Archive for category: Economy

Information and stories about economy.

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Millennium Challenge Corporation Seeks Expansion

Millennium Challenge Corporation
The Millennium Challenge Corporation (MCC) is seeking approval from Congress to expand its operations over the coming years via the Millennium Compacts for Regional Economic Integration (M-CORE) Act.

In a recent testimony before the Senate Foreign Relations Committee, MCC CEO Dana Hyde argued that the organization would be more effective if given the authority to make regional investments, in addition to the single-country investments it is currently authorized to make.

“By making coordinated regional investments across multiple eligible countries, MCC can help countries work together to build and grow regional markets…and help generate new business and market opportunities for U.S. and other companies,” Hyde said.

The MCC has a singular mandate: reduce poverty through economic growth. The organization does this by initiating joint public-private investment projects in countries working toward democratic governance, open markets and human development.

Since its creation in 2004 by President Bush, the Millennium Challenge Corporation has committed $10 billion in over 58 projects in 25 countries. Around 70 percent of this investment has gone into infrastructure projects like highways and ports and an increasing percentage is being invested in energy.

The organization is currently only allowed to initiate projects within single countries, which, according to Hyde and other experts, is an impractical development strategy.

According to Hyde, countries cannot develop economically if they are unable to trade with their neighbors. Regional projects like cross-border highways and railways could make a bigger impact – especially among groups of small states.

“It’s easy to think about how regional engagement might be beneficial in the context of electricity,” said Center for Global Development President Dr. Nancy Birdsall. “The logic of a shared grid across borders is clear. To work, countries involved need to commit to a strong regulatory and financial structure outside the auspices of a single government for power trading and pricing.

However, initiating projects across multiple countries also poses a number of challenges. One such challenge occurs because neighboring countries are often not at the same level of development. For example, if the MCC wanted to begin a project across two countries, one may meet the required indicators for open governance and human development while the other might not.

The organization currently bridges this gap by undertaking threshold programs designed to assist near-eligible countries to become ready for investment.

Now, it wants the additional authority to conduct threshold programs at the same time it begins investment projects – meaning countries can begin projects before they are fully eligible to do so.

It may seem counter to MCC’s mandate, but Hyde argued that it is a necessary.

In her testimony, Hyde said the Millennium Challenge Corporation has a proven record of implementing successful country projects and is well equipped to take on the challenges of regional investments without straying from its mandate.

– Ron Minard

Sources: American Progress, Senate.gov 1, Senate.gov 2, MCC
Photo: Wikipedia

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Creative Industries Offer Economic Opportunity

Economic_Opportunity_in_AfricaWhen it comes to creating jobs and economic opportunity in Africa, industries such as agriculture, mining and oil typically receive the most attention and investment from governments.

However, the cultural and creative industries are consistently overlooked as viable avenues for economic growth. These industries include food, film, fashion, textiles, literature, music, performing/visual arts, museums and more.

Africa is no exception to the massive potential benefits that these industries could yield. The recent worldwide growth of tourism serves to further generate increased exposure and outside interest as well.

Further, the labor-intensive aspect of the creative industries offers an opportunity to generate more skilled and unskilled jobs. Additionally, this is a sector where modern technology can be adopted at a relatively low cost of investment.

Though there is no shortage of creative talent in Africa, there are logistical and infrastructural obstacles.

These barriers include a lack of skilled managers and industry professionals, lack of avenues for training artists’ technical competence, poor packaging and lack of standardization of cultural products, and poor distribution systems.

In order to move forward, governments will need to increase investments and implement relevant policies for the cultural and creative industries. An increase in economic opportunity in Africa through the arts requires government support.

Global and regional supply chains across the continent should also be built that will, in turn, create new trade patterns for African economies. For this to happen, there needs to be increased collaboration between global and Africans brands, designers/manufacturers, and development partners and governments.

Though there is a lot of work to be done, recent developments point to the strong possibility of incoming progress in the future.

Efforts to direct focus to the arts and address obstacles have recently emerged. For example, at Economic Community of West African States (ECOWAS) stakeholder meetings in May 2015, the fifteen member states were urged to shift their focus from timber, cocoa and mineral exports to the introduction of relevant policies and funding for arts and cultural industries that will generate new economic opportunity in Africa.

In addition, ECOWAS members were called upon to support artists with training and offer them opportunities to collaborate with international partner organizations to help quality, standardization and packaging.

Further, the African Development Bank’s Office of the Special Envoy on Gender (AfDB) launched several initiatives in 2015. Such initiatives included Fashioeconomics, an event which brought together fashion designers and development partners to talk about the challenges of securing financing to build up the sector.

Additional forums and events regarding the fashion industry have also taken place, with participants highlighting the needs for innovative financing mechanisms to provide incentives to grow the industry.

Participants also highlight the need for fresh approaches to scale up African design firms through entrepreneurship, training and skills development, and boosting access to finance and global markets.

– Anton Li

Sources: The Africa Report, XinhuaNet, Daily Nation, African Development Bank Group (AFDB)
Photo: Flickr

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UN: New Efforts to Reduce Climate Change and Poverty

Reduce Climate_Change_and_PovertyOn December 5, officials from 195 different countries agreed on a proposal to reduce global carbon emissions in an effort to reduce climate change and poverty worldwide. The United Nations Framework Convention on Climate Change (UNFCCC) has released the drafted agreement that addresses issues relating to reducing climate change and poverty such as food security, deforestation and cutting greenhouse gas emissions. There are three global goals listed in the draft agreement, the first being to “maintain global average temperatures short of a two degrees Celsius increase over pre-industrial global temperatures.”

According to the National Centers for Environment Information (NOAA), every state in the U.S. had above-average fall temperatures during September and November of last year. The average global temperature during the month of October was the highest ever recorded.

The second goal of the climate change draft proposes increasing a nation’s ability to adapt to resulting climate change and respond effectively. The United Nations Environment Programme (UNEP) warns that climate change is a threat to economic growth in Africa and other parts of the developing world.

A World Bank report finds that globally, poor people are at high risk for climate-related disasters, so it is important for communities to develop early warning systems. Being prepared for a catastrophe, like flooding or crop damage due to heat, can save resources and help to counter the effects of climate change on the economy.

The third global goal of the UNFCCC climate change draft suggests creating sustainable development strategies in order to create climate-resilient communities with minimized greenhouse gas emissions to reduce poverty rates.

The climate change draft to reduce poverty also includes the following proposal: “Developed countries shall provide developing countries with long-term, scaled-up, predictable, new and additional finance, technology and capability-building.”

According to the World Bank, climate change can put 100 million more people into poverty by the year 2030. John Roome, Senior Director for Climate Change at the World Bank Group, recognizes the importance of creating sustainable development strategies to reduce climate change and poverty.

He states, “We have the ability to end extreme poverty even in the face of climate change, but to succeed, climate considerations will need to be integrated into development work. And we will need to act fast, because as climate impacts increase, so will the difficulty and cost of eradicating poverty.”

– Kelsey Lay

Sources: CNN, National Centers for Environment Information, NPR, United Nations Environment Programme, United Nations Framework Convention on Climate Change
Photo: UN

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Mozambique Entrepreneurs Change Lives with Bikes

mozambikes
Mozambique entrepreneurs have created the award-winning social enterprise Mozambikes builds low-cost bicycles to improve the livelihoods of thousands of people in Mozambique. Affordable and efficient bicycle transportation can greatly impact the pace of development in a country with 54 percent of citizens living below the poverty line, especially in rural areas.

In addition to bringing economic opportunities, Mozambikes is committed to improving the lives of 50,000 Mozambicans by 2018. The company and affiliated non-profit Mozambikes Social Development intends to reach this goal through the sale and donation of affordable branded bicycles.

Mozambikes’ unique branding strategy has created three avenues of distribution. The first allows customers to brand and purchase bicycles for their own business needs, such as employee incentive programs. Other customers choose to brand bicycles sold to low-income markets.

Branding customers allow Mozambikes to sell the bicycles at a subsidized rate. For advertisers, it is an opportunity to tap into remote rural markets. Bicycles can also be donated through Mozambikes Social Development for about $100.

These bicycles are purchased at cost from Mozambikes and donated to those who still cannot afford a bicycle. Co-Founder and Chief Executive Officer Lauren Thomas said in an article published on The Guardian, “A bicycle may seem like such a small item to many, but it is quite literally life-changing in rural Africa.” Mozambique_entrepreneurs

The bicycles are specifically designed for use on the bumpy roads in Mozambique with large luggage racks for transporting goods. The design also accommodates traditional skirts with a diagonal crossbar. Local technicians assemble the bicycles and after-market maintenance has created a demand for more bicycle technicians.

In comparison with regional competitors, Mozambikes’ product is better quality and more affordable. The company hopes to improve the bicycle industry of Mozambique through these innovations.

Bicycles can have a significant impact in low-income communities and aid development. In Mozambique, two-thirds of people walk more than an hour to the closest health center. Bicycles provide increased access to education, health care and are a clean energy solution.

In five years, Mozambikes has sold or donated over 7,000 bicycles and plans to increase that number to 125,000 by 2020. In rural Africa, a bicycle is generally considered a household items aiding not only individuals but also entire families.

It is estimated that 70 percent of Mozambicans rely on income from what they can produce, largely through subsistence farming. Transportation is essential in this informal economy. Fetching water, maintaining crops and getting products to market are all made easier with access to bicycles.

As a Mozambique business, Mozambikes employs about 12 workers and pay salaries above minimum wage. The company also strives to empower women, provide training for bike technicians, and educate cyclists about safety.

Mozambikes hopes to benefit a million Mozambicans through low-cost, efficient transportation. Each bicycle improves another Mozambican’s livelihood.

Thomas affirms the company’s long-term vision: “Some people come and go, but we are really committed to making this an ongoing, sustainable business, and there is still so much more we can do.”

– Cara Kuhlman

Sources: The Guardian, How We Made It In Africa, Mail & Guardian, Mozambikes, Mozambikes YouTube Channel
Photo: Wikimedia, Flickr

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How Pumpkins Boost the Ugandan Economy

Ugandan EconomyThe fall season is the time of year filled with caramel apples, trick-or-treating, corn mazes and pumpkin carving. But beyond the excitement of children at Old McDonald’s pumpkin patch, what is the worth of a pumpkin?

In Uganda, the pumpkin is a source of income that has helped boost the economy.

According to ONE, “Pumpkins can be grown all over Uganda and are often grown adjacent to cash crops. During harvest time, these pumpkins become great to sell for extra income!”

Looking at the Ugandan economy, extra income is still in great need for the large majority of the population.

While the African Economic Outlook, AEO, shows that Real GDP, gross domestic product, or the value of all goods and services produced in a single year, has increased from 4.7 to 6.3 since 2013, there is still a lot of progress to be made.

The AEO has stated that “this recovery in economic activity is mainly supported by public investment on infrastructure, recovery in private domestic consumption and investment demand, and a rebound in agriculture.”

For many in Uganda, this rebound is taking place thanks to the innovative thinking of Henry Kasozi. As chairman of the Nkokonjeru Women Saving and Credit Project, Kasozi teaches women and children how to grow pumpkins.

Since 2009, over 200 women and children have benefited from learning to cultivate pumpkins. For these individuals, it has become their main source of income.

With a fast growth cycle and multiple uses, the pumpkins have proven to be quite the cash crop.

In an interview for The Daily Monitor he stated, “the idea to grow pumpkins was born out of the realization that they take few months to grow and serve several purposes. They can serve as food, sauce, animal feeds and medicine among others.”

According to Web MD, pumpkins are legitimate sources of medicine. Both pumpkin seeds and oils have proven health benefits that have aided in alleviating various diseases.

On their site they state that “the chemicals in the pumpkin seed cause an increase in urination (diuretic effect), which helps relieve bladder discomfort. Pumpkin seed also contains a chemical that might kill intestinal worms.”

With worms and bladder/kidney infections being a large threat to the health of Ugandan citizens, pumpkins have become increasingly popular for these medicinal treatments.

Pumpkins have also shown to be a good source of calories and nutrients for the malnourished, which is one of the leading causes of preventable deaths in countries in sub-Saharan Africa, such as Uganda.

Pumpkins are more than a squash to carve into, but also a poverty-fighting and economy-boosting cash crop.

– Katherine Martin

Sources: ONE, African Economic Outlook, Farm Radio Weekly, Daily Monitor, WebMD
Photo: Wikipedia

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Trees for the Future: Fighting Global Poverty

Fighting Global Poverty and Deforestation: Trees for the FutureTrees for the Future is an organization that is focused on restoring the environment as well as fighting global poverty. It recognizes the large effect trees have in economic, environmental and social improvement. The slogan of the organization is, “Planting Trees, Changing Lives.”

Dave and Grace Deppner founded the organization in 1989 after an eye-opening experience in the Philippines. It was there that they discovered they could restore communities while saving degraded land.

Roughly 80% of the developing world has health and nutritional needs met by non-wood forest products and there are approximately 100,000 acres of forest lost each day in the world. The Deppners were determined to help reverse to statistics.

One country Trees for the Future works in is Senegal. Senegal’s increased deforestation has led to the loss of more than half of the forests. They have helped farmers plant more than half a million trees and develop forest gardens.

Trees for the Future has also partnered with the Peace Corps and the Senegalese Ministries of Agriculture and Forestry throughout their time there.

Brazil is another country where Trees for the Future’s impact can be seen. The organization has helped rebuild communities through the development of education programs on effective agroforestry. The main purposes of reforesting in Brazil are to bring back the nutrition in soil as well as to provide a source of food for the livestock.

One tree in particular, has proved invaluable to the Brazilian communities that the organization works with. The moringa oleifera tree produces edible pods, leaves and flowers. These are high in calcium and Vitamin A. The powder that comes from ground seeds has also helped improve the quality of water due to its purifying qualities.

The trees planted in these countries are unifying communities as well as creating sustainable agriculture. Trees for the Future has planted more than 50 million trees in various parts of Africa, Asia and Latin America. Their influence has reached 58 different countries and 12,000 villages.

– Iona Brannon

Sources: Food and Agriculture Organization, Trees for the Future, Trees for the Future: Senegal, Trees for the Future: Brazil,
Photo: Google Images

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How the Richest Man in China Became its Top Philanthropist

Richest_Man_in_China
China’s rich men have been passionate about philanthropy. In the latest Hurun Report, China’s FORBES list, Ma Yun (Jack Ma), the richest man in China, is also the country’s most generous person.

Ma Yun is the founder and executive chairman of Alibaba Group, a family of highly successful internet-based businesses. In 2014, according to the Bloomberg Billionaires Index, with an estimated net worth of $29.7 billion, he was listed as the richest man in China and the 18th richest person in the world.

In 2014, Ma Yun donated 14.5 billion RMB to the improvement of the environment, medicine and health care, as well as education and culture. Thus, it’s the first time in China that the richest guy is also the most generous one.

Recently, donation for philanthropies has been popular among China’s wealthy businessmen. Cai Chongxin, the second largest shareholder in Alibaba Group donated 6.2 billion RMB to philanthropies and thus become the top philanthropist in the region of Hong Kong, Macao and Taiwan.

The new record of the donated funding has been reached recently. The donation made by the first 100 philanthropists on the Hurun Report of Philanthropy has increased 264 percent compared with that in the last year.

Except Ma Yun, the rest of the philanthropists on the list have donated 8.6 percent more than last year on average. The level of being nominated for the list has increased 1 million RMB than last year. On the list, there are 71 newly nominated philanthropists.

Most philanthropists donated to the educational area, which occupied 27 percent in all the philanthropic donations. The second popular area that people donated was social charity. At the same time, disaster relief and poverty alleviation are also the main donated areas.

In 2014, Ma Yun and Cai Chongxin established two charitable trust funds based on their share holdings in Alibaba Group. After the Initial Public Offering, these two charitable trust funds are worth over $2 billion.

According to Ma, these two trust funds will be dedicated to pollution control and medical industry in China.

“I want to live in a world with bluer sky, cleaner water and better health care. I concern a lot about the environment, medical care and education in China, but only concerning can’t help. I’m passionate about contributing into and solving those problems.” Said Ma, a founder of charitable trust funds.

The establishment of two charitable trust funds made Ma Yun and Cai Chongxin known among worldwide famous philanthropists. In the press conference, Ma Yun received congratulations from many celebrated philanthropists, such as Bill Gates, Warren Buffett and Michael Bloomberg.

“Their donations set the new standard for the philanthropy in China, and other businessmen and business leaders are very likely to follow them.” Said Bloomberg.

– Shengyu Wang

Sources: Sina, Hurun Report, Financial Times China
Photo: Wikimedia

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In India Silkworms are an Economic Boon to the Poor

In India Silkworms are an Economic Boon to the Extremely Poor
Silk has always been a highly coveted material. While silk production is said to have begun in China several thousand years ago, the vibrant and expensive material also has a long history in India. Today, silk production may represent a pathway out of poverty for India’s rural poor.

In the eastern state of Bihar, India, women like Munia Murmu are expanding their economic opportunities by farming silkworms and producing silk. Like much of rural India, Murmu lived in extreme poverty until she started raising the worms.

She belongs to a tribal community, generically referred to as an Adivasi, who suffer some of the worst scores on most development indicators such as income, life expectancy and health in India.

Fortunately, silkworm rearing and silk production, also known as sericulture, allow these rural, tribal communities to lift themselves out of poverty.

A local NGO called Pradan (short for Professional Assistance for Development Action) provides livelihoods and training to these communities, teaching them advanced techniques to efficiently rear and sell silkworms and silk.

This is especially attractive for rice farmers in the state of Bihar and nearby Jharkhand, who do not have irrigated crops and must depend on unreliable monsoon rains. Sericulture provides a much-needed buffer against the uncertainty of growing traditional crops but probably doesn’t represent a stable year-round source of income itself.

Demand for silk is enormous in India alone, which is the world’s largest consumer of silk as well as the second largest producer after China. Silk products are also highly valued in western markets like the U.S. and Europe, making sericulture a very lucrative option for farmers like Murmu who are subject to seasonal uncertainty.

During silkworm breeding season, lasting three months per year, Murmu earns about $770, an amount that clearly goes a long way in improving her quality of life. A global annual demand of 1500 tons of raw silk also eliminates any worries about overproduction. As long as rural villagers are willing to raise silkworms, they will be able to find a market for their products.

Though silkworm production isn’t a new phenomenon in eastern India, Murmu and her tribal community have managed to increase yields from the techniques introduced to them from Pradan. For example, the NGO showed her community how to inspect eggs for disease using microscopes, as well as how to plant trees that host worms and moths.

Pradan has also provided instruction in the rearing of higher-value varieties of silkworms, such as Tasar, which is particularly productive in the large forests of Bihar. These developments have allowed villagers to maximize their profits by using only the most productive worms.

Thankful for the extra income they provide, Murmu simply says, “Silkworms have changed our lives,” pointing out her newly-built house, water pump and indoor plumbing. With proper training, rural farmers in other parts of India could also supplement their income and potentially grow out of extreme poverty.

Like what the ancient philosopher Maimonides said about teaching a man to fish, teaching the rural poor how to raise silkworms can help them support themselves and their communities in a generational, inexpensive and sustainable manner.

– Derek Marion

Sources: Global Post, Academia, Pradan
Photo: Google Images

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Colombian Farmers Expand Their Markets

Colombian Small-holder Farmers Expand their Markets
Whoever uttered the phrase “it’s not what you know, it’s who you know” wasn’t kidding. In today’s times, connections are key, and for Colombians trying to make a living in farm-based agriculture, the size of your market makes a significant impact on your income.

In fact, many challenges exist for small-holder farmers in Colombia. Hindrances such as low productivity, distorted information about pricing and selling prospects, and limited marketing access all remain obstacles for this group of farmers who end up selling their goods at open-air markets where there is more competition.

This automatically decreases a seller’s profits, furthering a cycle that seems inescapable.

Being a small-holder farmer can prove to be a difficult existence, at times feeling closed off from the evolving international markets of the world.

Other setbacks faced by farmers include selling through intermediaries, steep transaction costs to reach distant markets, and finally, a lack of means to produce the “volume, quality, and timely delivery” which large agricultural producers are able to generate.

Ultimately, the inability to expand and grow has contributed to poverty in this rural sector.

However, significant strides have been taken for those who fall under this title. An article from the World Bank addresses the solutions underway to improve the livelihoods of these farmers.

“In an effort to support Colombia’s smallholder producers to build entrepreneurship and compete more effectively, the Rural Productive Partnerships Project has been addressing the above-mentioned challenges by establishing, strengthening, and promoting productive alliances between rural producer organizations and private agribusinesses.”

Since the Rural Productive Partnership Project’s launch in 2002, many groups have received support through a process where partnerships are formed by competitive bidding partnered with an independent evaluation procedure. Today, this program continues to flourish and build from where it started.

The World Bank describes the program’s goal as one which involves keeping “production, sales and productivity” up through “investment grants, technical assistance and business development training.”

Aside from financial assistance, this project also seeks to dispel inequality however it can by reaching people who may have been neglected within the system, such as women, indigenous people and Afro-Colombians.

Colombia’s Ministry of Agriculture and Rural Development (MADR) reports that between 2002-2014 more than 820 successful partnerships have been formed helping 55,000 households, with 72 percent of the productive partnerships continuing to work together after the conclusion of the program.

With the second phase of the program ending in June 2015, targets have been reached within the project with more than 9,900 female-headed households benefiting in the first phase, and more than 9,250 indigenous peoples and Afro-Colombian households receiving assistance.

These successes have not only helped one small sector of farmers—but have reached far-away consumers and provided support for the vulnerable who live in Colombia, ultimately endeavoring to keep both their community and the world’s economy thriving.

– Nikki Schaffer

Sources: World Bank, YouTube
Photo: Google Images

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Services Addressing Wealth Inequality in Africa

Services Addressing Wealth Inequality in AfricaMore mobile phones than ever before have been making their way to countries in need and enabling financial inclusion, which is so essential to eliminating poverty.

In Africa, periods of drought can take a significant toll on communities that depend on their agricultural workers and cause widespread wealth inequality. Thanks to the distribution of mobile technologies, farmers can now open accounts.

Wired’s Marguerite McNeal reports, “In Kenya, a whopping 59 percent of the adult population actively uses mobile money services, with transactions of $2.2 billion per month”.

Also, out of the 89 countries in the world where money services are available, the greatest impact is being made in Africa where roughly 12 percent of adults now have mobile bank accounts creating greater financial stability.

World Remit

This money transfer company was the brainchild of Ismail Ahmed. The idea of World Remit came to him while at university. He was always having to travel long distances and pay fees to send money to his family in Africa. In 2010, World Remit became a reality.

“Subscribers send and receive payments directly on their phones, and pay far less in transfer fees — about 4 percent, compared to as much as 12 percent through a traditional service like Western Union.” This system allows for better transfer services and gives families greater income stability.

Tigo Wekeza

The 3.5 million customers that rely on Tigo Pesa money services can now receive interest on their funds through Tigo Wekeza. “Customers do not need to register separately in order to benefit and any returns due are paid directly into their Tigo Pesa wallet.

If a customer so chooses, they can nominate a nonprofit beneficiary instead.” Customers are offered interest rates between 7 and 9 percent, and no other financial authority has offered like provisions. President and CEO of Millicom, Hans-Holger Albrecht, commended the company on its extension of financial inclusion.

EcoFarmer

Since its 10 year recession, 70 percent of residents of Zimbabwe depend on agricultural workers for economic recovery. EcoFarmer is the first micro-insurance policy in Zimbabwe, and it ensures inputs against both drought and high rainfall.

“Using mobile money, subscribers pay 8 cents a day for 125 days and are guaranteed a harvest or at least $100 for every 10 kilograms of seed they plant, regardless of weather conditions.” Farmers also receive tips, such as technical information, market information, weather conditions, and so much more that they can use in order to produce the greatest yield.

Bima

Based in Stockholm, this insurance provider allows its customers in Ghana to register for life insurance at 2 cents a day and also manage risk to prevent financial instability all from mobile devices. Bima provides family care, hospital stays and more recently, telemedicine services.

“We believe that every consumer deserves choice, value and quality of service, regardless of their income level.” Also, this company doesn’t run on just technology. It also provides essential education for consumers, and more than 90 percent of registrations are made in person in order to prevent error.

– Anna Brailow

Sources: BIMA, Econet Wireless Zimbabwe, Millicom, Wired, World Remit
Photo: Flickr