Archive for category: Economy

Information and stories about economy.

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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

Namibian First Lady Launches ‘One Economy’ Foundation

Namibia_Economy
The First Lady of Namibia, Monica Geingos, established the One Economy Foundation in May of this year. The organization’s slogan, “one Namibia, one Economy,” describes its plans to bridge the gap between formal and informal entrepreneurship in the African nation.

Namibia’s economy has been improving recently, with Bloomberg calling it the top emerging economy in Africa in 2012. However, informal entrepreneurship (unregulated, untaxed commerce operating without contracts or laws) continues to inhibit the country’s growth potential.

According to the Namibian Statistics Agency, the country’s unemployment rate stood at 27.4 percent in 2012. Many of the unemployed opt to work informally, due to significant barriers to entry in Namibia’s formal economy. However, informal work offers little in terms of long-term growth at the individual and national level. This is the problem the One Economy foundation wishes to address.

The One Economy Foundation will focus on entrepreneurship, early childhood development and health. The most crucial components are professional economic coaching and collateral-free lending. These strategies will help young Namibians—particularly those without preexisting connections to the nation’s high-powered financial sector—get a foot in the door.

According to Geingos, “One Economy is about providing fair opportunity. It’s about providing people with talent with opportunity.” She went on to explain that the need for the One Economy Foundation exists at both ends of Namibian commerce, as many enterprising Namibian bankers need the means to tap into the population of informal workers.

Prior to her involvement in the state, Geingos was one of the key figures in Namibia’s growing economy, possessing major holdings in Namibian mining, banking and media corporations. Her most recent endeavors, as a member of the Economic Advisory Council and First Lady, have been part of a larger effort in Namibia’s war on poverty.

The First Lady’s husband, President Hage Giengob, has also made poverty his focus in recent years. Despite a report in the Journal of Economic Structures stating that Namibia has “one of the most unequal income distributions on the African continent,” the President and First Lady remain hopeful that the nation’s wealth can be redistributed to address the nation’s poor.

Late last year, the president declared an “all-out war on poverty,” after receiving an impressive 87 percent of votes in the Namibian general election.

One Economy has already raised over N$4.5 million for implementation later this year.

– John English

Photo: Flickr

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Brexit Implications: How Will Africa Fare?

Brexit_Implications
People across all nations are asking about the impact of Brexit on the world, but only a few are asking the very important question of, “What will be Brexit’s impact on Africa?” As powerful countries such as the U.S. and Germany wait anxiously for the final vote count, anticipating possible financial fallout, the third world has much larger concerns, especially Africa.

Brexit Implications on Africa: Humanitarian, Political and Economic

Whether or not there will be a recession in Britain following the country’s exit from the EU is unclear, but what is certain is that if an economic crisis does occur, Africa will be hit hard.

Great Britain has long been a strong trading ally for Africa, and according to The Chicago Tribune, the European Union has preferential trade agreements with every African country except for Libya and South Sudan.

Due to the Brexit, British officials will now have to rewrite many of their trade agreements with African nations, which will take extensive time and manpower. However, this could prove to be fruitful for Africa, as strict regulations such as the Common Agricultural Policy — set in place by the EU will no longer apply to trade legislation.

According to the European Commission, the Common Agricultural Policy is an EU initiative aimed at invigorating “agricultural productivity, so that consumers have a stable supply of healthy food”. Part of this policy grants subsidies to European farmers to promote sustainable agriculture and the growth of healthy food.

BBC reports that African farmers feel as though the subsidies attached to the Common Agricultural Policy “undermine the concept of a level playing field”. The U.K. agrees with their African allies and adamantly fought for policy reformation before their exit. Brexit’s impact on Africa will not only be economic, for it will also influence the political and humanitarian realm.

The U.K. and Aid to Africa

Prior to the U.K.’s decision to leave the European Union, it had incredible authority over the EU’s political and humanitarian initiatives in Africa.

The European Development Fund, according to the Chicago Tribune, is “the European Union’s main vehicle for providing development aid to Africa”. Britain was a leading voice in dictating the mission of the fund, as the third biggest contributor at 14 percent.

Even more impressive was the U.K.’s power over the African Peace Facility and its backing of the African Union Mission in Somalia. Britain made sure that the EU paid for 90 percent of the program, a 22,000-strong multinational force that protects the Somali Federal Government from the extremist militant group al-Shabab.

Before the Brexit, Britain was already beginning to lose their battle over policy in Somalia as the rest of the EU voted to pull some funding, hinting at a divided opinion about African aid.

The future of European policy in Africa is ambiguous, as one of the continent’s most passionate advocates is no longer a member of the EU. While this may seem like troubling news for Africa, the Brexit could turn out to be a blessing for the entire region.

The U.K. will no longer be held back by the EU’s restrictive guidelines as it applies to foreign policy and unless recession strikes Britain’s economy, it is likely that they will stay true to their promise of providing 0.7 percent of their gross national income to African aid.

– Liam Travers

Photo: Public Domain Images

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Five Ways the Marshall Islands Government is Staying Afloat

Marshall Islands

The Marshall Islands are two strings of atolls located in the North Pacific between Australia and the Hawaiian Islands. Their main exports are marine goods, coconut products, and handicrafts. Marshallese climate can be unpredictable, with climate change directly impacting the islands. In addition, securing sufficient sources for fresh water is a constant struggle. Because of these issues, many inhabitants of the islands live in poor circumstances, with bad health and little access to energy sources.

Since their year of independence in 1986, the Marshall Islands Government has been engaged in an uphill battle of physical, economic and environmental survival. Fortunately, there are a number of international lifeguards who are helping to keep the Marshallese government afloat.

The United States (U.S.)
One problem the Marshall Islands Government does not have to worry about is military security. Though it is a sovereign state, its military protection is provided by the U.S. But security is not the only service that the United States provides to the islands. The U.S. affords educational, medical and infrastructural aid, and donates funds in an effort to help the islands eventually attain economic self-sufficiency.

Roughly 50 percent of the revenue that the government obtains is gathered from foreign aid, and a large portion of this comes from U.S. coffers due to an agreement entitled the “Compact of Free Associations” which exists between the two nations.

Federal Emergency Management Agency (FEMA)
Though it is an entity within the structure of the United States government, FEMA merits particular mention. Operating under the supervision of the Department of Homeland Security, FEMA’s standard focus is the prevention, response and recovery from disasters that occur within U.S. borders. However, due to the Compact of Free Associations, the agency is also obliged to assist the Marshall Islands when disasters arise.

Just this year, the Marshall Islands have been experiencing one of the worst droughts in their nation’s history, collecting only a quarter of the rainfall that they typically obtain. On April 1st, Marshallese President Hilda Heine declared a state of emergency, and on April 28th FEMA announced that it has allotted federal disaster assistance to the Marshall Islands Government. Millions have been spent in past years on similar disasters.

Australia
The Marshall Island’s southern neighbor, Australia, is dedicated to supporting the islands in the economic and climatic issues. Between the Marshall Islands and two other North Pacific states, the Australian Government has pledged almost $10 million within the next fiscal year.

Australia’s goal is to increase access to water, sanitary facilities, and education. Additionally, Australia is helping to introduce a new public school system and spreading gender equality awareness throughout the islands. Many of these objectives have been reached through the sponsored delivery of water containers and the establishment of better education and scholarships to continue on to higher schooling.

The United Nations (U.N.)
The Marshall Islands and other low-lying countries are particularly susceptible an increase in global temperature.  It is projected that low-lying countries like the Marshal Islands will be submerged, or at least uninhabitable, if the global temperature rises just 2 degrees Celcius above pre-industrial levels.

In response to this dilemma, the U.N. has held multiple conferences over the last months in an effort to promote awareness and compliance to goals regarding carbon emissions. Just last month 175 countries were gathered in Paris to sign an agreement on the reduction of fossil fuel usage. The U.N. noted that this conference marked the largest number of countries to sign an international agreement at one time in the history of the world.

The Japan International Cooperation Agency (JICA)
A less recognized, but equally engaged organization is the Japan International Cooperation Agency. JICA focuses on what they call “inclusive development,” which emphasizes individual initiative in evaluating one’s own situation to improve it. JICA simply provides the resources necessary to carry out these improvements.

For the Marshall Islands, JICA is carrying out programs to improve waste control and worldwide education programs. JICA has been training volunteers to travel world-wide in an effort to address these issues, and in 2015 alone almost 3,500 volunteers traveled to the pacific to assist in humanitarian aid projects.

Despite the aid that these organizations are providing to the Marshall Islands, many inhabitants of the country live without the basic necessities of life. Further efforts are needed bring these individuals out of poverty. According to the World Bank, development must begin within the Marshall Islands Government. They commented, “The growth in the economy would be strengthened and sustained by the government’s commitment to reform.” The rest of us simply need to do our part.

– Preston Rust

Photo: Flickr

Why Vaccines are an Economic Investment

Vaccines_are_an_Economic_Investment
In addition to preventing serious illnesses, vaccines are an economic investment as they have the added bonus of saving money. As fewer people get sick, this reduces the need for complex and often long-term medical treatment which allows communities to save greatly.

Research from the Johns Hopkins Bloomberg School of Public Health, in addition to other studies, has shown that the returns on vaccines are 16 times the investment; that is to say, every dollar spent on vaccines, on average, saves sixteen dollars in future medical spending.

The journal Health Affairs, which published the Johns Hopkins study, noted that when other factors are considered beyond direct medical costs, such as time not taken off from work due to illness, the return rises to as high as $44 for every dollar spent.

While the economic benefits of vaccinations are great for every country, they especially matter in poor or developing countries, where funds are often stretched thin and accessing affordable health care can be difficult if not impossible.

The World Health Organization estimates that malaria costs Sub-Saharan Africa $100 billion every year. In a region plagued by poverty, that is too much money for countries to be spending on preventable diseases.

Vaccines show that when we invest in prevention, we can make huge savings on treatment. In turn, the money that would be spent treating preventable diseases can go to other places, such as to education, poverty reduction schemes or energy programs.

Vaccines are an economic investment that not only save lives, but they also save money in so many ways, not just treatment costs.

When people are sick with a debilitating illness, not only do they spend money on treatment, they lose money when they cannot work resulting in a vicious cycle of economic hardship. Continued increased access to vaccines can help millions around the world.

– Emily Milakovic

Photo: U.N. Multimedia

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Five Ways Global Communities Fight Poverty in Ghana

Global Communities Poverty in Ghana
A non-profit organization called Global Communities works to end poverty in Ghana with a 5-point plan in conjunction with USAID’s Multi-Sectoral Nutrition Strategy.

The non-profit organization works in more than 20 countries around the world, with Ghana being a focus of the recent programs. Global Communities, created about 60 years ago, works with the private sector, governments and local communities to provide the “means and ability to live and prosper with dignity,” something it ensures under its organization’s vision.

The Maryland-based organization paired with USAID in support of the Multi-Sectoral Nutrition Strategy to be implemented over the years 2014-2025. The program’s goal seeks to reduce chronic malnutrition by 20 percent over those 11 years. Global Communities has put forth these five goals in hopes of accelerating the fight against malnutrition in Ghana.

1. Provide more opportunities for economic growth through microfinance

Individuals who do not have access to the capital provided by large financial services corporations can gain access to funds through various microfunding institutions. These smaller companies allow a more intimate relationship between the lender and the borrower. Global Communities works through Boafo Microfinance Services in order to provide low-income Ghanaians with the money for new businesses, education and homes.

2. Build a more “resilient” Ghana by improving the nutrition in local diets

In order to reach this goal, Global Communities has partnered with the USAID/Ghana Resiliency in Northern Ghana (RING) program to “reduce poverty and improve the nutritional status of vulnerable populations.” The introduction of the sweet potato in local Ghanaian farms was a successful implementation of the partnership. Both USAID and Global Communities hope to educate communities on the importance of good nutrition instead of just providing temporary relief.

3. Create pathways for urban youth to become financially independent

Global Communities has joined the Youth Inclusive Entrepreneurial Development Initiative For Employment in opening up the construction sector to Ghana’s youth. In five of the biggest cities in Ghana, the initiative hopes to “reach more than 23,000 youth” by teaching them the skills for employment. Because Africa’s youth makes up a majority of the population, targeting this demographic is the most effective way to reducing poverty in Ghana.

4. Improve access to clean water and sanitation

Working with both the public and private sector, Global Communities is working to enhance the current water and sanitation infrastructure. With focus on “slum communities” in three cities, the non-profit seeks to optimize every individual’s condition while constructing water and sanitation services that can be sustainable. These efforts are paired with USAID’s Water Access Sanitation and Hygiene for the Urban Poor (WASH-UP) and USAID’s WASH for Health (W4H). An important part of the relief is affecting a change in behavior which can help create a poverty-free society that operates without relief.

5. Upgrade local neighborhoods and reinforce political and social institutions

After the basic needs of food, water and shelter are met, a society can begin to upgrade its political, economic and social conditions. Global Communities, with the Bill & Melinda Gates SCALE-UP program, echoes this idea as it reinforces educational and financial institutions for residents in the low-income communities of Accra and Sekondi-Takoradi. The expansion of government services, such as female inclusivity and public transportation, in those regions is being implemented through the Our City, Our Say project.

Global Communities is just part of a larger non-profit coalition fighting against global poverty in Ghana. The process includes numerous programs with funding from various foreign governments, each generating results through their focus on different parts of the Ghanaian society. Readers can follow the various programs and outcomes on the Global Communities website.

– Jacob Hess

Sources: Global Communities 1, Global Communities 2, USAID 1, USAID 2
Photo: Borgen Project

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Emerge Poverty Free Enables Communities

Poverty FreeEmerge Poverty Free is a nonprofit organization whose mission is to break the cycle of poverty by enabling communities to take control of their own needs.

In partnership with a local organization, Sustainable Investments and Development Initiatives (SIDI), Emerge Poverty Free has begun a project in Mwanza, Tanzania to empower hundreds of fisher-women through economic and environmental conservation projects.

Tanzania is known as one of the world’s least developed rural countries, where 40 percent of the adult population earns less than 1.25 USD per day.

The goals of the Sustainable Fisheries in Mwanza project are to enable women to become self-sustainable while also improving the environment of Lake Victoria that is threatened by pollution and excessive fishing.

To reach these goals, 250 women from the Kabusuli village of the Sengerema District in Mwanza have been trained in fish farming and healthcare. The group hopes to plant 10,000 trees along the Lake Victoria shore at the end of the project.

These trees will eventually be used to provide local families with wood for cooking and building materials to reduce deforestation.

Though a fairly new project, Emerge Poverty Free reports that women involved in the group have already doubled their daily incomes by selling fish within their communities during the past 10 months.

According to Aneta Dodo, secretary of the Sustainable Fisheries in Mwanza, the group has planted 6,000 trees, created five fish ponds for domestic use and local sale that have brought high profits — and a portion of the money earned by these women funded school tuition for 30 local children.

“We have gained a lot of expertise in finance issues, fishing, environmental conservation and we are able to do most things by ourselves without having to depend on men,” she said.

Dodo reports that the group was able to secure low-interest rate loans after the group started a saving and credit facility in their village of Kabusuli.

Despite these successes, the women of Tanzania still face many economic challenges — girls have higher education drop-out rates than young men and have limited access to medical care and employment, according to Emerge Poverty Free.

Group member Asha Malando does not see these statistics as an end-all and believes that women are still capable of empowering themselves by becoming involved in community projects.

“The government cannot do everything for us. We just have to use some of these organizations well so we can develop ourselves.”

Coleta Masesla, a female fisher in Tanzania, is now able to run her own food kiosk that provides income for her children’s education and home essentials like food and clothing.

“These women have become great role models in their community as they have proved that everything is possible. Most of them had lost hope but right now they are the ones running their families. We at Emerge Poverty Free are pleased by the attitude they have shown toward lifting themselves out of poverty,” stated Jeremey Horner, Emerge Poverty Free CEO.

– Kelsey Lay

Sources: Emerge Poverty Free 1, Emerge Poverty Free 2, IPP Media, The Daily News
Photo: Flickr