Archive for category: Global Poverty

Key articles and information on global poverty.

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Will and Jada Smith Partner with Together Band

Will and Jada Smith Together BandTogether Band is an organization that raises money for various causes in an innovative and trendy way aimed at persuading younger generations to support issues they care about most. It works toward the United Nations’ 17 global goals to create a more sustainable world by 2030. Recently, Together Band also partnered with Will and Jada Smith.

Together Band

The U.N.’s 17 Sustainable Development Goals include no poverty, zero hunger, gender equality, clean energy, equal education, good health, clean water, economic growth, industry innovation, sustainable communities, responsible consumption and production, marine conservation, land conservation, justice, reduced inequalities and partnership.

Each U.N. SDG has an associated color and Together Band produces bracelets of each color. The bracelet color a customer purchases determines which goal their money targets. Together Band directs proceeds to The Freedom Fund, Renewable World, Women Working Worldwide and Power for the People, among others.

Not only do the proceeds go to humanitarian funds but the materials and production of the bracelets are impactful as well. The clasp on each bracelet is repurposed metal derived from seized illegal firearms in Central America. The aim of this sourcing is to end armed violence in conflict-torn countries. The band is made from 100% upcycled plastic found on shores in coastal communities and on remote islands. Finally, formerly trafficked Nepalese artisans use the materials to craft the final product. The jobs created help communities build stable economies.

Together Fund

Together Band created the Together Fund to combat COVID-19. Now, when a customer purchases a bracelet, 50% of the proceeds go to support COVID-19 relief while the other 50% continue to go to the original organizations that the bracelet supported before the pandemic. The organization splits COVID-19 relief funds between the U.N. COVID-19 Solidarity Fund for WHO and Médecins sans Frontières.

Together Band added COVID-19 relief to their initiatives because communities around the globe urgently need accessible healthcare. “It’s important that we act quickly in response to COVID-19 to ensure patients can access the care they need as well as supporting disease prevention and frontline health workers across the globe.”

Partnering With the Will and Jada Smith Foundation

Celebrities Will and Jada Smith created the Will and Jada Smith Family Foundation in 1996 in order to make the world “better because we touched it.” The foundation has donated millions of dollars for innovative solutions to the world’s problems. Recently, the Will and Jada Smith Family Foundation partnered with Together Band to tackle both COVID-19 and racial injustice. Working with WJSFF, Together Fund has expanded to support U.N. Goal 10: Reduced Inequalities and Goal 16: Peace, Justice and Strong Institutions.

Money can be donated to the fund directly from the WJSFF homepage. Half of the proceeds go to additional COVID-19 relief funds such as the World Health Organization, Alight and Doctors Without Borders. The remaining half supports nonprofits that fight racial injustice. They include My Brother’s Keeper, the Legal Defense and Educational Fund, the Equal Justice Initiative and the Leadership Conference Education Fund.

In addition, Will and Jada Smith’s son, Jaden Smith, founded an eco-friendly version of bottled water called Just Water. Just Water customers now have the option to round up their purchases in support of the Together Fund.

Overall, the Smiths are an inspiring example of a celebrity family using their fame to support humanitarian causes and reduce global poverty.

– Sarah Eichstadt
Photo: Flickr

Biden Extends Temporary Protected Status for Yemen

Temporary Protected Status for YemenOn July 6, 2021, the Biden administration announced the extension of a program to support Yemeni individuals currently living in the U.S. as Yemen grapples with civil war and the most severe humanitarian crisis in the world. Even before the conflict, Yemen was the most impoverished nation in the Middle East and North Africa (MENA), with a poverty rate of more than 50%. Today, more than three-quarters of Yemen grapples with poverty. The Biden administration has extended the Temporary Protected Status for Yemen nationals in the United States due to deteriorating conditions in Yemen.

The Situation in Yemen

Since the civil rights crisis began, Yemen’s economy has unarguably collapsed. The conditions exacerbated citizens’ vulnerabilities and destroyed critical infrastructure, while famine-level food insecurity ravaged the nation. The political crisis coupled with the COVID-19 pandemic led to Yemenis living in increased poverty.

The World Bank notes that “more than 40% of Yemeni households that find it difficult to buy even the minimum amount of food may have also lost their primary source of income.” Additionally, 19.9 million citizens live without access to sufficient healthcare services. Proper healthcare is more crucial than ever considering the impact of COVID-19 and Yemen’s recent outbreaks of “cholera, diphtheria, measles and dengue fever.” Experts argue that rebuilding Yemen’s economy and mending “Yemen’s social fabric” can only happen with an “eventual political reconciliation.”

Temporary Protected Status

Congress created the Temporary Protected Status (TPS) in the Immigration Act of 1990, where it provides “temporary immigration status” to nationals of countries grappling with extraordinary conditions, such as ongoing armed conflict and violence. Also, the Secretary of Homeland Security may grant TPS to a country suffering an ongoing environmental disaster or epidemic.

Once granting an individual TPS, the Department of Homeland Security (DHS) cannot detain them based on their immigration status. TPS also does not impact an application for asylum or any other immigration benefits. Syria, El Salvador, Haiti and South Sudan are currently designated for TPS in addition to Yemen and several other countries. In the distant past, the U.S. granted TPS to countries like Lebanon, Kuwait and Rwanda.

The decision to extend the TPS of Yemeni nationals in the U.S. allows them to stay in the country without fear of deportation. Undoubtedly, the collapse of healthcare systems, sanitation and education services in Yemen bears influence on the decision. Furthermore, an unstable political transition compounded the need for this decision.

Secretary of Homeland Security Alejandro N. Mayorkas announced the extended Temporary Protected Status for Yemen after consulting with interagency partners. Mayorkas stated that the U.S. has “decided to extend and re-designate Yemen for Temporary Protected Status. We will continue to protect and offer their individuals a place of residency temporarily in the United States.”

US Role in the Yemen Crisis

In February 2021, Secretary of State Antony Blinken announced an end to U.S. support for offensive operations in the Yemen war, including relevant arms sales. The move contrasts the positions of Presidents Obama and Trump. President Trump backed arms deals with the Saudi coalition, citing benefits for the U.S. economy even though the weapons led to the harm of civilians. However, the outflow of arms to the Middle East initially started under the Obama administration.

Furthermore, on March 1, 2021, Secretary Blinken announced $191 million in humanitarian assistance to Yemen, making the U.S. one of the largest donors for relief to Yemen. To promote more aid, Blinken urged parties at the virtual 2021 High-Level Pledging Event for the Humanitarian Crisis in Yemen to follow in the footsteps of the U.S. by helping to “end the conflict in Yemen.” The Biden administration’s action to extend Temporary Protected Status for Yemen “will allow approximately 1,700 Yemenis to keep their status through 2023” and will also enable another 480 Yemenis to apply.

Overall, the TPS extension to Yemenis in the U.S. shows the United States’ commitment to safeguarding the well-being of vulnerable people whose lives would be at risk in their home countries.

– Alysha Mohamed

Photo: Flickr

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COVID-19’s Impact on Ethiopia 

COVID-19’s Impact on Ethiopia 
As of August 2021, Ethiopia had 292,731 documented COVID-19 cases and 4,518 deaths in a population of more than 118 million. However, COVID-19’s impact on Ethiopia is far more complicated. Aside from the clear health (medical and mental) implications of COVID-19, the pandemic affected other areas significantly, including poverty, nutrition and sanitation. The United Nation’s Ethiopia Assessment explored the impact of COVID-19 on poverty in Ethiopia.

Health and Nutrition

Despite being one of the fastest-growing economies in the world, 26% of Ethiopia’s population lives below the poverty line. In April 2021, there were studies on maternal and child nutrition and health during the early days of the pandemic compared to 2019. The studies showed a decline in these services in March and April 2020. The COVID-19 surge redirected nearly all resources and services. Therefore, there were few resources and services for other programs.

Healthcare workers, government and non-governmental organizations alike helped restore the services. A major factor in mitigating the negative impact of COVID-19 on Ethiopia’s health and nutrition was an awareness campaign. The campaign aimed to teach COVID-19 prevention utilizing volunteers in the community, including frontline workers and university students.

Water, Sanitation and Hygiene

A major factor in winning the battle against COVID-19 is appropriate hygiene, such as handwashing. However, people in Ethiopia do not always have adequate access to water. This places further strain on the community. In Ethiopia, “60-80% of communicable diseases are attributed to limited access to safe water and inadequate sanitation and hygiene services.” For example, people in Ethiopia do not always wash their hands after using the latrine. The COVID-19 pandemic has shown the many areas in which lower-income countries are at a disadvantage when it comes to keeping their citizens protected.

However, UNICEF partnered with the ONEWASH National Programme in 2013. This partnership established projects to guarantee access to a safely managed water supply, specifically to vulnerable groups like children and women. UNICEF and the ONEWASH National Programme aim to increase not only equitable and sustainable clean water supplies and sanitation services but also proper hygiene practices in rural and urban areas.

Government and Human Rights

The U.N. assessment on Ethiopia reported that the human rights situation in Ethiopia was improving. Due to government reforms and restructuring, opposition parties, women and different factions had a newfound voice in the government. However, human rights abuses remained. The pandemic exacerbated these abuses resulting in a state of emergency followed by delayed elections.

When the government postponed elections, the Tigray region chose to defy these orders and hold them anyway. This caused tension between the Tigray region and the federal government. Prime Minister Ahmed ordered military action against the Tigray region in retaliation for an attack on the federal government purportedly from the Tigray region. Additionally, in the western and southern parts of the Oromia region, “government counterinsurgency campaigns against armed rebel groups resulted in serious human rights and abuses against local communities by all sides.”

There are long-reaching implications of postponed elections. However, Ethiopia finally held elections in June 2021 with the ruling party winning a second term.

Looking Forward

COVID-19’s impact on Ethiopia is evolving as the vaccine rollout continues and the country implements information campaigns on COVID-19 prevention and hygiene and sanitation programs. The World Health Organization (WHO) through COVAX and the ACT accelerator shipped 38 million COVID-19 vaccine doses worldwide, providing vaccines to more than 100 countries. The efforts to fight COVID-19 in Ethiopia are not in vain and continue to positively impact countries around the globe.

– Tiffany Pate
Photo: Flickr

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IFAD’s Plans to Alleviate Poverty and Hunger

IFAD Plans to Alleviate HungerWith the new COVID-19 variants spreading in places such as Latin America and the Caribbean, poverty and hunger rates continue to increase. The International Fund for Agricultural Development (IFAD) has expressed its support for people suffering from these issues. It created a program with the main focus of providing money to businesses that depend on food systems. IFAD is also helping out by working with school programs. Here is more information about IFAD’s plans to alleviate hunger.

IFAD Helps Those Living in Poverty

The COVID-19 pandemic has brought on more challenges to many people, but that has not stopped IFAD from helping those in need. Since 2020, millions of people have received assistance and several projects have emerged. With the challenges of the pandemic, IFAD has been working to support citizens who lack access to essential resources such as food. The Rural Poor Stimulus Factory emerged to help farmers who were not able to work effectively. IFAD has also provided some digital services to countries such as Nepal and Bangladesh. It also contributed to grass-root activities, along with encouraging more citizens to get involved in other activities.

IFAD Creates New Financial Program

One way issues such as poverty and hunger can undergo resolution is by prioritizing workers who make major contributions to food systems. IFAD recently launched a financial program aimed to help businesses responsible for working with food systems. The purpose of the Private Sector Financing Programme, also known as PSFP, is to give financial assistance to small-scale farmers who struggle to provide food due to a variety of barriers. Some of the benefits they will receive include loans and other financial assistance. The benefits from PSFP will also help workers reach their potential through job opportunities, which will open the door to more solutions for hunger and poverty.

IFAD Expresses Support for Farmers

While Latin America and the Caribbean continue to see the worst of the COVID-19 pandemic, IFAD is working to help citizens who have suffered from pandemic-related challenges. IFAD has been supporting programs in Mexico that teach citizens about components such as economic development. It has invested a lot of money to help farmers in Mexico learn more skills and pursue their passions. In Guatemala, IFAD was able to help maintain the availability of school feeding programs during the lockdown. Farmers in Guatemala also had the opportunity to sell crops to citizens. The Rural Adelante Project, which received funding from IFAD, worked to guarantee citizens access to nutritious foods in El Salvador. IFAD also created a virtual marketplace to help farmers who lacked access to essential resources.

The International Fund for Agricultural Development has helped people living in poverty through a variety of ways, which includes expanding access to food and other resources. IFAD’s new financial program, the Rural Poor Stimulus Factory, aims to help workers suffering from pandemic-related challenges. Despite the COVID-19 pandemic taking a toll on Latin America and the Caribbean, IFAD made different contributions to serve those living in underprivileged communities.

– Chloe Moody
Photo: Wikipedia Commons

The Significance of USADF

The Significance of USADF
Congress established the United States African Development Foundation (USADF), which is an independent U.S. government agency. Its mission is very simple; to fund grassroots groups and entrepreneurs, as well as small and medium-sized businesses throughout Africa. The organization began in 1980 and has helped 7 million people since its origins. Here is some information about the significance of USADF.

About USADF

The significance of USADF is that it focuses on the impoverished while prioritizing people with specific needs such as troubled youth, disabled people and others from different minority groups, such as women. For every $10,000, 79 more people obtain access to electricity, and 25 more people more workers gain jobs. In the last five years, USADF has been a key factor of The Global Food Security Act by contributing $61 million that helped 3.4 million people in 20 African countries.

USADF aids community enterprises by providing grants of up to $250,000. This allows underserved people to participate in Africa’s development story.

USADF also works with communities to understand problems at the root in order to determine the most effective solution. Some of the problems USADF is attempting to deal with are food insecurity and unemployment.

The Significance of USADF in Sub-Saharan Africa

Sub-Saharan Africa has the world’s lowest energy access rates, with only around half of its population having access to electricity. Approximately 600 million people do not have electricity while 890 million people must utilize traditional fuels so they can cook. USADF’s off-grid energy grants promote market-based solutions that connect people and businesses to electricity. Since 2014, more than 130 off-grid energy projects have received more than $11 million in order to provide people with energy access.

While USADF funds energy projects, it also invests in agriculture. Close to 57% of Africa’s off-grid population works in agriculture. As a result, USADF has worked with businesses in agriculture, in order to provide them with support and reduce food insecurity. For example, through its partnership with the Feed the Future initiative, USADF has implemented projects in six African countries.

Looking Ahead

On June 24, 2021, Rep. Dean Phillips (D-MN) introduced a bipartisan resolution for the continued support of USADF. Since he came to Congress in 2018, Phillips has prioritized sustainable development and peacebuilding as a member of the Foreign Affairs Subcommittee on Africa, Global Health, and Global Human Rights, as well as the Caucus for Effective Foreign Assistance. Now, he is demonstrating his active support of USADF.

“By focusing on grassroots projects and meeting real needs of people at the community level, the U.S. African Development Foundation has pioneered a successful model for development, garnering broad bipartisan support,” said Rep. Chris Smith (R-NJ), a Ranking Member of the Foreign Affairs Subcommittee on Africa who is co-leading this initiative.

This bill is crucial as it will dictate the future of a foundation that has helped millions of people. Fortunately, the future of USADF looks bright.

– Noya Stessel
Photo: Flickr

Solutions for Blindness Can Alleviate Global Poverty

 

Solutions for BlindnessThere is a strong correlation between blindness and global poverty and people living with both have faced even more challenges than usual amid the COVID-19 pandemic. This is why one Harvard graduate chose to research eye diseases, their causes and how they intersect with global poverty. Lawson Ung focused on solutions for blindness that can also alleviate poverty, such as cataract surgery and spreading awareness of treatment options. In the same vein, the United Nations (U.N.) recently created an initiative that will help people living with blindness and other vision-related challenges.

Harvard Graduate Conducts Research on Blindness and Poverty

After developing an interest in studying ophthalmology, Lawson Ung, a recent Harvard graduate, became inspired to do research on eye disease. While working in a lab, Ung decided to research how eye diseases impact different parts of the world. He learned that 80% of people living with blindness live in low- or middle-income countries and most have limited access to eye doctors. Blindness also increases the likelihood of poverty since eye-related issues can impact people’s abilities to complete daily tasks.

Possible Solutions for Blindness

One solution for blindness that would benefit about half of the people in low-income countries is cataract surgery. Cataract surgery is inexpensive and boosts productivity significantly. Another solution for blindness is spreading awareness that vision loss is not inevitable while informing people about treatment options. This involves reaching out to patients who lack access to eye care services and providing them with the resources they need. However, cultural issues such as acceptance must be a priority in order to make improvements. One study found that only about 22% of blind people living in poverty were willing to receive free cataract surgery.

The UN Creates “Vision for Everyone”

The U.N. recently created “Vision for Everyone,” an initiative that plans to expand access to eye care services in low-income countries. The reason behind this initiative is the high likelihood of more people suffering from vision-related issues in upcoming years. The initiative’s priorities include encouraging governments to improve eye care availability and highlighting the socioeconomic impact of vision loss. The initiative believes that eye care is an important component of poverty alleviation.

In his research, Ung found that many people living with eye disease also face poverty and other environmental barriers. However, cataract surgery and informing people about treatment options are possible solutions for blindness. The U.N.’s “Vision for Everyone” will work to alleviate global poverty by reaching out to millions of people who suffer from blindness and other vision-related issues.

– Chloe Moody
Photo: Flickr

How Labor Unions Can Alleviate Poverty

Developed nations are witnessing a steep decline in labor union participation. Labor unions are organized groups of workers who negotiate decisions concerning their working conditions. From 1985 to 2017, union membership declined by 13%. Several factors have contributed to this decline, however, labor unions are important as they play a role in reducing poverty across the world.

The Decline in Labor Unions

The recent trend toward globalization has admittedly fostered business competitiveness. However, this threatens labor unions due to the belief that unionization can harm a company’s ability to compete internationally. This belief stems from the strong negotiating power of unions, forcing companies to pay and treat their workers well, which many international companies do not have to do. In addition, organizational and technological changes have threatened union longevity. The final contributing factor is the decline of the manufacturing sector, a sector that is more likely to support unionization than other industries.

Along with the organizational factors contributing to the decrease in labor unions, the societal understanding of the value of labor unions is also decreasing. In part due to mass propaganda campaigns and anti-labor advertising unleashed by businesses in the last three decades, there is a growing sentiment that these organizations are no longer useful or necessary. This sentiment poses a direct threat to workers throughout the world as these organizations play an important role in poverty reduction.

Decrease in Economic Inequality

Labor unions play an important role in decreasing economic inequality. Unions provide people with the power to negotiate, which in turn, strengthens the middle class and increases salaries for blue-collar workers. Unions give power to people in lower positions in companies so they can negotiate and work for better wages. Unionized workers are typically able to raise their wages by 20% through negotiation.

White-collar workers do not reap the same benefits and labor unions play an important role in stopping runaway incomes for people at the top. This gives power to the middle class and reduces the power of the top 1%. Not only do higher wages for blue-collar workers support the workers themselves but they also boost economic mobility for future generations. By empowering workers to collectively bargain for higher wages, labor unions have played a vital role in the rise of the middle class.

Healthcare

Because members of labor unions can negotiate better benefits, they are 30% more likely to have healthcare benefits than non-union workers. Additionally, these healthcare benefits are typically higher quality than baseline coverage. On average, unionized workers are more likely to have health plans, including dental and vision care. Quality health insurance plays an important role in reducing the risk of poverty. The CDC finds that workers who possess and utilize health plans are more productive. Increased productivity among workers provides a foundation for educational and workplace success.

Along with increasing productivity, quality healthcare can reduce the risk of medical debt-induced poverty. Medical coverage for working adults can also cover the worker’s children. This is important as children who have medical coverage are less likely to develop chronic health conditions. Through family care, labor unions provide workers and their families the resources necessary to remain in good health, achieve success and protect their futures.

Work-Life Balance

Labor unions provide workers with the chance to negotiate better working conditions, including more paid time off. Unionized workers have 26.6% more vacation time on average than non-unionized workers. This time off is important for a work-life balance, overall longevity and family time. Children who spend quality time with their parents are more likely to be physically healthy and are less likely to partake in risky behaviors such as drug and alcohol abuse. Furthermore, these children are more likely to stay in school and achieve academic success, helping them secure well-paying jobs in the future. By supporting a work-life balance, labor unions ensure that households have a pathway out of poverty.

In these ways, labor unions play a vital role in reducing poverty. By increasing wages, strengthening the middle class, providing healthcare access and facilitating quality family time, labor unions can help people break cycles of poverty.

– Haylee Ann Ramsey-Code
Photo: Flickr

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3D Printing Homes: the Future of Housing?

3D printed homesAn important part of fighting global poverty is providing people a safe place to live. 3D printed homes offers a new solution, as this new method allows for fast and cheap mass-production of affordable housing.

What is the Current Demand for Affordable Housing?

Before the pandemic, approximately 2% of the world’s population was classified as homeless. In addition, over 20% of the world’s population lacked adequate housing. Demographic trends point to an acceleration in population growth worldwide, coupled with the decline of average household size, the global need for affordable housing is increasing rapidly.

The UN estimates—with ‘medium growth’—the world’s population will reach over 11 billion people by the end of this century. Furthermore, environmental instances have displaced millions of people around the world, make it harder to live in some places. The need for affordable housing is clear, however, new 3D printing homes could be the answer to producing quality affordable housing around the world.

What does 3D Printed Housing Offer?

Compared to traditional housing methods, 3D printing is faster and cheaper. Moreover, 3D printing offers environmental benefits. By limiting construction and waste the method is carbon neutral or even negative. With millions of people living in poorly constructed homes made with scrap metal and dirt floors, 3D printed homes promise a safer and better-quality living environment. Living in slum housing can not only make it harder to succeed in school or at work, but the dangerous living conditions can present physical health risks.

3D printed homes are made to last. 3D printing creates a hybrid concrete mortar that hardens while printing. As a result, the tool can mass-produce ‘housing kits’ with the structures needed to build a home.

Current 3D Printing Examples

In the city of Chennai, India, the country is seeing its first 3D printed homes thanks to NGO Tvasta. “Traditional construction is tedious and time-consuming. People are increasingly getting left out as affordability is limited, or settling for low-quality homes,” said Adithya Jain, the company’s CEO. They built the first house in five days. Additionally, they used 30% less of the budget than planned and produced less environmental waste in the process.

In El Salvador, an American company ICON has successfully replaced slums with 3D-printed housing. They have designed a 350-square foot home which was assembled in approximately two days. “Something that sounds like science fiction is real… This is meant to be long-term sustainable housing,” said Jason Ballard the co-founder of ICON.

3D Printing’s Promising Future

As the demand for affordable housing continues to increase, there will be a need to invest in technology that allows us to keep up with the demand, giving everyone the opportunity to live in safe and quality housing. 3D printed homes have the potential to help end global poverty and the worldwide housing crisis.

– Alex Muckenfuss
Photo: Flickr

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Impact of COVID-19 on Poverty in Iran

Impact of COVID-19 on Poverty in Iran
The impact of COVID-19 on poverty in Iran is severe. The pandemic accelerated the decline of Iran’s Gross Domestic Product (GDP) and the rise of unemployment. Despite the economic crisis, Tehran’s massive natural resources allow the country to effectively recover economically if the newly elected Ebrahim Raisi is willing to end the country’s decades-long hostility with the United States.

The US Sanctions and Economic Crisis Before COVID-19

Before analyzing the impact of COVID-19 on poverty in Iran, one needs to understand the context in which the pandemic took place. In May 2018, under President Trump, the U.S. withdrew from the Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA). As a result of the U.S. withdrawal, a “maximum pressure” campaign that consisted of unilateral sanctions against the Middle Eastern country replaced the Obama-era Iran foreign policy.

The sanctions contributed significantly to the downfall of Iran’s economy. The country’s GDP went down by 11% and average living standards have reduced by 13%. The “maximum pressure” campaign also caused an inflation shock. The sanctions cut oil exports, which reduced the supply of foreign exchange and resulted in hyperinflation. For example, the sanctions were one of the main reasons for prices rising by 41% in 2019.

How COVID-19 Worsened Iran’s Economic Crisis

The pandemic has further accelerated the crisis of the already declining Iranian economy. The mismanagement of the COVID-19 outbreak resulted in Iran being one of the worst impacted countries in the world, with almost 94,603 deaths and more than four million overall cases. Considering how widespread the highly transmissible Delta variant is and the fact that only about 4% of the country’s 83 million citizens are fully vaccinated, the future seems even more pessimistic.

Observing the health effects of the pandemic, it is not surprising how severely COVID-19 damaged Iran’s economy. In 2020, an estimated three to four million Iranians were at risk of losing their jobs, with the potential of increasing the actual (not official) unemployment rate from 20% to more than 35%. The country’s GDP shrunk by 5% in 2020 and inflation nearly doubled from February 2020 to February 2021. The COVID-19 pandemic caused a decline in GDP and an increase in public spending led the government to take extensive debt and sell its assets on the stock market. As a result, the fiscal deficit-to-GDP ratio more than doubled.

The Lives of Impoverished Iranians During the Pandemic

COVID-19 forced working-class, low-income Iranians to choose between their health and earning a basic income necessary for physical survival. In previous decades, the combination of charity work and welfare ministry, which provided financial assistance to economically vulnerable families, managed to maintain poverty below the 10% threshold. However, sanctions and the pandemic have put the survival of millions of Iranians, particularly informal and daily workers, at risk.

Around six million Iranians (a quarter of the overall workforce) work in the informal economy and earn daily wages. They often have no fixed salaries, minimal or no savings and little insurance from the social protection programs. Although these workers face a greater risk of infection, their financial situation does not allow them to stop working. Due to the fragile economic reality of Iranian people, particularly low-income citizens, the government cannot afford strict quarantine measures because these restrictions can push an additional 20% of Iranians into extreme poverty.

Moreover, according to a World Bank report, consumer price inflation stood at 30.6% from April to November 2020 and reached 46.4% in November 2020. The hyperinflation caused drastic price increases in food and housing, which disproportionally harmed working-class families.

The Way Out of the Economic Crisis

Various international and local nongovernmental organizations work tirelessly to alleviate poverty in Iran. One of the most significant NGOs that provides financial and educational resources for Iran’s vulnerable is Relief International. The organization has been particularly active since the outbreak of COVID-19. Relief International has provided multi-purpose cash assistance for 26,000 families who lost their income due to the pandemic.

Although the work of Relief International and other NGOs is significant for mitigating the impact of COVID-19 on poverty in Iran, NGOs have limited resources. Therefore, the Iranian government should play a greater role in the process of poverty reduction. For easing the short-term economic impact, the government should provide direct income assistance to its vulnerable citizens. More importantly, for a meaningful, long-term change, the Reisi administration should end the four-decade-long animosity with the U.S. and agree to the new nuclear deal. The precedent of the 2015 JCPOA agreement shows that lifting sanctions will reverse the negative economic impact of COVID-19.

– Aleksandre Jgarkava
Photo: Flickr

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The New National Payments System in Somalia

National Payments System in SomaliaThe Somali government recently secured support from the International Monetary Fund (IMF) and World Bank to create a central payments system that will aid in rebuilding Somalia’s economy. Millions of Somalis have suffered for the preceding two decades as a result of insufficient economic infrastructure. The combination of economic distress due to widespread counterfeiting, displacement as a result of climate-related pressures and the ensuing threat of al Shabaab, an al-Qaeda affiliated terrorist organization, has left Somalia decimated. The national payments system in Somalia presents a glimmer of hope in the fight against widespread poverty in Somalia.

National Payments System

A national payments system simply refers to the infrastructure within a specified country or locality that allows for commercial and financial transactions to occur. This includes a network of banks and a messaging and routing system. The system protects the information and transactions of the public, secures their finances and acts as an avenue into the global economy. A national payments system is essential to the efficacy of national economies and their involvement on a global financial scale. Until recently, Somalia existed without a national payments system. Domestic financial transactions largely used the U.S. dollar given the prevalence of counterfeit currency in the use of Somali shillings and that little to no domestic financial infrastructure was in place. This financial foundation hamstrung the Somali people and economy to the whim of exterior powers that provided such infrastructure in its most rudimentary form. During this period, Somalia has been in civil war, riddled with environmental decay and stifled by the threat of al Shabaab. All of the aforementioned conditions created an economic situation in which 64% of the population lives in absolute poverty in Somalia. The national payments system presents a monumental step toward economic progress.

What the Future Holds

With the introduction of a national payments system in Somalia, the Central Bank of Somalia Governor Abdirahman M. Abdullahi stated that “the impact on the economy will be unprecedented. It will boost trade and business… and will enable more financial inclusion in a secure and safe manner.” The Central Bank of Somalia has also issued its first Visa card and its first mobile phone-centered financial system. During this time, the government has additionally increased its regulation and production of the Somali shilling. All these financial advancements have boosted the IMF’s predictions of Somali economic growth to 2.9% in the next year.

Further Humanitarian Developments

In addition to the progress brought by the national payments system in Somalia, the Somali government has recently passed election and healthcare reform bills to increase equity in their political and social infrastructure. The National Elections Security Committee, a newly founded governmental body, has begun work on a new initiative to guarantee that at least 30% of the electorate consists of Somali women. The committee has additionally begun numerous programs to protect election integrity and voter privacy. Support from international bodies ranging from the World Bank to the IMF is essential to the efficacy of domestic progress in Somalia. On the other hand, it is important to note from where the motivation for such changes has arisen. It was not international groups that began the charge for Somali advancement. Rather, the impetus for this progress came from domestic pressure, not foreign assistance. Through the example that Somalia set, one can easily grasp the potential for self-sufficient humanitarian growth. All the changes are recent and will hopefully be immediately impactful in the global and domestic effort to end poverty in Somalia. – Jonah Issac Stern Photo: Flickr