Archive for category: Economy

Information and stories about economy.

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Expansion of Carbon Pricing Promises to Alleviate Poverty

Expansion of Carbon Pricing Promises to Alleviate PovertyWith an estimated value of between $16 and $54 trillion, the services provided by natural resources are an asset worth protecting. It is widely recognized that carbon dioxide from fossil fuel emissions threatens the environment and that reducing carbon emissions is a global necessity. A dominant strategy to reduce carbon is to make it more expensive which incentivizes individuals, companies and nations to use it more efficiently or switch to alternatives. Roughly 40 countries and over 20 subnational governments are either doing or planning to do so through legal mechanisms that increase carbon pricing. A recent analysis by the World Bank estimates that the value of these initiatives grew to nearly $50 billion this year.

There are two ways in which these efforts will be working to lighten the burden of poverty across the globe.

The first focuses on the role that a stable climate and healthy ecosystems have in providing a solid footing for economic development. Clean air and water, fire, flood and erosion control, mitigation from tsunamis and prevention of landslides are all services that intact ecosystems provide. These protect human populations and provide the foundation of productive agricultural systems.

Excessive use of carbon is leading to rising sea levels, increased desertification, stronger storms and less predictable weather, which will subvert the progress made on ending poverty and may create large groups of climate refugees, up to 200 million by 2050. In short, robust ecosystems offer goods and services and climate change undermines the provision of these goods and endangers massive economic, social and political costs.

The second way in which the expanding carbon market may reduce poverty depends on the design of the regulation. Currently, the two main strategies that reign supreme are cap and trade schemes and carbon taxes. The first sets a limit, the cap, on the amount of carbon that can be emitted and allows firms to trade permits to pollute. If one firm does not need to pollute, they may sell their permit to a polluter. Over time the cap is lowered and so are the emissions. Carbon taxes simply add a tax to carbon to make it more expensive and less attractive to use, though how the tax is applied and what is to be done with the revenue is flexible.

While both forms work to end poverty through protecting the environment, the cap and trade scheme contains an added component, termed carbon offsetting, which funds emissions-reduction projects in the developing world. Rather than buying permits to pollute, a firm can invest in an emissions-reduction project that otherwise would not have been financially feasible. These projects introduce clean technology and increase the level of investment in the developing world while protecting the environment.

Examples of U.N. certified emissions-reduction projects range from a soil conservation project in Moldova to reforestation of degraded croplands in Paraguay and generating power from rice husks in India. In 2013, total investment from certified projects was estimated to be over $315 billion. As carbon pricing expands, poverty reduction and sustainable development will follow.

– John Wachter

Sources: National Geographic, Oakridge National Laboratory, The Nature Conservancy, United Nations Framework Convention on Climate Change, United Nations Framework Convention on Climate Change, United Nations Framework Convention on Climate Change, World Bank
Photo: Eco Talk

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This Generation’s Billionaires Start as Technopreneurs

technopreneursIt’s no secret that technology has been the key to success for decades now. A truly original program or interface may as well be a golden ticket to superstardom, if Steve Jobs, Mark Zuckerberg or Bill Gates are any lesson. So it comes as no surprise that many development agencies are encouraging countries to invest in ‘technopreneurs’ – young people with a penchant for invention and a business plan to match.

Bill Gates has an annual income higher than that of many countries. If he were a country, he would be the sixty-fifth richest in the world. He has an estimated net worth of $77.8 billion and is widely considered to be the wealthiest individual in the world. All that from selling computers and software.

In 2011, President Barack Obama called for an “all hands on deck” approach to innovation, encouraging government officials, academics and philanthropists to “spark … creativity and imagination.”

This is an important priority of America’s domestically and abroad. Partnership for Growth, a bilateral effort to promote inclusive economic growth, has enabled USAID to place a new emphasis on innovation and education, most notably in the Philippines, which recently played host to the Global Entrepreneurship Symposium and Workshop, a summit designed to help young Filipino inventors hone their ideas, connect with possible investors and launch their businesses.

Aid professionals are hopeful that an emphasis on launching small tech startups will drive long-lasting growth in countries like the Philippines, which have an undersized middle class.

“Entrepreneurship is the fastest way to move wealth in society. Education gives people the tools to innovate and build businesses,” says Dado Banatao, a Filipino-American engineer and entrepreneur who now runs the Philippine Development Foundation and works with young inventors. “Entrepreneurship leads to the creation of jobs and redistribution of wealth, and puts the Philippines on the global economic map.”

In the United States, two-thirds of jobs are generated by small and medium-scale businesses. These small businesses are at the heart of a middle class, the sweet spot between struggling to survive and living to excess. Most developing countries lack a robust middle class. Instead of small and medium-scale businesses, developing countries like the Philippines have offices for mega-corporations like McDonalds, and nameless micro-enterprises like street food vendors or family-run convenience shops.

Even if a technopreneur does not strike it rich, she or he could still run her or his venture like a small or medium business. More businesses mean more jobs, which is an improvement for everyone. With this growing push for innovation and empowerment, it would not be a stretch to predict that the next generation of billionaires will be making their first millions as the founders of tech companies in developing countries.

– Marina Middleton

Sources: USAID, Brookings Institution, Universiti Kuala Lumpur
Photo: Flickr

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World Bank Encourages Overseas Hiring Online

World Bank Encourages Overseas Hiring Online
A recent effort by the World Bank has helped make overseas hiring feasible for many interested parties – and has driven a surge of employment in Africa.

Unemployment has always been a boogeyman of modern culture. Whether a fully-developed or an emerging market, no economy thrives when it has a high rate of unemployment. According to the U.N., the challenge of unemployment is growing by the year. In 2014, the number of unemployed passed 201 million people worldwide. A disproportionate number of these were women and young people just entering the workforce.

The internet could change that. Like almost everything else the internet has affected, the job market is a very different place now than it was only three or four years ago. Digital entrepreneurs are increasingly common, and small businesses have access to better tools and faster communication than was ever possible before.

Entrepreneurship is not always an option, however. Being a digital entrepreneur requires social networking, strong skill development and a market to work with. On the other hand, companies are often looking for new talent pools of employees.

A study supported by the Rockefeller Foundation and done in partnership with Dahlberg Consulting has recently resulted in a new service. The World Bank is now helping interested individuals and companies find global employees through a new online toolkit. Companies seeking new talent can look abroad for the perfect fit for their employees. Meanwhile, people with technology skills in developing countries can now find jobs that allow them to use their full capacities.

This new business model, called “online outsourcing,” has the power to catalyze new economic growth. It also has the potential to drive a new wave of economic inclusion and equality, as typically underrepresented groups can join the workforce.

The collaboration between the World Bank and the Rockefeller Foundation is part of the Rockefeller Foundation’s Digital Jobs Africa Initiative. The mission of the initiative is to create new, sustainable employment opportunities for youth in Africa and the skills training to match. This is all working toward the ultimate goal of positively impacting 1 million lives in Egypt, Ghana, Kenya, Morocco, Nigeria and South Africa.

So far, the collaborations have been a success. The partnership has enhanced digital job creation in Africa in a number of ways, including the development of an information technology park and capacity building for the digitization of public records in Ghana.

Africa’s economy and population are both growing at an unprecedented rate. By 2050, 400 million people under the age of 25 will need to be gainfully employed in order for the continent’s economic growth to be sustained. Initiatives like the partnership between the Rockefeller Foundation and the World Bank could be the key to success – both of Africa’s economy and of Africa’s youth. The job market is becoming truly global, and everyone will reap the benefits.

– Marina Middleton

Sources: The World Bank, The Rockefeller Foundation
Photo: Flickr

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What it Means to Educate the World

Educate the World

Teach the world. Fix its problems. Seems like pretty simple logic.

However, advocacy for education around the world may seem like a broad scope, and many times the necessity of “spreading education” comes across so vague that it gets lost in the web of international aid “talk”. In order to understand the importance of education and creating more opportunities for education around the world, everyone should know some of the educational programs being created around the world. Here are a few just to start the long list!

Health Education: Rampant spread of disease is a significant concern in many developing nations around the globe. Many illnesses in poorer regions of the world are preventable and treatable, yet people in said communities continue to suffer. Health education is instilled in many countries, teaching many about general health and sexual health. HIV/AIDS in particular, remains a main focus for many international aid organizations, and by teaching safe sex practices and overall safer health practices, there will hopefully be an end to the spread of these deadly illnesses. To learn more about these kinds of organizations, go to www.planusa.org.

Economic Education: Instead of simply giving money to poor communities, it is important to also teach sustainable and smarter economic practices in order to assure more long-term effects from international aid efforts. Certain education advocacy groups go into poor communities in other countries, teaching small business owners and families more efficient strategies of economics and savings. This not only builds up said business, but also puts more money in the homes and to the families of the small communities, and moreover stimulates the overall economy. To learn more about these types of programs, go to www.trickleup.org.

Women’s Education: Educating and empowering women around the world is a huge objective in many international education programs. Many women in developing nations experience extreme oppression, and in many cases, abuse. By educating women, in particular skills and safer health practices, they are given more of ability to be independent, and are less likely to stay in circumstances in which they are abused. To see more about these types of programs go to www.learningpartnership.org.

Education covers a number of interests and fields, especially when dealing with international aid and relief organizations. By educating the world, we do more than teach people how to read and write. Education is matter of sustainable living, health, success and happiness.

– Alexandrea Jacinto 

Sources: Learning Partnership, Plan USA, Trickle Up Organization
Photo: World Vision

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Poverty in Chengdu, China

poverty_in_changdu_china
The meteoric rise of the Chinese economy has captured worldwide attention in recent years. But in the city of Chengdu, further progress is threatened by poverty and corruption.

Located in southwest China, Chengdu serves as the capital of Sichuan province. It’s an important city in the region with rapid economic growth, but poverty in Chengdu still exists.

Hundreds of Fortune 500 companies have set up local branches and the city hosts a booming technology industry. It also hosts the world’s largest building, the New Century Global Center, a megaproject which was completed in 2014. A symbol of the region’s economic progress, the hulking structure has enough space to fit 20 Sydney Opera Houses.

Like many newly prosperous cities, however, Chengdu struggles with problems associated with migrant labor and corruption.

According to SOS Children’s Villages, an NGO dedicated to protecting the rights of children, migrant workers are struggling in Chengdu. The economic growth of the city attracts many workers from the surrounding countryside. When these workers fail to find jobs, their families find themselves in trouble. They have little access to essential services because, as migrants, their rights are limited. Economic prospects are dim and many children are forced onto the streets to find work.

Corruption is another concern for residents. Chengdu made world news in 2012 when a government official, Wang Lijun, fled to the American embassy in Chengdu amid a major corruption scandal.

Construction of the enormous Global Center was also mired in controversy, leading to the arrests of dozens of local officials. Deng Hong, a billionaire behind its construction, is under investigation by the Chinese government for corruption.

After nearly 40 years of aggressive market reforms, China’s economy is now the fastest growing on earth and roughly 500 million people have been lifted out of poverty. There is no doubt that Chengdu, like many Chinese cities, has benefitted from the nation’s skyrocketing economic prospects. The breathtaking pace of China’s economic growth is well-known.

In 2014, China surpassed the United States in purchasing power parity, a measure which examines national GDP relative to the cost of living. In absolute terms, the Chinese economy is likely to overcome its American counterpart in the coming decades.

For this growth to be sustainable, however, China must contend with urban poverty and local corruption.

– Kevin Mclaughlin

Sources: SOS Children’s Villages, The TelegraphWorld Bank

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Malnutrition in Mauritania

Malnutrition in Mauritania
Though the shores are teeming with fish, childhood malnutrition in Mauritania persists.

According to UNICEF, 20 percent of the country’s children under five are underweight. Another 22.5 percent of children exhibited signs of stunting, an inhibition of growth caused by chronic malnutrition. Wasting, a deterioration of fat and muscle due to acute malnutrition, was seen in 12.2 percent of children.

Mauritania ranks 27th in the world for under-five mortality, with a rate of 84 per 1000 births. Thirty-four percent of children are born with a low birth weight of less than 2500 grams.

Professor and nutrition expert Michael Golden stated in a 2012 interview with UNICEF that malnutrition is often caused by a combination of poverty, low social mobility and poor medical services. “What is needed now is to focus on health services research – how to deliver services effectively to poor people in places like Mauritania,” Golden said. “We need to maximize the efficiency of small numbers of staff who are not always well trained.”

One of the world’s poorest countries, Mauritania is known for its slave trade. Though slavery was outlawed in 1981, there were no criminal penalties for slave owners until 2007 and the practice is still widespread.

Mauritania’s economy relies mostly on agriculture, fishing and mining in lieu of industry. Very little of Mauritania’s land is arable and the country suffers from recurring droughts. Overfishing by foreigners has hurt its economy.

The country continues to be home to nearly 50,000 refugees fleeing neighboring Mali. In 2012, war broke out between the Malian government, Tuareg rebels and Islamic extremists. The region remains volatile and refugees are reluctant to return.

According to the U.N.’s Standing Committee on Nutrition, malnutrition is the single largest contributor to disease. It is especially dangerous for young children, who need a proper diet to develop. Without necessary vitamins and minerals, children may suffer from stunted physical and mental development.

Malnutrition is both a cause and symptom of global poverty. In countries where families consist of many children, it may not be possible to feed all of them. Those who are malnourished may struggle to work and mothers are often unable to breastfeed. As stunted children typically earn less as adults, malnutrition is a major factor in the cycle of poverty.

– Kevin Mclaughlin

Sources: CIA, UNICEF 1, UNICEF 2, UNICEF 3
Photo: Flickr

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Poverty in Lahore, Pakistan

Poverty-in-Lahore-Pakistan
Pakistan is among the nations in the developing world that has made substantial progress in poverty reduction. The amount of people living in extreme poverty has gone down considerably over the years and continues to decrease today. What drives poverty reduction in Pakistan, especially in large areas such as Lahore, is income growth. Through a combination of support programs and reforms, as well as income equality, Pakistan was able to translate income growth to poverty reduction.

According to the World Bank Group, there are over 50 million less people living in poverty in present day Pakistan than there were in 1991. Additionally, the percent of people living on less than a dollar and a quarter a day fell from 66.5 percent to 12.7 percent. However, although extreme poverty in the region has been reduced, there is still over half of the population living under two dollars a day. Despite progress made in Pakistan, there still remains a high number of Pakistanis in poverty and many more who are vulnerable to falling back into poverty, especially in large cities such as Lahore.

Lahore, a large region in Pakistan, is considered to be one of the most populated urban areas in the world and is one of the largest cities in the Islamic world. According to Index Mundi, as of January 2015, Lahore has an estimated 10 million people living in the region. The size of the region poses a bilateral problem; on the one hand, Lahore’s population and size contributes to its wealth and prosperity, while on the other hand, with a large city comes overpopulation and underdevelopment. Large cities such as Lahore often have another side to their urban development: the underdevelopment of parts of the region called the slums. Similar to the slums in various parts of India, Indonesia and Kenya, slums in Lahore are densely populated with areas lacking in basic necessities such as clean water, electricity, security and health care.

In Lahore, 30 percent of the region is considered to fall into the category of slums; however, the percentage does not take into account the amount of unregistered slum neighborhoods in the city. These slums are formed by low income communities that do not have the means to live in proper housing in the city, and they are a byproduct of over population, economic, political and social inequalities as well government intervention. Slums in Lahore are also a consequence of people moving from rural areas around Pakistan to the city in hopes of attaining a better life. The reality, however, reveals that many who move into the city have a difficult time securing employment, and eventually settle in the slum communities as a result. Health care, education, and basics such as sanitation and electricity, are extremely limited in the slums of Lahore and further contribute to low living conditions.

A solution that can bring poverty rates down in Lahore is to have more government involvement through political laws and reforms that pay special attention to these areas. More government interference and aid to counteract inequalities can be the beginning of reducing poverty in the slums of Lahore.

– Nada Sewidan

Sources: The World Bank, TribuneAcademia.edu
Photo: Pakistan Defence

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Alaffia’s Beauty Products Make Global Impact


A premium skin-care company called Alaffia empowers local people in Togo by handcrafting beauty products prepared from Certified Fair Trade shea butter. Better yet, all of the sales from Alaffia’s beauty products contribute to the livelihood of West African communities.

Alaffia offers creams, soaps, lotions and hair-care products made from the indigenous shea tree. Alaffia operates at a local level, employing women in need and enabling youth to stay in school to complete their educations.

This company is essential to West African women because they have difficulty obtaining employment since they are oftentimes not able to access education. Exclusion from the workforce leaves them vulnerable and often unable to support their families. Alaffia directly employs around 500 women in co-ops throughout Togo to cultivate shea by hand. These women are compensated with fair wages for their work and they bring unique knowledge and handcrafting skills to the job.

The company was founded by Togolese native Olowo-n’djo Tchala in 2004 after he realized the need to combat gender inequality and poverty. Alaffia was founded on Tchala’s belief that everyone deserves equality, empowerment and beauty.

Furthermore, Alaffia uses its profits to sponsor philanthropic projects in Togo. One such project is called “Bicycles for Education,” which provides disadvantaged students with bikes to get to and from school. So far, it has helped more than 6,300 students in Togo. Alaffia donates metal roofs, seats, and school supplies to rural schools through its “School Supplies and Repairs” project to create a functional learning environment for youth.

Alaffia has also provided over 3,200 pregnant women with pre- and post-natal care, and has funded the planting of 25,000 trees to combat climate change.

While philanthropy and environmental benefits certainly set Alaffia apart from other major beauty companies, Alaffia products are also made with unrefined ingredients and contain no synthetic fragrances or genetically modified organisms. They are vegan, gluten free and an ideal alternative line for those with sensitive skin.

These products help Africans profit from their natural resources and create sustainable goods that help our planet, empower local communities, and improve education for students.

Alaffia products can be purchased at natural and organic food stores such as Lassen’s and Whole Foods.

– Jenn Hartmann

Sources: Alaffia, Thurston Talk
Photo: Hello Beautiful

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VEGA Brings Economic Growth Globally

VEGA
The Volunteers For Economic Growth Alliance, or VEGA, is a nonprofit that brings its members together to execute economic growth projects overseas.

Founded in 2004, VEGA was originally an initiative of the United States Agency for International Development. The organization was meant to be a procurement partner.

Today, VEGA represents itself as a respected NGO alliance of 23 member organizations. Each member brings its expertise to the Alliance to allow VEGA programs to grow in development and scale.

Based in Washington, D.C., VEGA can effectively manage its programs stationed in developing nations.

With a mission to mobilize expertise and resources to promote sustainable economic opportunities, VEGA’s programs aim to scale the services of local organizations, create jobs, increase commerce and trade and improve management.

Volunteers from the U.S. offer their expertise to programs that are committed to serving women, youth and others who are ready to be entrepreneurs in order to lift themselves out of poverty.

Currently, VEGA manages 36 programs in 28 countries.

These programs include: Farmer-to-Farmer, Capacity Building of Cambodia’s Local Organizations, Competitive Agriculture Systems for High Value Crops and Kazakhstan Business Connections.

Though programs only run in 28 countries, members have worked in over 140 countries, bringing their values and skills to local partnerships.

The expertise that VEGA members bring to the team range in areas from agriculture and food security, to tourism development and financial services. Also included are environment and energy, enterprise development and trade and investment.

VEGA believes that economic growth that emphasizes innovation, local partnerships and integrated solutions is the best way to promote prosperity.

With the power of volunteers rallying behind this mission, the strength in collaboration has allowed this NGO to make an impact in economic growth for the developing communities it serves.

– Chelsee Yee

Sources: VEGA Alliance, ACDI VOCA, Africa Agribusiness Magazine

Photo: USAID

Japan’s Economy Failing

Economy Failing Japan
Japan is currently facing a dour economic situation comparable to  2011 when a tsunami struck Japan’s eastern coast. Following the tsunami, Japan’s economy started to shrink to 6.9 percent and is now down to its lowest rate since the environmental disaster.

Economists attribute Japan’s most recent third-quarter recession to lack of investment in housing in addition to a rise in taxes enacted as a part of a series of reforms. The value-added tax (VAT) has caused the world’s third-largest economy to shrink into recession.

The unpopular rise in taxes comes at an unfortunate time for current Prime Minister Shinzo Abe who is seeking reelection.

Another burdening issue for Japan is the vast economic debt it has garnered. The debt is due to the inequality between revenue and expenditures and Tokyo’s inability to address this serious problem.

As a major player in the world economic system, Japan’s recession is affecting U.S. markets as well. It could negatively impact the U.S. economy because Japan consumes a large number of U.S. goods as its fourth-largest trading partner. A surprising number of American-brand luxury retailers rely on Japanese consumers to buy their products.

On the bright side, however, the country is currently projected to increase the quantity of exports as demand is likely to rise. Japan is currently pursuing low interest rates offered by the central bank on long-term borrowing. This will allow Japan to rise slowly out of public debt while not incurring the backlash of high interest rates.

Prime Minister Abe outlined a three-step solution to resolve the economic crisis in 2012. First, the Bank of Japan increases inflation followed by increased government monetary spending including a hefty stimulus package. The last step of “Abenomics,” as the Prime Minister’s plan has been dubbed, is to completely restructure the system by implementing tax cuts and other long-term reforms.

Abenomics is essentially the coupling of short-term policies with long-term, structural reforms aimed at strengthening the overall economy. However, the projected benefits of “Abenomics” have yet to be seen and increased taxes have plunged the economy into recession.

Eventually, the system is meant to result in higher wages that will allow an increase in consumer spending over time.

– Maxine Gordon

Sources: Yahoo Finance, The Economist, Trading Economics, CFR, Reuters
Photo: Foreign Affairs