Archive for category: Economy

Information and stories about economy.

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How to Help People in Portugal

How to Help People in Portugal

Like many countries across the world, Portugal was one of the nations in Europe significantly impacted by the financial crisis in the late 2000s. By 2009, the country began facing high levels of debt and a rising unemployment rate that, to this day, still weighs on the nation’s economy. While the Portuguese government attempts to understand how to help people in Portugal, much more needs to be done to address the country’s economic conditions.

Poverty and Unemployment
Since the beginning of the European debt crisis in 2009, Portugal has been affected by high levels of poverty, large instances of labor market segmentation and high unemployment rates.

In 2010, 18 percent of the population lived under the national poverty line, with certain groups affected more than others, such as women, children, ethnic minorities and the elderly. The incidence of poverty varies quite drastically between regions in Portugal. For instance, many areas in the northern region of the country have larger pockets of poverty due to the restructuring of the textile industry, while Lisbon may not see such a large impact, as its GDP nears the European average.

After joining the European Economic Community in 1986, Portugal experienced strong growth, decreasing interest rates and declining unemployment. However, with the economic problems faced in 2009, unemployment grew to over 10 percent by 2010, reaching a 24-year high.

By 2017, Portugal’s unemployment rate of 9.8 percent still lands the nation above the OECD average of 5.9 percent, yet the fall since 2010 has been quicker than the average across OECD countries. The main catalyst of the unemployment issues stretch beyond the recent debt crisis and are rooted in the country’s structural weaknesses.

Increasing the number of available jobs is one of the answers to how to help people in Portugal, as the country ranks in the bottom third of performers across OECD countries. The number of jobs has been decreasing in the nation since 2006 and is a major cause of the high levels of unemployment and poverty across the nation.

Portugal also needs to focus on improving the quality and inclusiveness of jobs. To improve the living conditions for Portuguese families, there must be a focus on improving earnings quality by increasing wages and reducing earning segmentation.

Certain groups are more likely to be employed on a temporary basis or through atypical contracts, which creates a barrier to inclusiveness in Portugal. This creates labor market segmentation and insecurity that also contributes to unemployment in the country.

Demographics
In addition to the effects on unemployment, the segmentation has also had a large impact on the country’s demographics and immigration of refugees. Portugal’s population is expected to shrink by 30 percent between 2015 and 2100 due to low fertility rates, higher life expectancy and migration outflows. With the old-age dependency ratio expecting to more than double over the same period, the economy will suffer from low future earnings.

The government believes they have a solution for how to help people in Portugal instead of simply allowing the statistic to unfold. The economic strategy focuses on increasing the number of asylum seekers and resettled refugees welcomed into the country. By attracting more people to settle in Portugal, the idea is that openness will boost economic activity while also counteracting an aging population and falling birthrate.

While the people of Portugal support immigration, the labor market conditions, lack of immigration historically and segmentation within society discourage refugees from resettling in Portugal. Therefore, to help those looking for refuge, integration and employment prospects must be considered in policy formation.

Fortunately, there is also support beyond the political sector. Abou Ras was himself a refugee who resettled in Portugal and has formed the association “Families of Refugees” with other asylum seekers to help migrants adjust to life in the country.

With Portugal taking a proactive approach to the inflow of refugees, the country could benefit from its efforts in the long run. However, emphasizing the importance of improving labor market conditions is one of the best ways to help people in Portugal. This will not only improve the current living conditions of the population, but also improve the prospects for all those to come.

– Tess Hinteregger

Photo: Flickr

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The Hidden Face of Poverty in Brunei

The Hidden Face of Poverty in BruneiBrunei Darussalam, the Abode of Peace, is a small Southeast Asian country with a population of approximately 350,000 people. Data on poverty in Brunei is scarce, but it shows that roughly five percent of the country’s population lives in poverty. Nevertheless, there is another face of poverty in the small nation: the poverty of freedom and opportunity.

Brunei is an Islamic Sultanate Kingdom ruled by a monarch in whom rests the executive, legislative and judicial powers of the State. The reigning monarch, Hassanal Bolkiah, is the 29th ruler in an unbroken line of succession for the past six centuries. The country’s citizenry has allowed the monarchical rule to survive for this long because of two reasons: welfare benefits and the respect for social and political order enforced by the state.

Economic poverty in Brunei is not a big problem because it is a rich nation and the third largest exporter of oil and gas, which allows the subjects of the King to enjoy a high per capita income of nearly $24,000 annually. The human development index (HDI) ranks it 30, which falls in a very high human development category, over countries such as Malta, Qatar and Cyprus, which rank 33. Brunei also ranks well in the gender development index (GDI). According to the 2015 HDI report, the female HDI value for Brunei is 0.854 which is a GDI value of 0.986, placing it into Group 1 with countries such as Norway, Australia and Singapore.

However, poverty in Brunei exists in the sense that there are reported problems of smaller economic inequalities and the lack of freedom and opportunity. Development across some areas is uneven and opportunities for younger generations to participate actively in the State affairs through education, employment and promotions on merit are less than encouraging. Brunei has no representative institutions due to the total control of the King’s authoritarian regime. Analysts believe that the State has been able to maintain harmony due to the vast wealth at its disposal for welfare activities.

The less diversified nature of economy, dependency on the oil and gas industry and the spread of ideas due to the rise of Internet and globalization among the younger generation do seem to pose a challenge for the current socioeconomic and political model. Economic and political measures in Brunei must be taken to address the emergent issue of poverty of opportunity and freedom and, simultaneously, sustain growth and prosperity.

– Aslam Kakar

Photo: Flickr

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Why Is Kuwait Poor?

Why Is Kuwait Poor?Kuwait, a small country located in the Middle East, is a country that tends to be stereotypically characterized as stricken with poverty. A common question that is asked is, why is Kuwait poor?

But this stereotype is not necessarily true. Kuwait is indeed small, but its oil reserves have made it one of the richer countries in the region. In terms of purchasing power, Kuwait’s GDP is ranked 55th in the world by the CIA World Factbook.

Due to Kuwait’s small population size, this success directly correlates to its people’s standard of living. As of 2016, Kuwait’s GDP per capita ranked 11th in the world at $71,900. This figure is much higher than many major economies such as the United States, which ranked 20th at $57,400.

Based on these figures alone, Kuwait appears not to be a poor country, but one of the most prosperous in the world. So, why is Kuwait poor? On the international stage, it is not. When one looks further, however, key figures may legitimize that question.

What is interesting about Kuwait is that the country’s poverty rate is extremely difficult to find. Neither the World Bank, the CIA World Factbook nor UNICEF have access to it, which raises a lot of questions. Why do these trusted international organizations not have this information? Is this information being withheld, and if so, for what reason?

Based on other metrics, it is hard to see Kuwait as a stereotypical poor country. The figures mentioned above related to GDP show that the nation as a whole is seeing economic success, and an unemployment rate of 3 percent suggests that its poverty rate must be low.

Still, the lack of specific data in this area is unsettling. If Kuwait is as prosperous as it seems to be, there should be no issue in providing data relevant to its poverty rate and income distribution. In order for the world to know for certain, the international community needs this data.

So, why is Kuwait poor? It technically is not poor, but that is not necessarily the right question to be asking. By asking questions regarding Kuwait’s poverty rate, its income distribution, and the general livelihoods of its people, we can better analyze the country’s successes, its shortcomings and its opportunities for growth long into the future.

– John Mirandette

Photo: Flickr

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Three Ways Poverty in Uruguay is Being Addressed

Poverty in UruguayWithin the past few decades, Uruguay—a small country with a population of about 3 million—has managed to reduce its moderate poverty rate from 25.5 percent in 1989 to 12.4 percent in 2012, and the extreme poverty rate from 3.3 percent to 0.5 percent over the same period. Because of the great reduction of poverty in Uruguay, the nation’s Human Development Index ranking is ever increasing, and it is seeing longer life expectancy and greater birth rates.

However, despite improved conditions for citizens of Uruguay, there is still anxiety among community members due to a long embedded history of fluctuations in the economy and government that have contributed to poverty-like phases for many. The last 40 years have been illustrated by a slow-moving economy, one that is not quick to adapt to change, but with moments of remarkable growth. Uruguay is uniquely addressing its poverty issues, some with successful outcomes and others with less positive consequences. Here are three ways poverty in Uruguay is being tackled.

  1. Economy
    Uruguay has been relatively successful in ramping up economic development, which has seemed to keep up with globalization. Gross Domestic Product increases in the late 80s have been able to sustain Uruguay through some economic downturns in recent history. This, coupled with social reform, is keeping extreme poverty low.
  2. Social Integration
    Uruguay still experiences marginalization and social disintegration, but has taken initiatives in the last few decades to bring these issues to public view. It has been argued that education is a key element is bringing many different demographics of people together and enabling students and families to take charge of their lives. From the early 90s to the present, referendums have been drafted regarding education and social reform as well as being a topic for political platforms.
  3. The Work Force
    Women have become more of a present figure in the job market, having the highest rate of participation in labor in Latin America. While the amount of active workers is higher than it has ever been, Uruguay still has relatively high unemployment rates. However, the Uruguay legal system is working toward slimming the gap between wage discrimination and job security rights among its citizens.

While Uruguayans are working toward a more stable economy and social reforms, there is clearly still some way to go. But, despite slow moving and small-scale changes, Uruguay is a positive example of poverty reduction efforts and there is growing hope for change in the South American nation.

– Casey Hess

Photo: Flickr

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Is Kazakhstan Poor?

Why Is Kazakhstan Poor?Kazakhstan is a Eurasian country, bordering China and Russia, whose size is comparable to that of western Europe. Kazakhstan has a population of 16.4 million. According to the Asian Development Bank, only 2.7 percent of the population in Kazakhstan lives below the poverty line. Kazakhstan has the lowest percentage of people living below the national poverty line in central and west Asia. These statistics suggest that Kazakhstan is not a poor country at all, which raises the question, is Kazakhstan poor?

Historical Context
Kazakhstan declared independence from the Soviet Union in 1991 and became an upper-middle-income country in less than two decades. Kazakhstan’s GDP has risen dramatically since the country became independent. In 1990, the year before Kazakhstan declared independence from the Soviet Union, the GDP was $27 billion. By 2013, the GDP was $237 billion. In 2016, however, the GDP had decreased to $134 billion. The rapid economic growth can be attributed to large investments in the oil sector.

Economy
Kazakhstan’s economy has declined due to the decrease of global commodity prices and the economic downturn of Russia. Additionally, Kazakhstan’s exports to the Eurasian Economic Union (EAEU) countries decreased by 23.5 percent in 2016. Imports to Kazakhstan from EAEU countries declined by 13.7 percent.

The majority of Kazakhstan’s economy is based on industry and services. Agriculture in Kazakhstan accounts for less than 5 percent of the country’s GDP. Kazakhstan’s economy, however, is not at all diverse and is largely dependent on oil. This dependency foreshadows an even steeper economic decline, especially considering imminent environmental concerns.

Infrastructure
Kazakhstan also confronts poor transportation infrastructure, especially for a country whose volume of road and railroad shipping is particularly high. Two-thirds of the 23,000 kilometers of highway are in poor condition.
Kazakhstan’s telecommunication infrastructure is also very poor. Though Kazakhstan has the best telephone system in central Asia, it ranks low in terms of world standards. For example, in 2004, the Kazakhstan telephone system provided only 15 telephone lines per 100 inhabitants.

Poverty Disparity
Kazakhstan has made huge strides in reducing poverty. From 2000 to 2006, the poverty rate declined from 34.5 percent to 19 percent. Rural poverty, however, is still high. For example, from 2005 to 2010, poverty in urban areas declined from 13.6 percent to less than 4 percent, while poverty in rural areas declined from 24.4 percent to 10 percent.

Is Kazakhstan Poor?
In truth, Kazakhstan is not a traditionally “poor” country. In 2011, Kazakhstan was ranked as a high human development country in the Human Development Report. Additionally, Kazakhstan has already achieved many of its Millennium Development Goals.

Kazakhstan is, however, an example of a country that quickly lifted itself out of poverty and can quickly fall back into poverty. Kazakhstan is an anomaly among the former Soviet Union countries, as Kazakhstan’s GDP increased and its poverty rate decreased almost immediately after declaring independence. Kazakhstan has relied heavily on oil to improve its economy. Poverty is largely related to employment opportunities, which have been plentiful in the oil business. Considering environmental concerns regarding oil, it would be in Kazakhstan’s best interest to diversify its economy in order to continue improving the quality of life of its citizens.

– Christiana Lano
Photo: Flickr

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Understanding the Reasons Why Tajikistan is Poor

Why Is Tajikistan PoorTajikistan has done an incredible job over the past 15 years of reducing poverty and strengthening its economy. However, the poverty rate still remains at 31 percent. Despite being in the top 10 percent of countries in terms of poverty reduction, the question of why Tajikistan is poor remains.

Poor soil and a lack of employment opportunities have driven more than one million Tajiks to work abroad, mostly in Russia, in order to support their families. Additionally, narcotics are a huge source of economic activity in Tajikistan, leading to hostile environments for students and driving away foreign investment.

Education in Tajikistan is often truncated. There is limited opportunity for secondary school, and higher education is an opportunity only the most privileged can afford. The levels of education across Tajikistan are lower for women, as 12 percent do not end up graduating the compulsory nine years of primary school.

Minimal infrastructure is another explanation as to why Tajikistan is poor. Though there is a fairly well developed system of roads, they are in need of repair and supplement. Access to the internet and clean water, not to mention basic health care, is also restricted, and the railway system is rudimentary and ineffective.

Besides a lack of education and overall infrastructure, the rule of law in Tajikistan is weak, likely due to a history of civil war and a former dependence on the Soviet Union. This makes foreign direct investment unlikely, leaving little chance for new businesses to grow and develop.

Much has been done in recent years to continue to strengthen the Tajikistan economy, yet the question of why Tajikistan is poor remains. The country must work even harder than in the past, increasing access to the internet and energy, developing the private sector more fully and making the country an attractive one for foreign direct investment if they wish to continue the impressive growth that has been the norm for fifteen years.

– Connor S. Keowen

Photo: Flickr

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The Poverty Rate in Tonga: A Nation in Need of Assistance

Tonga Poverty RateThe Polynesian Kingdom of Tonga is home to around 102,000 people. Tonga is an archipelago comprised of 171 islands, only 45 of which are inhabited. In 2005, the U.N. estimated 77 percent of the population lives in rural areas.

The poverty rate in Tonga is 22.1 percent; in other words, one out of every five Tongans lives below the poverty line. Among the eight nations in the Pacific region, Tonga has the third lowest poverty rate, proceeded by the Solomon Islands and Vanuatu.

Tonga’s impoverished communities are primarily in rural areas on the outer islands. The main island of Tongatapu has the highest GDP per capita, but the citizens of the farther islands of ‘Eau, Ha’apai, the Niuas and Vava’u struggle to find work. The higher poverty rates on these islands are due to a lack of access to goods, transportation and marketing opportunities.

The poverty rate in Tonga worsened after the 2008 global financial crisis. The cost of living skyrocketed due to increased prices of imported fuel and food. The crisis also caused Tongans overseas to lose their jobs in fields such as construction and landscaping, rendering them unable to send money back home. It is estimated that there are more Tongalese expatriates than current citizens, and many of them reside in the neighboring countries of Australia and New Zealand.

Tonga’s economy is primarily agricultural. Their main cash crops are squash, fish, copra and coconut products, vanilla bean extract and bananas. Tonga’s main mode of foreign exchange is through agricultural exports, tourism and remittances. The Tongalese economy also relies on foreign aid to offset its chronic trade deficit.

The biggest hope for improving the Tongan economy is tourism. Tonga hopes to increase high-value tourism among the outer islands, which have white sandy beaches and ideal sailing conditions. The Tongan tourism industry still has problems with remoteness, infrastructure and poor marketing. However, conditions are improving. In January 2011, tourist receipts totaled 60 million Tongan dollars, the highest point in the last decade.

Like many countries, Tonga is still in the process of rebuilding its economy after the 2008 financial shock. International cooperation will also be instrumental in doing so, as Tonga continues to rely on foreign aid for emergency assistance and filling the gaps in trade deficits. With further cooperation and the development of local markets, there is hope to lift many more Tongans out of poverty.

– Hannah Seitz

Photo: Flickr

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Causes of Poverty in Croatia

Causes of Poverty in Croatia
Croatia, a beautiful country home to numerous tourist destinations, is quickly becoming the EU’s poorest and slowest growing nation. With 19.5 percent of the population below the poverty line and an unemployment rate of almost 12 percent, the situation is dire.

While these numbers may not seem especially concerning, they are deceiving, as significant income disparities exist in Croatia. The poor in Croatia experience greater income differences among themselves than most countries. Those living in small towns in the east and southeast regions and in rural areas are especially at risk.

These areas suffered the most from the Homeland Wars in the 1990s. The wars and the corrupt privatization of state-owned companies hurt Croatia’s industrial sector. Once an industrial powerhouse, Croatia now has turned to a less dependable and less lucrative service-based economy that relies on tourism for jobs and income.

 

Main Causes of Poverty in Croatia

 

  • Rising Foreign Debt: Croatia’s external gross debt has risen to €46.4 billion, which equals 108 percent of the annual GDP and is an all-time record. The debt is still trending upward and shows no sign of stopping. Consequently, Croatia’s credit rating continues to drop and the country cannot accumulate as much of the foreign aid it desperately needs.
  • A Six-Year-Long Recession: The Great Recession of 2008 severely impacted the Croatian economy for years. During this period, child poverty increased by more than 50 percent. The recession exacerbated issues already present in the Croatian economy and is a large reason why the country’s growth rate remains under 2 percent. Furthermore, the poor economic performance has contributed to a doubling of the public debt that has resulted in high taxes and fewer jobs.
  • High Unemployment: The last of the main causes of poverty in Croatia is high unemployment, especially among youths. Among those aged 15 to 24, Croatia has the third highest unemployment rate in the European Union. The youth unemployment rate reached an all-time high of 49.8 percent in 2013 and currently fluctuates around 30 percent.

 

However, Croatia is working to improve these conditions. For example, as a member of the European Union, it has committed itself to the Youth Guarantee Programme. Through this initiative, Croatia receives funding from the EU to build a support system for Croatian youths that would feature more opportunities for vocational education and apprenticeships in the public and private sectors. The goal of this program is to ensure that youth members receive a job offer within four months of registering as unemployed.

Croatia also is implementing the Strategy on Combating Poverty and Social Exclusion in Croatia (2014-2020), which aims to reduce poverty and social exclusion in Croatia through a regional approach. Through initiatives like these, the government hopes to address the causes of poverty in Croatia and lift itself into economic prosperity.

– Lauren McBride

 

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Addressing Four Main Causes of Poverty in Algeria

Causes of Poverty in AlgeriaWith a population of approximately 40 million, Algeria is geographically North Africa’s largest country. It is also the world’s fourth largest gas exporter and the tenth largest exporter of oil. Algeria is a rich nation and the third most important economy in the Middle East and North Africa, but its people are poor. Reports show that the national rate of poverty in Algeria is as high as 23 percent.

What are the causes of poverty in Algeria? Why are up to half of young men from a country tempted to flee to Europe as illegal immigrants to escape misery at home?

Poverty and Unemployment

A high rate of unemployment among youth is one the causes of poverty in Algeria. Although the official figure is 12.48 percent, in reality it is much greater than that. One report from 2008 shows that unemployment among people under 30 was 70 percent. Such high unemployment rates and difficult quality of life have forced the country’s youth to take on desperate measures, such as illegal immigration to find work in Europe.

Political Conflict

Many Algerians blame the unresponsive and ineffective political leadership for the fall of the country’s economic position. One analyst claims that the “doctrinaire socialism” of the National Liberation Front (FLN), a political party which led the struggle for independence against France, rendered the country bankrupt. The Algerian Civil War between the Algerian government and various Islamic rebel groups from 1991 to 2002 and post-war political tensions further weakened the country’s political and economic stability.

Lack of Democracy

Lack of democratic institutions is another cause of poverty in Algeria. The struggle for power between the progressive FLN and conservative Islamic Front prompted military intervention on a number of occasions. The country’s current 80-year old President Abdelaziz Bouteflika has been in office since 1999 by “winning” four successive elections. Although he is respected as an elderly statesman for taking the country out of the civil war and eliminating radical and militant jihadi groups, the government under his rule has grown increasingly intolerant of press and political opposition.

Cuts in Government Spending

Another cause of people’s discontent and poverty in Algeria is the recent decline in oil price. Because Algeria relies heavily on oil and hydrocarbons for a strong economy, the sharp decline in oil price has prompted the government to implement spending cuts and tax hikes. Such measures without “improved safety nets, a cash transfer system reaching the needy, a solid media campaign to ensure better public understanding during its implementation and a stronger statistical system that allows monitoring of households’ living conditions more frequently” will pose a risk for Algeria.

Nevertheless, the pleasant news is that poverty in Algeria has decreased by 20 percent in the past two decades. While this number is promising, it is still not enough development. There is a need for a shift toward a more diversified economy that will move the country to sustainable growth and more employment opportunities.

– Aslam Kakar

Photo: Flickr

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Causes of Poverty in Malta

Causes of Poverty in Malta

For the island nation of Malta, poverty is an issue that must be addressed, especially with recent data that suggests that not only is poverty a persistent issue within this country, but also an issue that is on the rise. The causes of poverty in Malta are important to understand in order to address this issue.

Malta is located in the Mediterranean Sea, just south of Italy, and is comprised of a population of over 400,000 people. Of the 400,000 people who live on this island, 16.3 percent live below the poverty line, according to a 2015 estimate. Furthermore, according to European Union (EU) statistics, Malta is one of 14 European countries that experienced an increase in poverty between 2008 and 2014. After Greece, Spain and Cyprus, Malta experienced the fourth greatest increase in poverty during this period.

One cause of poverty in Malta is unemployment; an estimated 4.8 percent of Maltese people are unemployed. Nevertheless, there are many positive signs which indicate positive growth for Malta’s economy that could alleviate unemployment for many. The Maltese economy is strongly dependent on foreign trade, manufacturing and tourism, which have contributed to an economy that has grown 4.5 percent per year – the largest growth of any European country between 2014 and 2016.

There are also certain groups of Maltese people who are more vulnerable to being affected by poverty. Those that have been victims of violence and neglect, the mentally ill, immigrants, the disabled and those from single-parent households are more likely to live in poverty and therefore rely on social services. In particular, poverty affects the elderly – those over 65 – on this island at a significantly higher rate – 22 percent – than other age groups in the population. Many of those who are particularly vulnerable to poverty have also been pushed in that direction by falling into a pattern of being heavily indebted.

Despite the recent trend toward poverty, Malta is largely heading in a positive direction. Economically, the country is thriving and this economic growth could increase the unemployment rate and be used to further guarantee social services that could alleviate poverty for at-risk groups of people. Nonetheless, there is still a lot of work to be done and the causes of poverty in Malta need to be addressed fully in order to see progress.

– Jennifer Faulkner

Photo: Flickr