58. Poverty in Former USSR StatesThe countries that once made up the USSR are complex and differ in nearly every way. During the most of the 20th century, however, they were ruled over by one central government. Since the peaceful fall of the regime, the Soviet Union has splintered into the different countries we know today, connected via the Commonwealth of Independent States. Although poverty in former USSR states has generally decreased when comparing the rates of today to the past, this does not mean that the road to alleviating poverty in former USSR states was easy.

For many of the former “-stan” countries, for example, the fall had a rather negative effect on those economies. Turkmenistan became a dictatorship whose elections were not deemed fair and democratic. As a result, the country became very corrupt. Uzbekistan was not ruled by a dictatorship, but corruption inside the country is very high, making foreign aid difficult to administer. Furthermore, due to a highly controversial massacre of protesters in the country in 2005, it is the only country to have cut ties with the Western world. Tajikistan suffered a civil war right after the collapse. Kazakhstan, on the other hand, is different. The country has grown its economy since its independence due to its robust energy industry. Except for Turkmenistan (no data) and Kazakhstan (2.7 percent), every single one of the countries has a poverty rate of about 20 percent or higher.

For the countries located between the Black and the Caspian Seas, the state of poverty does not look much better. Armenia has a poverty rate of over 30 percent due to political instability, while Georgia experienced a civil war that created a few frozen conflict zones (South Ossetia and Abkhasia). Azerbaijan was spared any wars and has plentiful oil fields from which to grow its economy. Alas, corruption is very high in this country as well.

The countries in Europe, however, have done relatively well. Estonia is rated as the least poor of the countries (despite a 20 percent poverty rate) due to embracing the free market system and capitalizing on electronics. Latvia has also grown its GDP. Although it is poor, it proved itself immensely resistant to the 2009 recession and recovered very quickly while putting itself onto a path to join the EU. Moldova, however, has been suffering for two decades because of political instability, leading to the self-proclaimed state of Transnistria forming within the country. Now though, it is on its way towards EU membership, with a poverty rate of about 10 percent.

Ukraine has actually had a fairly peaceful transition into post-Soviet politics, making the 2000s a prosperous period for Ukraine. Although recent events in the country make it sound like a dangerous place, the poverty rate is in fact at only 6.4 percent. Finally, Belarus, arguably the worst country to live in after the collapse of the USSR. The country has been led by a dictator, Alexander Lukashenko, since its independence. The country has been graded as having the worst human rights of all the countries summarized in this article, making foreign aid questionable. Still, the poverty rate is supposedly at only 5.1 percent.

Overall, such a quick summary of each country cannot completely summarize the state of poverty in former USSR states. Every country is independent, making their political outcomes as varied as any group of countries in the world. What we can learn from this information is that whatever past a country might have had does not predict how it will perform in the future in regards to poverty. Those states that have succeeded in transitioning and becoming more wealthy have set a good example. Now it is up to the oppressive and poor countries to learn from this and grow.

Michal Burgunder

Photo: Flickr

Montenegro Poverty Rate
Montenegro is a small Balkan country that declared independence from Serbia in 2006. Since that time, the poverty rate in Montenegro has varied rather significantly, rising as high as 11.3 percent (2006, 2012) and falling as low as 4.9 percent (2008). The most recent data available, from 2013, lists the Montenegro poverty rate at 8.6 percent.

Prior to Montenegro’s independence, the country of Serbia and Montenegro was attempting accession into the European Union. Now an independent country, Montenegro is in its own process of accession into the EU. If and when Montenegro becomes an EU member, the Montenegro poverty rate has the potential for a fairly dramatic change, due to differences in how poverty is calculated.

Montenegro currently uses an absolute poverty rate. The poverty line as reported in 2013 was €186.54 per month. This line was calculated using basic costs of life needs, consisting of food costs and non-food needs. In contrast, the EU uses a relative poverty rate calculation. The poverty line in EU member states is calculated as 60 percent of the median income.

Attempting to calculate the relative poverty rate in Montenegro to demonstrate the difference is not easy. Monstat, Montenegro’s statistical office, currently provides average income rather than median income, so determining the relative poverty rate based on median income is not immediately possible. Using markers such as the given average income and income inequality index to estimate median income suggest the poverty line would rise using a relative calculation. Using EU member poverty rates as a guideline would also seem to suggest the potential for a higher poverty rate in a relative system.

Montenegro’s foreign minister Srđan Darmanović stated earlier this year that Montenegrin accession into the EU could happen as early as 2022. Even with the relative volatility of the Montenegro poverty rate over the last decade, a sudden rise around the point of accession need not be an immediate concern if understood as a change in the calculation system.

Erik Beck

Photo: Pixabay

Causes of Poverty in LuxembourgLuxembourg boasts one of the highest standards of living globally, with the world’s highest per capita income of $46,591 per person. However, with one in five citizens living umder the threat of poverty and social exclusion, even one of the world’s richest countries cannot escape poverty.

In Luxembourg, most people live comfortably. Since 2009, the employment rate has increased by more than 16 percent but the current unemployment rate is only 5.9 percent – well below the European average of 10.4 percent. Generous social benefits and laws condemning discrimination against women, ethnic minorities and disabled people further improve the overall quality of life in Luxembourg.

Despite these promising conditions, poverty is still an issue in Luxembourg. In 2013, the threshold for the risk of poverty amounted to approximately €1,665. During that year, about 15.9 percent of people living in the country found themselves in that category – of this group, 23.9 percent were children.

An article written by Gornick and Jantti identified Luxembourg as a high income country with disproportionately high child poverty. In the study, they found that children in Luxembourg were 20 percent more likely to be poor than the overall population.

One of the main causes of poverty in Luxembourg is having lived in poverty before. The risk of remaining poor or becoming poor for those who have previously lived in poverty is about 70 percent. On the other hand, those who have had no prior experience with poverty only face a four percent risk of entering poverty. Consequently, 60 percent of the level of state dependence is made up of those who have previously experienced poverty.

The Luxembourg Chamber of Employees identified another one of the causes of poverty in Luxembourg. They analyzed the relationship between the risk of poverty and cost of housing and found that nearly one third of tenants faced the risk of poverty. In other European countries, such as France and Germany, this risk is much lower.

One way that the Luxembourg government attempts to fight poverty and social exclusion is through the minimum guaranteed income (MGI). The MGI is given to people or households who fall below a certain threshold and its main goal is to provide sufficient means of existence and opportunities for social and professional inclusion.

Efforts such as the MGI are critical steps to improving poverty in Luxembourg. While many live comfortably and the country is prosperous in several ways, still more must be done to assist those in poverty and to lower the unnaturally high proportion of children in poverty.

Lauren Mcbride

Photo: Flickr

Monaco poverty rateHome to millionaires, a renowned casino and a prestigious Formula One Grand Prix, Monaco claims another headlining reality: the Monaco poverty rate is zero.

In order for any country to have a zero percent poverty rate, there must be zero percent of the population living under the international poverty line of U.S. $1.25 a day. So, why is the Monaco poverty rate zero? This feat is not accomplished easily; it is a combination of ideal conditions that have propelled Monaco to achieve its flawless poverty rate.

The Principality of Monaco is situated in the west of Europe along the French Riviera and bordered by France and the Mediterranean Sea. Monaco is aptly named a principality because its monarch takes the title of prince or princess. The current Prince of Monaco is Prince Albert III, who continues the Grimaldi family reign of more than 700 years.

This country is known for its beautiful surroundings and coastline, which helps draw a wealthy population, but its size plays an important role in the economy as well. Monaco is the second-smallest country in the world, after the Vatican City. It is a tiny two-square kilometers in size and the most densely-populated country in the world.

The number of residents this country can support is limited and its picturesque landscape draws people from around the world. Monaco is home to 30,645 residents. Only 16 percent of the residents are Monegasque (natives of Monaco), the majority is French and the rest come from nearby countries and outside. While Monaco’s size tightens the population, its economic strength adds additional incentives for residents.

Monaco’s current economy was strengthened by the historic decisions of Prince Charles III, known as the founder of Monte Carlo. Charles III ensured Monaco’s economic strength by taking advantage of gambling laws to build the Socièté des Bains de Mer, a company of a few hotels, a theater and a casino in 1863. The Monte Carlo casino became the most famous of these assets.

When gambling was banned elsewhere, the casino became a vacation of choice for the worlds wealthy, drawing in thousands of tourists. Charles the III also forged an agreement with France to install the first railroad across the principality as infrastructure to support the growing tourism market. Charles III attracted additional foreign investments when he established a zero income tax.

Why is the Monaco poverty rate zero? Tax incentives, location and the international popularity of Monte Carlo secured Monaco’s popularity with the wealthy and ignited the country’s tourism industry. Today, one-third of Monaco’s population makes more than $1 million to the point that Monaco’s GNI per capita is $186,080, the highest in the world.

Interestingly much of the working class in Monaco does not actually live there. Daily, more than 30,000 French and 5,800 Italian nationals travel to Monaco to work. This lends to the enormity of the private sector industries, which account for 86 percent of the labor force in Monaco. Monaco has developed into a destination for research centers, and 22 percent of the labor force works in scientific and technical activities, including administration and support services. The tourism industry accounts for 11 percent of the country’s economy, and the gaming industry 4 percent. The prince also guarantees all of the residents life-long employment, so there is nearly zero unemployment.

Monaco has the ideal combination of geographic, economic and residential dynamics to allow and support a zero percent poverty rate. The size of the country limits the amount of habitable space the country can offer and the landscape and world-renowned events like the Grand Prix give rise to millionaire inhabitants. The fiscal qualifications for residents in Monaco are set by the real estate prices while tax incentives provide a desirable buffer. Monaco builds its wealth on the investment of the worlds wealthy and maintains it through value-added tax revenues from established businesses. These factors have propelled Monaco’s reputation as the land of the millionaires and give insight into the Monaco poverty rate being zero.

Eliza Gresh

Photo: Pixabay

Slovakia Poverty RateSlovakia is a country that tends to get overlooked when considering global poverty. While media entities and NGOs focus on African and Asian nations, eastern European countries like Slovakia do not normally make headlines.

The story behind the Slovakia poverty rate, however, is worth discussing. With the 2015 figures coming in at 12.3 percent, according to the CIA World Factbook, this number should be scrutinized.

Since its separation from the Czech Republic in 1993, Slovakia has had an odd growth experience. In the last 13 years, for example, Slovakia’s poverty rate has cycled between 13.3 percent and 10.6 percent, according to the World Bank. The CIA World Factbook’s 2015 figure of 12.3 percent shows a slow decrease following the 2011 peak of 13.2 percent, which was the second of two peaks over the last 13 years.

To be clear, the fact that the Slovakia poverty rate is decreasing is a good thing. The country’s low-cost labor force has made it an attractive hub for foreign investment in central Europe in recent years. According to OECD, Slovakia’s GDP growth rate is projected to be 4.1 percent, which is a respectable number for any country and outpaces many economic powers like the United States.

The question that remains, though, is whether or not this advancement, and particularly the decrease in the Slovakia poverty rate, is sustainable. The upward trend in the Slovakia poverty rate from 10.6 percent in 2006 to 13.2 percent in 2011 could be an anomaly due to the 2008 financial crisis. With an economy highly based on labor that focuses itself on volatile industries such as energy, Slovakia must diversify its economy if it wishes to continue its recent economic growth.

It will be interesting to see how Slovakia develops as the country pulls itself out of poverty, unemployment and the like. Whether or not this recent growth is truly sustainable remains to be seen, but there are high hopes for the young country.

John Mirandette

Slovenia Poverty RateIn the wake of the 2008 financial crisis, one country that seemed to get overlooked was Slovenia. A Balkan country located in the heart of Central Europe, Slovenia wasn’t regularly mentioned in any newspapers or government hearings, but it, too, has had long-lasting economic issues.

The Slovenia poverty rate skyrocketed in four years, from 11.3 percent in 2008 to 14.5 percent in 2012, according to the World Bank. This number has since hovered around that peak, with the most recent data out of the C.I.A. World Factbook stating that, as of 2015, Slovenia’s poverty rate has remained at 14.3 percent.

Furthermore, Slovenia’s unemployment rate also saw a massive multi-year increase, from 4.38 percent in 2008 to 10.11 percent in 2013, according to the Organisation for Economic Co-operation and Development. World Bank data also shows that Slovenia’s GDP saw steady decreases while their population grew slightly over the same period.

The economic situation in Slovenia, though, has begun to change for the better. While Slovenia’s poverty rate, unemployment rate and the like have worsened since 2008, their trajectories are now turning around, forecasting a positive future for the small European nation.

By focusing on its economy, Slovenia has used export development as a catalyst to improve other societal factors. The Slovenia poverty rate, while currently at 14.3 percent, hasn’t worsened, their unemployment rate has dropped to 8.01 percent of the labor force and their projected GDP growth rate is a respectable 3.1 percent.

What this means is that, while Slovenia has undoubtedly suffered economic hardships over the last decade, there is hope for the future. With Slovenia’s poverty rate stabilizing and with other economic factors seeing marked improvements, Slovenia is on track to make a strong recovery. The next few years could be bright for the country and its people.

John Mirandette

Photo: Flickr

Czechia Poverty RateThe Czechia poverty rate continues to rank among the lowest in the EU. At 5.9 percent, the eastern European nation, which shed its English moniker of “Czech Republic” early in 2017, beat out such neighbors as Poland, Portugal, Hungary, Italy and Spain, all of whom have rates exceeding 10 percent.

In the OECD, Czechia ranks behind only Denmark in terms of poverty rate, which measures the amount of families living below a country’s poverty line. In Czechia, that number is 10,220 crowns (about $431 USD) per individual and 21,461 crowns (about $906 USD) for families with children.

Based on population-weighted estimates drawn from household surveys, the poverty rate is not necessarily a perfect benchmark for comparison between nations. Indicators are specific to each country’s economic and social circumstances, and a variety of factors influence perception of poverty.

However, other metrics tell the same story of a robust quality of life within Czechia. Not only is the Czechia poverty rate one of the lowest, the nation’s wealth inequality outperforms other high-performing countries. Only 22 percent of Czech income is held by the wealthiest 10 percent, lower than the U.S., China, Indonesia and Chile, who have rates of 30.2, 31.4, 31.9 and 41.5 percent respectively. The Gini coefficient, which measures income inequality, is a relatively low .26 for Czechia, and unemployment lingers at an impressive 3 percent as of 2017.

Explanations for the country’s favorable economic indicators are many. Czechia has an excellent education track record, with enrollment standing at 99.75 percent. Government funds have been redirected to education over the past decade, while decreasing in other sectors such as infrastructure. Public reform following the 2008 global economic crisis saw a VAT hike and reduction of social welfare benefits, but included significant tax discounts in other sectors of the economy and pensions that nearly doubled.

Though these factors have aided in suppressing the Czechia poverty rate, conditions for the majority of employees are not necessarily as complimentary. As average Czech wages increase, they still remain substantially lower than the EU median. An average wage across industry of $23,003 USD reflects Czechia’s tough minimum wage, which remains one of the lowest among OECD nations. The country’s main source of income comes from engineering and machine-building industries, which accounts for 37.5 percent of the economy. With a popular tourist destination for a capital, services bring in around 60 percent of Czechia’s wealth.

Forecasts predict a sustained pace of economic growth but slowing rates of employment. Inflation, which jumped from 2016 to 2017, is expected to decline as debt continues to diminish post-recession. It remains to be seen whether or not the trend in Czechia’s low poverty rate will continue.

Mikaela Krim

Photo: Google

Causes of Poverty in the Czech Republic
In the wake of its post-communist economy, the Czech Republic is working to revitalize its financial strategy and to become a commercial powerhouse in Eastern Europe. However, obstacles preventing the country from improving its economical state are due to the nature of its communist past.

The absence of labor markets forced the communist government to impoverish its citizens in order to sustain the state. Causes of poverty in the Czech Republic stem from the country’s political and economic background during the late 20th century and are exhibited through its complex economic struggles, faulty environmental policies and societal differences.

The Czech government enforces strict fiscal restrictions, which inhibit its economy from reaching its potential. Czechoslovakia strategizes its economy towards export-based trade to maximize external growth. This plan compromises economic security and further perpetuates causes of poverty in the Czech Republic. In order to strengthen its fiscal prospects, the Czech government must invest in its domestic demand for the sake of creating a more sustainable economy.

Instead of resourcing its environment responsibly by taking into consideration long-term consequences of pollution and resource obsolescence, the Czech Ministry of the Environment approves of policies that allow systematic ruin to the environment. This, combined with the issuing of permits without charge to large corporations (which wastes 47.5 billion Czech Korunas), deprives the Czech economy of state revenue it could utilize to fund public sectors that are desperate for financial aid.

With unemployment at 10 percent and various instances of political corruption, Czech society (which is exhaustively compromised of its middle and lower class) is distrusting of governmental figures and industry elites that dominate its politics. While the labor market of the Czech Republic is currently strong and wage increases are on the rise, causes of poverty in the Czech Republic are also contributing to fracturing the coexistence between social classes. For example, the Czech Republic’s reliance on its pension system is not ideal for economic longevity due to increasingly falling replacement rates.

If the Czech Republic is to preserve its strong labor market and to extend pensions to its citizens, it should focus on domestic market growth to meet the demands of its country from the inside out. In addition, the Czech government should focus on lessening the severity of its fiscal restrictions in hopes of liberating its economic prospects and combatting the causes of poverty in the Czech Republic.

Kaitlin Hocker

Photo: Flickr

Poverty Rate in Norway
Norway, officially known as the Kingdom of Norway, is located between Finland, Russia, Skagerrak and Denmark. With a population of over 5.2 million people, Norway is a member of the European Economic Area. Norway is the world’s fifth-largest oil exporter and is considered to be one of the richest countries in Europe. Below are eight facts about the poverty rate in Norway:

  1. Norway had an unemployment rate of 4.4 percent in 2016 and was ranked 48th on a list of worldwide unemployment rates. The rate dropped 0.2 percent from 2015 to 2016.
  2. Although Norway is considered to be a wealthy country, 7.5 percent of the population still lives below the poverty line.
  3. The richest 10 percent of the population in Norway controls 21.2 percent of the entire nation’s wealth. The poorest 10 percent of the population controls only 3.8 percent of the whole country’s wealth.
  4. Norway lowered its oil prices in 2015, which caused an increase in the country’s unemployment rate and slowed down the growth of its GDP in 2016.
  5. Many immigrants in Norway live in poverty. According to recent research, 36 percent of immigrant children live in poverty in Norway, while only five percent of children with Norwegian parents do.
  6. The main cause of poverty among immigrants is that many immigrants are unable to apply their education and work experience they gain from their home country to their new careers in Norway.
  7. The poverty among children is a direct cause of lower education rates. Most immigrant children end up failing at the workplace and struggling with the same poverty problem.
  8. Norway’s government has expressed a willingness to increase public spending from the sovereign wealth fund to help prevent a recession.

Although Norway is considered to be one of the wealthiest countries in Europe, poverty is still a problem in the country, especially among immigrants. The Norwegian government will need to pay more attention to immigrants’ living conditions in the future in order to make changes and reduce the poverty rate in Norway.

Mike Liu

Serbia Poverty RateThe Republic of Serbia is a European country that declared its independence from the union of Serbia and Montenegro in 2006. Due to Serbia’s separation from the union and its rapid growth between 2001 to 2008, the country faces a substantial poverty rate.

According to the United Nations Development Program (UNDP), nine percent of Serbians are living in poverty as of 2016. Additionally, a concerning 25 percent of Serbians are on the verge of poverty. However, the Serbia poverty rate has improved since 2014, in which one in four people were living below the poverty line. Currently, the most vulnerable groups in Serbia are the Roma and youths.

The Roma are widely recognized as the European Union’s largest minority group, totaling ten million people. In many countries, including Serbia, the Roma were particularly vulnerable to poverty largely due to discrimination. Overall, 19.7 percent of Serbians are unemployed, and more than 50 percent of the unemployed are Romani.

Thus, a significant percentage of the Serbia poverty rate is made up by the Roma, who make up two percent of the Serbian population. Poverty among the Roma continues to persist as Serbia’s method for inclusion relies wholly on education, despite current statistics. As of 2015, only 8 percent of Romanis completed high school, due to discrimination and family financial difficulties. To adequately address the economic disparity of the Roma, more efforts will need to be put towards inclusion.

Youth in Serbia are more likely to be on the verge of poverty or living in poverty due to unemployment. The UNDP reported that “1 in 8 children under the age of 14 live in poverty”. As of 2016, 44.2 percent of youths were reported as unemployed. This is caused by a gap between the supply and demand of skilled labor brought about by Serbia’s flawed educational system.

Education in Serbia is currently not centered around their economic needs, so youths do not have the required skills for available positions. Poor education has led to a substantial long-term youth unemployment rate of more than 50 percent. Educational reforms will need to be made to address youth unemployment and poverty.

Governmental reform programs are underway to address the Serbia poverty rate and to prevent more people from falling into poverty. The rapid growth of Serbia led to significant internal and external imbalances that will need to be addressed through fiscal consolidation.

Structural reforms will also be needed to address the current problems with the Serbian educational system as well as other services.  With effort from the Serbia government and outside assistance, there is hope that the Serbia poverty rate will significantly decrease by 2030.

Haley Hurtt

Photo: Flickr