Archive for category: Economy

Information and stories about economy.

, , , , ,

TaiwanICDF Provides Clean Water

April 11 marked the official opening ceremony commemorating the completion of a new, groundbreaking water supply system made possible by the Haitian government, the Red Cross Society of the Republic of China and the International Cooperation and Development Fund of Taiwan (TaiwanICDF.) The new water system will reportedly supply safe and clean domestic water for over 90 percent of the area’s inhabitants.

In January 2010 a magnitude seven earthquake devastated Haiti and rendered about 1 million Haitians homeless, a number of which relocated from its capital, Port-au-Prince, to New Hope Village in Savane Diane. As a result, the need for accessible and clean water  increased exponentially, and the new system accommodates this need and serves as a sustainable, long-term solution. TaiwanICDF reportedly showed residents how to maintain and fix the system in the event that it breaks down.

The Taiwanese ambassador to Haiti, Peter Hwang, attended this special celebration, as did TaiwanICDF’s Secretary General, Tao Wen-lung. Wen-lung said the system would provide enough water not only for over 200 homes, but additionally for the village’s health facility, school and nearby agricultural irrigation needs. He described it as “a real godsend for local residents.”

In a video on the TaiwanICDF website, a local resident describes the arduous three-hour process he formerly endured to transfer water from a far-away source back to his home. Now, he has a quick and easy water source practically in his backyard. In the video, the resident also thanks TaiwanICDF for their instrumental role in developing and maintaining the system in his village.

China and Taiwan are hosts to numerous humanitarian organizations. TaiwanICDF is particularly focused on infrastructural and economic development for long-term stability in needy nations and regions, as well as technical cooperation, humanitarian assistance and international education and training. This type of maintainable, long-term investment in developing nations has provided a model by which helpful contributions in such countries can make significant long-term differences.

– Arielle Swett

Sources: ICDF, Taipei Times
Photo: Taiwan Today

, , , , , ,

Global Health Investment is a Win-Win Situation

Economists, public officials and humanitarian leaders across the globe are all echoing a new stance on foreign aid: treat it like an investment.

Sure, many areas of the world still require immediate relief in the form of solid goods, but what these communities absolutely require is the stability and means to sustain themselves long-term. In order to break the cycle of poverty, impoverished people need a new cycle altogether characterized by improved economic infrastructure and stability.

The best aspect of the investment approach is that it promises profit. Business executives are now realizing the untapped workforce potential of the world’s destitute. By developing interest in these areas from an economic standpoint, companies are not only opening up access to the world market, but they are seeing positive returns as well.

Companies like Samasource, a Silicon Valley-based startup, have illustrated success in the private sector. Samasource’s model involves big data projects that they break down into manageable tasks for their overseas workers. American tech giants such as Google and LinkedIn benefit from the work and finance of the paychecks of their outsourced employees. As a result, Samasource is profitable and growing while people in rural areas have new access to the technological world market.

Now, imagine taking the approach a step further and funding industries that directly address the critical issues impoverished people face, such as global health investments. Could financing ventures that treat HIV, malaria and infant mortality help those in need and actually boost the economy? More and more people are answering this question with a solid “yes.”

The solution won’t be so simple, however. Devex editor Rolf Rozenkranz recently sat down with Annie Baston who is the chief strategy officer at PATH, an international nonprofit that specializes in long-term solutions to break cycles of poverty. Baston explained the common challenges faced when determining a “best buy” for global health investment. Multiple factors come into play involving technological solutions and systemic reform. These elements need to be carefully orchestrated and illustrated to investors to generate interest and maintain longevity.

In fact, organizations such as The Lancet and their team of researchers have laid out a complex global health investment plan, titled “Global Investment Framework for Women and Children’s Health,” that will secure high health, social and economic returns. Through simulation modeling, The Lancet has found that “increasing health expenditure by just $5 per person per year up to 2035 in 74 high-burden countries could yield up to nine times that value in economic and social benefits.” Their models, published late last year, approach maternal and newborn health, children’s health, malaria, HIV/AIDS, family planning and immunization.

– Edward Heinrich

Sources: DEVEX(1), DEVEX(2), The Lancet, Samasource
Photo: University of Delaware

, ,

How to End Hunger Around the World

Currently, around 1 billion people live in hunger around the world. That’s the same amount as the total populations of the United States, Canada and the European Union combined.

Nearly 98 percent of hunger around the world exists in developing countries, and 62.4 percent of people living in hunger live in Asia and the South Pacific.

However, the number of people living in hunger is not caused by a lack of food. The world produces enough food to feed the entire global population, but the people living in hunger have neither the land nor the money to acquire food.

Poverty is the main cause of hunger, just as hunger is a cause of poverty. When people go without food, it causes the brain to lose functionality so that they cannot contribute to their economy and allow it to grow. Providing the additional calories needed by the 13 percent of the world’s population living in hunger would require just 1 percent of the current global food supply.

There has been some development in terms of reducing hunger — the governments of Brazil and Ghana have significantly cut the number of people living in hunger by providing aid to their poor, raising their minimum wage and investing in small farms, especially those owned by women.

There are ways that global hunger can be stopped, though. One way is to prevent land grabbing. One of the negative aspects of the uncertainty of future food supply are wealthy yet small nations, like South Korea or the Gulf countries, gaining land from developing countries to use as additional farms.

Another way to prevent global hunger is to block out speculators from the global market. Since the financial crisis of 2008, money from investment funds have flooded the commodities market. The automated trading systems make it difficult for traditional traders to keep the prices of food stable and prevent spikes.

Producing less biofuel allows for sugar, maize and other food crops to be used as food, thus increasing the amount of food available to the global population and reduces the price on those items allowing for more people to access them.

However, those solutions mentioned above are short term and also hard to regulate. The most surefire way to end global hunger is to increase education. Less than 1 percent of what every nation in the world spends on developing weapons could put every child in the world in school.

An increase of education does not just help to put food in the stomach of one person, but also helps to increase the economy of the town or city the educated person is living in.

An educated person from an underdeveloped town would then have the means to open their own business and then employ others in their town who could then use their pay to invest in furthering their own education.

Education also provides children access to a stable food source and is a “strong incentive to send children to school and keep them there.” By sending children to school, it also allows families in underdeveloped countries to increase their food security in times of famine.

– Monica Newell

Sources: The Guardian, Do Something, Millions of Mouths, Huff Post, WFP
Photo: Jewels Fab Life

,

Unemployment In Spain

In his first speech since his father Juan Carlos abdicated the throne, Spain’s future King, Crown Prince Felipe, addressed his country’s begrudgingly slow economic recovery. He referred to Spain as “united and diverse.” These remarks came a week after a new report noted that 1.26 million Spaniards have been without jobs since 2010. These citizens, unemployed for at least three years, are representatives of the 500 percent increase in Spain’s long-term unemployed population since 2007. They are 23.1 percent of Spain’s unemployed population and their numbers are continuing to grow with each passing year.

In the first quarter of 2014, Spain’s unemployment rate fell to 25.73 percent, down from a record high of 26.94 percent last year. During the same quarter, Spain’s economy grew at a quarterly rate of 0.4 percent, its best period since 2006. These increases have caused politicians and the International Monetary Fund to reassert their confidence in Spain’s recovery prospects, but that confidence has proven divisive within Spain.

Fiscal policies by Prime Minister Mariano Rajoy and his conservative Popular Party have been lukewarmly received by the general public. On June 6, the Spanish government approved a $15 billion stimulus package to spur growth and promote their renewed confidence in the economy. However, 26 percent of Spain’s population remains on government benefits. This figure is second in the EU only to Greece.

As reform efforts begin to take hold throughout Spain, civil unrest has resurfaced. Much of the focus is now geared toward high levels of income inequality. There has recently been a boom in tourism in Barcelona, accounting for a record high of 7.5 million visitors in 2013, but the unemployment rate still looms at 18 percent. Protesters are noting changes in government policies which have only affected the well off and have left the despondent with little to aspire to.

Spain’s corporate tax rate has recently been lowered to 25 percent from 30 percent, but the ability of the country’s educational institutions to produce well-trained students for prospective employers is questionable at best. Two-thirds of Spain’s 38.6 million residents over the age of 16 have only a basic education. Of these residents, 32.5 percent are currently unemployed. The youth unemployment rate is also nearly double that of the national rate. Slow recovery rates have dissuaded international investment and stymied growth in Spain’s financial sector.

Spain recently announced an early 1.3 billion euro repayment of a 41 billion euro EU banking rescue loan. This announcement was positioned as a confidence boosting measure. Whether it proves a catalyst for a Spain bereft of chronic unemployment, only time will tell.

– Taylor Dow

Sources: Digital Journal, Euro Weekly News, Fox News Latino, Latin Post, The Local, RTE News, The Spain Report
Photo: Wall Street CN

,

What is the U.S. Climate Action Network?

In the fight against climate change, nothing is more important than mutual cooperation. Organizations like the U.S. Climate Action Network (USCAN) facilitate networks of NGOs who share the common goal of helping the environment. Such networks maximize the impact of individual organizations.

USCAN operates under a theory of change which includes three dimensions: relationships, process and results. The network provides the space to foster each. Relationships are built on the local, national and international levels between organizations with diverse approaches to climate change mitigation. USCAN facilitates the process of sharing information through issue briefings and coordination. Ultimately, these three dimensions serve to exponentially increase the impact of the organizations.

Members of USCAN have access to information, resources and services from a coalition of like-minded organizations. Members collaborate over policy recommendations for all levels of government, share information on campaign information such as IPCC reports and spread each other’s message.

To become a member an organization must share the vision that climate change must be fought by both mitigation and adaption. USCAN seeks to understand how climate processes and events affect communities, wildlife and businesses. It recognizes that these effects negatively impact not just the environment but the economy as well. This is why USCAN believes it is in the world’s best economic and environmental interest to fight climate change.

The Guardian highlights the importance of coalitions for affecting change and gives “13 tips on building a coalition to tackle climate change.” One tip is given by Robert Laubacher, the project director of MIT Climate CoLab. He writes that even a small level of collaboration can have a strong influence. Laubacher cautions against focusing too much on government progress, which is slow, and instead to see the virtue in small coalitions of non-governmental organizations — coalitions that USCAN helps to build.

Individual efforts to mitigate climate change are organized through societal organizations. USCAN, in turn, coordinates the efforts of the societal organizations, thus transforming the passion and desire of an individual into lasting change in the fight against climate change.

– Julianne O’Connor 

Sources: The Guardian, USCAN
Photo: news.com.au

,

Latin American Youth Struggle to Find Employment

Latin American youth are finding it increasingly difficult to find gainful employment. Of the region’s 108 million people in the 18 to 24 year age bracket, 21.8 million of them are known as NEETs – not in employment, education or training. In Spanish they are called NiNis – ni estudian ni trabajan (they do not study, nor do they work). NiNis are a stigmatized group, pegged as lazy, unmotivated and apathetic.

To make matters worse, many Latin American youth who do find jobs end up working in poor conditions and lack the protection of labor rights. Six in every 10 young people in Latin America work in unlawful labor conditions, according to a recent International Labor Organization report.

The ILO study, titled Trabajo decente y juventud: políticas para la acción (Decent Work and Youth: Policies for Action), also reported that the youth unemployment rate is three times as high as that of adults and twice as high as the overall rate. Young people are unable to find decent jobs even though the current generation is better educated than any previous cohort.

In Guatemala, 78 percent of NiNis work informal positions doing housework and other menial chores. Yet the hard core of NiNis exists in Paraguay and Uruguay, with 48 and 45 percent of young people respectively neither employed, nor enrolled in an academic institution.

Several causes for youth unemployment exist. Education is key – if the education system is not in sync with an area’s labor market, graduates will not leave their educational institution with the necessary skills to break into and thrive in the workforce. Population growth has also contributed to the existence of such high numbers of unemployed youth around the globe. Additionally, during times of economic hardship, employers are more likely to lay off younger workers who do not represent as significant of an investment as their older, better trained counterparts.

The fundamental problem, outlined by the ILO report, is that not enough opportunities exist for Latin American youth. Guy Rider, director of the International Labor Organization, says that the “lack of access to opportunities for decent work generates frustration and discouragement among youth. There are 108 million reasons why we must act now.”

The good news is that some organizations are acting. Work4Youth, a collaborative project between the ILO and MasterCard Foundation, seeks to match underprivileged youths aged 14 to 24 with local businesses in order to give young people the resources they need to break into the workforce. W4Y has operations all around the globe, and it maintains a presence in Brazil, Peru, El Salvador and Colombia.

The young generation currently entering the workforce is a valuable resource. Some estimates hold that if unemployment among young people were halved, the global GDP would experience an increase of 4 to 7 percent. In the words of 21-year-old Astrid Estefanía Garibay of Mexico: “People think ‘young’ and ‘NiNi,’ and they think about drug addicts and bums.” These young people simply need help connecting with opportunities rather than being stigmatized for their employment status.

– Kayla Strickland

Sources: IB Times, ILO, Pravda.ru, Press TV
Photo: Work4Youth

,

The International Monetary Fund: Friend or Foe?

Growth does not happen instantaneously and, oftentimes, catalyzing economic growth is a decades-long venture. No one expects positive results immediately, but people do expect a fair approach to promoting wealth. In times of crisis, most countries answer to the same worldwide organizations dedicated to ameliorating economic recession. Primarily, the International Monetary Fund (IMF).

Founded shortly after World War II, the IMF’s mandate was to promote international trade and economic cooperation by aiding countries in times of crisis, vis-a-vis loans and budgetary advice. It is predominantly counseled by six nations according to a weighted voting system. Germany, France, Japan, Britain, China and the United States control over 50 percent of the organization’s voting power. This is an important consideration when one considers that small, poverty-stricken countries, like those in Africa or Latin America, have absolutely no say in the IMF’s policies in comparison to a few powerful member states.

While the IMF may masquerade as an institution seeking to mitigate poverty, its economic decisions stem from countries that prioritize their own power and wealth. Noam Chomsky, a prominent political analyst and professor emeritus at MIT, described the works of the IMF and its top-member nations as “Designed for capital, not people.”

Most loan agreements from the International Monetary Fund come with harsh conditions that encourage the eventual triumph of capital while simultaneously removing social safety nets. Stipulations on loan agreements require severe cutbacks on wages and welfare in order to receive critically needed funds. Invariably, these loan conditions target the programs used by the working class majority.

News outlet Global Exchange (GE) documents the history of IMF protocol, reporting that “The IMF and World Bank frequently advise countries to attract foreign investors by weakening their labor laws – eliminating collective bargaining laws and suppressing wages.” Rather than encouraging domestic development, the IMF enforces economic policies that favor en mass, cheap exports operated through low wage labors costs and weakly regulated industries.

The results of Latin America’s arrangement with the IMF is indicative of the results of a “capital over community” approach. Argentina, once considered the model of financial prowess by the IMF, has steadily declined following the organization’s intervention during the late 90’s. According to University of Washington professor Victor Menaldo, “Public investment is the lowest it has ever been, less than 2 percent of GDP. Taxes on capital gains are less than 5 percent as of 2000. Lastly, along with Argentina, Brazil and Mexico are experiencing the highest amount of foreign debt in their histories.”

For many developing nations and countries under recession, poverty can be right around the corner. The way international organizations and enterprises collaborate in dealing with such potential poverty will determine whether a nation prospers or stagnates. Eliminating poverty is dependent on adjusting the failures of mainstream economics. This means stepping away from the IMF, preventing reductions in labor laws and not withholding loan agreements on conditions—such as eliminating bargaining rights or striking pensions—that have shown to only hurt economies in both the short and long term.

— Michael Giacoumopoulos

Sources: Global Exchange, The Tech, The Washington Post
Photo: NSZ

, , , , ,

5 Facts About the Food for Peace Reform Act of 2014

Food for Peace Reform Act of 2014
On Tuesday, U.S. lawmakers introduced the Food for Peace Reform Act of 2014. U.S. Sen. Bob Corker, R-Tenn., and Sen. Chris Coons, D-Del., jointly introduced this legislation, which would end restrictions on international food aid programs.

“More than anything else, the mission of America’s food aid program is to save lives,” Coons said. “Our current system for acquiring and distributing food aid is inefficient and often hurts the very communities it is trying to help.”

1. Feed More People
The reformed food aid legislation would feed about 9 million people around the world.

2. Greater Efficiency
The legislation would make hundreds of millions of dollars more available per year. Currently, the food aid program has restrictions that require food to be produced in the United States rather than purchased locally. It costs more and takes months to reach people in disaster areas. It would also allow U.S. locally or regionally acquired commodities, cash transfers or vouchers to be used for aid.

3. Small Effect on U.S. Agriculture
U.S. food aid contributed merely 0.86 percent of total U.S. agricultural exports between 2002 and 2011 and just 1.41 percent of net farm income.

4. Let USAID Ship Food on Any Available Vessels
Currently, half of food aid must also be transported on U.S. vessels, which takes months and costs more. The cargo preference requirement means that aid is shipped at 46 percent higher than the market rate.

5. End Monetization
“Monetization” is a requirement that says 15 percent of all U.S. donated food must be sold first by aid organizations, which produces cash that funds development projects. Removing this would save 25 cents out of every taxpayer dollar, would feed 800,000 more people and make about $30 million per year more available. Many development supporters argue that monetization upsets local markets.

“At a time when our budget is strained and U.S. resources are limited, Congress needs to find ways to be more efficient and effective with every dollar,” Corker said.

– Colleen Moore

Sources: Reuters, Agri-Pulse
Photo: Africa Green Media

, ,

The Relationship Between Aid and Security

Since the end of World War II, foreign aid and national security have evolved in close proximity. Indeed, in the decade that followed, United States foreign assistance would range between 1.5 percent and 3 percent of gross domestic product (GDP.)

Since then, foreign aid has played an important role in advancing national security through several of its components: “bilateral development aid, economic assistance supporting U.S. political and security goals, humanitarian aid, multilateral economic contributions and military aid and assistance.”

However, during the Cold War, this relation began to change. As the U.S. refocused its foreign policy toward containing the Soviet Union, foreign assistance began to drop as a percentage of GDP. But still many development programs remained in place, working toward bringing about political reform and democratization. The dominant logic that political reform and development would create stable and open regimes that could resist communist ideology.

The purpose of many programs did not changed since then: expanding access to healthcare services and education, reducing infant mortality rates, reducing hunger and even protecting the environment. Following the end of the Cold War, the main purpose was refracted; by then, the main target was no longer to contain the Soviet Union but to foment development and economic growth in poor countries.

This also meant that the share of military assistance versus aid also changed. During the Cold War, almost 50 percent of the foreign aid’s budget was allocated to military assistance. By 2001, it had dropped to 24 percent. While the humanitarian and development aid budget increased from 33 percent to 46 percent. The period between the end of the Cold War and the September 11 attacks is characterized by a shift toward prioritizing economic development and opening access to healthcare and education in poor countries. Although no imminent threat existed at the time, national security consideration always remained at the heart of foreign aid.

After the attacks of September 11, this relation between national security and foreign aid changed once more. By 2005, the war on terror had the U.S. engaged in providing foreign assistance to almost 150 countries. Once more the shift was toward containment, but this time of jihadists and extremist activities. Since September 11, the region that has received the bulk of U.S. aid is the Middle East.

Despite the many ups and downs in the road of U.S. foreign aid, the world still looks to U.S. to provide leadership in response to erupting crises around the world. If we are to take a few lessons from this close relationship between aid and security, they are that no matter what the threats are, a key component of national security is a stable world and the best way to achieve is by bringing people out poverty and giving them access to healthcare and education.

Responding to crisis world wide does not have to entail military might. While development and economic aid results can be longer term than military intervention, the long history of the U.S. as a major aid contributor shows that it certainly pays off.

– Sahar Abi Hassan

Sources: Foreign Aid and Foreign Policy: Lessons for the Next Half-Century, The Foreign Policy Initiative
Photo: ForeignPolicy

, ,

Bolivian Income Gap Causes Extreme Poverty

Bolivian_Income_Gap
Bolivia is the poorest country in South America. It possesses the largest ratio of indigenous people, who make up 62 percent of the population. Most of these indigenous groups suffer from poverty—over 74 percent are poor. The indigenous groups also make up most of the rural areas, where the greatest amount of poverty in the region is found. The unemployment rate remains high, with 8 percent of the population without jobs, increasing poverty in rural areas.

Bolivia’s income distribution is one of the most uneven in the world, ranking second in unequal income distribution. The land is rich in minerals and resources, but the elite Spanish ancestry dominates the economic system. Most Bolivians are low income farmers and traders. There has been long running tension over the rich natural gas resources by exploitation and export, which continues to strengthen the Bolivian income gap.

Social unrest in Bolivia is growing with the tax reform. The inflation rate is controlled by the tax reform and causes more tension within Bolivia’s economy. These issues in the economic system are creating poverty that affects groups like the indigenous people. Poverty can lead to inequality, which limits human rights and mobility through different strata of class, causing a separation of income.

Throughout history, indigenous people have been the poorest and most excluded from social economic growth. Access to basic health care and necessities is limited due to isolation. The high fertility rate among the indigenous people of Bolivia has increased their population to over 5 million people. The increase is so drastic because of the lack of access to education and health care needs.

Bolivia sees the highest rate of child malnutrition, particularly among indigenous cultures. World Vision estimates that over a quarter of the children under the age of five are malnourished and do not have access to proper health care.

Recent organizations, like World Vision, have formed local centers in Bolivia to help monitor the well-being of these children. This includes the implementation of training for local health care workers to bring awareness to kids to stay safe from different forms of child maltreatment.

 

Causes of poverty.

 

Most of the women living in rural areas have limited education or training for employment. There is also a lack of health services and education in the health sector for women. This restricts the growth of the economy by preventing these women from bettering their futures and the economy.

The rural areas continue to suffer from poverty. With the deficiency of natural resource management and limited approach to technology in rural areas, infrastructures such as roads will be neglected. Without the proper road system, isolation of indigenous groups will increase, causing lack of job opportunities and access to education.

These regions of Bolivia are facing obstacles in the economic development in many of the indigenous groups. The advancement of these obstacles relies on policies to protect the economic growth in the rural regions, where indigenous groups reside, and to help increase labor productivity.

— Rachel Cannon

Sources: BBC, UNICEF, Georgetown University, World Vision
Photo: Next Starfish