Archive for category: Economy

Information and stories about economy.

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Local Groups Develop Solutions to Combat Poverty in Italy

Poverty In Italy

Causes of Poverty in Italy

Poverty in Italy is on the rise as millions of Italians are unable to heat their homes and afford basic necessities. A recession, soaring unemployment and an increasing migrant population are the biggest contributors so far. In light of these conditions, Italians are working together to reduce poverty rates.

A post-war recession caused the number of people living in absolute and relative poverty to jump in 2012; southern regions were hit especially hard. Italy’s unemployment rate, like its economy, is slow to recover. Despite living in the third-largest economy in the eurozone, youths between 15-24 years of age are hit the hardest as approximately 40% are unemployed.

The Group of the Party of European Socialists (PES Group) in the Committee of the Regions (CoR) hopes to address this issue through the Giovanisi project in Tuscany. This project, which draws support from the European Union’s Structural Fund, includes initiatives to promote a right to study, vocational skills, entrepreneurship, support for housing and independent living as well as services related to well-being in the community.

Food Security

Food security is also an issue for many citizens. Of the 8.6 million impoverished people in Italy, about 16.6% of families live in poverty and cannot afford healthy meals. As a result, a family may go without meat once every two days. According to the Associated Press, Italy’s highest court ruled that stealing small amounts of food is no longer illegal for the country’s destitute and starving in May 2016.

Pope Francis recently visited the United Nations World Food Program (WFP) to address the need to end hunger. The pope called on U.N. member states to strengthen their commitment to serving and cooperating with WFP. “In this way, the World Food Program will not only be able to respond to emergencies but also implement sound and consistent projects and promote long-term development programs, as requested by each of the governments and in keeping with the needs of their peoples,” said the pope. Despite the lack of food security in Italy, the European nation was one of the top 25 donors to the WFP in 2015.

Migration into Italy

Italy has also seen a spike in the number of migrants. According to the Telegraph, “There are more than 130,000 migrants living in reception centers in Italy, waiting to hear if they will be granted asylum or expelled.” However, migrants have played a role in aiding police officers in the town of Caltanissetta, Sicily. According to The Local, officers struggled with providing support to the thousands of foreign visitors and migrants that pass through each year. Police Chief Diego Peruga approached the city’s mayor, Giovanni Ruvolo, about getting lessons for his officers. Ruvolo thought it would be beneficial if some of the city’s asylum seekers could teach a 30-hour basic English course for the police force; the asylum seekers were happy to volunteer as teachers. “It also provides them with the opportunity to give something back to the town which has welcomed them with open arms,” said Ruvolo.

There is still much work to be done to alleviate poverty in Italy — changes in the economy and unemployment cannot happen overnight. Thanks to these initiatives the country is getting on the right track.

– Veronica Ung-Kono

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The Benefits of Conditional Cash Transfers in Latin America

Conditional Cash TransfersIn development assistance, there is always a hand that gives and a hand that takes away. Policymakers now face the fact that up to 20% of foreign aid administered by NGOs and government agencies can end up in the hands of corrupt local leaders. However, conditional cash transfers may be the solution.

A recent report by the Inter-American Development Bank suggests that conditional cash transfers offer a way out of this dilemma. This form of foreign aid offers cash grants to citizens in exchange for compliance. This could mean enrolling their children in school, completing regular medical exams, or attending job skills training.

In Latin America, where youth unemployment hovers around 14%, this means lower risks of radicalization. Roughly 60% of the young adults in this region work in the informal sector, where there are markedly low wages, no benefits and job insecurity.

When this occurs, many of those who might have been productive citizens turn to more lucrative (and illegal) activities. And so the conditions for terrorism flourish.

Conditional cash transfers (CCTs) for the poor in Latin America have posted consistent gains over the past 15 years. They provide money for nearly 129 million individuals of working and post-working age. In addition, some of the countries suffering from the harshest degrees of poverty are taking advantage.

UNICEF reports from 2008 found that in Paraguay, CCTs increased household per capita income by 31% while reducing food expenditure by four percent.

Child school attendance also rose, as beneficiary families were able to save 20% more than without assistance. UNICEF also reports that families enjoyed seven percent greater access to credit. Finally, they invested 45% more in agricultural production.

These are significant results for a country tackling one of the most corrupt and poverty-stricken parts of the continent. Home to radical groups such as Hezbollah and al-Qaeda, the tri-border area—between Paraguay, Brazil and Argentina—is a perfect case for why the United States should ramp up its aid to Latin America.

The endemic poverty in this area allows one to bribe a local security agent for $35 ($15 for Paraguayan officers), buy an AK-47 for $375, or solicit women under 23 years of age for as little as $15.

In this sort of environment, traditional aid projects for nutrition or housing are less effective.

Researchers from Transparency International reveal that in areas like the tri-border, local leaders inflate the amount of requested aid, inviting speculation by gangs and smugglers.

Much of the aid is then misused: corrupt leaders sell food surpluses for personal profit, award housing contracts under threat. In addition, other goods (such as prescription drugs) enter the tri-border $1.5 billion black markets.

Conditional Cash Transfers offer immunity from these abuses by requiring greater accountability from both local leaders and the community. Because they are cash benefits, municipal officials are unable to divert goods as “losses” or favor particular groups.

Instead, they ensure that valuable U.S. aid reaches the hands of those who need it most—citizens doing their part to break the cycle of poverty.

– Alfredo Cumerma

Photo: Flickr

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Poverty in Russia: Unemployment is Low, but Poverty Remains High

Poverty in Russia
The Russian economy has taken more than its fair share of hits in recent years, with poverty in Russia affecting nearly 20 million Russian citizens.

The stagnation of Russia’s economy has its roots in the low oil prices in recent years, as well as sanctions imposed by the West. Russia produces the most crude oil in the world, and energy is by far Russia’s largest market. However, oil prices have dropped heavily since 2014, from around $100 per barrel to $50.

The effect on the Russian economy has been severe: the economy shrank 3.7 percent in 2015. The economic tightening has increased the inflation rate to 12.9 percent, reducing the purchasing power of Russian companies. This makes it significantly more difficult for other markets to fill the gap the declining oil industry has left.

The inflation rate also adds to the burdens of the working class, with rubles buying less nowadays than just a few years ago.

According to one Russian woman, “When you get home and unpack your shopping bag, you realize you have barely bought anything.”

Poverty in Russia is not located in large cities like Moscow and Saint Petersburg. The majority of Russia’s poor live in small, single-industry towns with declining populations.

The Kremlin itself, not exempt from the economic downturn, is currently operating at a severe budget deficit. This deficit makes it difficult for the Russian government to offer anything but lip service to the populace in regards to the decline.

Nonetheless, President Vladimir Putin’s approval ratings remain at an incredibly high 83 percent. Many Russians are faithful to Putin; when he took office in 2000, poverty was at a dangerously low 29 percent.

Furthermore, despite Russia’s current economic troubles, the country has seen significant economic improvement in the past 15 years.

Prior to 2014, Russia’s poverty rate had been dropping several percentage points every year since 2004. In addition, its GDP growth rate was on par with India until 2009.

Perhaps most encouraging is that despite the recession, Russia’s unemployment rate remains at a mere 6 percent. The low unemployment rate suggests that if oil prices stabilize, poverty in Russia will see a rapid decline.

– John English

Photo: Flickr

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Kenya: Model for African Nations in UN’s Blue Economy

Kenya_Economy“The New Frontier of African Renaissance” is the “blue economy,” according to the African Union. The United Nation’s Economic Commission for Africa (ECA) recently released a handbook on how Africa can make the most of its vast coastal and freshwater resources.

Out of 54 total countries in Africa, 38 are coastal, including the fastest growing economy on the continent, Kenya. Last year, Bloomberg ranked Kenya the third fastest growing economy in the world. The key to its success has been a strong blue exporting economy.

The backbone of Kenya’s private sector is its horticulture and tea industries, which are both export markets. Kenya not only produces the most black tea in the world, but it also exports the most. However, while neighboring nations like Tanzania produce more horticulture than Kenya, Kenya’s well-designed shipping infrastructure makes it a vastly superior exporter.

The economic trend visible in Kenya is that even when production is comparatively low, a streamlined exportation system can cause a big economic boom. The new handbook by the ECA explains how African nations can use their coastal status to promote long-term growth.

As in Kenya, the handbook emphasizes the blue economy involving shipping and other markets. The ECA calls for an update of maritime transportation to make Africa a center for global trade.

An overarching theme of the handbook is sustainability, particularly the use of hydroelectric power over petroleum or coal. As expected, Kenya mirrors the ECA’s suggestion, with 71 percent of national electricity coming from hydroelectric sources.

It will take a lot of work to make the handbook’s blue economy a reality. Countries with big shares of coastline like Eritrea and Somalia nonetheless trail far behind economically due to political instabilities in its region. Furthermore, the other African nation seeing major GDP growth, Nigeria, is heavily reliant on oil exports–the opposite of what the ECA suggests.

While the ECA cannot expect changes overnight, Executive Secretary Carlos Lopes is hopeful that Africa will benefit massively from a well run blue economy. According to Lopes, “If fully exploited and well managed, Africa’s Blue Economy can constitute a major source of wealth and catapult the continent’s fortunes.”

– John English

Photo: Flickr

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5 Things to Know About Poverty in Tajikistan

Poverty in Tajikistan

Poverty in Tajikistan remains a problem. Tajikistan is frequently cited as the poorest former Soviet republic, with one of the world’s lowest GDPs per capita (ranked 192). While it is a place that Americans do not hear about often, USAID has been busy in the country of just over eight million inhabitants for more than 20 years, almost as long as Tajikistan has been a sovereign nation.

 

Poverty in Tajikistan: Key Facts

 

1. Proportional to GDP, Tajikistan has one of the largest remittance economies in the world.

Due to a scarcity of secure employment opportunities, which contributes greatly to poverty in Tajikistan, more than one million Tajik citizens leave the country searching for work. The money that these Tajiks send home equals more than half of the entire country’s GDP. The vast majority of these migrants—90 percent—travel to Russia.

2. Poor infrastructure stagnates the Tajik economy.

Tajikistan is landlocked and sits in the northwestern Himalayas, one of the most mountainous regions on the planet, making transportation a challenge. Trade with other nations, which is important to the country’s economy, relies on a dilapidated railway system. The diminutive electricity market means energy infrastructure is also lacking. Power shortages and outages are rampant, especially during the winter.

The future for Tajikistan’s infrastructure may, however, be looking up due to foreign investment, which may alleviate some of the poverty in Tajikistan. Recently, Chinese investors funded new road construction in Dushanbe, the capital. Russia and Iran have also invested in hydroelectric plants, including a dam on the Vakhsh River that may become the world’s largest.

3. Tuberculosis is a growing public health problem.

Multi-drug resistant tuberculosis (MDR-TB) is disproportionately high in many central Asian countries, including Tajikistan. The country’s healthcare system is ill equipped to respond to this issue, lacking adequate information systems and human resources. Most funds for fighting TB come from international assistance.

MDR-TB is a complicated public health challenge, however, the World Health Organization (WHO) has partnered with the government and aid groups to improve and monitor Tajikistan’s ability to treat TB and stave off MDR-TB.

4. Most of the population does not have access to clean water.

Nearly 60 percent of Tajik citizens rely on unsanitary water supplies. Many depend on irrigation ditches for drinking water, meaning waterborne diseases are common. Diarrhea is the sixth leading cause of death in children under five.

While these statistics may seem bleak, water quality is a relatively straightforward issue to tackle. USAID has made notable strides in providing better access to clean water, one of its main focuses in Tajikistan. According to its website, USAID has “established 56 community-level water users’ associations,” helping the Tajik weather and water forecasting agency better manage the country’s vast supply of fresh water.

5. The civil war destroyed one out of five schools in the country.

Funding for education decreased drastically after Tajikistan became independent from the Soviet Union in 1992. The following five years of fighting destroyed or damaged a significant portion of the country’s schools. Naturally, such collateral destruction has contributed to the precarious state of the education system.

Since the fighting, the country has either struggled to or failed to revive school systems. According to the latest reports from UNICEF, schools are overcrowded, underfunded and understaffed, with many teachers working triple shifts. Furthermore, dropout rates are high, especially for girls.

The state of Tajikistan’s education system leaves much to be desired. However, organizations like USAID and UNICEF have partnered with the Tajik government. They are determined to nurture this fragile system to a point where it can sustain itself, mainly by focusing on preventing dropouts and improving equity and access.

In many ways, Tajikistan seems to lag behind its neighbors in the Central Asian region. With a strong memory of war and political upheaval, coupled with uncompromising geography, the country has struggled to develop.

But international aid organizations have shown great ambition and, partnered with the Tajik government, achieved tangible successes in reducing poverty in Tajikistan and its burdens. Likewise, international investment from the private sector suggests promise and hope for a society that has much to gain.

– Charlie Tomb

Photo: Pixabay

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8 Facts About Poverty in Jamaica

Poverty in Jamaica Poverty rate
Jamaica has struggled with poverty, unemployment and crime for the past half century, but the nation has recently seen ambitious government economic policies bear fruit. Discussed below are the leading facts about poverty in Jamaica and their implications.

8 Facts about Poverty in Jamaica

  1. Jamaica is not in extreme poverty and is regarded as a middle income country. For comparison, Jamaica has about 1/20th the GDP per capita of the United States, but a four-times-higher GDP per capita than the nearby country Haiti.
  2. Since the 1970s and 80s, Jamaica has experienced serious problems with poverty and unemployment. Through the 90s, unemployment remained around 15 percent, with poverty above 25 percent. The unemployment rate is currently 14 percent and poverty is 16 percent.
  3. A serious hindrance to Jamaica’s development has been slow rates of economic growth. In the past 30 years, Jamaica has had an average annual GDP growth rate of less than one percent. The slow growth rate is a major cause of persistent poverty in Jamaica.
  4. Relationships between Jamaican officials and crime groups cause widespread corruption, which results in many of Jamaica’s problems. The corruption not only hurts law abiding Jamaican citizens, but makes foreign investors far more hesitant to get involved in Jamaican industry.
  5. Public education in Jamaica is not entirely free. There is a registration fee and other school expenses that are not covered by the government. As a result, many of the nation’s most poor children are not able to attend school.
  6. Jamaica jumped 27 places in the 2015 Doing Business ranking, as the Jamaican government has improved its credit rating and decreased the national debt. It is hoped that the improved ranking will increase investment and alleviate poverty in Jamaica.
  7. The World Bank has a positive outlook for Jamaica’s economy, with forecasts of the country’s GDP growth rate climbing to over two percent in 2017.
  8. The Jamaican Government is currently working with the UNDP and the European Union to alleviate poverty on both a macro and micro level. Poverty alleviation and achievement of Millennium Development Goals remains a top priority for the Jamaican government.

Despite Jamaica’s history of poverty and some ongoing problems, economic forecasts for the country remain optimistic. It is possible that Jamaica will experience an economic resurgence and alleviate problems of unemployment and poverty in coming years.

– John English

Photo: Pixabay

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6 Facts about Poverty in South Africa

Poverty in South Africa

South Africa is a nation with a very deep and turbulent history. Since the official end of apartheid in 1994, the country has been struggling to combat entrenched poverty and inequalities. In order to further understand the issues, here are six facts about poverty in South Africa:

  1. South Africa is a middle-income nation with some highly developed economic sectors. For instance, South Africa’s stock exchange, JSE, is the largest in Africa and top 20 worldwide. Since 2000, South Africa has shown decreasing poverty and a decreasing wealth gap.
  2. The country nonetheless still suffers from serious poverty and unemployment, with 25 to 30 percent of the workforce unemployed. According to the U.S. government, around 36 percent of the population is living in poverty.
  3. The Statistics South Africa defines poverty with three categories: the food poverty line, the lower bound poverty line and the upper bound poverty line. About 20 percent of the population lives below the food poverty line, meaning they cannot afford food that meets a minimum calorie intake.
  4. South Africa’s poverty is rooted in economic disparities. Much of the nation’s wealth, as it is a moderately wealthy nation, is concentrated in the hands of few, particularly those who controlled wealth in apartheid times. Between 60 and 65 percent of the wealth in South Africa is concentrated in the hands of the wealthiest 10 percent of the nation. Comparatively, 40 to 45 percent of wealth in the U.S is controlled by the highest 10 percent.
  5. Poverty in South Africa has actually been declining since the mid 2000s. As a result of doubled per capita health spending and the building of 1.5 million free homes, among other government initiatives, over 2 million South Africans have climbed out of extreme poverty since 2006.
  6. In addition to the increased government spending, the United Nations Development Program has been working with the South African agencies to redress South Africans who were forced off of their land during apartheid. This land restitution initiative will help decrease South Africa’s wealth gap.

While poverty in South Africa is still a large problem, the recent government and international initiatives have had a dramatic effect on poverty reduction and economic redistribution.

– John English

Photo: Flickr

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What Everyone Should Know About Poverty in Egypt

Poverty in Egypt
For years, poverty in Egypt has been no anomaly. Over a quarter of the population lives below the national poverty line, and many have found it difficult to secure work in a turbulent economy.

From 1995 to 2000, poverty in Egypt began to recede. The percentage of the population living under the national poverty line decreased from 23% to under 17%. However, progress began to reverse itself. In 2010, over 25% of the population was living under the national poverty line.

This rate has failed to drop since the Arab spring in 2011.

However, the Egyptian government and various international organizations have not been idle in addressing this problem. In recent years, millions of dollars have been donated to instill sustainable growth and development and to chip away at the current percentage of those living in poverty.

The United Nations Development Programme (UNDP) is at the forefront of international organizations helping Egypt achieve economic stability and poverty reduction. It has created a plan called the UNDP Strategic Plan 2014–2017 for Egypt. The plan prioritizes the elimination of poverty in Egypt.

UNDP’s strategies are wide-ranging and beginning to gain a great deal of traction due to Egypt’s recent governmental transition.

Human development, gender equality, environmental development, transparency and sustainable development are some of the many focuses that the UNDP has for the Egyptian people in an effort to make them self-sufficient in the long term.

The Egypt Network for Integrated Development (ENID) is a pilot program the UNDP is testing in Egypt. The premise of the program is to empower individuals in rural areas by upgrading public services and providing more efficient agricultural and off-farm occupations.

Through these efforts, people can build and grow their own businesses. This will promote sustainable economic growth and development in these areas long after ENID discontinues aid.

ENID has given a special focus to women through the course of its debut. Seventy percent of the 573 individuals employed by ENID’s activities between 2012 and 2014 were women.

Outside rural areas, the UNDP is also creating jobs in the most impoverished govern-orates for young men and women. The majority of these new jobs are for women.

These programs are working wonders among the Egyptian people, but unfortunately they are not free to operate. The Egyptian Government foots the bill of the majority of these programs, followed by Japan and a collection of European states and organizations. The total amount of contributions from these organizations is just over $280 million USD. In a country of nearly 90 million residents, this amounts to roughly $3 per person.

Tackling Poverty in Egypt

Despite great progress towards poverty reduction in Egypt, there must be bigger changes. Just recently, Egyptian President Abdel Fattah El Sisi emphasized the need for foreign investment in large and small Egyptian enterprises. President Sisi pointed out that the government has made stellar improvements to the national infrastructure, but it still needs aid in developing businesses to use these new resources effectively.

By 2030, Egypt hopes to be well on its way toward sustainable development and a transparent governmental system. Though the country still needs help to develop its domestic affairs, many are optimistic that Egypt will be able to stand on its own within a decade.

– Preston Rust

Photo: Flickr

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Poverty in Iceland Drops as Tourism Rises

Poverty in Iceland
According to the Organisation for Economic Cooperation and Development’s (OECD) Better Life Index, Iceland‘s quality of life is very high. The country also has the highest employment rate of any OECD country. Simultaneously, however, poverty in Iceland affects 6,000 residents.
According to the Iceland Review, as of early 2015, around 9 percent of the population in the small country of Iceland fell into the low-income category. Recently, that number is steadily dropping thanks to a booming tourism industry. In 2011, upwards of 13 percent of the population fell below the poverty line.

 

Tourism Fights Poverty in Iceland

 

The 2008 financial crisis took a major toll on Iceland’s economy, leading to homelessness and unemployment. As a result, a Welfare Watch was created the following year in order to help alleviate these conditions.

In addition, the recent popularity of Iceland as a tourist destination has helped bounce the economy back towards its former financial success. The growing tourism industry has also created many new jobs for Icelandic residents. Unemployment rates have fallen and 45 percent of the jobs created within the past five years are related to the tourism industry.

There is no rest for the tourists — rental cars and lodgings are rapidly booked, even during the coldest months of the year, and Airbnb locations are second only to increasingly booked hotels. However, a host told Grapevine that he does not believe that even Airbnbs (in combination with traditional lodging vacancies) can meet the high demand.

The Icelandic bank, Islandsbanki’s projected future tourism rates estimate that in 2016 alone visitors will equal, or surpass, the number of people who live full-time in the island nation. Iceland’s growing fame has been attributed to volcanoes, inexpensive flights and layovers through Icelandair, as well as pop culture references like Game of Thrones.

Although many Icelanders are rejoicing at the tourism industry’s success, others are still wary of the future. The waterfalls and volcanoes of Iceland are major tourist honeypots, but increased crowding to these areas may be dangerous to both the environment and its visitors.

In the future, tourists may be discouraged to visit Iceland if the Icelandic Krona appreciates, causing prices to rise, or if the economy takes another hit.

There is also the fear that Iceland may lose part of its charm and culture as foreigners flock in. This is a trade-off for alleviating poverty in Iceland. Iceland is in need of money and, in the words of Bradley Turner of Grapevine, “The market doesn’t care much for memory, nostalgia, sentimentality, history.”

Poverty in Iceland continues to decline as a result of increasing visitors, but financial security comes at a price. Ironically, the Icelandic landscape and culture may be negatively affected by the country’s newfound popularity.

– Carrie Robinson

Photo: Flickr

International Companies Bring Cheap Solar Power to Zambia

Cheap Solar Power to Zambia
The World Bank has enabled three companies—First Solar Inc. from the U.S., Neoen SAS from France and Enel SA from Italy—to provide the cheapest solar power on the entire African continent to Zambia.

First Solar Inc. and Neoen SAS will jointly provide electricity to Zambian homes for 6.02 cents per kilowatt-hour, while Enel SA will be selling electricity for 7.84 cents per kilowatt-hour.

Through financial services as well as insurance and advisory roles, the World Bank, International Finance Corp. and the Multilateral Investment Guarantee Agency have created a sustainable energy movement through the Scaling Solar program. In addition, these groups are also investing in solar power for other sub-Saharan countries, such as Madagascar and Senegal.

This comes at a time in which renewable energy markets are emerging all over the world and becoming increasingly important. Investing in these companies and projects will allow electricity to expand to homes across the globe. As individuals who can afford it begin to purchase electricity, they will join the international market as new consumers of power.

Set for construction in the capital city of Lusaka, the private companies plan to complete their projects by mid-2017. They will work with local Zambian organizations, such as ZESCO, the state-run utility mogul, to ensure seamless operative standards between these international powers.

In recent years, the South African region has shown economic promise. Debt levels across the entire continent remain low and there is a set spending cap in the region. Consequently, these fiscal improvements have yielded an environment in which projects like cheap solar power can flourish.

Investing in countries stricken by poverty is an ideal way to receive a return on investment in U.S. companies, as citizens of those regions become future consumers of U.S. goods and services as they escape the cycle of poverty.

In the quest to intersect sustainability and capitalist ventures, bringing cheap solar power to Zambia—and hopefully to the rest of the continent—is a step in the right direction.

– Connor Borden

Photo: Greentechlead