Archive for category: Economy

Information and stories about economy.

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The Youth Unemployment Rate in Greece

Youth Unemployment Rate in GreeceThe youth unemployment rate in Greece has reached tremendously high levels and is resulting in the growth of poverty among young Greeks, in addition to stunting the development of the Greek economy. As of May 2017, the youth unemployment rate in Greece reached a staggering 46 percent. This rate means that roughly half of the Greek youth population are unable to find employment opportunities.

Looking at the high rate of youth unemployment, one factor can be seen as its primary cause: Greek debt.

In 2011, due to its ballooning debt levels and fears that Greece would default on its debt, European counterparts were forced to give Greece a bailout package of €109 billion. As part of the loan, however, major credit rating agencies gave Greece a rating along with a disclaimer saying there would be a substantial risk of default on Greek debt.

By giving Greece this rating, the country pushed away potential investors in the Greek economy, and, in combination with the effects of Greek austerity programs, substantially hurt the growth potential of the Greek economy. The adverse effects observed in Greece are exemplified by the fact that the country’s economy has contracted by a quarter since the crisis began.

The minimum wage in Greece is calculated differently for younger people than it is for people over 30, so young Greeks who have a job are often paid at a significantly lower rate than older workers.

As an overall effect on poverty in Greece, the high youth unemployment rate will very obviously impact the country and raise its poverty rate. As the Greek economy continues to deteriorate and young people continue to go without opportunities to work, the poverty rate in the country will inevitably grow.

Going hand-in-hand with the increase in the rate of poverty among young people in Greece is the level of youth homelessness. As the unemployment rate continues to climb, the rate of homelessness among Greek youth – in addition to the rate of substance abuse – both continue to rise.

Overall, the youth unemployment rate in Greece is elevating enough to become a significant issue requiring foreign assistance to resolve. As countries capable of proving support, the United States and Greece’s European counterparts must increase aid to help Greece combat this problem. By focusing efforts on increasing the success of the Greek economy, issues such as youth unemployment will certainly begin seeing improvement.

– Garrett Keyes

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Investing in the Future: Decreasing the Uruguay Poverty Rate

Uruguay Poverty RateUruguay has made great progress in reducing poverty since the mid-1980s, mainly due to the country’s extensive social policy and macroeconomic stability in the 1990s. The country is also notable in Latin America for its equitable distribution of income. However, the Uruguay poverty rate remains a concern for some Uruguayan communities.

Uruguay’s impoverished residents typically have a critical combination of low skills, weak demand and high family dependency that makes them vulnerable to financial struggles. A dual strategy that improves Uruguay’s investment climate and enhances growth is one method that could help the country’s poor. Investing in human capital via education could assist impoverished residents as well.

Uruguay’s poor are also marginalized. Impoverished Uruguayans are increasingly concentrated in specific neighborhoods, challenging poverty reduction efforts and implying changes to social services. Uruguayan children have become a significant portion of the country’s poor, with 40 percent born into poor families — a fact that foreshadows an intergenerational poverty problem.

Teenage mothers, inactive youths and unemployed adult males (40 to 50 years old) with low skillsets are vulnerable to the Uruguay poverty rate as well. While this demographic is relatively small, it could increase given Uruguay’s past social problems. However, this problem is still manageable in scope and depth. Uruguay would require a change to conventional social programs in order to help this vulnerable demographic.

Uruguayan children are the country’s most vulnerable demographic to impoverished conditions. However, Uruguay’s elderly population are at the least risk due to the country’s pension benefits and increasing job salaries. Uruguay’s constitutional change in 1989 permitted the indexation of pensions to wages, helping the country’s elderly to have higher income deciles and lower poverty rates as well.

Income inequality is another reason for the Uruguay poverty rate. Inequality in workers’ wages was on an upward trend from the 1990s to 2007. Since 2008, increases in labor income have helped lower Uruguay’s income inequality problems. However, Uruguay’s income inequality rate is still relatively high by OECD (Organization for Economic Co-operation and Development) standards.

Thankfully, Uruguay’s poverty rate is continuing to decrease. The country’s poverty rate was 11.5 percent in 2013 and dropped to 9.7 percent in 2014. Uruguay’s homelessness rate of 0.5 percent dropped to 0.3 percent within the same years. The country’s Central Bank stated that Uruguay’s economy grew by 3.5 percent and slightly above market expectations.

While the Uruguay poverty rate continues to decrease, the country’s impoverished communities will require opportunities for income equality. Uruguay has a literacy rate of 96 percent (the highest rate among Latin American countries) and a social contract that stresses the importance of accessing education.

Uruguayans with low skillsets may be able to escape poverty by taking advantage of the country’s educational opportunities, and therefore creating a brighter Uruguayan future for all.

– Rhondjé Singh Tanwar

Photo: Flickr

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Nine of the Most Important Facts About Tongan Emigrants

Tongan EmigrantsTonga is an archipelago in the South Pacific and the last surviving Polynesian kingdom. While isolation, limited markets, frequent earthquakes and cyclones pose a threat to native Tongans, emigration has had a positive economic impact both on Tongan emigrants and native Tongans. Here are nine facts about Tongan emigrants you should know:

  1. Tonga has retained much of its heritage despite 70 years of British colonial rule. The country gained independence and became a member of the British Commonwealth in 1970. Immigration patterns have helped maintain Tongan culture overseas: Emigrants have brought their families abroad, resulting in high concentrations of Tongans in cities like Auckland, New Zealand or Oahu, Hawaii where Tongan language and customs are preserved.
  2. One of the first motivations for Tongans to emigrate was population growth. In 1976, Tonga’s population tripled what it had been in the 1930s. The country’s relatively little land combined with a potential food shortage and greater educational opportunity abroad drove most Tongan emigrants to New Zealand, Australia and the U.S.
  3. Many early Tongan emigrants converted to Mormonism. The Church of Latter Day Saints conducted extensive missionary efforts in Tonga, and converts were offered free plane tickets to the U.S. This led to the creation of one of the first Tongan-American communities in Salt Lake City, Utah.
  4. Today, half of roughly 216,000 Tongans live abroad.
  5. Thirty percent of Tonga’s GDP comes from remittances, or sums of money sent from Tongans abroad to their families at home. Remittances come in the form of cash as well as material goods such as appliances and clothing. They are essential to the Tongan economy as Tonga has few exports, there are few salaried jobs available to young adults and unemployment is common in rural areas.
  6. However, remittances do have their drawbacks—money flowing into the country has caused a spike in material consumption, which has in turn caused inflation.
  7. Even Tonga’s tourism industry is bolstered by Tongan emigrants. Large families who have moved away visit Tonga frequently and support the country’s economy by spending money at local businesses.
  8. The longevity of remittances as the basis of Tonga’s economy currently lies in doubt. As more Tongans are born abroad, some fear that young Tongans’ connections to their home country could be weaker and that remittances could diminish.
  9. Another factor that contributes to economic instability in Tonga is the common occurrence of natural disasters. Tonga is part of the “Ring of Fire,” an area prone to earthquakes and volcanic eruptions near the basin of the Pacific Ocean. In addition, Tonga’s tropical cyclone season takes place November through April, though cyclones can occur at any point during the year. The variety and frequency of natural disasters in Tonga could threaten Tonga’s agricultural export infrastructure.

While Tonga’s economy faces some challenges, the Tongan population has been steadily increasing for decades. Notably, the rate of population increase spiked from 0.35 percent in 2013 to 0.82 percent in 2017. Tongans born abroad will have complex and varied relationships to their native country as time goes on, but the fact their numbers are increasing suggests that Tonga will be able to count on its emigrants for remittances for years to come.

– Caroline Meyers
Photo: Flickr

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Why Is Bulgaria Poor?

Why Is Bulgaria Poor
The European Union is one of the largest single-market economies in the world. However, not all of its 27 countries are able to attain the economic prosperity of the wealthier member states. Bulgaria is one such country. While the EU average risk of poverty is 23 percent, more than 41 percent of Bulgarians find themselves falling into this category, making it the member state with the highest level of this risk. Across the country, almost 10 percent of the population is defined as extremely poor, i.e. living with an income lower than 40 percent of that of the average member of the middle class. While other EU members thrive inside the single market, a question that needs to be asked is this: why is Bulgaria poor?

Perhaps the largest contributor to poverty in Bulgaria is the impact of the 2008 financial crisis on the country. In years prior, Bulgaria had experienced rapid growth. However, like many EU members, this reversed following the crash. In real terms, the economy contracted by 5.5 percent in 2009 primarily due to a decline in foreign direct investment and international trade. Since then, growth has not returned to previous levels, with 2011 figures showing GDP growth to be 1.7 percent. This is far lower than the 6.2 percent growth rate witnessed in 2008.

This lack of growth has negatively impacted wages, with the average annual wage in Bulgaria easily the lowest in the EU at the equivalent of just under 2,000 euros. Around 1.5 million people live on less than 60 percent of the average wage, limiting spending power and leading to further potential issues.

One of these issues is unemployment, with Bulgaria’s unemployment rate standing at 10.8 percent, a full percentage point higher than the EU average. The low wages offered through employment are part of this issue, with people lacking the incentive to work since they are able to receive similar incomes through unemployment benefits. Similarly, the financial crisis has enhanced this issue, with unemployment significantly increasing to current levels from 5.6 percent in 2008. With this being the case, many suggest unemployment as one of the primary reasons for Bulgaria’s high levels of poverty.

There seems to be little progress in assisting those in poverty in Bulgaria. Existing policies are criticised for being unreliable and unable to truly address the problems that the poor of the country face. Additionally, it is estimated that, of the poorest 20 percent of households, such policies impact less than half. Policy focused on growth appears to have failed as well and, despite funding from the EU, increases in employment, income and social inclusion have been minute.

The situation in Bulgaria appears bleak and, without significant policy change at a national level, little will change going forward. Decision makers must investigate ways to increase wages, growth and employment opportunities, while simultaneously providing sufficient aid to those in poverty. While this may be difficult, “why is Bulgaria poor?” should no longer be the primary question; rather, we should be asking about potential solutions.

– Gavin Callander

Photo: Flickr

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5 Things to Know About Poverty in Czech Republic

Poverty in Czech RepublicIncome poverty in Czech Republic is found predominantly among the unemployed, but can also be found in different aspects of the region including the working poor, which make up a small percentage of the population. People may also be at risk of poverty by social policy tools and low median wages. Over the years, though, the risk has become less likely and there have been small successes for the region. Some things to know about poverty in the Czech Republic include:

  1. The risk of poverty in Czech Republic reduced after the country joined the EU. Also as a result, Czech Republic now has the lowest poverty rates in the EU. Although salaries have gone up, so too have expenses, and so about 1.5 million people live on or below the poverty line. But thankfully, the overall percentage has gone down slightly compared to the past year.
  2. The Czech Republic is a developed country with a high-income economy. Its economy revolves around its employment rate, which the region is adamant on maintaining.
  3. With the pressure on public funds, Czech Republic‘s focus has been on increasing employment levels rather than supporting the working poor. As a result, the region has one of the lowest unemployment rates of 5.2 percent as of 2016.
  4. Three percent of the working population is the working poor. Czech Republic has the lowest minimum wage based on the median national wage, and legislation of minimum wages prevent related issues of poverty.
  5. The country has a prosperous market economy with one of the highest GDP growth rates. Its exports largely consist of automobiles that comprise some 80 percent of GDP.

There have been actions taken to reduce the possibility of the recession on the working poor — that is, maintaining employment levels that support the economy. Although there is no set result on this concept, the goal of reducing poverty in Czech Republic is ever-present in the country.

– Brandi Gomez

Photo: Flickr

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Why is Botswana Poor?

Why Botswana is PoorBotswana, located directly north of South Africa, is slightly smaller in size than Texas and has a population size of about 2.2 million. From 1867 to 1966, Botswana was under the rule of Great Britain, which limited its economic growth, as Britain used Botswana for its benefit. Nowadays, though, why is Botswana poor?

After achieving independence in 1966, Botswana saw its economy boom, in part due to the discovery of diamonds within its borders. Previously, Botswana had been one of the poorest countries in Africa, but it has continually grown economically, with an average GDP growth rate of 5 percent per annum in the last ten years.

Although Botswana has vastly improved since gaining independence, as is additionally supported by its dropped poverty rate from 50 percent in 1966 to 19 percent today, poverty is still a significant problem within Botswana. Focusing on rural areas where poverty is most present, one can find answers to the question “why is Botswana poor?”

Botswana has a lack of economic diversity; its two major sectors are the diamond industry and tourism. Rural subsistence farming and cattle raising account for an additional large portion of Botswana’s workforce. Botswana’s dependence on the diamond industry for economic growth creates economic instability.

The diamond industry accounts for 85 percent of Botswana’s export earnings. Dependency on diamonds, a luxury item, causes Botswana to be very vulnerable to economic downturns in developed countries, such as the 2008 recession. Economic growth has risen and fallen multiple times since the 2008 recession – most recently it grew 2.6 percent in 2016.

The diamond industry cannot support all of Botswana’s people, however, especially as it is mostly mechanized and therefore does not create a vast amount of jobs. Many Batswana survive through the agricultural industry, which is also unstable due to chronic droughts plaguing Botswana.

Why is Botswana poor? The years of 2015-2016 saw the worst drought to hit Botswana in 34 years. Many groundwater sources went dry, and dams fell to below 20 percent of their capacity. Unstable agricultural conditions in a country where nearly half (48.5 percent) of land is for agricultural use, contribute to poverty.

Another major reason why Botswana is poor is the intensity of HIV/AIDS within its borders. Although Botswana no longer ranks as the country with the highest rate of HIV/AIDS infection in the world, it is third-highest, with an adult prevalence rate of 21.9 percent. The HIV/AIDS epidemic is hugely detrimental to society and the economy.

A high prevalence of HIV/AIDS creates a diminished workforce and poses problems for employers that need to provide healthcare and death benefits. It also increases the gap between wealthy and poor within Botswana, as more affluent individuals and families are better equipped to pay for health expenditures and financially cope with the loss of a family member than an impoverished family.

– Mary Kate Luft

Photo: Flickr

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Human Rights in Montenegro Have Room for Improvement

Human Rights in MontenegroMontenegro, which declared its independence from the State Union of Serbia and Montenegro on June 3, 2006, is classified as an upper middle-income economy by the World Bank. Overall, the state of human rights in Montenegro seems to be better than that of other countries in the developing world. This being said, there is also still work to be done.

One of the areas in which human rights in Montenegro are relatively well protected is political freedom. Montenegro is a mixed parliamentary and presidential republic with a multiparty political system, in which the voters elect both the president and the unicameral parliament through popular elections. According to a preliminary report published by the observation mission of the Organization for Security and Cooperation in Europe’s Office for Democratic Institutions and Human Rights (OSCE/ODIHR), the elections held on October 16, 2016 were conducted in a competitive environment, and the fundamental freedoms of voters were generally respected. The Montenegro Human Rights Report, published by the U.S. State Department in 2016, also stated that there were no reports of the government’s involvement in arbitrary or illicit killings, and no reports of politically motivated disappearances.

However, some problems still remain unresolved, especially those involving restrictions on the freedom of press. For example, On October 22, 2015, a freelance journalist named Jovo Martinovic was arrested on suspicion of involvement in a drug-trafficking scheme. Many have voiced concerns that the evidence against Martinovic offered by the deputy special prosecutor is weak at best. Moreover, the journalist has contended from the beginning of his detention that the only reason he spent time with the criminal group was to fulfill his duties as an investigative journalist. This incident has clearly illustrated the Montenegro authorities’ lack of respect for media freedom.

Other reported problems in human rights in Montenegro include corruption and lack of transparency in government, impunity for war crime, and violations of the right to peaceful assembly. Whether the country will be able to achieve noticeable improvement in these areas still remains to be seen.

– Minh Joo Yi

Photo: Flickr

How to Help People in Bahrain

How to Help People in BahrainBahrain was predicted to have a significant amount of fiscal debts in coming years in July 2016. The debt of Bahrain’s government was expected to rise from 44 percent in GDP (gross domestic product) in 2014, to 83.7 percent in 2016. The answer to how to help people in Bahrain is to prevent such predictions from coming true, and solutions can be seen through the country’s recent opportunities.

The Economic Development Board characterizes Bahrain as a “legislative sector” and “strong financial system,” — a standing which attracts investors. Bahrain is also able to transfer profits, funds and capital without restrictions. Bahrain’s free and open economic policy has given its country the reputation of a fast-growing financial center in the Middle East.

As for Bahrain’s labor productivity rate, the country has seen only a 17 percent increase in this sector over the past 25 years. Compared to countries with labor productivity rate increases of 21 percent, Bahrain’s rate is relatively small. Bahrain also increased its employment rates by offering jobs to citizens in the country’s public sector. However, the jobs were low-wage, causing Bahrain to face a shortage of quality employment.

Hamad bin Isa Al Khalifa (Bahrain’s king in 2008) launched a development program called Vision 2030 to improve Bahrain’s economy. The program aimed for more Bahraini families to have twice as much disposable income by 2030. Less than a decade after Vision 2030’s launch, Bahrain’s economy has grown by 28 percent, and from 2009 to 2014 international investments into Bahrain have risen threefold.

Infrastructure investments in Bahrain have helped the country boost its non-oil sector by 3.7 percent. The sectors that helped this growth were particularly strong in financial performance, social services and construction. Additionally, Bahrain’s volume of active projects doubled from $1.6 billion in the first quarter of 2016 to $3.2 billion in February 2017.

After a six-year absence from Bahrain, Ethiopian Airlines announced in July 2017 that it would resume its services to the country. Ethiopian Airlines will offer three flights per week between its base in Addis Ababa-Bole and Manama (Bahrain’s capital). The airline calls Bahrain a “centre of the main trade routes” with a decade’s worth of growing economy; this too shows how to help people in Bahrain.

Bahrain’s manufacturing sector accounts for 14.4 percent of the country’s GDP. Bahrain also has investment and international growth opportunities in the sub-sectors of food, industrials, and beverage (F&B) and fast-moving consumer goods (FMCG).

The country plans to invest $32 billion in infrastructure projects in the coming years as well. One-third of the expenses will go toward Bahrain’s manufacturing sector.

Bahrain also works to enhance infrastructure and create more attractions to increase tourism. Earlier this year, Bahrain held an event called “Shop Bahrain” that managed to attract 130,000 shoppers from Saudi Arabia, Kuwait and other neighboring Gulf states. More business coming to Bahrain could mean more job opportunities for Bahrain’s citizens.

With trade, tourism and Vision 2030, Bahrainis may have many economic opportunities to come. This could prove especially helpful for the four percent of unemployed Bahrainis. These opportunities and the efforts in place to help the country’s economy demonstrate feasible methods of how to help people in Bahrain.

– Rhondjé Singh Tanwar

Photo: Flickr

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Why is Burundi Poor?

Why is Burundi PoorBurundi is a small East African nation located near Rwanda. Unfortunately, 58 percent of the population is chronically malnourished. Only 28 percent are food secure. With a GDP per capita of $818, it is the third poorest nation in the world. How is this nation one of the hungriest in the world, and why is Burundi poor? There are several reasons Burundi is poor and hungry. Below are four.

1. Conflict

Burundi has been involved in a cycle of civil wars since they obtained independence from Belgium in 1962. The nation has recorded five episodes of civil war that have claimed more than 500,000 lives and have produced about a million refugees. Consequently, this cycle of war has created an extremely unstable political environment. What is more, the latest two civil wars—one from 1993-2005 and another in 2015 after the controversial reelection of President Pierre Nkurunziza for a third term on a technicality—further crippled Burundi’s economy.

Conflict hinders agriculture, the backbone of Burundi’s economy. In fact, 90 percent of the population depend on agriculture for their livelihood. Due to Burundi’s civil war, poverty increased from 48 to 67 percent of the population between 1994 and 2006. Rising food prices (including a 28 percent increase in 2007-08) affect families’ livelihoods and increase their susceptibility to repetitive natural threats. These threats include flooding, droughts, landslides and the impact of climate change.

War has also impeded manufacturing. For example, the 1993-2005 civil war caused manufacturing production to decline by an average of 13 percent per year between 1993 and 1997.

Finally, war economies are short-term oriented. Even when wars end, post-war economies must overcome a destroyed infrastructure, a devastated productive sector because of allocating resources to fund the war, lack of funds and a dearth of moral standards. These facts make it easier to understand why the rate of investment in the Burundian economy declined during the 1993-2005 civil war years. The rate of gross investment declined from 17.5 percent in 1990 to a mere 5.6 percent in 1998.

Why is Burundi poor? The continuous cycle of violence and war has been a major detriment to Burundi’s economy and has increased the amount of people in poverty in the country.

2. Inefficient Management of Public Finances and Resources by the State

The state of Burundi regularly interferes with the economy. It subsidizes fuel and rations subsidized electricity. The government also influences other prices through state-owned enterprises and agriculture-support programs. Economic freedom is not allowed, and this weakens entrepreneurial activity. The state also takes away private property from citizens.

Whys is Burundi poor? Poor economic planning and management from the government prevents economic growth.

3. Little Land to Support the Growing Population

Burundi is landlocked, and its population is continually increasing. Land is the greatest source of conflict in Burundi. The country is overpopulated and rural, so land is valuable because it is a source of agriculture. Land is a source of life and death. In fact, 89 percent of the population are subsistence farmers and depend on the land to grow food for their families.

In his study, “Why Has Burundi Grown So Slowly?” Janvier D. Nkurunziza cites a 1998 study from the Entequete Prioritaire (EP 1998) that stated the average farmer in rural areas of Burundi walked an average of one hour to get to the nearest marketplace, and it took them 30 minutes to get to the nearest grocery. In addition, there is only one market day per week in many rural areas, and there are no storage areas for perishable produce. Because of this, farmers have no incentive to create surplus. EP1998 data further shows that Burundian producers consume on average 64 percent of their own food produce. The farmers farm to survive, not to grow wealth.

Why is Burundi poor? With a fast-growing population and too little land to house them all, resources and livelihoods are more difficult to acquire and improve.

4. Droughts and Other Natural Disasters

Burundi has suffered from an unusually high number of natural disasters. Droughts, torrential rain, floods and hailstorms have been particularly destructive in recent years. Disasters have contributed to the displacement of communities; the destruction of homes; the disruption of livelihoods and the further decline in food and nutrition security.

Other effects of the disasters include decreases in land productivity and an increase in crop pests. Regions affected by recent natural disasters are also at risk for permanent food insecurity and weak nutritional conditions. Overcrowded areas (about 270 inhabitants per km2, and up to 400 per km2 in the most densely populated areas) have also contributed to greater food and resource scarcity in affected areas.

Why is Burundi poor? Natural disasters through an already impoverished nation into a state of crisis, causing food shortages and displacement.

The history of conflict and leadership in Burundi has had long term consequences for the state of poverty in the country today. The recent decision by several western countries to discontinue aid to Burundi to compel its state to genuinely reform systemic issues that contribute to conflict is not helping poverty in the interim. However, humanitarian aid programs such as the World Food Programme (WFP) and UNICEF offer hope that someday, the Burundian people will overcome the perpetual cycle of poverty through compassion and help from their fellow man. Burundi has a long journey ahead on the path to reform. Understanding its history helps answer the question: why is Burundi poor?

– Jeanine Thomas

Photo: Flickr

Poverty in Romania on the Decline Despite the Odds

Poverty in RomaniaSituated on the Black Sea, Romania is the largest of the Balkan countries. Romania has a population of 21.4 million, one of the biggest in the EU. Unfortunately, poverty in Romania exists at one of the highest rates in the EU as well.

Poverty in Romania is stunning and widespread, affecting millions of people. Two measures of poverty in Romania are relative poverty and absolute poverty. Relative poverty is the number of citizens whose disposable income is lower than 60 percent of the population’s median income. In 2014, Romania ranked first in the EU for highest relative poverty rate, with 25 percent of its citizens facing relative poverty.

Absolute poverty is the lack of basic human needs such as food, safe drinking water, shelter, health, education, facilities and access to services. In 2000, the rate of absolute poverty in Romania was 35.9 percent and dropped to 13.8 percent in just six years, showing that progress has indeed been made in the country.

Several populations in Romania are vulnerable to poverty. More than 50 percent of children in Romania are at risk for poverty. This statistic places Romania as the country in the EU with the greatest risk of children facing poverty. Poverty in Romania is also at its highest in rural areas, where 45 percent of the population lives. This is the highest population in the EU to live in rural areas in a given country. The majority of Romanians who live in rural areas are subsistence farmers or unemployed rural workers, which is why 70 percent of the rural population in Romania lives in poverty. Finally, the populations most susceptible to poverty in terms of households are single persons, single parent families, families with three or more children and single people over the age of 65.

Romania’s history and changing governments affected change in poverty levels. After World War II, Romania became a socialist state in a communist regime, which entailed widespread social welfare. In 1990, right before the fall of communism, the poverty level in Romania was only seven percent. After the fall of communism in 1990, however, generalized social welfare was reduced.

Other causes of poverty in Romania include poor infrastructure, which affects everything from schools to medical centers. Regarding widespread rural poverty, there are more employment and educational opportunities in urban areas, as more money is invested in urban areas. Romania also suffers the consequences of bad foreign exchange rates as it does not use the euro and five to six percent of its GDP comes from remittances.

Progress has been made in decreasing poverty and growing a successful economy. Romania joined NATO in 2004 and joined the EU in 2007. Romania has enjoyed significant economic growth from 2013 to 2016 as a result of industrial exports, optimal agriculture harvests and trade within the EU.

Social welfare also benefits many poor Romanians. Today, social welfare is divided into multiple categories. Some benefits of Romania’s current social welfare system include free maternity care, an allowance for children and mothers, free education, subsidies for heat and electricity, unemployment aid and pension. It is important to note that certain benefits vary depending on the case.

The rate of poverty in Romania is very high for a country in the EU, but Romania continues to make progress in reducing poverty rates, providing social welfare and stabilizing its economy.

– Christiana Lano

Photo: Flickr