.

Due to inflation from the Argentina crisis, there was a decrease in public investment by 11.8 percent in 2018. However, public wages increased by 9.5 percent. International investors believed in macroeconomic management, boosting their Eurobond by 5.4 percent.

The poverty rate, however, is less than half of what it was in 2003.

Health Care and Living Conditions in Paraguay

Another aspect among advancements in Paraguay is in mortality. Life expectancy in Paraguay for males is 72 and 78 for females. The healthcare system is drastically understaffed with 11.1 doctors and 17.9 nurses and midwives to 10,000 people in the population. Paraguay’s government spends up to 37.7 percent toward health care. However, 87.7 percent of health care comes out of pocket. Health care coverage has begun to increase since 2008. It is still not where it needs to be. Less than 10 percent of total health spending comes from NGOs and other external resources.

While many who live in urban areas have improved access to clean water, those living in rural areas are not as fortunate. About 60 percent of inhabitants have access to clean water. This is better than the 25 percent who had access in 1990.

HIV and TB are below average. However, in neighboring countries like Argentina and Brazil, there is an outbreak of HIV. Poor urban countries tend to contribute to the under-reporting of TB. For these reasons, anyone who travels should take routine tests and checkups just be safe.

To ensure that there are more health care facilities to assist the country’s population, the national health care system has created public sectorss. These include:

  • Ministry of Public Health and Social Welfare
  • Military, Police and Navy Health Services
  • Institute of Social Welfare (IPS)
  • Clinics Hospital, which is part of the National University of Asuncion
  • Maternal and Children’s Health Center
  • Paraguayan Red Cross

One major improvement regarding living conditions in Paraguay has to do with health care. Paraguay became the first country in the region to be free of Malaria since Cuba in 1973. With no detection of the disease in five years, Paraguay was declared malaria-free in 2018 since Sri Lanka in 2016. Although Paraguay is malaria-free, other countries are still facing the disease. However, it gives hope to other countries that they can become malaria-free as well.

Technological Advancements and Living Conditions in Paraguay

Paraguay’s Space Agency (AEP), founded in 2014, is currently training specialists. AEP hopes to gain the interest of young children with the idea of space and astronomy. By 2021, Paraguay hopes to launch the first satellite. Research centers have already started to develop CubeSat, which is a type of miniaturized satellite. It will be used for forest monitoring and cadastral mapping.

BBVA (Banco Bilbao Vizcaya Argentaria) is a Spanish bank that has sponsored the League since 2008. BBVA prioritizes ensuring that Paraguay is digitally connected. About 68 percent of the population owns a smartphone. Additionally, 76 percent have access to the internet. BBVA wants “to bring the age of opportunity to everyone through the implementation of an ambitious transformation plan, encompassing not only processes and structures but also our culture and the way we get things done.” More and more people are using their access to the internet and smartphones to communicate with others.

Advancements in Paraguay have allowed the country to move forward with new opportunities to ensure that those in rural areas will continue to grow from extreme poverty. Even with a few setbacks along the way, Paraguay can grow economically, gain more health care opportunities and develop more ideas for technological advancements.

– Emilia Rivera
Photo: U.S. Dept of Defense

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8 Ways the African Continental Free Trade Area Agreement Will Impact Intra-African Trade

Intra-African tradeSince 2015, the African Union (AU) has been working to boost intra-African trade. In May 2019, 52 out of the 55 AU member countries signed the African Continental Free Trade Area (AfCFTA) agreement, making Africa the largest free trade area in the world. Africa, as a whole, has struggled with extreme global poverty and economic development. AfCFTA aims to unlock Africa’s economic potential and improve the lives of over 1.2 billion people. Here are eight ways AfCFTA will positively impact Africa.

Eight Ways the African Continental Free Trade Area Agreement Will Impact Africa

  1. AfCFTA will lower tariffs. Within five years, AfCFTA plans to cut tariffs by 90 percent. Currently, it is easier for AU members to export goods to the U.S. and Europe than to other African countries. Only 15 percent of trade in Africa is intra-regional. In comparison, intra-regional trade accounts for approximately 70 percent of all trade in Europe. By reducing the cost of importing and exporting goods in Africa, AfCFTA hopes to increase trade negotiations between African countries.
  2. AfCFTA will replace Africa’s Regional Economic Communities. Since 1991, eight sub-regional bodies called Regional Economic Communities (RECs) were the key building blocks for economic growth. RECs were one of the obstacles that prevented intra-regional trade from blooming. Essentially, Africa was home to eight different trading blocks. Each REC followed its own unique set of trade rules and regulations. AfCFTA will replace RECs as the authority over trade and ultimately unify all the RECs into one trading block.
  3. AfCFTA will standardize trade rules and regulations. Time and money were frequently wasted due to the ambiguity and guesswork required for intra-regional trading. AfCFTA will simplify the process for AU members to trade with each other by standardizing trade rules and regulations. Standardization eliminates the inefficiencies related to intra-regional trading and gives AU members the freedom to build trade relationships with neighboring countries.
  4. AfCFTA will promote a shift towards industrialization. Africa’s new trade agreement came at the best time. China, the lead producer of industrial goods, is increasing its efforts to move away from industrializations. China’s trade tensions with the U.S. has prompted the country to find other ways to sustain their economy. Many economists have predicted that Africa will become the next hub for industrial goods. By allowing goods to move more freely across the continent, AfCFTA will give AU members an incentive to shift towards industrialization.
  5. AfCFTA will advance manufacturing opportunities. With the new focus on industrialization, Africa will have to add more factories to produce more goods. AfCFTA gives small and large African countries alike the opportunity to advance manufacturing opportunities. Many economists believe that manufacturing is one of the main drivers of economic growth. Since global trade is based on goods, countries that produce the most goods often have the highest economies. The increase in factories and goods produced in Africa will help drive economic development.
  6. AfCFTA will replenish Africa’s natural resources. Raw materials, such as oils and minerals are currently one of Africa’s main exports. These extractive exports account for 75 percent of Africa’s external exports. The U.S., Europe and China are the main consumers. The extractive market is a volatile one and severely depletes African countries from valuable natural resources. The shift towards industrialization and manufacturing will help stabilize reserves of oils and minerals in Africa. AfCFTA also opens a new demand for extractives within Africa, allowing for the continent’s natural resources to move freely throughout its borders.
  7. AfCFTA will create more job opportunities. Employment is another important factor for economic development. Agriculture is the biggest industry in Africa and therefore the source of most employment opportunities.  As AfCFTA encourages AU members to invest in industrialization, the labor force will shift from agriculture to manufacturing. Research has shown that one manufacturing job has created an additional job in another sector that supports the work being done by the manufacturers.
  8. Through AfCFTA, Africa hopes to improve the lives of its citizens. Today, Eritrea remains the only AU country that has not signed the AfCFTA. Benin and Nigeria signed the agreement in early July. Once all 55 countries sign the agreement, it is predicted that intra-African trade will spike up to 52.3 percent. Industrialization and manufacturing opportunities are predicted to develop rapidly in Africa as well.

These changes will not occur overnight. But in a couple of years, through intra-African trade, Africa can expect to see an overall improvement in its economy and a significant dip in extreme global poverty thanks to the African Continental Free Trade Area Agreement.

– Paola Nuñez
Photo: Flickr

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The Promise of the East African Federation

East African FederationA proposed federation between Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda seeks to establish a single currency, political unity, modern infrastructure, improved trade relations and ensured peace. In the 1960s, when many of the above countries won their independence, a political federation was first proposed. Today, all six countries are members of the East African Community (EAC), which started in 1999 as a less ambitious form of unity. The East African Federation remains mostly an idea; however, leaders in all six countries are now working together to see the idea come to fruition.

Where it Stands

The countries began drafting a unified constitution in 2018, which would render each member’s individual constitution subordinate to that of the East African Federation. They have set the deadline for its completion to 2021. The EAC has already neared completion of a monetary union, likely being something akin to the European Union’s euro. The euro has allowed for the free movement of capital, stimulating trade activity between member states. Additionally, all six countries are planning to hold a referendum with their own citizens in order to gauge support.

Ambitions

The countries’ leaders say that a federation will lead to economic development and greater African sovereignty. The advantages of the East African Federation include linkages of infrastructure, which will allow four of the landlocked members to have access to the trading ports of Kenya and Tanzania. Further, the East African Federation, due to its enormity, will have more influence in international diplomacy, and its governmental institutions will become more robust through information sharing.

Limitations

When integration efforts were attempted in the past, they became derailed by individual national interests and existing tensions. While the East African Federation attempts to overcome these tensions, some doubt its ability to do so. Critics point to trade disputes between Rwanda and Uganda and military rivalries between Tanzania and Rwanda as prominent examples for why unity will remain unaccomplished.

The Promise

East Africa’s economy is the fastest-growing on the continent; GDP increased by 5.7 percent in 2018 and is forecasted to hit 5.9 percent in 2019. According to the World Bank’s most recent data, the average poverty rate for the 6 countries is 49.6 percent. Kenya has the lowest rate with 36.8 percent, and Burundi has the highest with 71.8 percent. The East African Federation promises to improve cooperation methods and increase economic potential, yielding greater growth, quicker development and lasting stability for the region.

– Kyle Linder
Photo: Flickr

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Three Countries in Hyperinflation

Hyperinflation

When it comes to global poverty, an important factor of a country’s economy is its inflation rate. Inflation occurs when the value of a nation’s currency decreases, but the prices for goods increase. Inflation affects many facets of everyday life, such as nationwide poverty rates, food and medical supplies.

Hyperinflation occurs when inflation rates rise quickly and uncontrollably. Hyperinflation is reached when an economy’s inflation rate is at least fifty percent for a thirty day period. However, high inflation rates consistent over a prolonged period of time also qualify as hyperinflation.  Here are three countries in hyperinflation today.

Venezuela

In the 1970s world energy crisis, Venezuela was a highly profitable oil producer. After oil prices dropped once the energy crisis ended in the 1980s, Venezuela’s chief export greatly declined in revenue and its economy began to suffer. Despite the decline in exports, Venezuela still needed to spend large sums of funding on the importation of basic goods for its people. This led to inflation, as the country dug itself into deficit spending. To pay for imported goods, Venezuelan banks then printed out paper notes not backed by actual wealth.

Now, inflation in Venezuela has reached monumental levels of devastation. Venezuela has been in hyperinflation since November 2016, when the inflation rate exceeded 50 percent. The International Monetary Fund estimates that inflation in Venezuela will exceed ten million percent by the end of 2019.

Because of this economic crisis, poverty is widespread. In 2017, the poverty rate across Venezuelan households reached 87 percent. On top of widespread poverty, food and medical supply shortages are rampant across Venezuela. The health of its people has deteriorated as weight loss and the spread of disease inflict the nation.

Currently, the Venezuelan government rejects the International Monetary Fund’s option to default on its debt. Venezuelan U.N. representatives have commented that in order for the nation to progress, it needs internal structural changes, not foreign aid.

South Sudan

South Sudan’s economy is also almost entirely oil-based. Of the countries in hyperinflation, South Sudan is the newest, gaining independence from British rule in 2011. However, South Sudan was quickly caught in a civil war from 2013 to 2018, soon after its founding. Damage to oil fields and other resources due to warfare severely affected the revenue of South Sudan’s exports. Inflation began as the struggle for resources and funding inflicted this budding nation.

South Sudan’s current economic crisis has caused mass poverty and food insecurity for its civilians. According to recent reports from the U.N., 43 percent of South Sudanese households are food insecure. At its peak, inflated food prices reached about 513 percent in December 2016. By the end of December 2018, the inflation on food prices dropped to 51 percent but is still hyperinflammatory by definition.

Unfortunately, South Sudan is currently not focusing on any poverty-reduction programs. According to the World Bank Organization, South Sudan’s overall inflation rate was an estimated 130.9 percent by the end of 2018; by the end of 2019, it is expected to drop to 49.3 percent, just under the hyperinflation threshold. However, given the financial instability of the nation, South Sudan will remain under close observation of the International Monetary Fund and similar entities for the foreseeable future.

Zimbabwe

Zimbabwe’s economy thrived in the 1980s and early 1990s, after declaring its independence from British control and creating its own domestic dollar currency in celebration. In the 1990s, however, Zimbabwe’s agricultural-based economy took a major hit after a series of crop failures. Compounded by the high costs of imports and funding for the war, Zimbabwe’s economy began to falter. In a panic to pay for goods, Zimbabwean banks rushed to print excess bills, leading the nation into hyperinflation.

Zimbabwe’s economy reached hyperinflation in March 2007, just passing the 50 percent threshold. For the next year, the nation’s inflation was a tumultuous series of highs and lows, eventually reaching a staggering 79.6 billion percent in November 2008. Eventually, Zimbabwe was forced to abandon its domestic currency, as its own population boycotted using the drastically inflated Zimbabwean dollar.

Despite the nation’s inflation rate lowering back down to 59.4 percent as of February 2019, Zimbabwe is still struggling to limit its cost of imports and boost its revenue from exports.

Potential Solutions

While there are numerous potential ways to address hyperinflation, a common solution for this phenomenon is dollarization — the abandonment of a failing domestic currency in favor of a stable foreign currency. A notable success story of dollarization is Montenegro, where the considerably weak Yugoslavic dinar was replaced with the euro, a more stable currency used widespread across the European Union. Before total dollarization, the inflation in Montenegro peaked at 26.5 percent in 2001. After adopting the euro, the country’s inflation is under one percent, as of 2019.

Of the three countries in hyperinflation today, Zimbabwe did utilize this method of dollarization; however, as of 2019, it abandoned dollarization, triggering the start of nationwide economic problems yet again. Overall, for these three countries in hyperinflation today, maintaining dollarization may be their best chance in regaining economic stability.

– Suzette Shultz
Photo: Wikimedia

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10 Facts About Poverty in Croatia

10 Facts About Poverty in Croatia
Croatia is located between central and southeastern Europe and includes a multitude of small islands that are scattered alongside its maritime coast with the Adriatic Sea. Despite being a member of the wealthy European Union, Croatia is economically unstable and wide-reaching poverty affects much of the population. Here is a list of 10 facts about poverty in Croatia that will illustrate living conditions today.

10 Facts About Poverty in Croatia

  1. High Poverty Rates: In 2008, Croatia experienced a sharp rise in poverty that exceeded the rates recorded by other EU members. About one-third of all citizens live in conditions of extreme material deprivation and just more than 15% are unable to afford the basic necessities needed to lead a comfortable life. Furthermore, there is a correlation between poverty and inequality in Croatia. A higher income is necessary as the world around develops. This makes it difficult for uneducated workers to afford the goods needed to increase their standard of living.
  2. The Country Faces a Significant Debt Burden: In 2018, the national debt in Croatia accumulated to $45.6 billion, which is equal to 74.1% of the country’s GDP. This amounts to $11,048 of debt for each individual living in Croatia. While the ratio has been improving since 2014, central government spending outweighs government revenues by a considerable margin. This may ensure that foreign debt will continue to burden Croatian citizens in the foreseeable future.
  3. Croatia has the Fourth Highest Youth Unemployment Rate in the EU: Statistics showed the Croatian youth unemployment rate at 23% in January 2019. According to Marijana Petir, a member of the European Parliament, the Croatian government has thus far created “improper employment conditions.” This has driven educated Croatian youth to seek jobs in wealthier European countries that have entrenched stable job opportunities into their economies.
  4. Poverty Disproportionately Affects Children: When the national debt peaked in 2014, about 2.6 million Croatian children were living in destitution. These vulnerable groups of individuals suffer the most due to a lack of the necessary nutrients they need to grow and an adequate government infrastructure necessary to secure future prospects of upward mobility. UNICEF is a leading organization working to improve the lives of impoverished children. In 2017, UNICEF entered into a partnership with the Croatian government in which both parties agreed to focus on improving children’s rights across the country.
  5. Croatia is Experiencing a Massive Emigration Wave: Records show that far more individuals have left Croatia since the recession than previously estimated. While Croatia had recorded the number at 102,000, foreign statistics indicate that the number accumulates to 230,000 individuals. Many of these emigrants are in fact refugees and asylum seekers hoping to find better living conditions in other EU states.
  6. Croatia Struggles with Underdeveloped Regions: Small towns and settlements on the eastern and southeastern borders experience the highest rates of poverty. Economic struggles are due to the effects of the Croatian War of Independence in the 1990s. This war to separate from Yugoslavia led to massive destruction in these regions, as it caused $36 billion worth of damage and destroyed thousands of houses.
  7. Education Decreases the Risk of Poverty: Among those who attend primary school in Croatia, the risk of poverty is 37.1%. This number drops by 16% for those who attend secondary school. The chance of attending even basic levels of education is unlikely for impoverished children in Croatia, as families struggle to afford the necessary supplies needed to excel.
  8. Health Care is in Need of Reform: The European Commission released an assessment of the Croatian health care system at the end of 2017 indicating their concerns. Some issues include low spending on health care, an insufficient number of nurses and doctors and an unhealthy general population. Croatians struggle with drinking, smoking and obesity, which all harm the immune system and increase the risk of attracting disease.
  9. Croatia’s Human Development Index (HDI) Rate is Increasing: Croatia’s HDI is steadily increasing, showing that the country is bettering its economic standing. Indicators in 2017 show that life expectancy at birth, years of schooling and GNI per capita are all on the rise. While Croatia’s HDI value of 0.831 puts it in the very high human development category, it is still well under the average HDI value for the European Union.
  10. The Programme for Fighting Poverty and Social Exclusion: The EU created this initiative in order to combat the coupled problems of poverty and exclusion. The Croatian government adopted this program in 2015 as a strategy to halt the expansion and mitigate the effects of these two issues. The Croatian government has taken a regional approach when implementing the program, as it has allocated resources based upon which areas are in most need of aid.

Concluding Thoughts

These 10 facts about poverty in Croatia detail the hardships that the Croatian population has endured; however, they also present a few avenues the central government is taking in order to alleviate these issues. Croatia has experienced slow yet impactful progress since 2014. Croatia needs to do more work if it is to become among the most affluent European states.

– Annie O’Connell
Photo: Flickr

E-Commerce Markets in Africa: A Mobile Economy

E-Commerce Markets in Africa
Africa holds less than 2 percent of the global e-commerce market, but an increase in participation could benefit the continent on a massive economic scale.

In fact, it has been shown that e-commerce allows consumers to connect to businesses as well as to other consumers in order to exchange goods via the Internet. E-commerce benefits global markets by improving efficiency in distribution channels and creating a more prominent market presence for individuals or businesses trying to sell products. For developing countries in Africa, one of the main obstacles in gaining access to e-commerce markets is limited access to banks.

Mobile Money

Globally, roughly 1.7 billion adults remain without access to a financial institution.

In order to alleviate this problem, mobile banking services focus on the high percentage of adults who have mobile phones in Africa. In South Africa, about 90 percent of the adult population owns a mobile device; whereas, Tanzania has the lowest with only about 75 percent of the adult population owning a mobile device.

The integration of mobile banking companies has increased dramatically over the past decade with 135 live mobile monetary services available in 2017. In fact, the number of subscribers in sub-Saharan Africa hit 44 percent in 2017. Mobile banking is attractive to people who do not physically have access to a bank or who do not have a permanent home address. It allows them to set up an account and protect their money electronically while giving them the freedom to interact financially on a global scale through e-commerce.

The Problem of Rural Communities

A smaller density of people lives in rural areas so there is a lower prospective income for operators who wish to set up mobile services in these regions. Roughly 20 percent of the population of sub-Saharan Africa is spread over 70 percent of the land. Consequently, operators in rural communities only secure a revenue of about one-tenth compared to those who work in urban areas.

Since many individuals rely on mobile banking to engage in the global market, reducing this barrier is essential to the continued development of e-commerce markets in Africa. As a result, in 2018, Uganda’s Communications Commission decided to pair with satellite firms Intelsat and Gilat in order to help increase access for those living in two rural communities.

The Prospective Value of E-Commerce Markets in Africa

A study by the McKinsey Global Institute estimates 3.7 trillion dollars (6 percent of GDP) could be added to the developing world’s collective GDP by 2025 due to a growing digital finance sector. It is 80 to 90 percent less expensive for financial institutions to provide mobile banking services than it is to create new physical branches. This method allows financial institutions to penetrate more of the population in developing and rural areas.

The e-commerce market has the potential to grow enormously over the next five years. Although access to financial institutions is an obstacle that many less privileged individuals face, an increase in mobile money services is helping to create parity. Financial inclusion means an upward trend in the global market participation, and through the development of internet-based trade, the global economy will experience more consumers, products and efficient distribution.

– Tera Hofmann
Photo: Flickr

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Top 10 Facts About Living Conditions in Azerbaijan

top 10 facts about living conditions in azerbaijan

Azerbaijan is a country of 9.8 million people situated between Eastern Europe and Western Asia. It is bordered by the Caucasus Mountains and the Caspian Sea. A former part of the Soviet Union, Azerbaijan is roughly the size of Maine. Below are the top 10 facts about living conditions in Azerbaijan.

Top 10 Facts About Living Conditions in Azerbaijan

  1. A Trading Economics report from 2008 shows that only 2.5 percent of the population lives on two dollars per day, while the top 10 percent of the population hold a quarter of the country’s wealth.
  2. Falling oil prices devastated Azerbaijan’s economy in 2015 when the national GDP fell from $75.244 billion in 2014 to $53.074 billion in 2015. The GDP fell even further in 2016 to $37.868 billion. The economy has begun to recover, but the GDP lingers just above half of the pre-economic shock levels.
  3. As the economy recovers, Azerbaijan hit an average record-high income per month in 2019. In March of this year, the average income was 577.60 AZN per month, roughly $399. This is a stark contrast from the record-low income per month just a decade ago, when the United States recession affected the world economy. In April 2008, the average wages were 242.70 AZN per month or $142.
  4. During this recession, food inflation rose to a peak of 18.27 percent. To offset the public’s inability to purchase food, the government raised pensions and wages, which is a move that many economists believed would further increase inflation, however, food inflation currently sits at around two percent.
  5. A majority of the population live in urban areas; 55 percent of citizens reside in cities.
  6. 100 percent of the country reports having access to electricity, both in rural and urban areas. The goal of the government has been to meet and maintain access to electricity for the entire population, but they have struggled to achieve their goal. Access has sat at or over 95 percent for the last three decades but has fluctuated.
  7. 78 percent of the population has access to the internet, although sweeping reforms in Azerbaijan’s government have given authorities the right to widely ban content. In recent years, many journalists were detained and sentenced to up to 10 years for their internet activity.
  8. Access to clean water was traditionally an issue for the people of Azerbaijan. In the early 1990s, only 68.8 percent of the population had access to clean water. Today, nearly 90 percent of people have access to clean water in their households. This improvement was made using many different public projects including sanitation plants installed along the river, and the collection and processing of rainwater.
  9. The fertility rate is low with just under two live births per woman in 2016, compared to near six live births per woman in the early 1960s. Programs that promoted birth control and educated women on pregnancy helped the fertility rate to decline. Another aiding factor was the increase in healthcare that allowed more children to live into adulthood, so families did not need to have as many children to ensure their family’s growth.
  10. The life expectancy at birth for the population of Azerbaijan is 72.8 years. Women have a life expectancy of over 76 years, while men have a life expectancy of 70 years.

These top 10 facts about living conditions in Azerbaijan suggest that the country is recovering from a difficult economic era. While there is less devastating poverty in recent years, the economic downturn of 2015 and 2016 shows that Azerbaijan is a country that needs to take steps in stabilizing the economy, investing further in its citizens and broadening its markets if the country wants to completely remove itself from poverty and carry its people into a brighter future. Azerbaijan has reduced the amount of poverty among their citizens, but they still have more to accomplish.

– Kathryn Moffet
Photo: Flickr

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10 Facts about Violence in Venezuela

10 Facts About Violence in VenezuelaVenezuela has been in an economic crisis since the election of Hugo Chavez in 1998 when the country’s oil-based socialist economy began to rapidly decline. Since then, Venezuela has faced extreme inflation that exacerbates with each passing year. Crippling poverty exists in this South American nation on a massive scale, snowballing into issues beyond the depreciation of the bolivar currency. In Venezuela, nationwide violence is a consistent problem that brings mass media attention from all over the world. In order to fully understand how to help alleviate the rising violence in Venezuela, it is essential to understand the top 10 facts about violence in Venezuela.

10 Facts About Violence in Venezuela

  1. A primary cause of violence in Venezuela is the economic recession sweeping across the nation. Since November 2016, the country has been experiencing hyperinflation, as every month since that November, the bolivar currency has exceeded an over 50 percent inflation rate. In addition, Venezuela’s overall unemployment rate has been around 35 percent since December 2018; projections state that this rate will significantly increase to 44 percent by the end of 2019. According to the United Nations, nearly 90 percent of Venezuelan residents live in poverty. This economic recession has caused mass financial insecurity across the nation, becoming a potential cause for the rising violence across Venezuela.
  2. Gangs, especially mega-gangs, are a major factor in the violence across Venezuela. Mega-gangs typically have around 50 members, with some gangs having members in the hundreds. There are about a dozen of these mega-gangs nationwide. Criminal gangs heavily congregate in the poorest places in Venezuela, called barrios or ranchos. The gangs are frequently responsible for violent crimes in these impoverished neighborhoods.
  3. The Citizens’ Council for Public Security and Criminal Justice ranked the Venezuelan capital, Caracas, as the most violent city in the world in 2016. As of 2018, Caracas maintains its place as one of the top three most violent cities worldwide.
  4. Caracas reaches notoriety for its high homicide rates. In 2015, Caracas was at one of its highest homicides per capita with around 119 murders per 100,000 residents.
  5. Across the whole of Venezuela today, the estimated homicide rate is 89 murders per 100,000 residents. While less compared to Caracas on its own, Venezuela’s overall homicide rate is still one of the highest worldwide.
  6. Despite there being violent crime widespread across the nation, the Venezuelan Violence Observatory reports that people report just over 60 percent of Venezuelan’s crimes.
  7. While many consider Caracas to be one of the most unsafe cities in the world, the true extent of violence in Venezuela is only speculative. According to Insight Crimes, referencing the Venezuelan Violence Observatory, the Venezuelan government prevents the release of real crime statistics. The Venezuelan government rejects any observational claims that the nation’s crime rates, especially in regard to homicides, are increasing. Nongovernmental groups like the Venezuelan Violence Observatory (OVV) have become the primary sources reporting on violence in Venezuela in the absence of government transparency.
  8. Under the regime of Nicolás Maduro, the Bolivarian National Police has created the Special Actions Forces (FAES) in response to the national crises. According to the OVV, about one-third of the murders in Caracas are the result of FAES and other security forces within Maduro’s regime. These security forces aim to repress political protestors and target suspects of violent crimes.
  9. Violence is committed by both sides of the Venezuelan political crisis. Loyalists and security forces in support of Maduro’s regime target protesters resulting in beatings, unlawful incarcerations and atrocities committed to those incarcerated. Some have reported that rebels protesting Maduro’s regime are aggressive towards police forces. They reportedly set fires to street barricades, and in an isolated attack, attempted to drop grenades onto a government building.
  10. Organized crime and violence flourish in abandoned peace zones across Venezuela. An unofficial government project, the government designated peace zones areas across Venezuela that lack police presence. The locals were supposed to negotiate policing, which left communities vulnerable to gangs. With the peace zones initiative now abandoned, these areas remain overrun with black markets and violent crimes.

Crime and violence is now an everyday norm across Venezuela, resulting in thousands of civilian deaths each year, and increasingly unsafe living conditions nationwide.

While there are many issues surrounding the violence in Venezuela, however, the world is noticing the situation. The United Nations has recently met to discuss the numerous crises going on in Venezuela. There was a mass condemnation of the government’s use of violence against peaceful civilians. The overall consensus is that since the problems in Venezuela stem from political discourse, peaceful political initiatives are the correct route in addressing the nation’s problems.

– Suzette Shultz
Photo: Flickr

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The Pros of Immigration Outweigh the Cons

Pros of Immigration

While many view immigration as a cultural crisis, the pros of immigration are significant. Immigration is a point of contention as immigrants change the face of a population and bring their own culture with them. Moreover, immigrants receive criticism if they do not fully integrate, by not speaking the country’s primary language. Some people simply feel there’s no room for immigrants. They fear their jobs will be taken or undercut by the low wages some immigrants are willing to work for.

In spite of these concerns, it is undeniable that immigrants infuse much needed vitality into the economy. They build businesses, create jobs and bring new perspectives. Most importantly, welcoming immigrants supports and promotes an international standard of human rights. Everyone should be able to settle somewhere safe, healthy and stable—especially if their native country is not so.

Below is an immigration case study of sorts, demonstrating the economic benefits of immigration in Japan, the U.S., and Western Europe.

Japan

Plagued by an aging population and declining birth rates, immigration provides Japan with a new source of young workers. The Japanese Health Ministry predicts that by 2060, the country’s population will fall to 86.74 million. This is a 40 million decrease since 2010. Currently, 20 percent of Japan’s population is over 65 years old. As a result, this burdens Japan’s shrinking workforce with the funds for their pensions and healthcare. But immigration into Japan ensures the nation’s economy can maintain itself as people retire.

Japan is historically unwelcoming to immigrants, believing peace and harmony to be rooted in homogeneity. As such, the nation’s immigration policy reflects this. Japan only allows a small number of highly skilled workers into the country. This policy has been in place since 1988 to combat labor shortages. However, this is no longer enough to combat Japan’s worsening economy. In 2018, labor shortages in the nation were the highest they had been in 40 years.

However, the pros of immigration in Japan are clear. Without it, Japan faces an incredibly insecure economic future. With no sign of population growth, the nation’s perpetually shrinking workforce will become unable to support its retired citizens. However, immigrants can round out the workforce in Japan. And they can neutralize any economic woes the nation might face in the future by preventing labor shortages.

USA

The cultural and economic contributions immigrants have made to America are vast, overwhelmingly advantageous and long-lasting.

A study done by economists at Harvard, Yale and the London School of Economics found US counties that accepted more immigrants between 1860 and 1920 are doing better today as a result. These counties have significantly higher incomes, higher educational achievement, less poverty and lower unemployment because immigrants provided the low-skilled labor needed to support rapid industrialization. Undeniably, immigrants have always and still continue to increase economic growth in America.

Similarly, immigrants in the U.S. have been integral to innovation and entrepreneurship. Half of all startups in America worth over a billion dollars have been founded by immigrants. Eleven of these startups employ more than 17,000 people in the U.S. Some of these companies, such as Uber and WeWork, have significantly changed American culture. They modify the way Americans live their daily lives. Therefore, the pros of immigration in the U.S. are grounded in the diversity of thought brought by immigrants, necessary to further American innovation and economic growth.

Western Europe

Like Japan, Western Europe is battling an aging population and declining birth rates. Fertility rates are expected to hit zero in the next decade. Consequently, this region may not be able to sustain its expansive social welfare programs as its workforce shrinks and retired populations grow. In Germany, the median age is 47.1 years, the oldest in Western Europe. This is only slightly younger than Japan’s 47.3 years. Besides convincing its native populations to have more children, immigration is their only alternative.

Immigration into Western Europe is an undeniable win for both the immigrants and the host countries. Many new immigrants in Western Europe have escaped unstable regimes, religious persecution, and economic downturn in North African and Middle Eastern countries. Thus, immigrants give the region a younger workforce that is able to sustain the region’s expensive social benefits. In return, Western Europe provides immigrants with jobs, stability, and a safe place to live.

While still a very divisive topic, the pros of immigration lie in its plethora of economic benefits. It is undeniable that immigration has always been the driver of economic growth, despite all of the criticism. Immigration provides immigrants with an alternative to oppressive regimes and other instability, of course. And the pros of immigration for nations absolutely outweigh the cons.

– Jillian Baxter
Photo: Pixabay