Archive for category: Economy

Information and stories about economy.

,

What Is the Poverty Rate in Cuba? Difficulties in Narrowing Down

What Is the Poverty Rate in CubaWhat is the poverty rate in Cuba? Because of the country’s socialist economy and the government’s lack of published data, this is not an easy question to answer. Estimates range from claiming five percent to twenty-six percent of the Cuban population lives in poverty. What is clear is that poverty in Cuba has lessened since the devastating Special Period in the 1990s.

But how much have the country and individual Cubans recovered? There are many factors to consider when trying to determine what is the poverty rate in Cuba.

At first glance, it may appear that at least two-thirds of the Cuban population currently live in poverty. The state salary is a mere $20 per month, well below the international poverty line of $2 per day. But this figure does not account for the free social services all Cubans enjoy nor other important sources of income, such as remittances from abroad.

Plus, since the 1990s a small private sector has blossomed in Cuba, and as of 2016 it employed one-third of the Cuban workforce.

There are a number of factors beyond income levels and the poverty line that help inform a conception of poverty in modern Cuba. Cuba scores well in many categories traditionally considered characteristics of “the middle class.” These include education, female participation in the workforce, low fertility rates, home ownership and enrollment in social services.

Based on Cuba’s impressive statistics when it comes to these general indicators of economic security, Cuba could be considered a middle class society.

While the majority of the Cuban population could be counted below the international poverty line according to conventional means, Cubans do not suffer from many of the issues that plague low-income societies. But poverty in Cuba does create many daily struggles that cast a shadow on Cubans’ access to free healthcare and education.

For instance, while Cuba has an impressive homeownership rate of 85 percent, most buildings are in such disrepair that they suffer daily losses of electricity and even frequent collapses. Basic consumer goods, a traditional hallmark of middle class societies, are nearly impossible for most Cubans to acquire. The population counts 11 million people, yet only 173,000 cars.

Cubans enjoy certain measures of economic security, but they also suffer shortages of everything from transportation, to food, to internet access.

What is the poverty rate in Cuba? It is hard to narrow down to a single number. But one important factor to consider for the future of the Cuban people is the new U.S. restrictions announced in June. The renewed regulations on travel to Cuba are likely to hurt the tourism industry, the number-one employer of private entrepreneurs. And the new rules against trade with the Cuban government will also further limit the accessibility of goods in Cuba.

Without political outreach from American citizens, the enigmatic Cuban poverty rate may start increasing.

– Bret Anne Serbin

Photo: Flickr

,

Malaysian Government Stifles Poverty

Malaysian GovernmentMalaysia is currently on the rise as far as its economy. The country is now considered an upper-middle income economy that has become a leading exporter of electronic appliances, electronic parts and components, palm oil and natural gas.

Malaysia has been successful in eradicating most poverty in the country with less than 1 percent of households living in extreme poverty. The states of Penang, Selangor, Malacca and the federal territories showed marked improvements in 2012 with no extreme poverty in these regions.

“This is proof that the Federal Government’s initiatives to eradicate poverty have succeeded and been of benefit to the rakyat regardless of differences in political ideology,” Malaysia’s economic planning minister Tan Sri Nor Mohamed Yakcop said.

The Malaysian government has done an admirable job of exceeding the Millennium Development Goals which were introduced in 1990. Malaysia succeeded in halving the number of people living on less than a dollar a day much before the 2015 expectant date.

“This is a result of rapid economic development and the effectiveness of poverty eradication programs carried out by the government,” Yakcop said.

According to the Malaysian government, fewer than 110,000 people were living in poverty and that the poverty statistics had nearly been halved within the span of three years. According to this information, the overall poverty rate in Malaysia dropped to 1.7 percent in 2012 which is a significant change compared to the 3.8% in 2009.

The fall in poverty rates was felt in both urban and rural areas. In urban areas, the number of impoverished people fell to just 1 percent in 2012 compared to 1.7 percent in 2009. In rural areas, the numbers were staggering. Poverty rates dropped from 8.4 percent in 2009 to 3.4 percent in 2012.

The focus of the Malaysian government has shifted toward the well-being of “the bottom 40” or poorest 40 percent of the population. Between From 2014 the average household of “the bottom 40” grew at 11.9 percent a year compared to 7.9 percent from 2009 for the total population.

Income inequality still remains a major issue in Malaysia compared to other East Asian countries but the disparity is gradually declining. According to its Gini coefficient, a measurement of income inequality where 0 and 1 indicates perfect inequality, Malaysia scored around 0.49, one of the highest in the region.

Though Malaysia still has some significant work to do as long as income equality, state programs have been put in place to alleviate much of the disparity. With the help of its own government, Malaysia stands as a significant example of a success in the region.

– Drew Hazzard

Photo: Flickr

,

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

,

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

,

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

,

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

,

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

, ,

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

,

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