Archive for category: Economy

Information and stories about economy.

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Is Global Governance Undermining Global Health?

Global governance
On February 11, The Lancet and the University of Oslo issued a joint commission calling for a political commitment to reform the current system of global governance in favor of one that prioritizes human health over wealth. The Commission of Global Governance for Health brought together 18 leaders of research and policy-making, drawn from a number of different backgrounds, to draft the report.

Data was gathered for two years on how socioeconomic inequality between nations is exacerbated by a system of global governance run by a handful of the wealthiest nations. This imbalance of political power between nations is exactly what the commission is trying to fight.

The main agenda it promotes is that health equity should be a top priority of all political, economic and social sectors.

Richard Horton, editor-in-chief of The Lancet, notes, “Economic growth alone will not deliver good health to the most vulnerable sectors of society without addressing the intertwined global factors that challenge or destroy health lives.”

The commission identifies seven areas where political and economic injustice affects population health:

  • The global financial crisis and ensuing austerity policies
  • Knowledge and intellectual property
  • Investment treaties
  • Food security
  • Transnational corporations
  • Migration
  • Armed violence

Within these areas, there are five key “dysfunctions” that are preventing improvements in health outcomes. They are:

  • Democratic deficits (“the exclusion of civil society and marginalized populations from national and global decision making”)
  • Weak accountability (“inadequate means to constrain power”)
  • Institutional “stickiness” (“decision-making processes that fail to adapt to the changing needs of people”)
  • Inadequate policy space for health (“health concerns are too often subordinated to other objectives, such as economic growth and national security”)
  • Absence of international institutions to protect and promote human health

So where does this leave people?

The Commission makes it quite clear that all of these challenges can only be addressed by moving beyond the health sector. In order to promote human health and address global inequities, they argue that people need to reform their current system of global governance in a number of ways:

1. Create a multi-stakeholder platform on governance for health (“a place for deliberation and debate to strengthen accountability for health”)
2. Form an independent scientific monitoring panel (“to measure and track progress in overcoming the political, economic, and social determinants of adverse health outcomes”)
3. Organize health equity impact assessments of all policies and practices
4. Strengthen existing mechanisms to protect health and build commitment to global solidarity and shared responsibility

It is the hope of the Commission of Global Governance for Health that this report will bring health inequities between nations to the forefront of global policy.

– Mollie O’Brien

Sources: Medical News Today, The Hindu
Photo: Masafumi Matsumoto

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Poverty and Violence in Honduras

Violence_Poverty_Exacerbate_Homelessness_Honduras
Birthplace of the term “banana republic” and victim of the brutal fruit companies-led coup, Honduras is among the countries with the lowest incomes in Latin America, poverty is very pronounced problem in this Central American nation. Despite an economic growth of around 3 percent per annum, the gross domestic product (GDP) per capita of the country remains stagnant.

This discrepancy could indicate that there is a widening disparity gap.

In fact, since the coup d’état in 2009, Honduras witnesses the most rapid rise in inequality in Latin America, a factor that contributes to prevailing climate of violence. Equally frustrating, the top 10 percent of the population also earns virtually all of the republic’s real income gains.

Furthermore, the 2009 coup d’état had increased the overall rates of poverty and extreme poverty. This climate of political crisis had reverted the economic advances that took place in the country. In addition, the government of President Porfirio Lobo, who came into power after the post-coup elections of 2010, had reduced social spending despite the boost in public spending.

It is estimated that 71 percent of the 8.3 million Hondurans live in poverty, a major problem that contributes to the frequent instances of violence that plague the nation. Because of this astronomic number of people living in poverty, a large sector of Honduras’ population is also deprived of education.

Only a lucky few can afford any education beyond sixth grade.

What’s more, Honduras has the highest rate of homicide in the world, with the average of 20 people murdered daily, 90 percent of whom are male victims. This frightening data stem from the burgeoning narcotic business, which has given rise to many organized crimes. This epidemic problem of homicides also takes away from the country’s meager income by necessitating the Honduran government to spend 10.5 percent of the national GDP in the combat of violence.

Due to Honduras’ constant history of political instability, there has always been very little opportunity for Honduras to develop democratic institutions to impose the rule of law. Instead, centuries of colonialism and decades of dictatorship have marginalized the poor, leaving them with minimal choices to make a living.

This scarcity of upward economic mobility and grinding poverty have driven many towards illicit ways of earning money.

In its attempt to encourage Honduras to alleviate poverty, the World Bank has suggested the country to support the stability and the growth of its macro-economy as well as to improve the quality of its education. But, these key options to improve the situation of the country are easier said (or suggested) than done. Development and democracy are not phenomena whose advent can be brought about at an instant.

Instead, they require years of institutional and systematic reforms for a society to have a functional democracy and a sustainable development.

 – Peewara Sapsuwan

Sources: El Pais Internacional, El Heraldo, El Heraldo, Los Angeles Times, World Bank, World Bank
Photo: Zimbio

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Fortress Europe: Ceuta and Melilla

Ceuta_Melilla_Border
The term Fortress Europe refers to the European Union’s obstructive policies towards immigrants. It is a term that critics employ to highlight many member states’ reluctance and outright unwillingness to welcome migrants seeking a better life within the European Union.

Nowhere is this Euro-jargon more literal in than the Spanish enclaves of Ceuta and Melilla in North Africa. These two cities are where the E.U. borders the African; the cities are located only a few yards apart, they are also where modern day fortresses have been erected.

Heavily patrolled and surrounded with three rows of 20-foot-high barbed wire fences and infrared cameras, the borders of Ceuta and Melilla bare resemblances to the Berlin Wall. In 2005, 11,000 Africans forced their way across the borders in hope of entering the E.U. via Spain since these two cities are politically European despite not being on the continent.

Since then, the Spanish government has invested heavily in fortifying the EU’s southern most land frontiers (more than 30 million Euros, or approximately $41,238,000.)

In 2010, these two enclaves, both relying on resources from their immediate neighbor, Morocco, caused a political ruffling when the Moroccan government accused Spain of racism and boycotted produces going into the two Spanish territories.

What is the most direct effect of these European fortresses in Africa? Since the revamp of the fences, immigrants—many being refugees—have to cross into Europe via the Mediterranean, often in makeshift and unseaworthy boats.

The Arab Spring that sprung across North Africa and into the Levant unleashed waves of asylum seekers and refugees dire to get into the E.U. However, due to the difficulties of crossing into these two enclaves people have been going via the sea to reach another nearby EU territory—the Italian island of Lampedusa. These journeys frequently prove to be perilous.

A Syrian refugee and his family who had traveled through five countries with six forged passport across the Levant and North Africa hoping entering Europe via Melilla claims this European fortress is nothing less than an open-air prison.

Not only is the condition inside the refugee camp less than optimal, in February, Spain took the decision to close the border of Melilla after a group of around 200 to 300 Syrian refugees tried to enter.

After the Moroccan authorities warned the Spanish authorities of the presence of “uncontrolled people,” the gates of Europe quickly flung closed before these desperate people who found themselves stranded in Moroccan territory. Earlier in February, at least 12 people died outside of Ceuta’s fences; 23 others were handed to the Moroccan authorities to be returned to Syria, a human right violation and a contradiction of the terms laid out in the Convention for Refugees of 1951.

If the E.U. would like to live up to the terms set out in the Europe Convention on Human Rights of the Council of Europe and other treaties and conventions to which it and its member states are party, the unofficial Fortress Europe policies of its frontier member states must not continue. These policies are unjustifiable disregard of ongoing ordeals that many refugees are facing in their homeland as well as the value of their lives.

– Peewara Sapsuwan

Sources: CEA(R), 20 Minutos, Spiegel Online International, Reuters
Photo: 20 Minutos

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Facts About U.S. Aid to Israel

U.S._Aid_to_Israel
Since 1997, Israel has received $3.1 billion annually in foreign aid from the United States. The agreement began almost two decades ago, after Israeli Prime Minister Benjamin Netanyahu spoke before a join session of congress to establish a goal for economic independence.

“Israel’s gross domestic product is at about $250 billion a year, and its per capita income is about $33,000 a year.”

Considering the nation’s level of economic development, the aid could be much more beneficial in other areas. The United Nations Human Development Index currently ranks Israel at 16th in the world and life expectancy at birth is at 81 years—two years higher than the United States itself. Israel has also been the top recipient of United States foreign aid for over the past 30 years.

The question therefore arises, how does a developed nation with per capita gross domestic product on the same level as the European Union average, receive the most amount of aid from the United States?

The answer is riddled with politics and is primarily concerned with influence in the Middle East region. The vast majority of U.S. aid to Israel actually goes to supporting Israel’s military.

The U.S. presently funds about one quarter of Israel’s defense budget.

Much of this aid ends up going to the Israel’s weapons industries. Accordingly, it is not the people of Israel who receive the majority of the aid. In fact, “replacing all American aid would cost Israelis about 1 percent of their income per year,” which is a modest figure considering that the funds could be going to developing nations.

Recent polls show that when asked about the U.S. federal budget, U.S. citizens believe that 28 percent of the budget goes to foreign aid and that the percentage ought to be reduced to 10%. In actuality, less than 1 percent of the U.S. budget goes to foreign aid.

Considering that much of that 1 percent goes to the economically stable nation of Israel, other programs or nations could use the money much more efficiently.

The U.S. and Israel have had a longstanding alliance, which has contributed to their agreement in military funding. However, considering the purpose of foreign aid, contemporary third world nations facing popular suffering and instability have a far greater need for the help.

– Jugal Patel

Sources: Economonitor, Le Monde
Photo: IMEMC

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TOMS Shoe Company: Buy a Pair, Give a Pair

Toms_Shoe_Charity
Most people have heard of TOMS shoe company, or even own a pair of TOMS themselves. The shoes are comfortable and casual as well as fashionably cute for everyday wear. In addition, for every pair of shoes purchased from TOMS, another pair is given away to someone in need.

The company has recently been criticized for hurting economies struggling against poverty by taking away business with their shoe give-aways.

A for-profit company, TOMS’s mission is to help societies that are lacking in basic supplies such as shoes. They have announced their plan to produce one third of shoes in the countries in which they donate the extra pair.

Blake Mycoskie, the founder of TOMS shoe company, has stated that the company is looking forward to helping solve more global issues such as clean water, nutrition and education. The company is examining ways to expand their product lines and business model to help further improving the quality of lives of those suffering from poverty around the world.

TOMS website shares how providing shoes to children helps give them the ability to go to school, to work and to participate in their communities without fear of injury and illness that can easily happen with bare feet.

Shoes are a basic need for everyone, and having kids in school, working and being healthy is a huge factor in breaking societies out of poverty.

The TOMS team calculates how many pairs of shoes they sell and match that number in pairs that they will give away.

Partners that operate community health programs in foreign countries work with TOMS to figure out sizes, quantities, and delivery costs. TOMS covers all of the shipping and distribution, and corrects their methods based on feedback from their ‘giving partners’ that are actually working in the societies TOMS donates to.

More and more companies are beginning to realize that making a positive difference in the lives of others is actually a very profitable venture. More than a billion people are living on less than two dollars per day, and that is a huge customer base for a company to cater to.

Viewing the world’s poor as a market share is an innovative and successful way to start a business and simultaneously free people from the cycle of poverty.

The cycle is often perpetuated by illness, malnutrition, unemployment and lack of medical care; these are problems that businesses can solve with new products and services. TOMS is only one of the companies that is thriving in the business world and helping people who really need it every step of the way. Additionally, TOMS personalizes their shoe donations for the different countries they assist. In January 2014, members of the company visited Tanzania and learned that almost half of the residents are under the age of fourteen years old.

This helps them decide types and quantities of shoes to distribute to Tanzania versus another country with alternative statistics. The more successful TOMS becomes, the more people across the globe are receiving shoes and the ability to walk to a better future on their own.

– Kaitlin Sutherby

Sources: The Huffington Post, Toms, Toms Stories
Photo: Forbes

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Obama Addresses Decline of Opportunity in America

Opportunity-In-america
President Barack Obama’s 2014 State of the Union Address highlighted the growing imbalances throughout the world.  In recent decades, the U.S. has depended on its military strength as a substitute for diplomacy, but the President specified the need to shift the focus to fighting extreme poverty within Africa, the Americas and the Asia-Pacific.

The President’s agenda is taking on the issue of poverty head-on.

He recognizes that to address the large inequalities we must reverse the decline of social and economic mobility.  Currently, 65 percent of Americans born in the bottom fifth of incomes stay in the bottom two-fifths income class while 65 percent of top fifth stay in the top two-fifths.

A major factor that maintains this mobility gap is poverty.

Families from poor backgrounds and low economic status are at a disadvantage right from the start.  Just 36 percent of kids born in the poorest households get a strong start in life compared to 70 percent for middle-income kids and 87 percent for the upper class.

With federal programs like Head Start and Race to the Top are putting an emphasis on early child development, it is critical that we create social policy that supports individuals throughout all stages of life.  The Brookings Institute has identified five major life stages that we can consciously cultivate in order to increase mobility and opportunity in America.

  • Strong Start in life: Being born to a mother with at least a high school degree increases the likelihood of leading a successful life. Only 48 percent of children in the bottom fifth are born to mothers with a high school level education.  Increased cognitive ability starts in the home and these same children will hear fewer words, read fewer books and are overall less stimulated than their counterparts.
  • Strong Start in School: Starting school with a disadvantage is a factor that only compounds as a child grows.  By the age of five, less than half of low-income children are deemed school-ready.  To get a head start, children must develop social and academic skills before they enter school.  This is the rationale behind the President’s early learning initiative.
  • A Strong Start in Postsecondary Education:  Postsecondary education must begin with a high school diploma.  The dropout rate among low-income students is six times higher than the rate of high-income students.  Students must not only graduate but graduate with sufficient skills to succeed in higher education.
  • A Strong Start in Labor Market: In today’s economy, the value of a postsecondary degree is tremendous.  On average, each additional year of school accounts for an extra 10 percent return in annual income.  This makes four-year degrees more desirable than one from a community college.  Over 50 percent of low-income students enrolled in community college fail to graduate or transfer to a four-year college.  A support system to encourage students to remain focused and finish their degrees will transform their chances in a sluggish labor market.
  • A Strong Start for a Family: This brings the cycle full circle.  Before getting married and having children, individuals need to consider their personal financial security as a prerequisite.  Marriage plays a critical role in determining the fate of a child. Proper parenting skills are often developed through the shared experience of marriage.  Crafting social policy that encourages marriage can offer more incentives for couples to stay together and create a strong family.

– Sunny Bhatt

Sources: Brookings Institute, New York Times
Photo: Prague Post

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Education in India Suffers from Income Inequality

education_india
India is known for having one of the fastest growing economies in the world. Currently, the growth for GDP within India rests at 4.9 percent, but this is far below its potential.

Similarly to the United States, India is another one of the world’s largest democracies. However, they both also have some of the worst cases of income inequality. In the past 15 years, the net worth of India’s top billionaires have increased 12 times, enough to eliminate poverty in India twice.

The public infrastructure of India is developing at a decent pace, but there are problems that are often left unaccounted for by the Indian government. For example, education in India is a system in dire need of improvement.

According to UNESCO’s Education For All global monitoring report, “At 287 million, India has 37 percent of the total population of illiterate adults across the world.” The report also asserts that the poorest of India will not expect to receive universal education until around the year 2080.

In regards to the specific problems that India faces with education, access and quality are two of the greatest concerns. Much of it is tied to the proper functioning and funding of Indian government, which may not be reliable in certain instances.

90% of people do not continue to college in India, 58% do not finish primary school and 4% never even have the opportunity to start.

The extensive lack of universal education in India also goes on to provide problems for India’s human capital in general. Out of 122 total countries released by the World Economic Forum’s Human Capital Index, India is ranked a measly 78.th The problems India faces may require the nation to make steps toward realizing more inclusive growth and development.

Income inequality ought to be addressed in India for their human capital to rise.

This means core public services including basic healthcare, education and power or water supply must be established by Indian government at multiple levels. Investment in people has proven a successful method to national development. In other words, India still has a ways to go in realizing its full potential.

– Jugal Patel

Sources: World Bank, India Times, Teach For India, Live Mint, Outlook India
Photo: The New York Times

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Afghanistan’s Mineral Wealth Remains Untapped

Afghanistan_Mineral_Mine_Gold_Natural Resources
Afghanistan is a country trying desperately to recover from decades of conflict. From the Soviet invasion in 1979 to the United State’s invasion in 2001, Afghanistan has suffered a multitude of setbacks and developing world devastation to its people, culture and way of life. However, Afghanistan’s way forward is sitting right under its feet.

Afghanistan’s mineral wealth of gold, copper, iron and other rare metals is valued up to 3 trillion, according to NPR. This type of money could truly turn Afghanistan from an impoverished and suffering country whose largest export is currently heroin to a country that is the envy of its neighbors.

On top of this wealth comes a recent discovery by a small group of Pentagon officials and an American geologist, that there is an estimated 1 trillion dollars worth of the rare metal lithium in massive quantities as well. An internal Pentagon memo noted that Afghanistan could become the “Saudi Arabia of lithium” a New York Times article recently stated.

The un-mined potential of the mineral wealth is so great that many believe it will attract investors before any type of mining becomes profitable.

The issue of attracting companies to begin investing in the country is another matter entirely.  Afghanistan’s current instability is of major concern, the NATO pullout of the majority of its troops at the end of 2014 has most major companies in a holding matter waiting to see what changes will occur once Afghanistan is virtually in charge of all facets of running itself.

Afghan officials have recently opened up a nearly 1 billion dollar cement tender which is in part due to the fact that as of right now, Afghanistan imports virtually all of its cement (which is a 1 billion dollar drain on the economy).

Another noted fear by many potential investors is the issue of corruption in any official dealings that outside investors may have with the Afghani government. Afghanistan is routinely noted for being one of the most corrupt countries in the world. In 2012, its corruption rank according to the Transparency International Corruption Perception Index placed Afghanistan at the bottom with North Korea and Somalia.

All three countries scored an 8 out of 100, 176 countries were studied in order to compile the full table. Afghanistan has long been a country that has endured conflict after conflict, and a multitude of hardships and struggles.

However, with a lot of hard work by both international and local Afghan institutions; the nearly limitless mineral potential under its feet could truly make Afghanistan one of the most important mining countries in the world. There is not been a real chance for a country to do so much good for itself in a long time, but if both the world and Afghanistan work together, this could be the turning point that this war ravaged country so badly needs.

– Arthur Fuller

Sources: Huffington Post, New York Times, Reuters, NPR, Huffington Post- 2
Photo: Global Post

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Norway Quality of Life Far Exceeds America

Scandinavia_Norway_Europe
When it comes to quality of life, there are few countries that can supersede America in terms of luxury, comfort and overall well-being. Not even Canada or Britain exceeds the United States in quality of life. However, Norway, an oil-rich country situated in the Scandinavian Peninsula, undeniably outstrips the American standard of living.

The United States has a lower per capita GDP than Norway with a GDP of 51,749 compared to 99,558, respectively, and is also home to one of the most pressing income distribution gaps in any industrialized nation, surpassed in income inequality by only Russia and Mexico.

Due to America’s cavernous income inequality, the poorest 38% of Norwegians are better off than the poorest 38% of Americans despite an overall lower average per capita GDP. According to Syracuse University professor Timothy Smeeding, the United States relies heavily on the markets to an extent that social safety nets are neglected, unlike Norway, which focuses more resources on providing aid to the poor.

This is not to say that America completely disregards its poor. To clarify, the United States has initiated its portion of socially-oriented acts, such as its attempt to reform the welfare system during the past two decades.

However, while the number of individuals on welfare was reduced from 5 million to slightly over 2 million, the welfare poor were downgraded into the working poor. Although welfare reform was rooted in good intentions, the lack of government safety nets defeated the purpose of the entire act.

Although the discovery of oil on the land in 1969 had transformed Norway, more than just an abundance of the valued natural resource buttresses Norway’s economy. Norway’s success has been attributed to what many call the “Norwegian Model”– a model of running a welfare state in which resources are carefully monitored, preserved and kept up-to-date.

While the United States ranks among one of the wealthiest nations in the world, it has stayed remiss in establishing social safety nets, particularly for the less economically-advantaged subsection of the population. Due to the lack of social safety nets, America hosts one of the largest global income inequality gaps, and is ultimately surpassed by the tiny welfare state of Norway in terms of quality of life.

– Phoebe Pradhan

Sources: Infoplease, CS Monitor, World Bank, News in English
Photo: The Telegraph

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Poverty in Nicaragua

poverty in nicaragua
Nicaragua is one of the poorest countries in Latin America, second only to Haiti. Most of the poverty in Nicaragua exists rurally (more than 80 percent,) but there are also very impoverished neighborhoods in the capital of Managua.  In fact, 43 percent of the Nicaraguan population lives in rural areas and 68 percent of them are trying to survive off just over $1 per day. Overall, 46.2 percent of the population lives below the poverty line.

 

Implications of Poverty in Nicaragua

 

The poverty in Nicaragua has caused extremely poor health conditions. HIV and AIDS have been a big issue; there have also been frequent reports of violence against women. Many organizations have been working to prevent the spread of HIV and AIDS and provide support for those with it, to empower women in their fight for freedom from violence and to empower the youth to encourage them to change their society.

Over the last 40 years, there has been extreme inequality and the country has had to overcome a cruel dictatorship, a gruesome civil war and multiple natural disasters. Another big problem is that the central government has historically marginalized the areas with large populations of indigenous people. The gross domestic product (GDP) per capita has decreased to only one-third of what it was in 1977 because of the combined impact of continued civil strife, trade embargos, unsuitable macroeconomic policies and institutional changes that are leading toward an even and more centrally-controlled economy.

Unemployment across the entire country is at 12 percent, but among the poor rural families, it is over 20 percent, so many rural families are migrating to other countries or urban areas within Nicaragua to find work. Remittances are vital sources of income for one in every five families and account for 20 percent of the country’s GDP.

Fortunately, the Nicaraguan economy has been growing substantially and has recently received lots of attention, having grown 30 percent since 2006, when the Sandinistas came back into power. Also, the GDP per capita has increased from $1,239 to $1,582 in the past year alone. Also, the Nicaraguan government has signed a lucrative memorandum of understanding with a telecommunications company from China to fund and build an inter-oceanic canal that is said to rival the Panama Canal.

Nicaragua is presently importing oil from Venezuela at solidarity rates, so Nicaragua pays extremely low prices up front for the first half of the oil and then pays low-interest loans over time for the rest. The Central Bank has said that macro-business development and social programs are funded by 62 percent of the Nicaraguan oil revenue.

Because of all of this news in the last five years,  extreme poverty (measured by a familial income of less than $1.25 per day) in Nicaragua has fallen from 11.2 percent to 5.5 percent. In 2011, Nicaragua was reported to have an economic growth of 5.1 percent, which was the highest in Central America.  Despite all of this good news, a considerable amount of work still needs to be done before it can fully eradicate poverty.

– Kenneth W. Kliesner

Sources: World Bank, Rural Poverty Portal, Health Poverty Action, The Tico Times
Photo: Pacific Lots