Information and stories about economy.

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Global Unemployment

Global Unemployement
Many countries measure their unemployment rate differently. However, unemployed people are individuals who are actively seeking for job but could not obtain jobs. Reason for unemployment varies from economy downturn, and changes of particular industry to lack of required skills.

In third world countries, global unemployment is cause by overpopulation and lack of education. Unemployment rate is one of the biggest indicators of the economy, but it is also one of the biggest indicators of poverty. Countries with high unemployment rate normally have high level of poverty.

An example of the relationship between poverty and unemployment rate is Greece. In 2008, Greece unemployment rate was 7.7%, but after the economics crisis, the unemployment rate rose to 23.8% in 2012. The same situation is spotted in Spain. Spain’s unemployment rate in 2012 is 24.9%. Even though these numbers are high, but African countries are at alarming levels. Some high unemployment rates in Africa are: Kenya (40%), Congo (49.1%), and Djibouti (59.5%).

In the United States, the unemployment rate is only 7.7% in 2013, but it results in slow economic recovery and more people each day is living under poverty level. With only half of the population employed, these countries do not have enough income to distribute among all their citizens.

Half of the people are unable to support themselves with adequate shelters, food, and medical supply. In developed countries such as the United States, the government offers welfare for unemployed citizens to maintain the standard of living. However, in developing countries, welfare programs do not exist or are very limited. Unemployed individuals are struggling every for their basic needs.

When the world economy is recording due to the emerging market, many people are still suffering from the impact of the economic crisis.

– Phong Pham

Sources: Huffingtion Post, International Labour Organization, Trading Economics, Global Finance

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The Importance of Malls in Africa

Malls in Africa
In late September 2013, a group of Al-Shabab terrorists entered the upscale Westgate Mall in Nairobi, Kenya and opened fire on its patrons. The siege lasted about four days leaving at least seventy people dead, including women and children. In the aftermath of the Westgate Mall attack, the question, “Why a mall?” remains.

At first glance, it appeared that the attackers chose the mall because white patrons frequently visit it. However, pictures and video from the attack that later surfaced show that a variety of people were caught in the crossfire. Whether the terrorists knew it or not, the importance of malls in Africa and the very different roles they have in society as compared to those in the United States, create a security hazard that may be breached in the future.

By the year 2025, more than half of Africa’s population will live in cities, nearly a 25% percent increase from thirty years before. Africa has the fastest growing middle class in the world, and the retail industry is developing rapidly as a result. As investment shifts from natural resources, plans to build malls in Africa to meet retail demand are growing as well. Currently, about fifty mega malls are expected to be built by one South African development company.

Malls play an important role in modern African cities because they act as an epicenter for socioeconomic development. In surrounding communities, class separations are evident through gates and barbed wire that divide the rich and poor. As malls in America are characterized by some as centers of economic conformism, African malls create an opportunity for a diverse assembly of people to engage in activities and behavior that they may not normally be comfortable with due to the more traditional views of the areas.

The difference between African and American malls can also be seen in their interior characteristics. Generally, malls in Africa are much cleaner than American malls and elaborately decorated. Compared to the surrounding environments, these malls offer patrons the feeling of entering a new world. As African citizens continue to become more sophisticated and technologically advanced, the elaborately designed atmospheres in these malls provide a break from issues that plague many different areas of the continent such as rough public infrastructure, internal government conflicts and the mark of dire poverty.

The increase in mega mall development in Africa will enhance infrastructure and give people a glimpse of an innovative and developed African dream. However, the Westgate Mall attack may result in a boost in security precautions at malls all over Africa, and patrons may find it difficult to find an escape in the mall from harsh realities that exist outside their walls.

– Daren Gottlieb

Sources: PolicyMic New Republic

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Miss Universe Pageant and Venezuela Economic Crisis

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Last week, Venezuelan Gabriela Isler became the sixty-second Miss Universe. The twenty-five-year old won the title during the greatest economic downturn in her country’s history.

Venezuela possesses the largest known oil reserves in the world but nearly 60 percent of its population is considered poor. Inflation continues to plague the country, rising to over 50 percent in the last year alone. And the current exchange rate has fallen to 6.3 bolivars for each U.S. dollar.

In an effort to combat the economy, President Nicolás Maduro mandated that prices be lowered in stores around the country. The mandate is the result of the government’s recent decision to grant Maduro power to rule by decree without legislative support.

Moreover, the country’s national debt has increased in recent years. Recent figures estimate that Venezuelan business owners owe between $700 million and $1.2 billion to their Panamanian suppliers.

In spite of its economic woes, Venezuela has continued to lend support and resources to maintain its participation in the Miss Universe pageant. Isler became the seventh Venezuelan to win the coveted title on November 9.

Along with the other contestants, Isler stayed at the Crowne Plaza World Trade Centre in Moscow whose accommodations cost between 6,500 to 95,000 rubles or $197 to $2,900 USD per night. Several candidates arrived as early as October 21 to prepare for the event.

The 86 participants also enjoyed products from a variety of luxury sponsors including IMAGE skincare, Yamamay swimsuits and Chinese Laundry shoes.

As the newest Miss Universe, Isler was asked to unveil a $1 million swimsuit designed by Yamamay for the occasion.

– Jasmine D. Smith

Sources: The Guardian, BBC, IB Times, Miss Universe

10 Global Trends for 2014

Increasing_Tension_in_Middle_East_Global_Trends_2014
The World Economic Forum recently published a report answering the question, “What are the top trends facing the world in 2014?” Based on a poll of 1,592 leaders from academia, business, government, and non-profits, the report determined 10 global trends to expect in the coming year.

1. Increasing Tensions in the Middle East and North Africa

For the post-Arab Spring countries, promise and hope has given way to uncertainty. A debate continues about whether or not to keep religion and government separate while unemployment persists. The report recommends an entrepreneur-friendly climate to help promote economic growth for the masses, which in turn would build stability.

2.  Widening Income Disparities

The gap between rich and poor is a major challenge for most of the world. The problem is seen as the most pressing issue amongst North Americans.

3. Persistent Structural Unemployment

History has shown that chronic joblessness is tied to social unrest, especially among a young generation growing up in hopelessness. A solution: train and offer mentorship to young adults so that they could develop in roles that show promise for career growth. Governments should create incentives for companies to create jobs and invest in their workers.

4. Intensifying Cyber Threats

Emerging technologies are outpacing security. Technology allows us to operate remotely more than ever, but our vulnerabilities to hackers increase. Rather than attempting to prevent all possible forms of hacking, the report suggests that we ensure that it’s not catastrophic to get hacked.

5. Inaction on Climate Change

There is action and attention towards climate change, but not at the scale that is needed.  For example, there is $1 trillion of cumulative investment in renewable energy. However, $1 trillion per year is needed.

6. Diminishing Confidence in Economic Policies

The pop of the American housing bubble retrospectively revealed the deficiencies in US economic policies. The Pew conducted polls across the globe that showed people voicing similar widespread concerns about economic conditions in their countries. Europeans were particularly disillusioned.

7.  A Lack of Values in Leadership

People in Latin America and sub-Saharan Africa do not trust that their leadership, even when elected, will act in the interest of the common good. Free press is important for promoting accountability along with the sharing and understanding of various values.

8.   The Expanding Middle Class in Asia

More than any other region, Asians are hopeful about the economic prospects for the next generation. This is a result of free market reforms, investments in science, technology and education, a culture of pragmatism, meritocracy, and peace, and a strong the rule of law. Nonetheless, there is a need to make sure this generation of Asians does not negatively impact the global environment more than it needs to.

9.  The Growing Importance of Megacities

According to the United Nations Population Division, more than half of the world’s population lives in urban areas. By 2025, there will be 35 megacities in comparison to 22 in 2011.

10. The Rapid Spread of Misinformation Online

One-third (30%) of the world’s youth have been active online for at least five years, according to the International Telecommunication Union. Social networking has also spread around the world. Rumors fly easily when there are 1 billion tweets produced every two-and a-half days

– Maria Caluag

Sources: Pew, World Economic Forum
Photo: National Post

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Barbados Works toward a Green Economy

barbados_green_economy
On September 30, the Barbados Minister for Foreign Affairs and Foreign Trade, Maxine Pamela Ometa McClean, made a statement at the United Nations (UN) General Assembly highlighting the small Caribbean nation’s quest for a green economy. She told the Assembly that adopting a policy of sustainable development will be a means of survival for Barbados.

A partner with the United Nations Environment Program (UNEP), Barbados has created a National Strategic Plan (NSP), in which one of the goals is “building a green economy, strengthening the physical infrastructure and preserving the environment.”

Set to end in 2025, the plan has already led to progress – by 2012, the Barbados government committed to generating 30 percent of the island’s electricity supply from renewable energy. The NSP also seeks to correct Barbados’s reliance on imported fossil fuels. By 2025, the government hopes to increase Barbados’s renewable energy supply by doubling the use of solar water heaters.

According to Prime Minister Freundel Stuart, “The green economy debate recognizes our structural vulnerabilities, offers a model to assist us in further realizing our sustainable development aspirations and creates the institutional platform that would enable us to participate in innovative partnerships in the fight to save our planet, against mounting unsustainable consumption and production patterns.”

However, at the Generaly Assembly, McClean made it clear that there is still work that needs to be done. As a “small island developing state” (SIDS),  debt sustainability and poverty are also important issues that Barbados must address before sustainable development can be achieved. SIDS nations have all made less progress than any other group on the UN Millenium Development Goals. Additionally, the high price of imported fossil fuels affects Barbados’s and other island nations’ financial stability.

To remedy these problems, McClean called for more recognition of and attention to the SIDS in the international community. She advocated for a special meeting specifically concentrated on these island states to discuss debt sustainability, before the Third International Conference in September 2014.

– Elisha-Kim Desmangles
Feature Writer

Sources: UNEP, UNEP, UN News Centre
Photo: Loop Barbados

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China and Senegal Grow an Economy

china_senegal_meeting
A growing number of Chinese migrants are working in Africa due to economic growth in recent times. While many world officials claim China’s relations with African nations are heavily linked to exploitation of resources, such as Africa’s gold, diamonds, timber and oil, China has since the 2000s began migrating to nations without these resources.

Notably, Chinese have migrated into Senegal. Senegal has good economic stability and attractive location in West Africa.

These factors are suitable for China’s workers to invest in Senegal. The motivations behind the Chinese workers as a whole are business-rooted. Senegal’s compliance to work with the Chinese is based on a desire to seek diverse investment opportunities and trade partners, as well as an improved position in international affairs.

With the large Chinese presence in African nations, Chinese traders have created competition among the migrants. This competition has forced many workers to expand into other business sectors, thus supporting the economic growth.

Historically, China and Senegal have had international relations with each other since 1971, (with a gap between 1996 and 2005, where Senegal acknowledged Taiwan) the growth of Chinese migrants traveling to the nation increased greatly in 2005. Today, most Chinese in Senegal are completing state work in infrastructure, communication, mining, and oil.

The business relationship still remains unbalanced, however. The Senegalese imports are very small compared to the Chinese exports to the West African nation. However, officials know this is common for Chinese relationships with African nations, and this is just another example of how China’s economy wields strength and influence.

To visualize, in 2010, China and Senegal reached $549 million, where China invested $45 million in Senegal, primarily within the infrastructure sector.

In late September of this year, the Chinese ambassador to Senegal, Xia Huang said China is looking for ways to share its developmental experience and knowledge with the Senegalese to boost further their emerging economy. The ambassador explained how the relations between Senegal and China are still growing in a positive way.

At the celebration of China’s National Day on October 1st, he said Sino-Senegal relations had, “remained fruitful, tangible and has continued to give concrete results to the Chinese and Senegalese people.”

In addition, Xia mentioned that even though China is the second largest economy in the world, 100 million Chinese people are living below the poverty line. Concluding, Xia said by the year 2021 Chinese officials will double the nation’s GDP.

– Laura Reinacher

Sources: All Africa, Migration Information
Photo: Forum on China-Africa Cooperation

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Tujijenge Tanzania Helps ‘Build Africa’ through Microfinance

tujijenge_tanzania_microfinance
Tujijenge Tanzania is a microfinance company based in Dar es Salaam, Tanzania. Founded in 2006, the organization is both the largest and fastest growing microfinance institution (MFI) in Tanzania. Broadly speaking, MFIs are companies that provide financial services to low-income individuals, or that provide services in areas without access to “typical” banking. They operate off of the idea that poverty-stricken individuals can remedy their own situation if given access to financial services.

Today, Tujijenge Tanzania is part of the larger, not-for-profit company Tujijenge Afrika, a Swahili name that roughly translates to mean “let’s build ourselves, Africa.” The company was founded by six microfinance practitioners, who now serve on its board of directors. The founders sought to remedy a problem that they observed in African society by employing their own skills. That is, 90 percent of the country does not have access to financial services. They saw that few MFIs existed, forcing residents to rely on expensive banking alternatives that perpetuated a lifestyle of poverty.

Tujijenge Tanzania aims to provide financial help to individuals, both men and women, who are engaged in all manner of small businesses, ranging from stationery shops to restaurants. The company operates by sending Loan Officers into local communities to give presentations about their services. Interested individuals then form groups of up to 35 members and receive four weeks of training from the Loan Officers. This includes instruction on lending methodology and creating viable business plans. During this period, the group must satisfy several requirements, including electing leaders and opening an account with a commercial bank (the company partners with both Bank of America and Kenya Commercial Bank).

Furthermore, every member is required to save 20 percent of the expected amount of the loan during this training period. This serves the dual purpose of teaching the discipline of making weekly payments, as well as demonstrating that the individual is engaged in a serious, capital-generating business. Upon completion of the training period, if all requirements have been met, the group can make a formal application for a loan. After receiving the money, the group will continue to meet every week, both to make repayments and to discuss general business issues and practices.

Beyond making loans to small business owners, the company is also engaged in a wide variety of product development. Currently, Tujijenge Tanzania is in the process of developing a mobile banking solution for their clients to help serve those in less accessible areas.

In the past, they have developed both solar loan and agricultural loan models in collaboration with organizations such as Oxfam. They have also engaged in market research in the promotion of medical and life insurance all around Africa.

– Rebecca Beyer
Feature Writer

Sources: Tujijenge Afrika, KIVA

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Revolutionary Thinking is Creating a Solution Economy

cinncinati_recyclebankSome people claim that we are living in revolutionary times. With terms like Arab Spring and Occupy Wall Street becoming part of our everyday lexicon, it’s hard to argue otherwise. But one revolution occurring outside the lens of the mainstream media involves young, tech-savvy entrepreneurs applying creative solutions to solve problems associated with everything from environmental cleanup to access to higher education.

Those studying this rapidly evolving phenomenon refer to it as the “Solution Economy.”

These solution revolutionaries are challenging old business models and developing products or services that deal directly with social problems. To accomplish this, these entrepreneurs combine technological knowledge with creative business planning and behavioral incentivizing. Generally speaking, the new solution revolutionaries are not in it so much for the money–they’re in it to solve problems.

William Eggers and Paul Macmillan–co-authors of a recently published book on the subject–claim that these solution revolutionaries, “develop fundamentally different operating models that are fostering new relationships between services and clients, government and citizens, managers and workers, and neighbors and strangers.”

Many enterprises in the Solution Economy benefit from the collaboration of government, private businesses and non-profit organizations. One example is an organization called Recyclebank, which rewards households that recycle by issuing points that can be redeemed for prizes or discounts on products.

Recyclebank relies on collaboration with small municipalities, waste haulers and large, for-profit corporations. Neighborhoods that have partnered with Recyclebank have witnessed a large increase in consumer recycling. In some parts of Philadelphia, for example, rates have gone from 7 percent to 90 percent.

Traffic congestion is another problem area where social entrepreneurs are competing to develop solutions. According to Eggers and Macmillan, Americans lose 4.76 billion hours a year to delays resulting from traffic congestion. The annual opportunity cost of these delays is nearly $160 billion.

To solve this problem, entrepreneurs have developed a variety of apps that pair commuters with drivers to utilize empty seats in automobiles. One app–Carma–actually transfers a mileage-based fee from the passenger’s account to the driver’s account, making the transaction simple and efficient.

Examples abound of social entrepreneurs collaborating with public and private partners to develop creative solutions to collective problems here and across the globe. In an age of growing frustration and discontent, it may be comforting to know that solution revolutionaries are utilizing their minds and talents to promote a new kind of economic progress.

This brand of revolutionary does not seem concerned with rhetorical bickering about government, corporations or corruption. Instead, they are driven by a more tangible and immediate goal–innovative solutions to difficult problems.

– Daniel Bonasso

Sources: PBS, Huffington Post, Fast Company
Photo: Urban Cincy

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Where Walmart Won’t Win

Walmart Failing India Russia Asia
Walmart has sales reaching over $135 billion in 26 countries outside the United States making it the world’s biggest retailer. It’s also the world’s largest public corporation when ranked by revenue.

It has shattered the expectations of many small businesses that have either opened in a Walmart’s vicinity or have had a Walmart take over the local community. It’s a seemingly unstoppable force in the retail business. But looking abroad to several of the world’s largest economically sound countries, not a single Walmart store can be found.

On October 9, 2013, Walmart announced that it was breaking up its corporate partnership with Bharti Enterprises, which hints to the dissolving of its vision of opening up hundreds of stores throughout India. Scott Price, head of Walmart Asia, referred to the breakup being fueled by “poor investment conditions.”

This is a deeper issue than pro-small business owners and supporters celebrating over this breakup. When an individual, group, or corporation ascends to the heights that Walmart has in its respective niche, competition has no choice but either to compete and take a tiny share of the market or to hope that the empire crumbles.

While this decision by no means points to Walmart losing its stranglehold on the retail market, it sends a sign to most investors looking to put money in Southeast Asia. If Walmart is backing out and cannot make a steep, yet potentially rewarding investment, how can others?

Russia is another market Walmart has not tapped. For six years, Walmart has been in talks with a Russian-based company to join a partnership that would ease Walmart’s entry into the bureaucratically strict nation. Germany and South Korea are without Walmart stores, as well. Walmart was present in both nations until 2006 when it shut down all operating stores.

For Germany, it was a rather strange issue that possibly stems from cultural and sexual repression. German men did not like when Walmart clerks handed their groceries to them and smiled as they were leaving the store. They believed the friendliness was a sign of flirting which made them uncomfortable. South Korea has also found it hard to house a Walmart chain, as it preferred to stock electronics and clothing as opposed to food and beverages, which can be bought at local markets.

This is not a loss for Walmart as much as it is a rattling in its marketing process. This shake up abroad almost seems like collusion between governments not wanting to take away domestic profits from local businesses, and can anyone blame them?

– Sagar Jay Patel

Sources: Business Week, New York Times
Photo: Chieforganizer.org

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Sonata Finance Puts the Power Back Into the Hands of Women

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Perhaps one of the most significant elements of the fight against global poverty is the emphasis on women. Fighting against numerous disadvantages for their entire lives, women make up 70 percent of the world’s one billion most impoverished citizens. Women only earn 10 percent of the entire world’s income and own less than a percent of the world’s property. As a result, finding ways to remove these women from the grasp of poverty becomes a key component in the plan to eradicate global poverty.

Enter Sonata Finance Ltd. Based out of India, Sonata Finance has established a mission for themselves to “Identify and motivate poor women in a cost-effective way and deliver them micro finance services in an honest, timely, and efficient manner.” But what exactly does this mean?

Sonata Finance makes use of different lending approaches and programs that work to give these women the start-up capital that they need to become entrepreneurs and small business owners. Because women make up the largest portion of the world’s poor – and because women invest their income into their children and households – Sonata Finance works exclusively with these women. Their lending programs are designed to lend to either a single person or parties of 10-20 women.

The success stories of Sonata Finance include that of Sunita Desai, a 25-year-old woman who joined Sonata and took loans from them after the boat her husband used to collect sand to sell to construction companies wrecked.  As a result, Sunita was able to finance a new boat. Instead of having to share a boat (and the profits) with another person, she now owns a boat – and all of the income from it goes straight to her household.

Sonata Finance, through its understanding of global poverty and finance strategies, played a key role in Sunita’s story, and is working to alleviate the burden of poverty for the world by assisting the largest poverty-stricken demographic.

– Ryan Miller

Sources: Sonata, Global Poverty Project
Photo: Aleph Journal