Archive for category: Economy

Information and stories about economy.

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What $10 Buys in World’s 10 Poorest Countries

Often, the assumption is that the world’s poorest countries must have a low cost of living; unfortunately, the average annual income (GNI) in poor countries is often too low to purchase many of the things Western Civilization considers basic necessities of life. With this discrepancy, it is possible to see how so many people are going without food and an education. Below is a list of what you can buy with $10 in the World’s 10 poorest countries.

Afghanistan (GNI = $426): $10 buys 35 pounds of Pakistani sugar, or 17 pounds of rice

Madagascar (GNI = $450): $10 buys five dozen eggs, five liters of domestic draft beer or two seats for an international film release at the cinema

Malawi (GNI = $900): $10 buys 22 pounds of rice

Niger (GNI = $3,716): $10 buys 20 cigarettes

Central African Republic (GNI = $800): $10 buys four and a half pounds of apples, or 11 pounds of potatoes

Eritrea (GNI – $403): $10 buys ten liters of gasoline

Liberia (GNI = $436): $10 buys 15 liters of mineral water

Burundi (GNI = $160): $10 buys five and a half pounds of rice, or one combo meal at a local fast food joint

Zimbabwe (GNI = $150): $10 buys a meal in an inexpensive restaurant, or five cappuccinos

Democratic Republic of the Congo (GNI = $120): $10 buys financial literacy training material for one woman

This list demonstrates how important it is to provide the means rather than the product; shipping water across the ocean rings up an endless bill, but digging a well could save hundreds and is a one-time labor. A small loan is all it takes to provide a woman with the knowledge to later provide for herself and her children.

The cost of food skyrockets when there is a shortage and evaporates when there is abundance, so rather than a single meal, they often need support for their agricultural systems to provide a cushion for farmers. Our money would be well served providing farmers with the knowledge and equipment to maintain a reliable price on their product. This would not only allow farmers to feed and care for their families, but keep food available and affordable for the masses.

– Lydia Caswell

Sources: Asia Times, FINCA, Global Giving, International Women’s Rights Action Watch, Maps of World, The Richest, The Washington Post, The World Bank, World Vision
Photo: Vando Nascimento

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Greece: A Nation in Decline

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In 2013, Greece faced its sixth consecutive year of a devastating recession. In order to secure $325 billion in rescue funds from the European Union and the International Monetary Fund, the Greek government resorted to cutting jobs and wages, actions that consequentially incited mass protests and unrest.

As a result, according to statistics released by the Hellenic Statistical Authority (HSA,) nearly a quarter of Greece’s population is susceptible to poverty. In a nation composed of 11 million residents, 2.75 million of whom are at risk of poverty, Greece has the highest poverty risk in the E.U. Among those at risk, the most susceptible individuals are single parents and unemployed men. Approximately half of jobless men in Greece are at risk of poverty, while single-parent households are also in a vulnerable position.

A factor contributing to the anticipated poverty of Greece’s population are the projected social welfare budget cuts for 2014. Between 2012 to 2013, the welfare budget had been cut by almost seven percent. However, the projected budget reduction for social welfare in 2014 is a staggering 18%, or $406 billion.

Furthermore, according to the Public Policy Analysis Group at the Athens University of Economics and Business (AUEB) discovered that within the last year, approximately 14% of Greeks had earned an income that was less than the living standard. In contrast, in 2004, only two percent of the population had earned an income below the standard of living.

Since 2008, the crisis in Greece had steadily increased in volatility. According to ESYE statistics agency, an increase in material deprivation in at least four of the nine basic categories of goods and services for human survival occurred during the past five years. To clarify, basic needs include the ability to endure unforeseen financial expenses, eat meat every two days, and heat one’s home. However, due to the economic crisis, approximately 76.3% of poor Greeks were directly affected, while 30.8 percent of the non-poor population suffered as well.

Without adequate government intervention, a substantial portion of the Greek population will remain at risk of poverty throughout 2014. With poverty and struggle in sight, internal social conflict in Greece will continue to rise as well. However, with aid from the E.U. and gradual stabilization, the nation can begin to recover.

– Phoebe Pradhan

Sources: International Business Times, The Telegraph, Zero Hedge, AFR
Photo: Read My Mind

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Are Needy Children in Nigeria Invisible?

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As the most populous country in all of Africa, the Federal Republic of Nigeria is made up of over 250 ethnic groups. The following are the most populous: Fulani and Hausa, 29 percent; Yoruba, 21 percent; Igbo, 18 percent and Ijaw 10 percent.  They also have a significant split in religion, with 50 percent of the population being Muslim and 40 percent of the population being Christian.

With the largest population in Africa, Nigeria has 174,507,539 people and is ranked as having the 8th highest amount of people in the world.  Of all those people, 76,461,896 are fourteen years of age or younger, meaning 43.8 percent of Nigerians are children.  Of that 43.8 percent, about 60 percent lack birth certificates, meaning they are not permitted to use many government facilities that would normally be free with proper proof of citizenship.

Nigeria’s government is trying to reform its petroleum-based economy, but through all the corruption in that sector, it is not focusing as much on the youth in need.  On top of that, presidential elections are tarnished by substantial violence and irregularities and the country has been undergoing long-lasting religious and ethnic conflicts, which also takes focus away from the children in need.  These children need help; about 1,000,000 children die each year in Nigeria before their fifth birthday (10 percent of the global total.) What they need to save more lives is continuous investment and organized scaling up of essential newborn, maternal, and juvenile health interventions.

In Nigeria, there are numerous state hospitals that are free for children under the age of five, but the only dilemma is that the majority of these children do not have birth certificates.  This is a catch-22 because the hospitals admit patients under five for free with proof of age, but these children have never had any way to prove how old they truly are.  From there, they have no choice but to go to a private hospital for treatment where they are forced to pay $45 (a trivial amount for a life-saving medication in the United States,) but an unfathomable expense for the people living in this region, especially since most of them live on less than a dollar per day.

The number of children lacking birth certificates in Nigeria is up to about 17,000,000, a number second only to India, which has 71,000,000 unregistered children.  According to UNICEF, one out of every three children in Sub-Saharan Africa does not “officially exist,” but does that mean that they do not still need help?  The undocumented children in Nigeria are denied education and healthcare and often times have their rights abused.  Their parents often times cannot even help them because in these rural areas many are uneducated and are not aware of how important it is to register their children.

The deficiency of birth records in Nigeria also causes an error in the government’s efforts to track demographic information.  Without the proper information on how many children need hospitalization or immunization, the government cannot tell how many vaccines it needs from organizations like UNICEF, it cannot tell how many children have already died nor the cause of death.

The good news is UNICEF is trying to convince people to register their children and trying to increase the number of registration centers in Nigeria so the families can have easier access.  They plan on having 65 percent to 70 percent of children be registered with official birth certificates within the next few years.

– Kenneth W. Kliesner

Sources: CIA World Factbook, Voice of America ,UNICEF
Photo: The Guardian

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Davos’s Gender Problem

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Helen Clark, the former prime minister of New Zealand, was interviewed during her preparations to attend the World Economic Forum in Davos, Switzerland. More than 2,600 people are currently attending the forum, which runs from January 22 to January 25.

Asked about women’s attendance at the conference, Clark said “It’s the same story every year, under 20% of the people going are women.” When informed that the actual figure is closer to 15%, the former prime minister just rolled her eyes.

And, understandably so. Despite comprising 50% of the global population, a mere 15% of attendees are women. Worse yet, this number is down from last year, where 17% of attendees were female. Statistically, this means a person is 66% less likely to encounter a woman at Davos than anywhere else in the world.

The World Economic Forum’s (WEF) organizers contend that the gender disparity at the conference merely mirrors the reality of today’s world. WEF’s managing director and head of communications Adrian Monck says: “We’re on the front line of reflecting the world as it is, not how we want it to be.”

Monck claims that the organization wishes its meetings were better attended by women but that the organization’s greater goal prevents it. WEF’s imperative? To bring together the world’s most powerful and influential people. Given that only 16.9% of Fortune 500 boards of directors are comprised of women and less than 5% of the Fortune 500 are actually led by women, it is a point that, unfortunately, makes sense.

However, according to Clark, who is currently ranked as the 21st most powerful woman in the world by Forbes, getting women to these events should not be an issue. “Often the response from people who organize these events is that they cannot find enough women. If you look you can find them, they exist,” she says.

At least one measure is in place to encourage more women to attend. Business members of WEF receive varying numbers of invitations to be distributed to their employees as they see fit. At the highest level of membership, members are offered four tickets, but if one of their designated tickets is given to a female employee, the company gets a fifth ticket to dole out.

But, as evidenced by the 15% female attendance rate at Davos this year, such a measure enjoys only limited success in drawing women to the conference. Thus, Davos’s reflection of the world’s gaping gender bias calls into question the efficacy of the conference.

The WEF defines itself as “an independent international organization committed to improving the state of the world by engaging in business, political, academic and other leaders of society to shape global, regional and industry agendas.” Yet, with only one out of every seven delegates a woman, how can you really tackle the issues that face today’s world?

Making such a question even more stark is WEF’s theme this year: “Reshaping the World.”

As put by Forbes’s Dina Medland, “what’s the point of meetings between elite male leaders to discuss a world that goes far beyond their boundaries?”

– Kelley Calkins

Sources: The Telegraph, Quartz, Huffington Post, Forbes
Photo: The Daily Beast

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Poverty is Reality for Struggling Spain

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The Great Recession brought economic progress to a virtual standstill in the Western World: property values plummeted, the stock market took a hit to the gut and unemployment rates spiked. In the United States, investors and employees are slowly getting back on their feet, but are still anxious due to the ping-pongish activity of the Dow Jones and mediocre new job numbers from the Department of Labor.

While Americans struggle to digest their nation’s 6.7 percent unemployment rate, some Europeans are choking on jobless numbers affecting upwards of 20 percent of the workforce, even over five years after the economy first took a nosedive.

The European Union’s austerity measures have yet to restore stability to pre-bailout levels and a recent Oxfam report revealed “only the richest 10 percent of Europeans…have seen their wealth rise” as a result of the well-intentioned policies. Macroeconomists measure the ongoing crisis in terms of government debt, budget deficits and income inequality, but the individuals and families affected in floundering nations like Spain feel the sting of poverty in an acute and personal way.

Spain, a pillar of culture and history on the European continent, hosts millions of tourists each year who yearn for a taste of Hispanic culture and a hint of the nation’s unique flavor. Few westerners would suppose that a historic power player overflowing with natural beauty is home to a poverty rate on par with former socialist nations Romania and Bulgaria.

Spain’s saga followed the same basic trajectory as that of the United States. In 2008, following a property boom, regional governments that had raked up pricey expenses found themselves with empty pockets and out-of-control debts. A shaky central government with debt of its own was unable to provide enough federal assistance to localities and the nation found itself in an economic tailspin.

E.U. interventions such as the aforementioned austerity measures have thus far been ineffective in creating jobs and a critical portion of the Spanish workforce has emigrated in search of opportunities suited for their skill set. Those remaining must clamor for dwindling, low-paying positions.

Many former middle class Spanish families have found themselves unexpectedly living under the poverty line.

A whopping 15 percent of Spaniards subsist on less than half of the national median income and nearly 10 percent have unfortunately arrived at “great poverty” status, indicating a household income below 40 percent of the national average. For Spaniards, these rates translate into monthly earnings of below 555 euros and 444 euros, respectively, for the two groups.

Women and young people are disproportionately affected by poverty in Spain. According to Eurostat, a full 1.2 percentage points (to the detriment of females) separate the number of impoverished men and women. Similarly, six percent more young people fewer than 25 years of age suffer in poverty than Spanish citizens in their late twenties and beyond.

Rising power bills, a frozen minimum wage and more expensive public transportation will add to the burden for a generation of Spaniards who, on an aggregate level, greet 2014 “a little poorer.”

Frustrated citizens, the backbone of 2011’s “los indignados” movement (a precursor to Occupy Wall Street,) will continue to push back against policy decisions negatively impacting an increasingly impoverished working class. Poverty will be synonymous with reality for over 20 percent of Spaniards until Spain’s anemic economy is jump-started back to life.

– Casey Ernstes

Sources: Eurostat, Forbes, Global Research Centre for Research on Globalization, Inequality Watch, Oxfam International, The Huffington Post, The Huffington Post WorldPost
Photo: Food Not Bombs

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Prison and Poverty

Prison and Poverty
The incarcerated population of the United States has reached over 2.3 million, making the U.S. incarceration rate the highest in the world, housing more inmates than the top 30 European nations combined.  Mass incarceration strategies were put in place, in part, to reduce crime in poor neighborhoods, but decades after their initial implementation, individuals and communities continue to suffer.

Researchers attribute some of the large increases in prison populations to longer mandatory sentencing.  Going hand in hand with longer sentencing is the fact that the incarcerated population is disproportionately concentrated among young minority men with very low levels of education.   For instance, black men experience 20% longer prison sentences than white men for similar crimes.

When people are in their twenties and are locked up for 10 to 15 years, they not only adapt to the extreme culture of prison, but when they exit, they will find it hard to assimilate into normal society.  Moreover, the slim job prospects many people faced before going into jail are worsened upon release.

Sociologists have found that once one takes into account the various socioeconomic factors, incarceration typically reduces annual earnings by 40% for the former average male prisoner.  This does not include wages lost while behind bars or the burdens endured by the prisoner’s family and community during the stint.

Prison has such a debilitating impact on the U.S. that taxpayers end up spending over $50 billion annually on maintaining the system of incarceration.  Without the significant incarceration efforts made by the U.S. government, researchers calculate that the nation’s poverty rate would be 20% below the current level, equaling to roughly 9 million people who would be less reliant on subsidies and assistance programs.  These same people would add to the tax base and make up potential consumers of American products.

Furthermore, slightly under half of federal prisoners are in jail for drug crimes and nearly half of all prisoners in state prisons are there for non-violent offenses.  As a result, the Obama administration has recognized the moral and economic need to curb prison populations.  In 2013, Attorney General Eric Holder Jr. announced policies that would increase the use of drug-treatment programs as alternatives to incarceration while expanding another program which releases inmates who committed non-violent crimes and have served significant portions of their sentences.

The experiment of mass incarceration in the name of public safety has been a clear detriment to American society.  Rather than throw away money and effort to a system that perpetuates unemployment, poor health, family instability and other conditions of poverty, the U.S. must focus on social policies that improve opportunities for those on the lower pegs of the socioeconomic ladder.

– Sunny Bhatt

Sources: New York Times, National Public Radio, Bureau of Justice Statistics

Photo: Barnard.edu

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Venezuelan Economic Spiral

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Eudomar Tovar is the Central Bank President in Venezuela and has taken the spotlight most recently for blaming a nation-wide blackout on sabotage. Accusations have been made that the Central Bank has been using their gold supply in a deal with Goldman Sachs and Bank of America to increase hard currency.

Tovar vehemently denies that the Central Bank is doing any sort of business with either Goldman Sachs or Bank of America. Henrique Capriles, an opposition leader, claims that Central Bank was involved in a value swap with Goldman Sachs for the equivalent of $2 billion dollars (USD) in gold ounces. Central Bank has also been accused of dealing with Bank of America to pay off debts owed to foreign governments. Tovar denied any such deals and claimed they were unofficial proposals, but did not elaborate or further explain the Bank’s position in regards to these claims.

The main problem is that Venezuela is experiencing a shortage of basic goods, and could potentially use its huge reserves of gold to procure a loan from such companies such as Goldman Sachs or Bank of America. Main Central Bank officials have complained that they are due a huge amount of hard currency from Washington, and that the red tape and delay in receiving this currency is causing inflation and product shortages.

Furthermore, a decrease in oil supply has caused tension on the dollar value, making some think that Venezuela is in desperate need of cash. The value of gold has decreased as well, putting a dent in the net worth of the country’s enormous gold reserves. As it stands, only government channels have access to the dollar due to harsh capital requirements, which often causes delays and bottlenecks day-to-day cash flow.

Leaders of the South American nation do not believe in free market capitalism and have tightly controlled the cash flow for decades. Consequently, the country falls more deeply into poverty every year, while the tyrannical government is not improving the situation.

President Maduro replaced the recently deceased President Chavez, who had a reputation for spending funds that could not be liquidated. Shortages have increased, inflation has risen to 55% and an inside Bank official claimed that Venezuela was indeed conversing with Wall Street. However, all three parties involved had no comment to offer on these claims. The economy is in a downward spiral, encouraged by the fact that stores cannot buy new inventory due to the cost of goods being higher than the retail price.

Questions are circulating about methods of intervention and whether American aid is appropriate, as well as questions regarding the depth of corruption in the Venezuelan government. Basic economics further show that public spending is good for the economy, when business have the right to compete with each other for capital gain.

The absence of a free market suggests that if Bank of America or Goldman Sachs loaned Venezuela the cash they need, it would just be reinvested into a corrupt system and exacerbate the problem. Solutions must involve correcting the dishonest practices of the government and its leaders so that the citizens will not continue to suffer, but instead thrive.

– Kaitlin Sutherby

Sources: Reuters, The Wall Street Journal: The Pope, State and Venezuela, The Wall Street Journal: Blackout
Photo: Vintage 3D

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Myanmar to Reclaim Title “Asian Rice Bowl”

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Myanmar makes strides towards reclaiming the title of being the primary source of rice exports, so named the “Asian Rice Bowl,” by doubling its rice production and export.

In fact, Myanmar aims to ship 2.5 million metric tons of rice between 2014-2015 with a targeted increase of 4.8 million tons between the years 2019-2020. In comparison, Myanmar shipped approximately 690,000 tons last year, ranking 9th in the world.

Among Myanmar’s competitors are its neighboring countries: Thailand, Cambodia and Vietnam. In its favor, Myanmar holds vast arable land, a large water supply and labor force, as well as low production costs.

Myanmar’s primary beneficiaries include Russia, as well as a number of other European and African countries. Half of Myanmar’s rice shipment goes towards its largest shipper: China.

However, a key hindrance to Myanmar’s growth concerns the remnants of its past military regime. Myanmar was the largest exporter of rice between 1961-1963.

More importantly, Myanmar’s prime deterrent in reestablishing itself as a large rice exporter is its infrastructure. With almost five decades run by a military junta, Myanmar has since seen little development in mechanization, basic electricity, telephone networks, and facilities such as governmental buildings are severely lacking in computers. From processing and shipment to transport, Myanmar is also lacking in the quality of its ports.

As the nation shrugs off 49 years of dictatorship rule, Myanmar is ready to show the world, particularly foreign investors, that the rules will change. In 2010, pro-democracy and Nobel Peace Prize winner Aung San Suu Kyi was released. Since then, many more political prisoners have been released. Political parties formed and participated in parliamentary elections in 2012 and in the same year, privately owned newspapers were allowed into the country.

Results have come about. Previous economic sanctions by the United States and the European Union have been lifted. The Asian Development Bank, in a bid to jump start the fledgling regime’s economic and social institutions, granted loans to Myanmar. Furthermore, Myanmar recently regained its position in the Association of Southeast Asian Nations (ASEAN).

Despite a history of human rights abuses and ethnic and religious conflicts occurring, Myanmar is implementing necessary changes, starting with rice.

In regards to its citizens, Myanmar’s working sector is heavily tied to the rice industry in which an estimated 70% of the population partakes. Additionally, 13% of Myanmar’s gross domestic product is in the rice industry.

In order to truly be the Asian Rice Bowl, Myanmar must continue to cultivate and foster its existing industry towards creating a surplus of opportunity for its citizens.

– Miles Abadilla

Sources: BBC: Increase in Rice Exports, BBC: Reforms in Burma, Bloomberg, Thomson Reuters: Analysis, Thomson Reuters: ASEAN Chair
Photo: Giphy.com

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A Congress of Millionaires

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As Congress debated extending unemployment benefits, like Medicare and Social Security disability benefits, a report regarding other benefits was released. The Center for Responsive Politics found that, for the first time in history, more than half of the Congressional members are worth more than $1 million.

The report, released in early January, finds that at least 268 out of the 534 current members of Congress have an average net worth of more than $1 million. The numbers are based on personal disclosures filed in 2013, regarding the 2012 fiscal year. To calculate net worth, the Center added together the members’ assets, such as corporate bonds and stocks, and subtracted liabilities such as credit card loans and mortgage debt.

Overall, Senators are wealthier than House members while Democrats are slightly wealthier than Republicans.

The fact and knowledge that Congressional members are much wealthier than the average Americans they represent is not new. Intuitively, politicians need large sums of money to run campaigns, and are more likely to have access to influential donors if they themselves are wealthy.

However, this is the first time in history that we have a Congress of millionaires, where over half of Congress is worth more than $1 million. That fact is somewhat ironic, as it is Congress who determines unemployment benefits, food stamps and the minimum wage, as well as legislation to overhaul the tax code.

Josh Bivens, director of research at the Economic Policy Institute, was quoted in the New York Times as saying, “Congress not only seems more responsive to policy desires of the very rich, but increasingly they are the very rich.

These findings also come at a time when wealth disparity within the United States of America is becoming a political focus. During the summer of 2013, Obama decried the “inequality of opportunity” while Pope Francis recently drew attention to growing economic inequalities – a message that Congress supported.

These issues of inequality are likely to weigh heavily on the 2016 election. Whether or not the pressure will result in a more economically diverse group of representatives remains to be seen.

– Claire Karban

Sources: Open Secrets, New York Times, LA Times, Time, New York Times Blogs
Photo: Nation of Change

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NPR Makes a T-Shirt

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Take a look at the shirt you’re wearing. Odds are it’s better traveled than you are.

National Public Radio’s (NPR) Planet Money recently published a multimedia series on the making of a T-shirt and its extraordinary journey through the world economy.

Believe it or not, your shirt and others like it are a wonder of the modern world.

The five part series follows a T-shirt from cottonseed to ink print. It would seem like a simple process, but the Planet Money special reveals the hidden complexity of a global enterprise.

Behind each of these cheaply produced shirts are multinational corporations and complex trade deals between nations — but, most of all, people’s lives. While the series takes a look at the entire process, it is the human connection that it seems most poised to drive home.

Although the chapters are mostly delivered through a dispassionate reportage, the deleterious effects of the garment industry in the developing world are likely to ignite the passions of most viewers.

Perhaps the most illuminating of these stories is that of Jasmine in Bangladesh.

More than 4 million people like Jasmine work in the garment industry in Bangladesh. Many of these people work for less than 35 cents an hour.

Cramped living and working environments, the absence of electricity and running water as well as disease make life extremely difficult. Jasmine, herself, lives in a small group home without running water and sends most of her earnings to her parents.

However, these hardships pale in comparison to the risk many of these workers face.

For instance, while the Planet Money team was filming, a major garment building in Bangladesh collapsed killing over one thousand workers. The online series shows difficult images of bodies tangled in the framework of the building.

Tragically, without the garment industry, NPR argues, Bangladesh would be worse off still.

In the end, the shirt they made traveled thousands of miles by air, by land and by sea. Even so, it’s total production cost just over 12 dollars. The cost in time, travel and human toil, however, is something a bit larger.

It is a complicated process with complicated results but for people in developing nations that make the goods that the developed world buys, the garment industry’s work is a double bind.

On the one hand, it sustains their entire nation and on the other, it does not sufficiently provide for, or protect, its workers. If nothing else, NPR has created a series that does not shy away from presenting a complex image of an industry, its products and its people.

– Chase Colton

Sources: NPR, Al Jazeera
Photo: Giphy.com