Archive for category: Economy

Information and stories about economy.

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Things To Know About the Income Gap in Italy

Income Gap in ItalyAmong European countries, Italy experiences some of the widest income inequality. A deep divide between the North and South shapes access to infrastructure, income levels and health care. Northern Italians benefit from stronger public services and higher wages, while Southern Italians often face limited resources and economic hardship. This inequality has created numerous tensions between the two sides of the country. This tension creates an imperative need to fix the income gap in Italy.

Income Gap in Italy

Italy, as a country, has experienced numerous economic hardships. Italy’s poverty rate exceeds the European Union (EU) average, with nearly one in 12 Italians living in absolute poverty. Southern Italy holds significantly less of the nation’s wealth than the North. More than two million people in the region live in absolute poverty, which is defined as having low incomes to meet basic needs such as food, shelter, education and health care.

Southern Italy holds significantly less gross domestic product (GDP) and wealth than the North. In Lombardy, a northern region, GDP per capita reaches 127% of the EU average. In contrast, Calabria, a southern region, sits at just 56%, a gap of nearly 75%. The South has historically lagged behind in industrial development. It has had limited access to both domestic and foreign markets compared to the North, deepening the economic divide.

Solutions to the Income Gap

To address the country’s income gap, the Italian government has introduced a program called Assegno di Inclusione (Inclusion Allowance). This financial support targets households with at least one member who is disabled, a minor or aged 60 or above. Eligible families can receive up to €6,000 annually (approximately $7,050), with an additional €3,360 per year (around $3,950) to help cover rent. The allowance is issued for 18 months and can be renewed every 12 months thereafter.

Another effort to reduce income inequality in Italy comes from international nonprofit organizations, such as the Italian Food Bank Network. These organizations work to combat poverty and food scarcity via charity and international coalitions dedicated to ending poverty and hunger. The Italian Food Bank collects surplus food from the supply chain and redistributes it through its network of 21 regional organizations. This system supports nearly 9,000 charitable groups across the country, helping deliver essential resources to those in need.

Conclusion

Italy’s regional income divide is more than an economic issue; it’s a social and structural issue. While programs like the Inclusion Allowance and initiatives from nonprofits like the Italian Food Bank offer relief, long-term solutions require systemic investment in Southern infrastructure, job creation and inclusive policy reform. Without bridging this gap, Italy risks deepening the economic and social rift that holds back its national progress.

– Caelan Caukin

Caelan is based in Los Angeles, CA, USA and focuses on Global Health and Politics for The Borgen Project.

Photo: Flickr

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Russia’s Resilient Petrostate: Oil Economy and Poverty Reduction

Russia’s Resilient PetrostateEndowed with vast natural resources, Russia holds significant oil and gas reserves. After the financial crisis of 1998, Russia bounced back with an average annual gross domestic product (GDP) growth of 7%. Global demand for oil and gas fueled Russia’s economic recovery. The boom in hydrocarbon revenue contributed to domestic welfare. Between 2000 and 2008, poverty levels decreased by 16%.

Russia is a leader in oil and gas production. Natural resource rents account for 16.7% of Russia’s GDP as of 2024. Around 30-50% of the federal government’s revenue comes from Russia’s hydrocarbon sector. Any abrupt change in demand for energy can stimulate economic growth or trigger a recession. The government adopted various measures and policies to create and sustain Russia’s resilient petrostate.

Stabilization Fund

Minister of Finance Alexei Kudrin set out to limit vulnerability to and dependence on volatile energy prices. Kudrin put the Stabilization Fund into operation in 2004. The Fund accumulated surplus revenues from oil production and exports. The Fund helps the Central Bank accommodate external shocks to maintain a balanced budget and reduce inflationary pressures.

When raw material prices decreased in 2008, Russian GDP shrank by 8%. This prompted Kudrin to create a buffer to withstand larger fluctuations. The Stabilization Fund was split into the National Reserve and the National Wealth Fund in 2008. Despite continued dependence on oil and gas exports, Russia maintained macroeconomic stability.

Private-Public Partnership

President Putin improved state control over natural resources in the early 2000s. While two national champions, Rosneft and Gazprom, dominate, private companies still operate in a semi-competitive environment. Independent firms help generate output and investment in new technologies and infrastructure. Novatek is now a leader in the production of LNG. The Russian style “public-private partnership” improved the ability of the energy sector to absorb fluctuations in oil and gas prices.

Russia’s Pivot to the East

China surpassed America in energy consumption in 2009, which heightened hydrocarbon demand. In the 2010s, Putin launched Russia’s “Pivot to the East.” This shift in policy emphasis to Asia required new oil and gas routes. The Russian government developed production areas in Eastern Siberia and built two vast pipeline systems. The Eastern Siberia-Pacific Ocean (2012) and Power of Siberia (2019) represented a crucial diversification of Russian export markets.

When Russia invaded Ukraine in 2022, Western governments decided to cut imports of Russian energy. This put more pressure on Russia to redirect export flows toward Asia. Robust global prices for fossil fuel commodities softened the shock of Russia’s “Pivot to the East.” Moreover, Russia overcame unprecedented trade restrictions and avoided a forced oil output reduction.

Russia’s Resilient Petrostate 

The crisis in Ukraine provoked massive Western economic and political sanctions. Oil and gas exports are instrumental in Russia’s relative economic security. A resilient petrostate, Russia recorded GDP growth of 3.6% in 2023 and managed to keep inflation in check at 7.4%. Overall macroeconomic stability allows the Russian government to fulfill the social contract with citizens.

– Alessandra Lewis

Alessandra is based in Westport, CT, USA and focuses on Business and Good News for The Borgen Project.

Photo: Flickr

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Vaccinations in Africa: How Gavi Advances Economic Development

Vaccinations in AfricaFor decades, Africa has faced a dangerous dependency: carrying some of the world’s highest disease burdens while producing less than 1% of its vaccines. This reliance on imports has long limited access to life-saving vaccinations in Africa, slowing responses to health emergencies and straining national development across the continent.

To reshape this narrative, Gavi, the Global Vaccine Alliance, is laying the foundations for a thriving, self-sustaining vaccine economy for the continent. Through continental partnerships, investments and innovations, the international organization created to ensure vaccine security is working to transform African health policy. The goal is to shift it from a long-standing area of weakness into a pillar of long-term economic strength.

Initiating Local Manufacturing

The COVID-19 pandemic exposed the risks of global supply chain disruptions and the weakness of economies reliant on vaccine importation. Many African countries struggled to access vaccines in the early rollout, sparking calls for regional self-reliance. In response, the African Union set a bold goal: to produce 60% of the continent’s vaccine needs locally by 2040, with Gavi central to achieving that ambition.

Through initiatives like the African Vaccine Manufacturing Accelerator, Gavi is shaping markets, lowering barriers and mobilizing funding to grow production capacity across the continent. More than 30 African vaccine manufacturing initiatives are now in motion, supported by a mix of government leadership and international investment. These efforts aim to build a sustainable, locally based supply of vaccines for routine immunizations. By producing vaccines within the continent, Africa is taking direct action to reduce its dependence on external sources and strengthen its resilience against future global health crises.

The strength of Gavi’s procurement and demand-forecasting models is crucial to growing an African vaccine economy. It allows local producers to see and rely on predictable, long-term vaccine demand figures. This crucial step sustains the development of a successful and relevant supply chain of vaccines within Africa, ensuring the local industries remain viable and successful as the continent builds to its 2040 goal.

Economic Growth Through Immunization

Gavi’s core mission of expanding access to immunization has driven development in Africa far beyond vaccine manufacturing. Vaccinations across Africa continue to deliver strong economic benefits, improving public health while boosting productivity and long-term growth. Healthier populations lead to fewer missed school days, lower health care costs and higher workforce productivity. According to Gavi, every $1 spent on vaccinations in Africa yields up to $21 in economic benefit through avoided illness, improved wages and long-term growth.

Since its inception in 2000, Gavi’s efforts have helped immunize more than 800 million children, averting more than 14 million deaths. In Africa alone, since 2000, coverage of the diphtheria, tetanus and pertussis (DTP3) vaccine across Gavi-supported African countries has increased from 52% to more than 70%. By building health systems around vaccine delivery, such as training workers, investing in cold chains and digitizing records, Gavi has strengthened public infrastructure in regions where such systems are often underfunded. This progress has not only saved lives but also helped countries make strides toward the Sustainable Development Goals.

Toward a Resilient Vaccine Future

A more secure future for African public health begins with Gavi’s support for the African Vaccine Manufacturing Accelerator. This initiative not only increases vaccine supply but also strengthens regional resilience against future pandemics. This resilience, however, is seen as only the starting point for an African vaccination economic sector. The developmental transition of African nations from Gavi support to self-financed immunization programs is hoping to create not just independence but also leadership in global health manufacturing.

In this vision, Gavi in Africa is more than a health initiative; it is an economic strategy, a security policy and a development model. As African-made vaccines begin protecting African communities, the continent moves closer to a future where health equity and economic strength go hand in hand.

– Tom Finighan

Tom is based in London, UK and focuses on Business and Global Health for The Borgen Project.

Photo: Flickr

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ILO’s Decent Work Agenda Shaping Minimum Wage Policies

ILO’s Decent Work AgendaThe International Labor Organization (ILO) plays an important role in tackling global poverty. Through conventions, partnerships and country-specific programs, the ILO has helped shape labor laws and wage systems that improve the lives of millions of workers. A key framework of its efforts is the ILO Convention No. 131, also known as the Minimum Wage Fixing Convention, adopted in 1970 to encourage states to establish minimum wage systems.

Additionally, the ILO’s Decent Work Agenda, launched in 1999, aims to promote rights at work, fair remuneration and equal opportunity regardless of gender. Under this agenda, the ILO has supported initiatives in countries such as Namibia, Indonesia and Vietnam for progress in wage reform and labor protection.

Namibia

Although Article 95 of the Namibian constitution sets out the principle of fair remuneration, this is ineffective in practice. Many workers, particularly women, still struggle to access fair pay and efforts to increase wages have often just led to increased job losses. In response, the Namibian government, supported by the ILO, initiated the drafting of new labor legislation to set up a new minimum wage system.

A National Wages Commission was first established to hold public hearings nationwide to incorporate feedback from workers and employers. Following this, the ILO gave Namibia a recommendation based on its proposal to gradually increase the minimum wage to give industries time to adjust.

From January 2025, Namibia implemented the new policy, which sets the national minimum wage as N$12 ($0.68) per hour. Incorporating the ILO’s recommendations, this rate will gradually increase to N$15 ($0.85) per hour in 2026. Furthremore, N$18 ($1.02) per hour in 2027. The new policy also addresses the gender pay gap. Women in Namibia make up 40% of the workforce but represent more than half of those earning below the minimum wage. This includes raising wages in female-dominated sectors and the ILO’s continued support in monitoring compliance.

Indonesia

Indonesia has faced ongoing challenges in enforcing the minimum wage, leading to other issues such as job insecurity and poverty. Hence, the nation launched the Better Work Indonesia initiative with the support of the ILO and the International Finance Corporation (IFC) to improve compliance with regulations regarding wages and working conditions.

At the national level, the mission provides training to wage council members. It conducts assessments to understand the impact of wage structures. It has also helped develop more effective minimum wage monitoring systems for better compliance. At the workplace level, the initiative offers compliance advisory services, on-site training and independent assessments to ensure wage regulations are followed.

These efforts protect workers and put Indonesian industries in a more competitive position in the global market, where ethical labor practices are increasingly valued.

Vietnam

Vietnam has also made notable progress under the ILO’s Decent Work Agenda. During the first phase of the Decent Work Country Program, Vietnam reformed its labor code with the ILO’s support. It has increased the national minimum wage since then. However, this progress has slowed recently, as almost 12% of workers earn below the minimum wage.

In response, the Decent Work Country Program Vietnam 2022-26 was launched in cooperation between Vietnamese workers, employers, the government and the ILO. The program is now in its fourth phase. It focuses on social policies for strengthened rule of law, enhanced governance and responsive institutions. In particular, it aims to achieve a gender-responsive economic transformation for all workers to benefit from inclusive, high-quality social services.

Minimum wage in Vietnam is also regularly reviewed with the support of the ILO. For instance, the Setting Adequate Wages (SAW) project helps determine appropriate wage levels. It achieves this by conducting independent wage assessments, publishing wage reports and identifying relevant factors such as socioeconomic factors, inflation and family situations. Based on this information, wages are negotiated to establish a fair rate reflecting the real living cost.

Final Remarks

Namibia, Indonesia and Vietnam show how the ILO’s Decent Work Agenda can shape fair minimum wage policies. These policies help fight poverty and raise workers’ living standards. Today’s consumers increasingly demand ethical and sustainable industries. As a result, fair labor practices and minimum wage compliance are more important than ever. They boost global competitiveness and fuel long-term economic growth.

– Lucy Cho

Lucy is based in Edinburgh, Scotland and focuses on Good News and Politics for The Borgen Project.

Photo: Unsplash

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Migration to Thailand: The New Land of Opportunity

Migration to ThailandThailand is a popular subject on the topic of migration. The Southeast Asian country is beloved for its tropical climate, scenic beauty and historical sites. However, its beauty is not the sole reason for increased migration to Thailand.

Migration is an umbrella term involving the movement of people from one place to another, whether temporarily or permanently. Immigration, a sub-branch of migration, refers to people moving to a new country and settling there either semi-permanently or permanently. Both migration and immigration have increased in Thailand in recent years. Here are three reasons why people migrate to Thailand.

3 Reasons Why People Migrate to Thailand

  1. Economic Opportunities: Thailand has a moderately stable economy which is favorable to workers in neighboring countries. According to the International Organization for Migration (IOM), Thailand’s “sectors such as fishing, agriculture, hospitality, domestic work and manufacturing are heavily reliant on migrant workers for manpower.” The majority of workers migrating to Thailand are from Cambodia, Lao People’s Democratic Republic and Myanmar seeking better opportunities and higher wages than their respective countries.
  2. Refugee Migration: According to the 2024 Migration Report from the United Nations Thailand, “Thailand hosts at least 5.3 million non-Thai nationals, marking an 8 per cent increase compared to nearly 4.9 million” in the previous report. This sharp increase is due in part to intensifying conflict in Myanmar. Since 2019, Myanmar migrant populations in Thailand have doubled to 1.8 million, with an estimated 150,000 living in refugee camps on the Thai-Myanmar border. In response, the National Screening Mechanism (NSM) launched in 2023 to assist migrants in applying for “protected person” legal status to prevent deportation.
  3. Reduced Cost of Living: Western Expats from Europe and the United States have identified Thailand as a popular residential destination to escape high costs of living. From health care to groceries to living expenses, Thailand offers around a 50% reduction in average cost. With the popularization of the “Digital Nomad Visa” and other offerings, immigrants are able to enjoy reduced cost of living and increased financial flexibility, while contributing to Thailand’s economy.

Impacts of Migration to Thailand

Migration has a profound effect on Thailand’s economy. According to a report from the International Labor Organization (ILO), immigrant workers contribute to virtually all sectors and are “associated with an improvement of labor market outcomes of the native-born population.” Because a large percentage of this population has employment, the report estimates that income per capita will rise significantly. Of course, migrants and low-income, rural Thai residents still face hardships.

In a 2022 report, the World Bank noted that Thailand made “remarkable progress in reducing poverty from 58% in 1990 to 6.8% in 2020.” However, as that progress has slowed, large gaps in wealth equality are revealed, leaving nearly 80% of the poor population in rural areas earning an income that is only 68% of their urban counterparts. This income inequality disproportionately affects the recent and ongoing influx of migrants who take on roles involving fishing and agriculture.

Additionally, there is research that suggests a link between migration to Thailand and public health. In a research paper that BMC Public Health published, migrants “may impact public health by transmitting communicable diseases to the local population.” This impact depends on the type of disease in question. Yet, while a rise in migration is associated with more cases of respiratory and other infectious illnesses, it is also linked to a decline in diseases that can be prevented through vaccination. While health care in Thailand is free to all, regardless of legal status, NGOs have been crucial for migrant groups to secure equal access to health care. According to interviews that Human Rights Watch conducted, the Mae Tao Clinic is a hotspot for Myanmar nationals that offers primary care services to undocumented migrants.

Looking Ahead

Overall, migration to Thailand offers valuable and significant benefits to the growth and development of the country, and in return, migrants enjoy the benefits of improved economic conditions, refugee support and a manageable cost of living. Thailand’s approach to migration is unique and serves as an example to the world of how opening one’s border can lead to unexpected positive outcomes that challenge conventional views on migration.

– Jamaya Newton

Jamaya is based in Somerset, NJ, USA and focuses on Politics for The Borgen Project.

Photo: Unsplash

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Agricultural Exports in Egypt Reaches Highest Level in Years

Agricultural Export in EgyptLocated in North Africa, Egypt is known for its ancient history, with landmarks like the Pyramids of Giza and other iconic sites in Cairo still standing today. The country has a population of approximately 106.6 million people, with 14.7 million living in poverty, earning less than $3.65 daily. However, this poverty rate is projected to decline as Egypt’s employment rate continues to rise. Increased investment in sectors like agriculture plays a key role in driving economic improvement across the country.

Agricultural Expansion in Egypt

Agricultural export in Egypt has reached an all-time high of 6.24 million tonnes as of July 2025, an increase of 575,000 tonnes from last year. These exports include crops grown in Egypt as well as those imported from neighboring or distant countries. Notable increases have been recorded in potatoes, sweet potatoes, onions, grapes and various fruits. Among them, citrus fruits saw the largest growth, with 1.9 million tonnes exported.

In addition to Egypt’s homegrown produce, agricultural goods are now arriving from new trade partners such as South Africa, Uzbekistan, the Philippines and others. These new import-export relationships allow Egypt to access products that cannot be locally produced, potentially benefiting its citizens and expanding market variety.

What Does This Mean for Egypt?

Approximately 96% of Egypt is covered by desert, making access to arable farmland extremely difficult. This geographic challenge limits opportunities for widespread farming and often delays access to fresh produce. However, the recent increase in agricultural exports in Egypt contributes to the economy by allowing everyone fresh and healthy produce, meats and other grown foods, regardless of social class. Additionally, this growth in the agricultural sector is creating more job opportunities for individuals living below the poverty line.

According to the World Food Program (WFP), manual labor, including farming, employed 20% of Egypt’s population in 2020. While this data is from 2020, the recent surge in agricultural exports suggests a promising future for the sector, potentially accelerating economic growth and improving livelihoods. With many Egyptians engaged in various forms of manual labor, the expansion of farming plays a crucial role in producing high-quality goods and sustaining income opportunities for a significant portion of the population.

How This Impacts the Country

Agriculture has played a vital role in Egypt since ancient times. As the sector continues to increase, it contributes directly to economic growth. A stronger economy, in turn, creates more opportunities for citizens, supports healthier living and fosters a mutually beneficial relationship between the government and its people.

As Alaa Farouk, Egypt’s Minister of Agriculture and Land Reclamation, continues to implement policies that support agricultural exports in Egypt, the country will be well-positioned to thrive economically and socially in the years ahead.

– Erin Lee

Erin is based in New York City, NY, USA and focuses on Good News for The Borgen Project.

Photo: Pixabay

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China’s Taobao Villages are Fighting Poverty through E-Commerce

taobao villagesAlibaba coined the term Taobao Village to describe villages where at least 10% of households engage in e-commerce and have online sales of at least 10 million Yuan, or $1.5 million. These villages represent a bottom-up transformation in rural China, where residents have built thriving digital enterprises that have led to the development and reduced the number of the country’s population living in poverty. What began as an informal commerce strategy quickly grew into a national phenomenon, reshaping rural economies and changing the lives of villagers. As China continues to modernize, Taobao Villages highlight how digital innovation can reduce poverty, empower marginalized groups and generate long-term economic growth.

The Rise of Taobao Villages

The first Taobao Village can be traced back to Dongfeng village in Shaji, located in Jiangsu province. With a small population of about 50,000 people, it was the first rural village to take up e-commerce on a large scale. In 2010, while researching e-commerce and the villages, Alibaba’s team was surprised to see strong e-commerce activity in the town, which emerged organically through local grassroots initiative, according to Harvard University Asia Center.

It all started with one entrepreneur, a Shaji native, who opened the first online Taobao shop in 2006, first reselling mobile phone accessories and then expanding into the furniture business. Inspired by his success, other villages opened their own e-commerce stores, expanding the network as the Taobao Villages came to life.

Seeing how e-commerce slowly allowed locals to build their businesses, Alibaba created the Taobao platform, which provided opportunities for small and newer firms to sell products and services online. Taking no cuts from online transactions and demanding no fees from the opening of online stores, the platform diffused across the country, having a transformative effect in rural China.

Taobao Villages formed in three main stages:

  1. Grassroots development, as villagers led the establishment of local businesses;
  2. Government support through the expansion of local infrastructure and e-commerce training;
  3. Further government support through subsidies for service providers and firms.

Transforming Rural Economies

With reduced entry barriers, e-commerce is an accessible means of work and income for residents with minimal capital. This has led to more inclusive economic growth in rural areas of the country, especially Western and Central China, as financial conditions improved through the creation of more jobs and the general development of the economy.

The abundance of technology platforms and collaboration among villagers is changing the lives of millions of Chinese citizens. World Bank studies show that household incomes in Taobao Villages are close to three times the average rural household income, according to Alizila. Higher income leads to higher consumption, exacerbating the need for more service and goods providers, leading to a better job market and reduced income inequality.

The Result

Often perceived as a phenomenon of high-income countries, China’s e-commerce development has shown that high levels of development are not required for a successful transition from physical to digital commerce. With a worldwide commerce transaction value that exceeds that of France, Japan, Germany, the United States and the United Kingdom combined, China proves its commitment to development and the fight against poverty.

Taobao Villages became part of a grander national strategy to fight poverty, with the State Council Office on Poverty Alleviation releasing guidelines on the expansion of e-commerce in rural areas as an essential step in November 2016. In 2021, China achieved the United Nations’ 2030 poverty reduction goals in the Agenda for Sustainable Development. In the past forty years, it has lifted more than 800 million people out of extreme poverty.

Conclusion

While more research on the topic is necessary to clarify the relationship between the dominance of e-commerce in villages and welfare improvement, many cases show that people in Taobao Villages lead better lives. Lowering the required skill threshold, digital technologies can allow less-skilled and less-educated individuals to participate in e-commerce and achieve higher living standards.

For e-commerce to help alleviate poverty, the government should develop infrastructure and offer logistical support, creating a conducive environment for change. Subsidies and workshops are additional ways in which the government can contribute to the development of e-commerce platforms and combat poverty.

– Rafaela Paquet

Rafaela is based in Montreal, Canada and focuses on Business and Technology for The Borgen Project.

Photo: Flickr

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Using Oil to Fight Poverty in Guyana

Oil in GuyanaGuyana gained independence less than 60 years ago, in 1966. Since then, it has faced a lot of economic challenges that have left it classified as a developing nation. For decades, limited resources held back the country’s growth and prosperity. However, in 2015, a major turning point came when ExxonMobil discovered offshore oil reserves, forever altering the economic future of Guyana.

By October 2022, two additional oil discoveries had been made, confirming that Guyana was sitting on one of the largest oil finds in the region. Today, Guyana is one of the world’s fastest-growing economies and this trend is expected to continue. According to the International Monetary Fund’s April 2024 World Economic Outlook, Guyana is predicted to be “one of just a few countries in the world to post double-digit economic growth in 2025.”

What Does All of This Oil Mean for Guyana

As of 2024, Guyana was producing more than 600,000 barrels of oil per day, a major output for a country of about 830,000 people. The scale of this production is not only boosting gross domestic product (GDP), it’s also fueling job creation and generating billions in government revenue. As one of the fastest-growing economies in the world, Guyana is using these funds to take care of long-overdue development efforts across the country.

From Oil to Employment

Since becoming one of the fastest-growing economies in the world, Guyana has seen an increase in available infrastructure funding. Such growth has allowed the government to launch development initiatives aimed at improving the country’s economy and reducing poverty in Guyana. According to 7NEWS, Vice President Bharrat Jagdeo announced in 2023 that several major projects are underway. These include the construction of 12 hospitals, seven hotels, numerous schools and various public facilities.

Many of these buildings are expected to open soon or within the next few years. These investments have so many benefits, helping to improve access to health care, education and tourism. Also, they are expected to generate thousands of new jobs and raise the overall quality of life for the Guyanese population. The expansion of infrastructure shows a huge step in ensuring that the country’s wealth benefits a broad spectrum of its citizens.

More Than Just Oil

By creating more career opportunities, poverty in Guyana is gradually begin eroded, allowing individuals access to opportunities and experiences they may have never been exposed to. In this sense, oil is more than just a natural resource; it’s a tool for transformation. It represents the possibility of long-term development, greater access to essential resources and the chance to uplift entire communities.

– Knia Parks

Knia is based in Pepper Pike, OH, USA and focuses on Good News for The Borgen Project.

Photo: Unsplash

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KFC in South Africa: Fueling Economic Prosperity

KFC in South Africa: Fueling Economic Prosperity in Underdeveloped Markets Since Kentucky Fried Chicken (KFC) arrived in South Africa in 1971, it has grown into one of the most popular fast-food chains in the country, fueling economic prosperity in the region just after the financial crisis of 2008. With more than 900 stores across the country, it has created employment opportunities. The brand has created thousands of jobs, both directly through restaurant staff and indirectly via local suppliers, logistics and advertising, helping put money not only in the people of South Africa’s pockets, but also boosting the economy. For many South Africans, KFC represents more than just a quick meal; it serves as a source of employment and a pathway to financial stability.

KFC’s Economic Footprint and Social Responsibility in South Africa

Through its Add Hope initiative, KFC has raised more than R1 billion to fight hunger in South Africa, providing at least 80,000 meals daily to vulnerable children. The program partners with more than 130 nongovernmental organizations (NGOs), supporting sustainable feeding schemes and empowering communities. A 2024 impact study by the Gordon Institute of Business Science found that Add Hope contributes to improved health outcomes, school attendance and long-term socioeconomic development. It’s a model that shows how corporate social investment can be both strategic and transformative.

A Blueprint for Fueling Economic Prosperity

According to the OECD’s 2024 Emerging Markets Report, foreign direct investment (FDI) in these regions is rebounding, with Africa and Latin America showing strong potential for sustainable development in the future, especially when companies localize their operations and invest in infrastructure, education and community partnerships. Standard Bank projects that East Africa’s infrastructure boom could push its business value from $37 billion in 2024 to $54 billion in the coming years. This kind of growth opens doors for new markets and companies willing to engage deeply with local economies.  

Cultural Integration

When KFC made the jump to South Africa, it had to adapt its menu to reflect South African tastes and cultural norms, a move that helped build trust and brand loyalty. Other companies like Coca-Cola, McDonald’s and IKEA have also thrived by tailoring their products and marketing to local preferences.

Looking Ahead

As KFC continues to serve more than just food in South Africa, its story reflects a broader narrative: global brands have the potential to contribute to development while doing business. By anchoring themselves in local needs—through employment, cultural respect and social investment—companies can potentially help foster economic resilience in underdeveloped markets.

KFC has established a presence in South Africa that goes beyond corporate growth; it offers a model for supporting economic development in regions often overlooked by global expansion. When brands take similar approaches with intentionality, success can also be measured by improved livelihoods, stronger communities and more inclusive economies.

– Dylan Fly

Dylan is based in Detroit, MI, USA and focuses on Business and New Markets for The Borgen Project.

Photo: Flickr

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Poverty Reduction in Gabon

Poverty reduction in gabonGabon is a country with valuable natural resources like oil, timber and manganese. Yet, despite this wealth, more than one-third of its people live in poverty. High youth unemployment makes the situation worse. The political transition in August 2023, although challenging, has led to a stronger national focus on development. The National Development Plan of the Transition (PNDT) is at the heart of these efforts, aiming to reduce poverty in Gabon.

PNDT

The PNDT is Gabon’s main plan for solving economic and social challenges during the two-year transition that began on August 30, 2023. It focuses on five main goals: “political and institutional reforms, development of strategic infrastructure, intensification of economic diversification, development of human capital and social inclusion, and environmental sustainability.” All these goals connect directly to reducing poverty in Gabon.

A major goal is to invest in key infrastructure, like roads, energy, and health care. The PNDT wants to move Gabon away from depending only on raw materials and instead grow industries that add more value, like timber processing. This approach could create more jobs and reduce the country’s reliance on unstable resource prices.

Key Initiatives for Poverty Reduction in Gabon

One major effort to reduce poverty is the Emergency Community Development Program (PUDC). Launched with help from the UNDP, it aims to provide clean water, electricity, and better infrastructure in rural and peri-urban areas. It also encourages small businesses, youth employment and local planning. Gabon has invested 120 billion CFA francs into this program, with 66.7 billion already used.

Gabon is also improving health care through the National Health Insurance and Social Coverage Fund (CNAMGS). Started in 2008, CNAMGS first helped the poorest groups, students, and seniors, and now covers over half the population.

The transitional government is working to diversify the economy by focusing on industries beyond oil, such as forestry, mining, agriculture and tourism. These areas are seen as having strong potential for creating jobs and supporting rural development.

Addressing Governance and Fiscal Sustainability

Poverty reduction in Gabon is closely tied to better governance. This means improving transparency, accountability, and the use of public money, especially oil revenues. Poor management in the past has led to high debt and slow economic growth.

The PNDT also focuses on improving financial management. One step is the Treasury Single Account (TSA), which should be fully running by June 2024 to make public finances more efficient. The 2024 budget aims to raise more revenue, cut tax breaks, and modernize customs and tax systems. The IMF has stated that Gabon’s economic success depends on moving toward more transparent and inclusive governance.

Challenges and Future Outlook

Gabon is making strong efforts to fight poverty and inequality, but the success of these changes depends on fixing long-standing problems in governance, finances, and business conditions. Urban areas, where 90% of the population lives, still face concentrated poverty. To solve this, Gabon needs balanced development that supports both cities and rural areas.

– Cameron Jones

Cameron is based in Hendersonville, TN, USA and focuses on Good News and Politics for The Borgen Project.

Photo: Flickr