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Archive for category: Global Poverty

Key articles and information on global poverty.

Economy, Global Poverty

How to Help People in Dominica

How to Help People in Dominica

The Commonwealth of Dominica, a small island nation, is one of the poorest countries in the Caribbean. While other Caribbean nations have moderately successful tourist industries, Dominica’s tourism has decreased in recent years along with its economic growth. Dependence on a failing banana industry has further exacerbated the country’s poverty; therefore, it is necessary to help people in Dominica reinvent their economy.

As recently as the 1990s, Dominica supported itself through banana farming, which was well-suited to the country’s tropical environment. While banana-centric agriculture was reliable and productive, economic specialization proved to be a kiss of death for Dominica’s economy in a changing trade landscape. When global tariffs on American-grown bananas were lifted in 2008, Dominican farmers simply could not compete with the low prices offered by American companies.

While the revenue generated by banana exports once supported nearly 2,000 Dominican farmers, only about 700 struggling banana farmers remain. Dominica’s unemployment rate sits at a staggering 23%, having decreased only two percent over the last decade.

Dominica’s economic hard times have impacted the lives of its citizens. Forty percent of Dominica’s population lives in poverty. Since the fall of the banana industry, Dominicans have left the country in droves, seeking employment. The exodus has been so significant that remittance payments from emigrant family members account for 16% of Dominica’s GDP.

The Dominican government has promoted economic diversification in an attempt to resurrect the economy and provide more jobs for Dominican citizens. Another Caribbean nation, Antigua and Barbuda, set the example for a diversified economy after the decline of its sugar cane industry. By embracing tourism and online gaming, as well as construction, Antigua and Barbuda saw significant financial benefits. Unfortunately, Dominica has not yet successfully diversified. The tourism industry in Dominica is still meager compared to that of other Caribbean nations, and other agricultural exports, like coffee, fruit and flowers, have not replaced the lucrative banana.

In addition to monetary problems, water sanitation issues and resulting diseases plague Dominica’s inhabitants. Thirty-seven percent of Dominicans do not have access to clean water. Unsanitary water increases the incidence of diseases such as typhoid fever, which has increased in Dominica by nearly 40% since 1990. Though Dominica’s government created a water and sewage management company in 1989 (The Dominica Water and Sewage Company), Dominica still relies on foreign grants for infrastructural maintenance.

Changes in trade policy would greatly help people in Dominica. The reimplementation of tariffs on U.S. produce would make it easier for Dominican farmers to sell their bananas on the global market. Fair trade organizations, such as the Windward Islands Farmers Association, have helped banana farmers access profitable trading opportunities, so buying fair trade Dominican bananas supports the livelihood of Dominican farmers. However, further assistance is needed.

The EU is Dominica’s most significant donor, though China also contributes aid. If Dominica is going to be successful, more wealthy countries such as the U.S. should provide aid programs or create legislation to strengthen infrastructure, reenergize and diversify the economy, and help people in Dominica live free from poverty.

– Mary Efird
Photo: Flickr

October 18, 2017
https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg 0 0 Borgen Project https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg Borgen Project2017-10-18 07:30:462024-06-05 23:48:46How to Help People in Dominica
Global Poverty

Why Is Andorra Poor? A Resolved Issue or Still at Risk?

Why Is Andorra Poor? A Resolved Issue or Still at Risk?

Although Andorra is a part of Europe, this small chunk of land skirts above the poverty line. Andorrans narrowly avoid poverty through trade alone, meaning one decision or mistake could lead people to ask: why is Andorra poor?

Andorra‘s independence has successfully lasted about 150 years, yet only five percent of their land is arable. Andorrans rely on Spain for 63.6% of consumer goods, food, fuel and electricity, while France provides them with 15.8% and Germany 3.1% of their resources. Andorra imports a total of 82.5% of these resources that are necessary for survival.

Without trade, Andorra would fall drastically below the poverty line because the land cannot support the population. Furthermore, Andorra does not contain an airport, thus they can only rely on neighboring countries for imported goods. If Andorra built an airport and made trade connections with multiple countries, it would not be as vulnerable.

Luckily, Andorra has made other improvements to help it remain above the poverty line, such as a recent decline in their unemployment rate from 4.1% in 2015 to 3.7% in 2016. The infant mortality rate has also fallen from seven per 1,000 in 1990 to three per 1,000 in 2012.

Andorra’s basic education remains free for residents and they provide three different school systems to address the various language barriers. They have an Andorran, French and Spanish school system. The diversity in education allows greater access for children to become educated, leading to economic success.

It is not as if Andorrans have not considered the disadvantages of their trade-reliant society. In 2006, “the Andorran government began sweeping economic reforms,” hoping for economic growth. The government also passed foreign investment laws in both 2008 and 2012.

Andorrans live prosperously, while also hoping they will never be asked: why is Andorra poor?

– Brianna White

Photo: Flickr

October 18, 2017
https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg 0 0 Borgen Project https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg Borgen Project2017-10-18 07:30:152024-06-07 05:07:46Why Is Andorra Poor? A Resolved Issue or Still at Risk?
Economy, Global Poverty

How to Help People in Andorra

How to Help People in Andorra

Mountains draw people to the European microstate of Andorra, which offers the best skiing and resorts in the Pyrenees. Prior to World War II and the modernization of Andorra, subsistence agriculture was the dominant industry, even though its mountainous geography is not conducive to large agricultural gain. After the war and the integration of Europe, Andorra quickly modernized and moved toward a lucrative service economy based on tourism. Today, with the rise of the tourism industry, agriculture makes up a small proportion of Andorra‘s industry. Most families own hotels, restaurants and other businesses rather than supporting themselves through farming, greatly increasing their quality of life and wealth.

Andorra has a very low poverty rate due to its booming service economy fueled by its tourism industry. Over 95% of people work in the service industry and only 3.7% of people were unemployed as of 2016. Poverty is so low that the percentage of the population below the poverty line is not measured. One can help people in Andorra stay out of poverty by supporting the Andorran tourism industry, thus sustaining Andorra’s equitable living standards and strong economy, with the added benefit of exploring Andorra’s culture in its beautiful Pyrenees location.

As of 2016, Andorra’s population was 77,281. Its GDP from the year prior was $3.327 billion. Its GDP per capita from 2015 was $49,900, making it the twenty-fifth wealthiest nation in the world as of 2015. These figures show the country’s strength and the lack of direct need to help people in Andorra.

Although there is not a crucial need for foreigners to help people in Andorra, it is important to maintain the success of Andorra, which can only continue by foreigners continuing to visit Andorra and support its tourism industry — an enjoyable way for one to help Andorrans.

– Mary Kate Luft

Photo: Flickr

October 18, 2017
https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg 0 0 Kim Thelwell https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg Kim Thelwell2017-10-18 01:30:512024-05-28 00:16:14How to Help People in Andorra
Global Poverty, Health

Causes of Poverty in Monaco Successfully Minimized

Causes of Poverty in Monaco

What are the causes of poverty in Monaco? This is a difficult question to answer. As of 2009, according to the World Health Organization, Monaco does not have any percentage of its population living below the national or international poverty line. So, there are essentially no causes of poverty in Monaco.

Monaco, a microstate located on France‘s southern coast, has a small population of 38,000 people. In 2015, Monaco had the highest per capita GDP in the world. Thus, it is not surprising that Monaco is home to some of the world’s wealthiest people and many popular, expensive tourist attractions such as Monte Carlo.

Furthermore, the cost of living is extremely high in Monaco; property costs $9,000 per square inch, which is approximately 50% more expensive than the average apartment in New York City. Monaco is roughly the size of Central Park, and so it is fairly difficult for a large number of people of low socioeconomic status to find a place to live.

In addition, the working class of Monaco is hardly even comparable to the working class of many developed countries like the United States. Workers are granted competitive, tax-free salaries and they do not suffer the same hardships and difficulties that part-time, minimum wage workers in the United States face.

Health outcomes are oftentimes linked to poverty rates and may provide meaningful insight into a country’s poverty rate. Underdeveloped countries, which experience higher incidence rates of communicable diseases, have higher poverty rates than developed countries like Monaco, which experience high incidence rates of non-communicable diseases. Infectious, communicable diseases that are oftentimes rampant among groups of low socioeconomic status do not have high incidence rates in Monaco.

For instance, diarrhea, which is a common indicator of infectious disease rates, was reported to have an incidence rate of 0.3 in 2009, which is comparable to the world’s lowest incidence rate of diarrhea of 0.2 at that time. Cardiovascular disease is an example of a non-communicable disease that has a fairly high incidence rate in developed countries. In Monaco, cardiovascular disease had an incidence rate of 2.1 in 2009, compared to the world’s lowest incidence rate of cardiovascular disease, 1.4, at that time.

Monaco’s health outcomes are comparable to those of developed countries rather than underdeveloped countries. These facts, combined with the protections for worker salaries and the many wealthy people that live there, mean that poverty is fortunately not an issue for the people of Monaco.

– Emily Santora

Photo: Flickr

October 18, 2017
https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg 0 0 Kim Thelwell https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg Kim Thelwell2017-10-18 01:30:452024-12-13 17:58:26Causes of Poverty in Monaco Successfully Minimized
Global Poverty

Education in the Bahamas

Education in the Bahamas

The quality of education in the Bahamas has been improving since the late 1950s. These improvements have been spurred on by leaders of the Bahamas Union of Teachers (BUT), which has recognized the failures of the previous education system.

The Education Act, which was revised in 1996, is the primary education law governing the Bahamas today. It guarantees free education for all residents between five and 16 years of age. About 75% of children attend public primary schools, but most nurseries and pre-schools are run by churches. There are 170 educational institutions in the Bahamas, which is a great number considering the population of the archipelago. In 2014, the Bahamas introduced the National High School Diploma, to create a standard for minimum basic education for every child. This was a big step in improving the education system by ensuring equal education for all children.

In the nation, over 100% of children received primary education in 2006 and this trend has been continuing into the present. This is a very impressive rate, especially given that there is no disparity between access to education between boys and girls. In 2003, the literacy rate for adults ages 15 and over was 95.5%. This percentage was even higher for young adults aged 15 to 24. Most of the population in the Bahamas is under 60 years old, meaning that the education system in the country has been relatively successful in having literate citizens since the 1960s.

A few years ago, the Minister of Education, Science and Technology gave a statement about recognizing the need for a larger skilled workforce. The government invested $4 million in Information and Communications Technology in public schools to better prepare students for a technologically advancing world. Career Academies were implemented in high schools to allow students to gain specific skills for the job market. These skills include hospitality management and business studies, which should help them get jobs in the Bahamian tourism industry.

The Minister also indicated that the Bahamas would focus on developing better quality teachers. An In-Service Professional Development Institute was opened to provide standardized and more effective training for teachers and other educators in the country. These programs are still in development but have proven to be valuable steps forward for the nation.

Ultimately, education in the Bahamas is on the right track, as the government is prioritizing high-quality education for all. They should continue to implement new and improved programs, as well as start focusing on increasing the number of residents who have access to, and attend, higher education institutions. With these current programs and a steady plan for improvement in the future, the Bahamas can surely create an excellent education system for it citizens.

– Liyanga De Silva

Photo: Flickr

October 18, 2017
https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg 0 0 Kim Thelwell https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg Kim Thelwell2017-10-18 01:30:182020-06-25 15:29:15Education in the Bahamas
Global Poverty

How to Address Education for Rohingya Children

Education for Rohingya Children

Hundreds of thousands of ethnic Muslims from Myanmar’s Rakhine State have been fleeing to Bangladesh with the hope of finding shelter from the extreme violence they have had to endure. As the minority group of Myanmar, the Rohingya Muslims are the populations facing discrimination and persecution from the Buddhist majority, which is defined by U.N. human rights officials as “ethnic cleansing.”

Rohingya refugees were therefore forced to escape their country to find safety in neighboring Bangladesh, which already housed almost 430,000 of those refugees. With the increasing influx of refugees fleeing into Cox’s Bazar, Bangladesh, the country has announced that it will create the world’s largest refugee settlement with the capacity to shelter 800,000 displaced Rohingya Muslims, including children.

According to UNICEF, 250,000 Rohingya children have escaped from Myanmar to the host community of Bangladesh, making up at least 60% of all refugees. According to the research-based advocacy project — the Arakan Project — education for Rohingya children has always been at risk, as most of them did not have the chance to attend school due to poverty factors and lack of schools. Additionally, Rohingya students are being barred access from universities in Burma. Now living in refugee camps in Bangladesh, some of the students are missing out on proper education, as secondary schools in camps are not allowed by the Bangladeshi government.

However, UNICEF has been working toward providing proper education for Rohingya children within the camps. On September 29, the organization announced that it will build new learning centers for Rohingya children in addition to the 182 existing centers in the camps. In total, UNICEF is planning to increase its numbers to 1,300 learning centers in order to provide education to the expected 200,000 child refugees coming to Bangladesh.

These learning centers will only provide education to children ranging from ages four to 14. Therefore, education for Rohingya children older than 14 is still compromised, leading to illiteracy for the majority of those students. Currently, there is an estimated total of 80% of Rohingya people being illiterate. UNICEF is working on developing additional educational opportunities for the future of Rohingya children.

– Sarah Soutoul

Photo: Flickr

October 18, 2017
https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg 0 0 Kim Thelwell https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg Kim Thelwell2017-10-18 01:30:112024-06-11 02:48:34How to Address Education for Rohingya Children
Economy, Global Poverty

Why is Cabo Verde Poor?

Why Is Cabo Verde Poor?

Cabo Verde, or Cape Verde, is a former Portuguese colony made up of 10 islands and five islets located just over 300 miles off Africa’s west coast. Why is Cabo Verde poor? Severe droughts during the 1900s killed 200,000 people and caused many to leave the islands.

Cabo Verde does not have many natural resources, and only 10% of the land can sustain crops. This makes the nation vulnerable to poor economic growth. Although the poverty rate has been reduced significantly, one-quarter of the population is still poor.

The national poverty rate in Cabo Verde fell from 37% to 27% between 2003 and 2008, according to the World Bank, and the extreme poverty rate went from 21% to 12%.

Tourism is a major source of economic growth in Cabo Verde and is credited as the main reason for the drop in poverty rates. Still, one is compelled to ask: why is Cabo Verde poor?

The Congressional Research Service reported that slow economic growth in Europe has fostered slow growth in Cabo Verde. This is because Europe is a major trading partner and source of foreign investment, and Cabo Verde is also a major tourist destination for many Europeans.

Despite all this, growth has recovered due to a resurgence in tourism and foreign investment. Gross domestic product grew from .93% to 3.63% between 2012 and 2016. Unemployment is now estimated to be at nine percent, which is a significant drop from 16.8% in 2012. Yet, one must still ask: why is Cabo Verde poor?

Public debt in Cabo Verde was 130% of the GDP at the end of 2016, according to the World Bank. It is also estimated that growth was above four percent which is 1.5% more than in 2015 but still not enough to bring down debt levels. The World Bank predicts that debt will continue to increase in 2017 because of a state-owned airline (TACV) and social housing.

Modest growth is predicted for Cabo Verde’s major trading partners which may slow foreign investment in the small nation as well.

– Fernando Vazquez
Photo: Flickr

October 17, 2017
https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg 0 0 Borgen Project https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg Borgen Project2017-10-17 07:30:552020-06-25 15:55:29Why is Cabo Verde Poor?
Global Poverty, Government

Kuwait’s Stateless Population

Kuwait's Stateless Population

Growing up, Mona Kareem was not a victim of childhood torment because of her nationality—but, rather, her absence of nationality. She is a member of Kuwait‘s stateless population. From an extremely young age, Kareem knew she did not quite belong. Her fellow students, and even her teachers in Kuwaiti’s free, public schools seemed to treat her more as an apparition than an individual.

One could imagine why Kareem accepted an academic scholarship in 2011 to study in the United States at SUNY Binghamton. Though this decision came with a measure of arduous ambiguity concerning how and when she may see her family again—the act of leaving her ‘home’ country of Kuwait did not weigh heavily of Kareem, given that this ‘home’ refuses to recognize her existence. She is just one of many that fall under Kuwait’s stateless population.

According to the CIA World Factbook, Kuwait is an extremely wealthy country with little measurable poverty. Bordering the Persian Gulf, lodged between Iraq and Saudi Arabia, this tiny country—slightly smaller than the state of New Jersey—holds more than 6 percent of the globe’s crude oil reserves. This asset accounts for more than 50 percent of its GDP, and 92 percent of its export revenue.

Sitting on such an expansive source of wealth allows Kuwait to take care of its citizens. Earlier this year, Business Insider placed Kuwait sixth on their ranking of richest countries based on GDP per capita. With a population of just above 4 million, the country brings in the equivalent of an annual $71,263 per person.

Each resident has access to free healthcare, education up to (and including) the university level, and monetary allowances from the government for major life occasions. If a Kuwaiti was to be married, for example, they would receive $19,000 American dollars for their doing so—half acting as an interest free loan, and the other half as a complimentary gift toward their future.

In 2004, Oprah Winfrey interviewed Princess Zain Al Sabah on her nationally-viewed show, confirming the extravagant lifestyle embraced by her and the majority of her ‘friends.’ She went on to explain that this lifestyle is accessible not only to royalty, but the ‘common,’ everyday citizens of Kuwait.

However, the contention with Kuwaiti’s government does not lay with the Kuwaiti common, nor the royal ‘friends’—but those that perhaps aren’t recognized as ‘friends’ at all. Unfortunately, there is a large proportion of individuals living in Kuwait that do not qualify for the benefits the Princess emphasized. In fact, they do not qualify as citizens; according to the Kuwaiti government, they do not exist. This is Kuwait’s stateless population.

Kareem and her family are known to the Kuwaiti people as ‘Bedoons,’ translating to mean ‘without’ in Arabic. They are descendants of Bedouin tribes, nomadic groups who have raised cattle and tended to crop across the Middle East and Arabian peninsula for centuries.

Traditionally, the Bedouin tribes have led self-sufficient lives, migrating at the turn of the season and rejecting modernity. Of course, tradition changes with the time, and descendants of this nomadic lifestyle have begun to seek more than perpetual exodus to fulfill their lives.

In the late 1950’s, before declaring sovereignty 1961, Kuwait’s government declared that all citizens must formally register before the country is recognized. To qualify for nationality one must meet the following requirements: one must have had settled in Kuwait prior to 1920 and maintained residence in the region; one must be a person in or outside Kuwait whose father is a Kuwaiti national; or one that can prove to have been born in Kuwait, even if their parents are unknown.

At the time of registry, however, a large proportion of Kuwaiti inhabitants lived in rural regions, lacking both the necessary paperwork and literary skills necessary to understand the weighty context of this request. Consequently, around 300,000 Kuwaiti people, including the ancestors of Kareem, did not become citizens.

Today, this would equate to one-third of the native population living in Kuwait. Those that had forgone the process of citizenship were left ‘without’ nationality. Thus, the majority of descendants remain without nationality—otherwise known as Kuwaiti’s ‘Bedoons.’

For several years post-independence, Kuwait’s stateless population continued to live unchallenged by their lack of nationality. Most kept to their tribal traditions, living outside of urban areas and seeking government assistance only on rare, emergency occasions. If public education was sought for a child, the Kuwaiti government allowed schooling for the Bidoon—despite their statelessness.

It was only after heightened tensions in the Middle-East in the late eighties that xenophobia began to emerge as a weapon against the Bidoon people. After a large portion of Kuwait’s people fled during the Iraqi invasion in 1991, only about half of the Bedoons were allowed re-entry.

Of course, Kuwait’s stateless population returned to a different world. Suspicions of Iraqi alignment ran rampant throughout the nation. Consequently, the Bidoon’s lack of formal nationality often receiving the brunt of this hostility.

To this day, over 100,000 Bedoons live without recognition in the only country they have ever called home. Most dwell in rural areas, exposed to unsuitable living conditions. Regardless of their ability to trace back their native roots, they are repeatedly denied citizenship and are unable to qualify for basic government subsidies on healthcare, education and housing/food allowances. On top of this, there still exists an equal number of stateless individuals in neighboring countries, perceived as refugees and denied access to their home altogether.

In a nation that can afford not only to meet the needs of their citizens, but encourage wealthy and prosperous lives—it is unfortunate that such a great number of its native people are living in a way that threatens their basic security.

In order for the world to understand the demographic of the Kuwaiti people and the true ‘wealth’ of this small nation, the government must first open its doors to Kuwait’s stateless population.

– Briana Fernald

Photo: Flickr

October 17, 2017
https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg 0 0 Kim Thelwell https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg Kim Thelwell2017-10-17 07:30:292024-05-29 22:27:17Kuwait’s Stateless Population
Global Poverty

Common Diseases in Saint Lucia

Common Diseases in Saint Lucia

Saint Lucia is a small island nation in the Caribbean with a population of about 165,000 people. The citizens have a life expectancy of about 78  years. Although life expectancy is comparable to Jamaica and the United States, common diseases in Saint Lucia still have an impact on the population.

Noncommunicable Diseases

The most common noncommunicable diseases that plague Saint Lucia are cardiovascular diseases, contributing to about 42.3 percent of deaths in Saint Lucia. Stroke and ischemic heart disease are currently the two deadliest cardiovascular diseases in Saint Lucia.

A stroke occurs when blood supply to the brain is interrupted. For example, a blocked artery or damaged blood vessel can cause a stroke. The signs of a stroke include numbness (often on one side of the body), trouble speaking, and loss of balance. Strokes can lead to serious disabilities or death. Both tobacco use and high blood pressure can cause a person to have a stroke. About 14,800 citizens in Saint Lucia use tobacco, which is likely a contributing factor for strokes in the country.

Ischemic heart disease is not only one of the common diseases in Saint Lucia, it is also a contributing factor to strokes. Ischemic heart disease occurs when plaque forms in major blood vessels in the heart, blocking blood flow. This can cause both heart attacks and strokes.

Although stroke and ischemic heart disease are the deadliest cardiovascular diseases in Saint Lucia, incidences of both are actually on a decline. Since 1990, stroke has had a four percent decrease in mortality rate, and ischemic heart disease has had a 16 percent decrease. Although these are small decreases, they are encouraging signs of improvement in Saint Lucia.

Communicable Diseases

Although the situation with noncommunicable diseases has improved, communicable diseases have had an increase in problems. More specifically, Saint Lucia is currently plagued with the zika virus.

Zika is a mosquito-borne disease that is spread through the bugs’ bites. Common symptoms of Zika are fever, headache, red eyes and joint pain. If a pregnant woman contracts Zika, it can cause developmental complications in infants born from the infected mother. Infected patients can also become paralyzed, as Zika can cause the immune system to attack the nervous system.

As of August 29th, 2017 the Centers for Disease Control and Prevention has issued an alert level two in regards to the Zika virus in Saint Lucia. This means that although travel is not recommended, travelers can go to Saint Lucia so long as they use enhanced precautions.

Thanks to the Olympic Games in Rio 2016, the entire world put a spotlight on Zika. Consequently, this has led researchers to compete to find a vaccine or a cure for the virus. Although there is currently no cure or vaccine yet, there are many reports coming out saying researchers are getting a better understanding of the proteins which is essential to finding a cure. Once researchers find a cure, Zika will not be one of the common diseases in Saint Lucia.

– Daniel Borjas

Photo: Flickr

October 17, 2017
https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg 0 0 Kim Thelwell https://borgenproject.org/wp-content/uploads/borgen-project-logo.svg Kim Thelwell2017-10-17 07:30:232024-06-05 23:47:15Common Diseases in Saint Lucia
Economy, Global Poverty

Causes of Poverty in San Marino

Causes of Poverty in San Marino

San Marino is a small, landlocked country located within Italy. It is a remnant from a time when city states dotted the European landscape. San Marino is believed to be the world’s oldest surviving republic, and tourism plays the largest role in the economy. More than three million people visit the republic each year. However, the nation still struggles with poverty. Here is a look at causes of poverty in San Marino.

One of the causes of poverty in San Marino was the recession of 2008. San Marino‘s economy is heavily reliant on tourism, and the recession incited a drop in tourism rates.

Although tourism is a large part of the economy, San Marino also acted as a tax haven for the wealthy people of Europe. This changed when the European Union and Italy pressured San Marino into going along with a crackdown on tax evasion and money laundering.

The United States Department of State reported that the strict regulations placed on the financial sector has led to a decrease in money laundering. There is not a large enough market for illegal goods, so most money laundering was done on the behalf of people outside of the country looking to avoid higher tax rates in their own countries.

A number of top executives at the Cassa di Risparmio della Repubblica di San Marino were arrested on money laundering charges. This was the nation’s top bank, so the arrests dealt a heavy blow to the nation’s economy. Thus, while it is good for the global economy, the inability to launder money is another one of the causes of poverty in San Marino.

The government of San Marino has taken actions in order to combat the economic downturn, which includes subsidized credit for businesses. San Marino has also taken steps to move its economic growth model away from a dependence on bank and tax secrecy.

Due to its low corporate taxes compared to other nations, the economy can profit from foreign investment as well. San Marino’s income tax is also about one-third the amount compared to other nations in the EU.

The Organization for Economic Cooperation (OECD) removed the small nation from its list of tax havens that have not fully complied with global tax standards in 2009. San Marino also signed tax information exchange agreements with most major nations in 2010.

Causes of poverty in San Marino are largely due to the loss of tourism and its strict regulations on the financial sector, but with its advantages for foreign investments, the small nation hopes to turn its economic woes around.

– Fernando Vazquez

Photo: Flickr

October 17, 2017
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