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Archive for category: Global Poverty

Key articles and information on global poverty.

Global Poverty

Chicken Farming: Combating Poverty in Haiti

Combating Poverty in Haiti

When the 2010 Earthquake left 1 million Haitians homeless and more than 600,000 injured or killed, the international community responded en masse. That response has continued over the years, as the effects of the earthquake continue to compound the preexisting battle with combating poverty in Haiti.

As that response evolves, many aid sources are focusing on entrepreneurial aid which produces business. Micro-loans for mobilizing small-scale chicken farms are one example of the business-aid model in action that exists to combat poverty in Haiti.

KORE Foundation supports impoverished Haitians by doing just that. Their investments enable families to establish chicken farms, with the generated business often increasing their annual income by 400 percent or more.

When these families are then able to repay the initial loan, the funds are reinvested in other Haitian families. In keeping with the foundation’s mission of going “beyond relief,” this model is combating poverty in Haiti by funding self-sufficiency. In addition, it keeps relief funds at work by promoting a cycle of reinvesting dollars into the community.

Supporting small-scale chicken farmers does more than allow Haitians to provide for their families as entrepreneurs. In a country where two-thirds of children are malnourished, the increased availability of poultry and eggs represents an invaluable source of dietary protein.

Organizations active in offering micro-loan aid in Haiti often provide business skills training as well, like the partnership between Love a Child and Open Hand. The duo provides micro-loans to other Haitian business owners interested in economic growth.

Through financial mentorship, the organization provides recipients management skills as they grow their businesses and repay their loans. These micro-loans support the average Haitian who would not otherwise qualify for bank loans, preventing them from having to turn to micro-loans that charge interest rates approaching 40 percent.

Combating poverty in Haiti represents no small task. As the poorest country in the Western Hemisphere, the need for investment in families’ ability to generate a stable income is dire. With 78 percent of the country’s inhabitants living on only $2 per day, generating sufficient income is an everyday difficulty. Two-thirds of the country’s labor force hold informal jobs, making stability an important goal for aspiring business owners.

In the six years following the earthquake in Haiti, many members of the international community have questioned how to offer effective humanitarian aid. Among the largest concerns are the well-meant actions (like rebuilding local schools and offering free health services) out-competing local laborers and unknowingly robbing these locals of an income.

Organizations offering micro-loans for sustainable business like chicken farming seek to circumvent these concerns. Investment in self-sufficiency enables local laborers and thus an entire community.

– Charlotte Bellomy

Photo: Flickr

June 26, 2016
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Advocacy, Global Poverty

What are the Causes of Poverty?

what causes global poverty
As governments, aid workers and activists search for solutions to the urgent problem of widespread poverty and seek to combat its many negative effects, there is a need to identify the causes of poverty in order to create sustainable change. Understanding what causes global poverty is a crucial part of the process of devising and implementing effective solutions.

Most analysts would agree that there is no single root cause of all poverty everywhere throughout human history. However, even taking into account the individual histories and circumstances of particular countries and regions, there are significant trends in the causes of poverty.

 

Top 5 Causes of Poverty

 

  1. History
    Many of the poorest nations in the world were former colonies from which slaves and resources had been systematically extracted for the benefit of colonizing countries. Although there are notable exceptions (Australia, Canada and the U.S. being perhaps the most prominent), for most of these former colonies, colonialism and its legacies have helped create the conditions that prevent many people from accessing land, capital, education and other resources that allow people to support themselves adequately. In these nations, poverty is one legacy of a troubled history involving conquest.
  2. War & political instability
    Whatever the causes of war and political upheaval, it is clear that safety, stability and security are essential for subsistence and, beyond that, economic prosperity and growth. Without these basics, natural resources cannot be harnessed individually or collectively, and no amount of education, talent or technological know-how will allow people to work and reap the benefits of their labor. Laws are needed to protect rights, property and investments, and without legal protections, farmers, would-be entrepreneurs and business owners cannot safely invest in a country’s economy. It is a telling sign that the poorest countries in the world have all experienced civil war and serious political upheaval at some point in the 20th century, and many of them have weak governments that cannot or do not protect people against violence.
  3. National Debt
    Many poor countries carry significant debt due to loans from wealthier nations and international financial institutions. Poorer nations owe an average of $2.30 in debt for every $1 received in grant aid. In addition, structural adjustment policies by organizations like the World Bank and the International Monetary Fund often require poorer nations to open their markets to outside business and investors, thereby increasing competition with local businesses and, many argue, undermining the potential development of local economies. In recent years, calls for debt reduction and forgiveness have been increasing, as activists see this as a key means of reducing poverty. The United Nations has also made it a priority to examine how economic structural adjustment policies can be designed to place less pressure on vulnerable populations.
  4. Discrimination and social inequality
    Poverty and inequality are two different things, but inequality can feed widespread poverty by barring groups with lower social status from accessing the tools and resources to support themselves. According to the United Nations Social Policy and Development Division, “inequalities in income distribution and access to productive resources, basic social services, opportunities, markets, and information have been on the rise worldwide, often causing and exacerbating poverty.” The U.N. and many aid groups also point out that gender discrimination has been a significant factor in holding many women and children around the world in poverty.
  5. Vulnerability to natural disasters
    In regions of the world that are already less wealthy, recurrent or occasional catastrophic natural disasters can pose a significant obstacle to eradicating poverty. The effects of flooding in Bangladesh, drought in the Horn of Africa and the 2005 earthquake in Haiti are examples of the ways in which vulnerability to natural disasters can be devastating to affected countries. In each of these cases, already impoverished people became refugees within their own countries, losing whatever little they had, being forced out of their living spaces and becoming almost completely dependent on others for survival. According to the World Bank, two years after Cyclone Nargis hit Myanmar in 2008, the debt burden of local fishermen had doubled. The Solomon Islands experienced an earthquake and tsunami in 2007 and the losses from that disaster equaled 95 percent of the national budget. Without foreign aid, governments in these countries would have been unable to meet the needs of their people.

These are only five causes of poverty. They are both external and internal causes; both man-made and natural. Just as there is no single cause of poverty, there is no single solution. Nevertheless, understanding the ways in which complex forces like these interact to create and sustain the conditions of widespread global poverty is a vital step toward combating poverty around the world.

– Délice Williams

Source: Global Issues, USCCB, World Bank

 

 

June 25, 2016
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Global Poverty

Four Projects That Are Alleviating Poverty in Cambodia

Poverty in Cambodia
In May 2016, the World Bank Board of Executive Directors approved a $130 million grant to help reduce poverty in Cambodia and improve the lives of poor Cambodians.

The Royal Government of Cambodia and the World Bank signed an agreement on June 9, 2016. This agreement details the four major projects funded by the International Development Association (IDA), the World Bank’s lending arm for the world’s poorest developing countries.

There are 3 million Cambodians living in poverty. However, poverty in Cambodia has steadily decreased over the past 8 years. Currently, 17.7 percent of the Cambodian population is living below the poverty line, compared to 34 percent in 2008.

Needless to say there is still work to be done in Cambodia. The World Bank agreement has created projects that target four specific areas of development to help alleviate poverty in Cambodia.

Health Equity and Quality Improvement ($30 million)

Life expectancy in Cambodia is 68.2 years, while the average life expectancy of developing countries in East Asia and the Pacific is 74.

The Health Improvement plan has two primary focus areas for funding Cambodia’s health care system. The Health Equity Fund helps to provide reliable financing for health facilities as well as cover costs for low income families, in order to reduce out-of pocket spending.

The second focus area applies to redesigned Service Delivery Grants working to improve the quality of health services. It places an emphasis on bettering health-facility management and staff in addition to enhancing coverage of health services.

Mekong Integrated Water Resources Management ($15 million)

Some of the most intensive freshwater fisheries are located in Cambodia. Fishermen catch 2.6 million metric tons of fish in the Mekong basin annually. However, Cambodia’s growing population and overfishing are causing the depletion of fish stocks in Cambodian waters.

The Water Management project aims to improve the oversight of fisheries and water resources specific to the Mekong River Basin.

Road Asset Management ($60 million)

Road condition surveys conducted in 2005 indicated that 60 percent of roads in Cambodia are in poor or bad condition.

This infrastructure development project is projected to supplement 218 kilometers (135.459 miles) of roads. They will also install flood resistant measures. The road improvement will allow for faster travel and better connectivity between the Preah Sihanouk, Kampot, Tbong Khmom, and Kratie provinces.

Land Allocation for Social and Economic Development Project ($25 million)

Agriculture has become increasingly vital for the Cambodian economy and fight against poverty.

Over the past decade, positive developments in agriculture have lifted 4 million people out of poverty. However, as farmland diminishes and global food prices decline, Cambodia is in need of new pathways to promote future agricultural growth.

The Land Allocation Project will provide more than 5,000 land-poor or previously landless families across five provinces with agricultural livelihood support. This project will also include the education and implementation of better farming practices.

In a World Bank press release article Ulrich Zachau, the Country Director of the World Bank for Southeast Asia, made a statement on the day of the signing: “The four projects signed today all contribute to improving the lives of poor Cambodians, and we are glad to support them.”

– Kristyn Rohrer

Photo: World Bank

June 25, 2016
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Global Poverty, Technology

Internet Access: Reducing Global Poverty

Reducing_Global Poverty

In a speech to the United Nations in September 2015, Mark Zuckerberg stated, “When communities are connected, we can lift them out of poverty.” During his talk, the Facebook CEO and founder asserted that increased Internet access can aid in reducing global poverty.

According to the World Bank’s 2016 World Development Report, 60 percent of the world’s population do not have access to the Internet. In the United States alone, 60 million people do not have Internet access at home. However, for the rest of the world’s population, technological advancement has provided enormous levels of wealth and development.

A recent report by Price Waterhouse Cooper’s consulting and strategy firm, Strategy&, states that giving internet to the world could bring extraordinary results. If the 4.1 billion people without Internet were given access, 500 million people could be brought out of poverty.

For those in poverty, the Internet provides a multitude of opportunities, including jobs, access to global current affairs and education. In 1998, the World Hospitals and Health Services Journal released an article discussing the advantages of Internet access, arguing that “Access to information is an essential condition to development.” Almost twenty years on, researchers and institutions are still looking to the Internet as a technique for reducing global poverty.

In developing and impoverished areas, most individuals cannot afford the cost of the Internet. According to the World Economic Forum, only 20.7 percent of Africa’s population use the Internet, compared to 77.6 percent of Europe’s population.

The Head of Africa for the World Economic Forum, Elsie Kanza, discussed the way in which technological advancement could help bring “vast improvements in the way the region governs, feeds, lives, educates, trades and interacts with itself.”

On a recent “Intersections” podcast, the Brookings Institute recently discussed the issue of poverty and internet access. Laurence Chandy, a fellow at the Brookings Institute, stated, “Digital technology is changing what it means to be poor because it’s bringing poor people out of the margins.”

With projects such as Internet.org and Project Loon, tech giants such as Google and Facebook have begun to tackle the goal of creating widespread internet access for reducing global poverty.

– Isabella Farr

Photo: Flickr

June 25, 2016
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Global Poverty

Long-Awaited Aid Works to Alleviate Poverty in Syria

Poverty in Syria
In early June, Darayya, the rebel-held suburb of Damascus, received its first aid convoy in four years. While the delivery was invaluable to helping alleviate poverty in Syria. However, the U.N. was unable to send more than a month’s worth of medical supplies and food.

Reuters reports that the U.N. received permission for this exchange in March, but the Syrian government would not permit any more deliveries. They claimed that the rebels have plenty of supplies.

In addition, BBC reports that the population of Syria has dropped by at least 6.5 million in five years. Unfortunately, the war and poverty in Syria has led to this massive displacement and death. the BBC estimates that approximately 6 million people are refugees, and between 100-500 thousand are dead.

Those left behind face sieges, soaring food prices and decreased access to important institutions like hospitals or schools. Throughout the country, the civil war has left many.

At least 13.5 million of the 17.9 million people still in Syria desperately need assistance.

Another article from the BBC displays something even more harrowing. The names and dates of children killed in the war reel, one right after the other, across the screen.

The stories are short, similar and sobering: “Seta Naser al-Krad, a girl from Deraa, was shot and killed on 25 March 2011… Anas Muayad al-Wassa, a boy from Hama, was executed on 24 February 2012.” Underneath, the article states that over 19 hours would be required to read them all.

Currently, the population of Darayya—8,000 individuals—needs more food if they are going to outlast the siege. The government’s assurance that they have plenty does not match inhabitants’ reports. Constant bombardments and the long siege have destroyed a place once renowned for its grapes, apricots and olives.

Tales now range from kids growing ill from eating nothing but soup and salad to foraging for grass as rations dwindle.

One woman reports that her young grandson does not know what fruit is.

The U.N. has struggled to get aid to the rebels facing siege in Darayya. While they were able to gain permission for this convoy, the regime has been successful in blocking previous attempts.

Few rebels waited to receive the convoy. Syrians who did manage to receive aid were incredibly grateful.

Considering the obstacles, distributing medical supplies is a huge step for the U.N. and Darayya. The situation in Syria remains dire, but small successes such as this one make a large impact and will save hundreds of lives.

– Jeanette Burke

Photo: Flickr

June 25, 2016
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Global Poverty

1 in 6 Children Live in Poverty in Australia

Poverty in Australia
The CRC25 Australian Child Rights Progress Report claims one in six children currently live in poverty in Australia.

The report defines poverty as “households earning less than 50 percent of median household income.”

Adrian Graham, UNICEF Australia chief executive officer, said, “Australia is not the lucky country for many children.”

Almost 30 years ago, Australia ratified the United Nations Convention on the Rights of the Child. This convention included the right for children to have “a standard of living adequate for the child’s physical, mental, spiritual, moral and social development.”

Australia agreed that every child deserves equal rights. In addition, the government would give more attention to the most disadvantaged and marginalized children.

However, the report confirms that discrimination is persistent for most children growing up in poverty in Australia.

The report also identifies that Aboriginal and Torres Strait Islander children, lesbian, gay, bisexual, transgender and intersex (LGBTI) children, children from rural areas, children with disabilities and children from migrant backgrounds are more likely to experience poverty and discrimination.

Despite two decades of economic growth, Australia still has over 600,000 children living in poverty. This totals at 18 percent. The statistics show Aboriginal and Torres Strait Islander people make up 2.5 percent of Australia’s population. However, they also make up 25 percent of the homeless population.

Additionally, school retention rates among Aboriginal and Torres Strait Islander students are considerably lower than non-indigenous students. Nearly 80 percent of homeless children have a mental disability, and 61 percent have a physical disability.

Children with disabilities are three to four times more likely to experience sexual abuse than children without disabilities. Many of these children do not have the language or ability to communicate their abuse.

In addition, 80 percent of lesbian, gay, bisexual, transgender and intersex children report abuse at school. Victims of sexual abuse experience reduced concentration, more absences from school, drops in school grades or dropping out of school entirely.

Graham said, “Children living in poverty have less access to both primary and specialist health services than the general population, higher levels of contact with the criminal justice system and greater exposure to domestic violence. Children living in poverty are also more likely to be removed from their families and placed into care arrangements.”

The Taskforce calls on the Australian government to set a national policy agenda for children to ensure that all children growing up in Australia have a decent quality of life.

Judge Alastair Nicholson, the Chair of Children’s Rights International, is hopeful that the report will encourage actions to reduce the number of Australian children trapped in poverty.

– Jacqueline Venuti

Photo: Flickr

June 25, 2016
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Global Poverty, Poverty Reduction

The Principles of Economics and Poverty

 Economics_PovertyContrary to popular belief, economists are not just concerned about money. In fact, much of the study of economics is concerned with how people behave and make choices. Since the days of Adam Smith, who is widely regarded as the father of this discipline, economists have adopted various views of poverty.  Exploring the link between economics and poverty is crucial if the world is to make positive progress.

What Causes Poverty?

Economics and poverty have a long history with thought camps that diverge in many directions. Nevertheless, many economists agree that some reasons for poverty are beyond the control of individuals.

According to the more classical view of economics, an individual’s social and private characteristics could lead to lower income and a lower probability of financial growth.

For example, a single parent without adequate support would find it harder to secure a full time job than someone who has no children. Meanwhile, someone born into an environment without easy access to education would find it harder to compete in the job market later on.

Poor health, discrimination and market failures are other examples of unavoidable inequalities that may contribute to poverty.

Other theories claim that since poor people are often excluded from the social circles of the rich, they are also excluded from certain opportunities.

Networking, or forming strategic relationships to gain entry to certain markets, is critical to financial success in a majority of career fields. Since the poor are unable to network with the rich, they are effectively barred from certain lucrative jobs, thus perpetuating poverty.

More modern strands of economics believe that poverty can be linked to failings of the government. If a country’s government fails to react to a significant decline in economic growth through financial or monetary policies, or if it does not adequately fund areas such as education, then the country’s population will suffer unemployment and a lack of financial mobility.

What Should We Do?

The natures of economics and poverty makes it difficult to address inefficiencies directly and successfully. For example, evidence has shown that raising minimum wages and enforcing caps on prices may actually hurt the poor. However, there are some things that governments can do to reduce poverty rates in their countries by using the relationship between economics and poverty.

One of the best things a government can do is focus on economic growth. A country’s GDP is linked to unemployment in a relationship defined by Okun’s Law, which states that an increase in a country’s output will inevitably cause unemployment to decrease. By pursuing policy that strives for growth, a government can create jobs for its citizens.

Shocks to GDP tend to have a disproportionately negative effect on the poor. For example, children from poor families in Latin America and Africa often drop out of school to help at home during economic crises. To counter this, governments can enact policies to curb inflation and promote stability.

Governments can also focus on creating opportunities for poor citizens to build their human capital through education, work training, loans and grants. These chances at building mastery in employable skills and traits allows poorer people to compete in the job market and ultimately equalize income across the population.

The availability of information, which economists largely consider a public good, is also incredibly important. Many people are unable to access programs of job opportunities simply because they are unaware.

If citizens are poorly informed, then policies targeting poverty become ineffective. Remedies to this problem include job agencies, well advertised websites and community centers in low income areas.

Unfortunately, not all governments have the means to accomplish these things and may require aid from foreign powers.

Will There Always Be Poverty?

There are two types of poverty in the world: relative and absolute.

People who are relatively poor make a certain percentage of the average per capita income and in many countries have adequate funds.

Those who are in absolute or extreme poverty live on less than $1.90 a day. These people do not have enough income to live comfortably and therefore suffer from poor health and living conditions.

In the year 2000, the members of the United Nations set a goal to halve the absolute poverty rate by 2015. By 2010, the ratio of people living in extreme poverty was reduced from 43 percent to 21 percent.

This astounding success has caused many economists to believe that it is indeed possible to erase extreme poverty completely through continued growth and creative social and economic programs.

– Emiliano Perez

Photo: Flickr

June 25, 2016
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Education, Global Poverty

The Resurrection of Education in Myanmar

eudcation_in_MyanmarEducation in Myanmar is improving, though this progress has been slow. At the time of the British decolonization of Asia in 1948, Myanmar (then Burma) was lauded for having one of the top educational systems in the continent.

Many experts projected that Myanmar would come to be one of the central powers of the region due to its superior education, however, this has not been the case.

The World Bank has attributed the country’s now weak education system to various warring ethnic groups, particularly the progressive power of military rule that took hold over a half-century ago.

Myanmar has only recently begun to give way to democratic rule–the system that was originally intended for the developing country in 1948.

From the beginning of military involvement in governance in the early 1960s, an increasing list of sanctions was placed upon the country.

With the combination of international economic restrictions and tightening limitations from the military government, education in Myanmar quickly began to decompose.

However, after decades of brutal military rule, the people began to fight against the stiff restrictions imposed upon them. Notably, in November 2015, Htin Kyaw was elected as president of Myanmar in the first openly contested parliamentary elections that the country has ever had.

Since then, many sanctions have been lifted to allow open international trade and commerce.

With these recent signs of progress, many are optimistic that the education system in Myanmar will also begin to improve. Dr. Mya Oo, the Secretary of Education Development Committee of Myanmar has said that the first step that is needed is to create a system of free and compulsory education.

The first five years of education in Myanmar are already compulsory, but they are not free. The imposed educational fees put a strain on impoverished families who are usually forced to opt out from lack of personal resources.

There is also a certain level of discrimination against girls and ethnic minorities, which further limits the proportion of students in school. Only one-third of students reach the five-year level of education and this number decreases exponentially as the students continue to progress toward higher schooling.

The current Myanmar government recognizes these as serious issues, and as such recently announced, it plans to help boost enrollment rates as well as the quality of education. These propositions address increases in funding, focusing on equal education for women and ethnic minorities, building schools in remote areas and establishing better training systems for teachers.

These goals are scheduled to be reached before the end of 2016.

The government is also placing a greater emphasis on higher education as well. Myanmar governmental and educational officials have begun to consult with a number bordering states and European entities for improvement ideas in their universities.

Many of suggestions include universal equality, the establishment of student unions and universities that are allowed to operate autonomously.

With the implementation of these targets, many are optimistic that Myanmar will be able to provide for the anticipated influx of students seeking higher education.

Government oppression and poverty made it nearly impossible to achieve more than basic literacy. However, as the country works toward social progress, it is hoped that education in Myanmar can be brought back to life in a timely and efficient manner.

– Preston Rust

Photo: Flickr

June 24, 2016
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 Project2016-06-24 01:30:592024-12-13 17:54:36The Resurrection of Education in Myanmar
Development, Global Poverty

Skills Training to Increase Development in Pakistan

Development in Pakistan
Pakistani President Mamnoon Hussain and Governor Iqbal Zafar Jhagra announced at the National Skills Show that the Government of Pakistan would push a new emphasis on skills training for their youth. Through this initiative, they hope to boost future development in Pakistan.

Governor Jhagra asked industrialists to start training youth in vocational and technical skills, establishing institutes that will offer these programs. He noted that reducing unemployment and poverty rates greatly helps youth to succeed.

The National Skills Show, organized by the National Vocational and Technical Training Commission (NAVTCC), takes place in the U.K. annually. It features five sectors: engineering and technology, media and creative, IT and enterprise, hospitality and lifestyle as well as construction and infrastructure. The best and the brightest students of the U.K. come together to compete and demonstrate their skills in one of these sectors.

Governor Jhagra stressed that Pakistan has an agricultural economy, highlighting the importance of focusing on skills training within the industry. In addition, technical education is extremely important for keeping the unemployment rates low.

As of 2015, Pakistan holds an unemployment rate of 5.9 percent, a slight decrease from six percent the previous year. But in 2013, the World Bank noted that 29.5 percent of the nearly 190 million people living in Pakistan resided below the poverty line.

Executive Director of NAVTTC, Zulfiqar Ahmad Cheema, noted that 50,000 youth in Pakistan will take part in skills training in multiple trades. The courses that they engage in will be free of charge, and they will receive a stipend as trainees.

Governor Jhagra is determined to fully utilize the capabilities of the talented Pakistani youth population. He stated, “Our human capital is our biggest asset.” Currently, young citizens make up 60 percent of the population.

Ambassadors from Germany, the Netherlands and the European Union joined the show and congratulated the winners. They agreed with Pakistani officials in recognizing how skills training can boost the economy and decrease poverty.

This effort will provide a large majority of the Pakistani youth with employable skills, granting them financial independence, reducing the poverty rate throughout the country and helping meet the needs of local and international job markets—ultimately, improving development in Pakistan.

– Kimber Kraus

Photo: Flickr

June 23, 2016
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 Project2016-06-23 01:30:592024-06-05 01:28:27Skills Training to Increase Development in Pakistan
Global Poverty

Three Reasons for the Economic Crisis in Venezuela

Economic Crisis in VenezuelaOn Saturday, May 14, Venezuela’s president, Nicolas Maduro, issued a state of emergency in response to widespread discontent that had risen throughout the country. Protests and calls for a reform in the government came about because of the historic economic crisis in Venezuela.

Since the beginning of 2015, inflation within the country has been on a steady increase. During the months of June and July, it began to accelerate upward. By the close of the year, Venezuela was left with an inflation rate of 180 percent, the highest in the world. This has led to deficiencies in food, medicine and hygiene products.

However, the recent explosion of economic inflation is only a symptom of deeper troubles within the economy that have been building for the past years. Many are criticizing Venezuela for failing to diversify in products and services. Gretchen Bakke of the New Yorker summarized the economic crisis in Venezuela using the adage, “putting all its eggs in one basket.”

Various occurrences have led Venezuela to the brink of economic collapse, but three in particular bear mentioning:

1. Venezuela’s Dependence on Oil as a Profitable Export

Petroleum products made up roughly 93 percent of the $63 billion in exports that Venezuela made in 2014. This is not surprising, since Venezuela is sitting on the largest proven oil reserves in the world. Historically, various Venezuelan presidents have used petroleum production and exports to increase development, yet they failed to diversify their economic productions. In the 1920s Venezuela registered a third of its GDP as agricultural products, but almost a century later, these products make up six percent of GDP and less than one percent of the country’s exports.

Its identity as an oil-producing state has served Venezuela well in the past, but the tide is turning. With lifted sanctions on Iranian petroleum and increased oil production in the United States, Canada and Iraq, petroleum prices have been driven down by a saturated global market. The New York Times reported a barrel of oil to be 70 percent cheaper now than it was two years ago.

2. Venezuela’s Dependence on Water as its Primary Electricity Source

Almost 80 percent of Venezuela’s electricity comes from hydroelectric power. The international community has recently been pushing for cleaner energy (that which does not rely on fossil fuels) and hydroelectricity is one way to achieve these goals. However, hydro-power can be problematic when water turns into a limited resource.

Venezuela has currently been suffering through a three-year drought which many are attributing to El Niño, an intermittent weather pattern that has been accentuated by the recent rise in global temperature. In addition to the normal problems that are generated by water shortages, Venezuela is now facing a shortened work week due to the rationing of electricity for the many shortages.

These newly-prescribed measures are criticized for accelerating the process of economic collapse, since workers now have a shortened period in which they can earn money to pay for the necessities of life.

3. Venezuela’s Unipolar Political System

For years, the socialist party has dominated the branches of the central government, and in the recent escalations of the economic crisis in Venezuela have caused the government to “become more authoritarian,” as the Council on Foreign Relations wrote.

In December of last year, the opposing party finally took control of one part of the government, The National Assembly. Though a referendum is being constructed to oust Maduro from his seat, very few immediate solutions are being proposed to relieve the collapsing economy.

The economic crisis in Venezuela is provoking protests throughout the country. Various citizens of the country told the Wall Street Journal that they have to stand for hours in line to receive a small portion of food for the day. These individuals have hopes to change the trajectory of their nation, and with the majority of the people on their side, they may still have time to do so.

– Preston Rust

Photo: Flickr

June 23, 2016
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