Information and stories about economy.

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Traid: Fighting Fast Fashion

Traid“Fast fashion” reflects the rapid production, consumption and often disposal of clothing garments. It has become intrinsic to consumerist culture; trendy purchases cheap prices and constant wardrobe overhauls are common practices. Brand and company marketing through social media, prints, billboards and even people themselves exacerbate the desire to consume more and more. However, the glamour, cheap pricing and cultural normalization of the fashion fanfare have made it easy for consumers to turn a blind eye to the dark sides of garment manufacturing. The industry largely supports systemic exploitation, child labor and environmental degradation, and perpetuates poverty amongst those already struggling to live. The current reality of fast fashion is bleak, but numerous organizations and initiatives are rising to challenge the system and push consumers and companies to make more ethical choices in fighting fast fashion.

Traid

Traid is a U.K.-based charity retailer that collects and curates second-hand clothes for retail in charity shops. Globally, it funds causes that empower those involved in clothing production, including farmers and garment workers. It has several inspiring projects, including its 2024 initiative in Benin, in collaboration with Pesticide Action Network U.K. and OBEPAB (a Benin-based organization promoting organic agriculture). Traid has committed £336,382 to this 18-month project to improve incomes, health and soil quality for thousands of cotton farmers in Benin.

Cotton farmers often work in hot temperatures and engage in labor-intensive work for long hours with little breaks. They face exposure to harmful pesticides, which can cause health issues but continue to be used to keep yield production high and remain competitive with other farmers.

The Traid project has worked to build the capacity of smallholder farmers through education and the deployment of “Farmer Field Schools.” The organization has strengthened transnational supply chains for local farms and positively promoted Benin’s organic cotton, according to its website.

Consequently, organic cotton farmers have earned more than triple the net income of conventional farmers, and there has been a much higher rate of female inclusion. Not only has the physical health of the farmers improved through reduced pesticide exposure, but their financial, social and emotional health has vastly improved.

GoodWeave

Looking to the area of garment production, a notable non-profit is GoodWeave, founded in 1994, which endeavors to stop child labor in global supply chains. Goodweave works to expose hidden supply chains, empower workers and protect workers’ rights. It also operates a certification system where through its logo certification, it assures consumers that those particular products are free from child labor.

Employing approximately 75 million factory workers worldwide, the fashion manufacturing industry has no small reach. Of these workers, less than 2% make a living wage, often struggling with poverty and barely covering basic living costs like food. The working conditions are also often unsafe – cramped conditions, poor regulations on equipment and lack of ventilation.

GoodWeave has funded rescue and rehabilitation centers that have had transformative impacts on children’s lives. To date, GoodWeave has restored freedom to 10,868 children and provided 99,526 children with direct access to education.

In Nepal, for example, its Hamro Ghar home is populated by young individuals previously exploited and abused in the textiles industry, now with the opportunity to pursue education and break the cycle of poverty and exploitation.

Labour Behind The Label

Labour Behind the Label takes a more lobbying and activism approach to fighting fast fashion. This organization builds solidarity between garment makers and consumers. This helps to breach the socio-spatial difference formed through the production line, which increases consumers’ connection with those who make their clothes and the conditions they endure. Activists from all angles can then collectively lobby companies to improve worker rights.

The organization contributes to the fight against exploitation in the fashion industry, and campaigns for the instigation of a living wage. Its successes so far have seen U.K. retailers sign the “Bangladesh Accord on Fire and Building Safety” to protect workers’ safety, as well as ensuring that victims of the Rana Plaza disaster in 2013, whereby a factory tragically collapsed due to unsafe conditions, have access to long-term compensation. Its policy work and campaigning are significant contributors to ensuring workers’ health, equity and safety.

Looking Forward

The fast fashion industry has, in some instances, become an exploitative and destructive entity, prioritizing money over welfare. However, it does not have to remain this way, thanks to the work of the organizations that are fighting fast fashion. Taking action through political and social activism, advocacy, policy change and spending consumer money more ethically can work to reinvent existing labor chains into fair and just production lines.

– Rebecca Barry

Rebecca is based in Manchester, UK and focuses on Good News and  Technology for The Borgen Project.

Photo: Flickr

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Economic Growth in El Salvador: Key Areas

Economic Growth in El SalvadorEl Salvador, once known for its high crime rates and violence, is now witnessing a remarkable transformation. The nation’s economy has significantly improved, contributing to peace and stability. This article explores five key ways of economic growth in El Salvador: an increase in tourism, a surge in foreign investments, substantial infrastructure development, the implementation of rehabilitation and social programs, and the growth of entrepreneurship and small and medium enterprises. These changes are paving the way for a brighter future for El Salvador, highlighting the profound economic benefits of a more stable society.

Tourism

El Salvador has experienced significant growth in tourism in recent years, highlighting its appeal as a travel destination. Reforms in public security and government efforts to improve safety have resulted in a safer environment for tourists. According to the World Travel and Tourism Council (WTTC), El Salvador has had an exponential growth of 157% during the first six months of 2023 compared to previous years. The organization forecasts El Salvador to be the leading country in international tourism in Latin America in 2024. Improvements in public security have created a more favourable environment for tourism, contributing to the country’s economic growth and sustainable development in the tourism sector.

Foreign Investments

El Salvador has seen a noticeable increase in foreign investments, reflecting growing confidence in the country’s economic potential. As the country has become safer, international businesses and investors have started to take a big interest in the opportunities available. This surge of foreign capital has stimulated economic growth which could create more jobs. This has opened the door for sustainable economic progress, positioning El Salvador as an attractive destination for future investments. A recent report by the Central Reverse Bank reflects a notable surge in foreign investments in the first three months of 2024; investments from abroad increased by 8%. El Salvador’s economy expanded by $14.33 million more than in 2023.

Infrastructure Development

El Salvador’s government has made significant strides in several major projects, including the construction of a new international airport and a port in La Unión. These projects are at various stages of development, alongside the modernization of road infrastructure and the health care system with new hospitals and roads. These achievements reflect the government’s commitment to the country’s development and set the stage for a more prosperous and stable future in El Salvador.

Entrepreneurship and Small and Medium Enterprises

The reduction of violence in El Salvador could significantly impact entrepreneurship and the growth of small and medium enterprises (SMEs). According to the Bloomberg article based on Moody’s Investors Service information, the decrease in crime could encourage local companies to increase their investments. This is largely due to the implementation of the Territorial Control Plan (PCT) and the Exception Regime by the government, which has restored peace of mind and confidence among both the population and business owners. With more than 64,000 terrorists captured and one of the lowest homicide rates in the world, the safer environment has allowed SMEs to prosper, contributing to the country’s economic growth and creating new opportunities for employment and development.

Community Development Programs

The government, in collaboration with organizations like the Peace Corps, is providing training in entrepreneurship, employability skills, financial management and life skills. These programs aim to empower communities, especially the youth and women, to take advantage of new economic opportunities. By focusing on these areas, El Salvador is promoting economic security and mobility, ultimately contributing to the nation’s growth and stability.

Conclusion

To conclude, economic growth in El Salvador illustrates the significant effects of stability and growth on national prosperity. The boost in tourism, rise in foreign investments, extensive infrastructure improvements, community development programs and the expansion of entrepreneurship and small businesses are key factors driving this transformation. These developments not only emphasize El Salvador’s potential but also set the stage for a brighter and more prosperous future, pointing out the substantial benefits of a stable and succeeding economy.

– Maria Urioste

Maria is based in Maspeth, NY, USA and focuses on Good News for The Borgen Project.

Photo: Unsplash

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Poverty and Terrorism: How Economic Inequality Fuels Extremism

How Poverty Fuels TerrorismThe link between poverty and terrorism is complex, involving economic, political and social factors that drive individuals toward extremism. Economic hardship can create environments where extremist groups thrive, as they often exploit the vulnerability of impoverished communities to gain followers. When individuals lack access to stable employment, education and necessities, the appeal of joining extremist movements increases as these groups often promise income, food and social belonging. Understanding the connection between poverty and terrorism is crucial for crafting effective counterterrorism strategies that address root causes rather than just symptoms.

Economic Hardship as a Driver of Extremism

Studies indicate that poverty-stricken regions are more susceptible to terrorism due to the economic vulnerability of their populations. With limited job opportunities and scarce resources, extremist groups can lure impoverished individuals with promises of financial support and security. For instance, research from the United Nations Development Programme (UNDP) found that economic factors played a significant role in driving individuals to join extremist groups. Poverty and unemployment create a fertile environment for radicalization as individuals seek stability and hope in regions where governmental support is lacking.

Social Marginalization and Lack of Education

Poverty often coincides with a lack of educational opportunities, which further exacerbates vulnerability to extremist ideologies. Without access to education, individuals are more susceptible to radical propaganda, as they may lack the critical thinking skills to resist extremist narratives. Alongside this, poor education systems can create a failure to address poverty and unemployment. Addressing educational inequality can be a significant tool in reducing susceptibility and root causes of extremist recruitment.

Political Instability and Weak Institutions

Economic hardship is often intertwined with political instability, as poverty-stricken regions frequently lack robust institutions capable of maintaining law and order. In regions with weak governance, extremist groups can step in to provide services such as food distribution, security and basic health care, essentially becoming a de facto government. This creates a power vacuum that extremist groups exploit, using economic incentives to gain loyalty and recruit members. For instance, areas like the Sahel region in Africa have seen an increase in terrorism partly due to the inability of local governments to provide essential services.

Displacement and Refugee Crises

Poverty exacerbates displacement, which in turn fuels terrorism by creating large populations of vulnerable, dislocated individuals who may turn to extremism out of desperation. The United Nations Refugee Agency (UNHCR) reports that displaced populations face extreme economic hardship, often living in dire conditions with limited access to food, shelter and safety. Extremist groups, recognizing this desperation, target refugee camps and displaced communities to recruit new members with promises of stability and sustenance. Compared to only a decade ago, the number of refugees worldwide has more than tripled. Making it more important than ever to address the basic needs of displaced populations to reduce the risk of extremist recruitment.

Economic Development as a Tool Against Terrorism

Countering terrorism requires a multidimensional approach that includes addressing poverty through economic development programs. By investing in job creation, education and infrastructure, governments and international organizations can reduce the appeal of extremist groups. The United Nations advocates for initiatives that focus on youth employment and educational programs that offer alternatives to terrorism. In Africa and the Middle East, for example, initiatives that promote vocational training have helped safeguard youth against extremist ideologies by providing economic opportunities outside of radical groups.

Conclusion

The relationship between poverty and terrorism highlights the need for holistic counterterrorism strategies that address socioeconomic factors. Tackling poverty, improving educational access, strengthening governance and supporting displaced populations are all crucial steps in reducing the appeal of extremist ideologies. Furthermore, by addressing these underlying issues, the global community can work toward a future where economic stability undermines terrorism’s grip on vulnerable populations.

– Harriet Conway

Harriet is based in London, UK and focuses on Politics for The Borgen Project.

Photo: Flickr

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Fragility and Rule of Law in CAR

Fragility and Rule of Law in CARThe Central African Republic (CAR) is a landlocked country in sub-Saharan Africa and has a population of 6.1 million, ranking among the lowest on the human capital and development indices. Poverty in CAR is widespread, with nearly 70% of its population living in extreme poverty. Its history of conflict and political displacement has undermined economic growth for several reasons, such as reduced business investments. The country suffers from fragility. Its weak government has limited legitimacy and struggles to provide basic public services, including the rule of law. Fragility and the rule of law in CAR need addressing.

Politics, Violence and Economy

CAR has a long history of instability, state disintegration and political violence. It straddles the Sahel region, with a majority Muslim population, while savanna communities are mainly Christian. The conflict has regularly broken out between the Muslim ex-Seleka rebels and the Christian anti-balaka rebels. In 2013, Seleka rebels stormed the capital, Bangui and the country descended into a brutal civil war that continues in some parts of the country.

CAR suffers acutely from gender-based violence (GBV) against women and girls, recording 23.644 cases of GBV in 2022. Inadequate food and water resources, poor health care and weak housing infrastructure exacerbate tensions within households. These challenges, along with socio-cultural norms that are unfavorable to women, have led to sub-optimal survival strategies.

An unstable economy also influences fragility in CAR. Its government has failed to provide basic public goods, including water, food and health care. Poor education and job insecurity have stunted its growth. CAR has a rich endowment of natural resources but has not benefited due to mismanagement. According to the World Bank, the country has also suffered from flooding, fuel shortages and declining international timber trading. These challenges risk an already fragile economy.

Solutions

MINUSCA is a multidimensional United Nations peacekeeping operation set up by the Security Council in 2014. Its mission is to assist CAR in building national stability. It prioritizes the country’s security, rule of law, human rights and political crisis. MINUSCA provides military and police services from regions such as Rwanda to handle disarmament, demobilization and reintegration in CAR.

Cooperazione Internazionale (COOPI) focuses on supporting victims of GBV in CAR. Women and girls gather in a welcoming home in Bangassou where they are encouraged to participate in activities such as knitting and patternmaking, providing them with psychosocial support.

Pelvia, an 18-year-old girl spoke about the positive effect COOPI has had on her life. She spoke about the skills she has learned and how they have provided her with an income to buy necessities that she would otherwise be unable to afford. Pelvia is also glad for the company and support of the other women and girls who have shared similar traumatic experiences, UNOCHA reports.

Economic Growth

CAR receives most of its financial aid from the International Monetary Fund (IMF). In June 2024, the IMF approved an extended $25 million disbursement to continue the push for economic growth in CAR. The aid has been distributed to assist the economy and sustain priority spending on basic public services. The IMF forecasts that CAR’s economy will grow by 1.4% in 2024.

Looking Ahead

Fragility and rule of law in CAR are improving. The country has a long road to stability but there are positive forecasts for its future. 

The Economist Intelligence reports that the country’s economic activity will continue to rise over the next few years, with help from the IMF’s funded program. Whilst many areas of CAR are still overrun by rebel groups, the government, with assistance from Russian and Rwandan forces, has control over several major cities, including the capital. This allows for a more stabilized political structure and open rule of law in these areas.

– Millie Trussler

Millie is based in London, UK and focuses on Politics for The Borgen Project.

Photo: Flickr

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Projects in Tunisia Combat Food Insecurity and Boost the Economy

Projects in TunisiaOn March 15, 2024, the World Bank’s Board of Directors approved two loans worth $520 million to strengthen Tunisia’s economy. The loans will be used for two projects aiming to address and combat food insecurity and reduce regional inequalities in Tunisia. High unemployment, a five-year drought and the nation’s dependence on agricultural imports have amplified inflation rates and led to many food shortages in the country.

The Emergency Food Security Support Project (PAUSAT) will have a range of objectives that will help combat the food insecurity problem while also strengthening Tunisia’s economy and self-sufficiency. Meanwhile, the second loan will focus on the Tunisia Economic Development Corridor Project. This will address the urban infrastructure along the Kasserine – Sidi Bouzid – Sfax corridor.

PAUSAT

This project will help to strengthen Tunisia’s economy by increasing resilience to future food crises. This is by supplying short-term agricultural inputs for farmers to guarantee the next cropping season. A difficult cereal harvest of 2023 contributes to the string of droughts that Tunisia has suffered. By focusing on long-term solutions, this project will also provide barley and climate-resilient seeds to small-scale farmers and milk producers.

This assistance will help to rebuild Tunisia’s economy as it aims to prevent future agricultural challenges. With 30% of children aged less than 5 and 32% of pregnant and breastfeeding women having been affected by malnutrition, the economy is not Tunisia’s only focus. Ensuring access to bread for impoverished and vulnerable households is one of PAUSAT’s short-term objectives.

PAUSAT also aims to combat food insecurity in the short term by offering the vulnerable percentage of the population bare necessities such as bread. With women making up 46%-51% of the family farm labor force and are also 50% of Tunisia’s rural population, PAUSAT’s supply of soft wheat and barley to local markets will also help reduce food insecurity and prevent malnutrition among children and pregnant women.

Tunisia Economic Development Corridor Project

The Kasserine–Sidi Bouzid–Sfax corridor faces regional economic disparities that this project seeks to address. By adding 65 km of new roads and 117 km of feeder roads, the initiative aims to enhance accessibility to inter-regional areas, facilitate business financing and improve mobility for Tunisia’s rural population. The creation of these feeder roads and roadworks will benefit small and medium-sized enterprises (SMEs) and encourage small businesses to open up further.

The Tunisia Economic Development Corridor Project also benefits households that depend on roads. By improving mobility and expanding access to more regions, the enhanced rural infrastructure enables isolated households in the countryside to reach nearby towns and cities more easily. Significantly, this connectivity opens up new employment opportunities, allowing access to businesses and fostering the growth of new SMEs.

Toward a More Connected, Well-Fed Future

Tunisia continues to face extremely challenging conditions regarding cereal harvests, droughts and rural mobility. These two new loans bring new hope as they commit to two projects dedicated to fighting food insecurity and strengthening the economy of Tunisia. By addressing important issues with these two projects, Tunisia will be able to provide both long and short-term solutions for a more sustainable and self-sufficient future.

– Chelsey Saya McCloud

Chelsey is based in Southampton, Hampshire, UK and focuses on Good News and Technology for The Borgen Project.

Photo: Pixabay

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Innovations in Poverty Eradication in Kuwait

Poverty Eradication in Kuwait
Despite Kuwait’s wealth and robust welfare system, poverty eradication in Kuwait remains a pressing issue, particularly among expatriates. While every Kuwaiti citizen get support from the government, with no reports of poverty in the country from the World Bank, expatriates—who remit approximately $4 billion annually—face stark inequalities. Many low-income foreign workers live in conditions that could be considered below the poverty line, despite labor laws meant to protect their rights. These workers often endure overcrowded housing, abuse, non-payment of salaries, and limited access to basic services. Although every expatriate is supposed to arrive with a guaranteed job, thousands live jobless in the country, contributing to a growing sense of neglect and exploitation.

Dilapidated areas, begging and the exploitation of household helpers have tarnished Kuwait’s image. Despite discussions around eliminating the sponsorship system, the issue persists, with companies exploiting loopholes and underpaying workers. Strikes, unpaid wages and the need for charitable donations for basic necessities reflect the failure to enforce labor protections, according to Times Kuwait. While there should be no poor people in Kuwait by law, the reality for many expatriates tells a different story. In response, poverty eradication in Kuwait has become a priority, with several innovative programs focused on expanding social protection, fostering public-private partnerships, empowering youth, managing water resources and addressing energy poverty. Each initiative reflects Kuwait’s commitment to poverty eradication despite its wealth.

Expanding Social Protection Programs

Kuwait has expanded its social protection programs under Public Assistance Law 12/2011, administered by the Ministry of Social Affairs (MOSA). These programs provide financial assistance, health care and education to vulnerable groups such as the elderly, widows, orphans and low-income families. Since its implementation, the law has supported thousands of families, ensuring basic living standards and contributing to poverty eradication in Kuwait. In line with SDG 1 (No Poverty), MOSA’s initiatives have supported 2,030 families locally and 316,701 poor families abroad, while employing 14,518 previously unemployed youths, according to a 2019 report. Collaboration with organizations like Bayt Al Zakat has also strengthened poverty eradication in Kuwait, particularly through housing subsidies and health care services for vulnerable groups.

Expanding Public-Private Partnerships

Public-private partnerships (PPPs) are a key component of poverty eradication in Kuwait. The Kuwait Authority for Partnership Projects (KAPP) oversees initiatives like the Shagaya Renewable Energy Park, which generates clean energy and creates job opportunities, according to a 2019 report. By reducing energy costs, this project helps low-income families afford utilities, contributing to poverty eradication. These partnerships highlight the private sector’s role in supporting poverty eradication in Kuwait, leveraging private resources to benefit public welfare and improve living conditions for marginalized communities.

Clarified Youth Empowerment Initiatives

Youth empowerment is vital to poverty eradication in Kuwait. Initiatives like the 2018 SDG workshops, organized by the International Youth Federation (IYF), aim to foster leadership and innovation among young Kuwaitis. These workshops equip participants with the skills to address poverty at the community level. By creating social enterprises that offer affordable education and health services, young Kuwaitis contribute directly to poverty eradication efforts in their neighborhoods. Empowering the youth to actively participate in poverty eradication in Kuwait is essential for building a more equitable future.

Water Desalination Initiatives

Kuwait’s efforts in poverty eradication are closely tied to its water management strategies, particularly given the nation’s challenges with low groundwater levels, which renew at a rate of less than 70 mm per year. To address this, Kuwait has increasingly depended on cross-border groundwater and, more importantly, established seawater desalination facilities. Desalination now accounts for 93% of Kuwait’s drinking water, providing a vital resource for its growing population and urbanization. By ensuring access to clean water, desalination plays a key role in poverty eradication in Kuwait, supporting both domestic needs and irrigation for agricultural development. This strategy not only alleviates the strain on natural resources but also fosters economic stability, which is essential for long-term poverty eradication in Kuwait.

Decent Work and Economic Growth

Kuwait’s focus on decent work and economic growth is critical for poverty eradication in Kuwait, particularly as the country transitions away from its heavy reliance on the oil sector. Fluctuations in oil prices have historically impacted Kuwait’s GDP, as seen when the GDP per capita dropped from $10,113 in 2012 to $9,208.8 in 2016 due to a decline in oil prices. Furthermore, the employee per capita share of GDP decreased from $85,200 to $75,640 over the same period.

To mitigate such risks and reduce the vulnerability of its economy, Kuwait established the Kuwait Direct Investment Promotion Authority (KDIPA) in 2013 to attract both local and foreign investment. This move not only diversifies income sources but also fosters economic resilience, thereby contributing to poverty eradication in Kuwait. Moreover, The Public Authority of Manpower (PAM), established in 2017, supports small and medium entrepreneurs, streamlines access to government tenders and promotes equitable employment. PAM enforces laws requiring at least 4% of staff in private companies to be persons with disabilities and collaborates on vocational training for women in low-income households. These efforts diversify the economy, foster inclusivity and strengthen economic resilience, crucial for poverty eradication in Kuwait.

Conclusion

Kuwait’s comprehensive approach to poverty eradication includes expanded social protection programs, public-private partnerships, youth empowerment, and technological solutions. By focusing on community engagement and sustainability, the country is making significant strides in reducing poverty and improving the quality of life for its vulnerable populations. These efforts underscore Kuwait’s commitment to poverty eradication and addressing social inequalities despite its considerable wealth.

– Laila Alaya

Laila is based in Abuja, Nigeria and focuses on World News and Technology for The Borgen Project.

Photo: Flickr

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Reducing Poverty Via Social Entrepreneurship in Indonesia

Social Entrepreneurship in IndonesiaThe largest economy in Southeast Asia, Indonesia, has achieved impressive economic growth in the last decade, with a steady gross domestic product (GDP) growth rate after overcoming the effects of the Asian financial crisis in 1998. However, a significant portion of the country’s population is still living in poverty. As of March 2024, Indonesia’s poverty rate stood at 7.09% for the urban region and 11.79% for the rural area. In total, more than 25 million Indonesians are living below the national poverty line.

Social Entrepreneurship in Indonesia

Social entrepreneurs or entrepreneurs who pursue innovative ideas with the potential to solve a community problem, can contribute to poverty reduction in Indonesia. As of 2018, there were an estimated 34,205 social enterprises in Indonesia, including nongovernmental organizations (NGOs), cooperatives and micro, small or medium businesses. The study also found that young people are strongly represented in social enterprises, suggesting the increasing popularity of social entrepreneurship among young people and the growth potential of social entrepreneurship in the future. Social enterprises in Indonesia are mostly in the creative industry (22%), followed by the agriculture and fisheries industry (16%) and the education sector (15%).

Social entrepreneurship in Indonesia can support business opportunities and economic development in the country. Researchers found that amid economic crises like the COVID-19 pandemic, social entrepreneurship plays an important role in encouraging the creation of existing and new social entrepreneurial business opportunities to help solve economic development problems. Besides, social entrepreneurship also contributes to sustainable environmental policies in Indonesia. Research on green space development in Indonesia suggests that social enterprises serve as catalysts for ecological impact, effectively converting community perceptions that favor sustainability into sustainable practices.

Facilitating Positive Changes

For instance, Azzura Solar, a social enterprise co-founded by Hemant Chanrai, is a social enterprise that focuses on solar energy and empowers communities with its businesses. The Bright Future Program (BFP) of the company installs solar panels for the population in the Marga Mulya area of North Jakarta, a more impoverished region of the country with limited access to electricity. The enterprise developed its own indigenous, low-cost system that not only promotes access to electricity for needier populations but encourages the reuse of drinking bottles. The receivers of the services can pay what they can afford, with the rest of the cost covered by sponsors and Azzura Solar.

Javara, on the other hand, focused on assisting local indigenous farmers to earn their livelihood from traditional agricultural products. Through ethical partnerships with farmers, fishers and food artisans, the enterprise brings biodiversity-based food products from rural Indonesia to a broader market. With a wide range of products from honey and coffee to pasta, the company has exported sustainable agricultural products in Indonesia to 33 countries on five continents.

Looking Forward

Policymakers in the Indonesian government have promoted social enterprises mainly through financial assistance and training. The Kredit Usaha Rakyat (KUR) Program, for instance, has been in place to provide bank loans to small businesses in Indonesia since 2007. The Beginner Entrepreneur Program also provides funds for young entrepreneurs with training certificates from the Ministry of Cooperatives and Small and Medium Enterprises.

The ProKUS program in 2021 assisted impoverished and vulnerable families with activities and social and business approaches to prevent and overcome social risks after the COVID-19 pandemic. The program collaborated with social workers and 26 business mentors to incubate social enterprises across 33 districts of the country, improving entrepreneurship skills for the recipients.

With significant government commitment and existing successes, social entrepreneurship in Indonesia is a highly promising solution that can promote poverty reduction in the country. By further promoting social entrepreneurship, the government can empower the local community and contribute to sustainable development in the long term.

– Wangruoxi Liang

Wangruoxi is based in Ann Arbor, MI, USA and focuses on Business and New Markets for The Borgen Project.

Photo: Pexels

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The Approach of the Catalan Integral Cooperative to the Economy

Catalan Integral CooperativeThe Catalan Integral Cooperative (CIC) is a network of more than 600 interlinked but autonomous cooperatives and projects located in Catalonia, the easternmost region of mainland Spain. Despite being relatively unheard of, CIC boasts its own currency, legal infrastructure, food pantries, investment bank and more. Even more intriguing, it has the audacious mission of transforming the way we think about the global economy.

Background of the Catalan Integral Cooperative

While the 2008 financial crisis was global in scope, it hit Spain particularly hard: the unemployment rate skyrocketed from 8.2% in 2007 to 26.1% by 2013, while youth unemployment was above 55% by 2013. With a declining gross domestic product (GDP) and a ballooning national debt, the Spanish government instituted austerity measures in 2010. Actions included rolling back the welfare system and making hiring and firing easier for employers. Civil unrest swept the nation and Catalonia in particular.

The CIC was born in this milieu with the aim of creating an alternative economy based on the principles of direct democracy, transparency and cooperative ownership. While CIC dissolved as an organized entity in 2015, many of its autonomous components survive to this day. Here are three of its most fascinating components.

  • The Catalan Supply Center (CAC): Started in 2012, the CAC constitutes one of CIC’s most successful undertakings. It consists of 20 self-managed pantries and about 70 small local producers, whose actions are coordinated via committee. Through logistical and transportation support, CAC’s main objective is to help small farmers get their products to markets and connect them with buyers. Thus with one project, CIC is working to both promote food security and boost small farmers’ incomes in the region.
  • The Eco: The “eco” is the local currency used by CIC, in parallel with the Euro. In contrast to regular fiat currencies, the eco is not backed by any state. This leaves its value entirely dependent on its holders’ beliefs. The eco can be traded with other members of CIC’s various autonomous organizations for goods and services. In a testament to its success, CIC’s “eco-network” had more than 2,600 members as of April 2017.
  • Casx: CIC’s investment bank—Casx, pronounced “cash” in Catalonian—is also highly unorthodox. For instance, the bank charges zero interest on loans. This entitles depositors to participate in deliberations on which projects to fund and makes all accounts fully visible to one another. Despite these limitations, deposits totaled more than $250,000 from 2012-2015.

Concluding Remarks

The CIC may have collapsed as an organization almost a decade ago, however, its legacy of furthering the public good endures by way of its numerous still-active offshoots and sub-organizations. Cooperative projects like CAC, the eco and Casx have sheltered living standards. Furthermore, they have boosted purchasing power in the region while granting valuable insight into both the promise and pitfalls of a post-capitalist economy.

– Kipling Newman

Kipling is based in Denver, CO, USA and focuses on Good News and Global Health for The Borgen Project.

Photo: Wikimedia Commons

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Project Mano: Ethiopia Uses Bitcoin to Fight Poverty

Project ManoIn Ethiopia, 40% of the population still doesn’t have access to electricity, contributing to high unemployment, particularly among young adults. Without proper technological skills and access to electricity, people are less likely to find jobs. Nearly 4% of the country’s population is unemployed across both rural and urban areas. Ethiopia’s new initiative, Project Mano, aims to address these challenges by utilizing Bitcoin. The project focuses on Bitcoin mining facilities and substations to strengthen the country’s economy.

Project Mano

Project Mano aims to integrate intensive bitcoin mining into Ethiopia’s economy, powered by the country’s renewable energy resources, including the Grand Ethiopian Renaissance Dam (GERD), the largest dam in Africa. Led by the Russian bitcoin mining company Bitcluster, the project will support Ethiopia’s environmental goals of clean energy while also boosting technological infrastructure and growing the nation’s economy. If GERD is repurposed for bitcoin mining, it could generate billions of dollars annually for Ethiopia. At full capacity, the dam could power 200,000 similar machines, potentially yielding more than $2 billion per year.

Project Mano will establish a mining facility in Addis Ababa, strategically located near the GERD. Ethiopia’s climate is also a significant advantage for the facility’s construction. With temperatures ranging from 9°C to 24°C throughout the year, the country provides ideal conditions for bitcoin mining, as facilities are less likely to overheat or freeze. Additionally, Addis Ababa’s Bole International Airport, the largest on the continent, offers direct flights to most global capitals, making it a key transport hub and helping reduce the cost of importing equipment and materials.

The Benefits

Project Mano will offer significant benefits to Ethiopia’s population in the fight against poverty. Inflation remains high and the crises in Ukraine and Gaza have increased pressure on import prices. With 55% of the population unbanked, money circulation is limited, forcing the government to print more money and worsening inflation. One of Project Mano’s initiatives is to adopt Bitcoin as legal tender, allowing it to be used for purchases, employee salaries and taxes. Since bitcoin maintains its value, this could help reduce poverty by stabilizing Ethiopia’s economy and promoting fiscal security.

Furthermore, using the GERD for bitcoin mining will provide 24/7 electricity access, helping Ethiopia combat poverty. The “electrification” of rural areas will lead to the establishment of bitcoin mining substations, allowing remote communities to gain access to electricity while creating new tech-related job opportunities. This increase in employment will boost Ethiopia’s economy and significantly reduce the number of people struggling with food poverty.

Summary

Project Mano proposes bitcoin mining as a solution for securing a stable economy. It plans to establish a facility in Addis Ababa powered by Africa’s largest hydroelectric project and other renewable energy sources. The project aligns with Ethiopia’s renewable energy goals while having the potential to generate billions of dollars for the economy. By expanding technological infrastructure, bitcoin mining will create more employment opportunities, address the high unemployment rate among young adults and help alleviate food poverty. Additionally, the Bitcoin facilities present significant opportunities for foreign investment and access to foreign currency, improving the quality of life for average Ethiopians and stabilizing the economy on a larger scale.

– Chelsey Saya McLeod

Chelsey is based in Southampton, Hampshire, UK and focuses on Good News, Technology and Solutions for The Borgen Project.

Photo: Pexels

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6 Things to Know about Vietnam’s Economic Development

Vietnam’s Economic DevelopmentVietnam’s economy is steadily growing, with remarkable development following decades of economic reform and strategic investments. Once an underdeveloped nation, Vietnam has significantly reduced poverty. This economic growth is driven by reforms, industrialization, infrastructure development and improved access to education and health care.

Doi Moi

Vietnam implemented the Doi Moi reforms in 1986, transitioning from a strictly communist economy toward a more open market with socialist influences. Before these reforms, the country was considered “underdeveloped.” The Doi Moi reforms modernized Vietnam’s trade economy, setting the foundation for its subsequent economic boom.

Industrialization and Infrastructure Development

Industrialization in Vietnam began in the early ’90s and continues today, driving economic development as the country transitions from a primarily agricultural economy to a more diversified and advanced industrialized one. Vietnam now manufactures products such as cars, electronics and textiles. Between 2020 and now, the country’s manufacturing, construction, services and industrial sectors grew from 81.1% to 85.2%.

Investment in public infrastructure has been one of the fundamental driving forces behind Vietnam’s economic development in recent decades. The country has mainly focused on roads, airports and seaports. Private and public investment in infrastructure has accounted for as much as 5.7% of the gross domestic product (GDP) in recent years. This is the second highest in all of Asia, following China.

Better Access to Education

Since gaining independence in 1945, Vietnam has prioritized education and reduced illiteracy rates. Today, the country places even greater emphasis on improving education. In 2002, the government allocated 3.9% of its GDP to education, which increased to 6.3% by 2014. Vietnam has enhanced access to education by ensuring universal preschool education through public spending and engaging communities and the private sector. The country has also improved learning outcomes, with Vietnamese students outperforming the average students in Organisation for Economic Cooperation and Development (OECD) countries.

In 2012, Vietnamese youth ranked 8th in science, 17th in mathematics and 19th in reading out of 65 countries. The Vietnamese government also prioritizes equity in education, contributing to these high learning outcomes. The central government allocates more funding per capita to geographically disadvantaged provinces and teachers in these areas are paid more than those working in cities. Vietnam’s progress in education has been a critical factor in its ranking of 48 out of 157 countries on the Human Capital Index.

Better Access to Health Care

Along with the economic growth, the health of the Vietnamese people has improved between 1990 and 2020. Life expectancy grew from 69 to 75. The aged than 5 child mortality rate decreased from 30 to 21 per 1000 live births. While the health care system has improved significantly in the past decades, Vietnam stands before an inevitable challenge: it has one of the fastest-growing aging populations in Asia.

Looking Forward

Vietnam’s transition from a centrally planned to a market economy has transformed it from one of the poorest countries in the world into a lower-middle-income nation. Since the Doi Moi reforms, GDP per capita has increased sixfold. Economic growth is projected to reach 5.5% by the end of 2024. Vietnam aims to become a high-income country by 2045, requiring an average annual growth rate of about 6% per capita to achieve this goal.

Vietnam has experienced significant development over the past few decades, with investments in health and human skills playing a central role in this progress and delivering substantial economic benefits. Despite this development, the country faces significant social issues. Vietnam is dealing with an aging population, persistent inequalities in the education sector and ongoing economic effects from the pandemic. Like many other countries, Vietnam’s economy faced a downturn in 2023 due to post-pandemic challenges. However, Vietnam’s economic development is now on the rise again.

– Sigrid Nyhammer

Sigrid is based in Bergen, Norway and focuses on Good News and Politics for The Borgen Project.

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