Inequality in Peru characterized by its over-dependence on Lima

Inequality in PeruPeru’s capital city Lima is home to more than 10 million people, which is almost a third of the 33 million people who live in the country. Meanwhile, the second largest city in Peru, Arequipa, has just one-tenth of the population size of Lima, highlighting disproportionate overpopulation in the capital. The fact that such a large proportion of the country lives in the capital city has exacerbated inequality in Peru, as rural areas mostly miss out on government programs that aim to boost development. Also, the focus remains on the urban hotspot because governments view this as the best way for the country to improve its economic status through trade and other economic activities.

In the 20th century, the population of Lima exploded, particularly after the Second World War when inward migration to the city picked up as people searched for better opportunities and living conditions. Reports suggest that Lima’s population will continue to grow to almost 13 million by 2035.

Rising Inequality in Peru

Whilst there has been a reduction of poverty overall in Peru, with poverty rates falling from 59% to 20% between 2004 and 2019. In addition, the majority of this development took place in the urban areas of Peru, especially Lima, allowing rural areas to fall behind and inequality levels to grow. In 2022, the poverty rate in Peru was 25%, as a result of a rise from the COVID-19 pandemic. Also, in 2021, more than half of the country’s population was living in moderate food insecurity where the available food lacked all the necessary nutrients for a healthy life. This resulted in increasing cases of health conditions such as anemia.

Rural areas remain the home of the poorest regions in Peru, where there is a lack of opportunities to help civilians rise out of poverty. Inequality in Peru is evident through the level of schooling in years, which in Lima is double compared to the level in the country’s most deprived rural areas.

Possible Solutions

A report published by the World Bank in 2023 recommended the government promote access to better public services throughout the country, including the availability of drinking water, sanitation and electricity. Additionally, it stated the need for the government to address the informal employment sector, particularly since the pandemic, as approximately three-quarters of workers’ jobs are informal.

One big problem in Peru is unfair taxation, which fails to collect sufficient funds through income tax and instead focuses on value-added tax (VAT), which disproportionately affects the poor. In fact, the government has made no plans of reforming the tax system and instead has even made moves to reduce corporate income taxes in hopes of encouraging investment in the country. This relieves businesses of taxes, which if increased, could help fund social projects and improve the living conditions of those living in poverty. Changing the method of tax collection to better reflect incomes it would also allow the government to collect more money, which could fund social projects to reduce inequality, while also not unfairly burdening the poor.

The high levels of informal jobs also impact the government’s ability to collect income taxes. Similarly, without proper records and documentation of wages, it is impossible to collect the appropriate amount of tax, if any in the case of the work being off-record.

What is Next?

Efforts to address the disproportionate overpopulation and inequality in Lima, Peru, are crucial for the country’s development. Recommendations from the World Bank include promoting access to public services throughout the country and addressing the informal employment sector. The government’s consideration of tax system reforms could help in reducing inequality and funding social projects for the benefit of those living in poverty, thereby bringing about progress for Peru.

– Hannah Naylor

Photo: Pixabay

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Implementing Fair Taxes to End Poverty

Fair Taxes
In a time of unprecedented wealth, poverty still plagues the planet. Despite enormous strides in health care, education and total wealth over the last millennium, modern society is as unequal as feudal Europe. As transnational companies (TNCs) and the super-rich accrue vast fortunes, in 2022, 648 million people lived in extreme poverty, surviving on less than $2.15 per day. Without fair taxes, global inequality increases and poverty progress slows.

Growing Inequality

Between 1990 and 2019, the global extreme poverty rate shrank from 37.8% to 8.4%. However, in the wake of the global pandemic, progress toward ending poverty reversed for the first time in 25 years. In 2020, global extreme poverty rates rose to 9.3%. Since 2020, the wealthiest 1% of people have accumulated 63% of all newly created wealth.

Further, as billionaire fortunes raise a cumulative interest of $2.7 billion per day, the last year saw inflation rates surpass salary growth for 1.7 billion workers. Only half of all billionaire fortunes are subject to inheritance tax, with “tax havens” holding “8% of the world’s household financial wealth,” Oxfam highlights. Additionally, major “food and energy companies more than doubled their profits in 2022,” during the same year that saw even the developed world choose between a full stomach and a warm home, Oxfam reports.

The 5% Tax

In January 2023, Oxfam published a paper titled “Survival of the Richest,” which highlights the broadening wealth gap between the rich and the deprived and suggests that the world reconsiders the meaning of fair taxes. The crux of this paper is a simple idea. Oxfam proposes that a 5% tax apply unilaterally to all multi-millionaires and billionaires. A humble 5% tax would accumulate $1.7 trillion per annum: sufficient funds to implement a comprehensive strategy to eliminate world hunger and end poverty for 2 billion people.

Changing Attitudes

Amid escalating inequality, attitudes regarding what constitutes fair taxes are changing. For the first time in history, most Americans agree with the statement: “the government should redistribute wealth by heavy taxes on the rich.” About 80% of Indians and 85% of Brazilians also favor higher, fair taxes for the super-rich.

In October 2022, proposed tax cuts for large corporations in the U.K. led to a “U-turn” in the prime minister’s plans and even her resignation. In the same year, more than 100 millionaires signed a charter demanding higher tax burdens on the rich as a way to resolve global poverty. Even those who benefit from the current economic system agree that it causes unfair economic inequality.

Tax expert Chenai C. Mukumba says in her foreword introducing the Oxfam paper, “Inequality is one of the most important issues today and, left unabated, has the potential to exacerbate many of the social cleavages that exist within our society.”

She says further, “Addressing it, therefore, should be at the forefront of our policy agendas and this report presents an important but insufficiently explored way of doing just that: taxing the rich. Taxes that target the rich allow tax to play its redistributive function by constraining the growth of income.”

Colombia’s Tax Revolution

Echoing Mukumba, Colombia’s Minister of Finance and Public Credit José Antonio Ocampo proclaims in his foreword that “taxing the wealthiest is no longer an option — it’s a must. Global inequality has exploded and there is no better way to tackle inequality than by redistributing wealth.”

Colombia stood as the seventh most economically unequal nation on the planet in 2020 but Ocampo aims to change this. “By abolishing decades-long tax privileges and loopholes that benefit only the richest, there will be more money to invest in free, quality public services like education and health care. To invest in agriculture. In climate and nature. And in peace.” He says further, “This is not something symbolic; it’s not just talk about increasing taxes on the rich to support the poor. It’s [a] historic shift. And it’s long overdue…Ordinary Colombians have had enough and demanded change.”

In keeping with Ocampo’s aspirations, Colombia passed the Tax Reform Law (TRL) on January 1, 2023. In 2022, Colombia temporarily raised its corporation tax to 35%, the third highest rate in the world. The new TRL enshrines the 35% corporation tax in the Colombian legislature. The TRL also repealed the Mega Investment regime law, which reduced income tax to 27% for foreign investors. Most pertinently, TRL introduces Oxfam’s proposed 5% millionaire tax, which supplements the new 35% corporation tax. Although Oxfam’s paper only offers a fledgling suggestion, the ripples of its ideas are already making waves in the Colombian tax structure.

Fair Taxes to End Poverty

Since 1980, inheritance and income taxes have fallen sharply for the super-rich. With global cohesion and cooperation, the 5% income tax could eradicate poverty and hunger in a year at the cost of returning billionaires to the levels of wealth they held in 2012, which is still a tremendous imbalance in affluence.

The world is beginning to agree that “inequality is not inevitable,” as Oxfam highlights. Colombia has proven that fair taxes are a possibility. Those who wish to end inequality and poverty can take heart that the world is not only listening but beginning to change.

– David Smith
Photo: Wikipedia Commons

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Board Games Educating People about Poverty and Inequality

Board Games
Historically, many board game ideas come from an idea about social or moral issues. For example, Monopoly was designed to teach people about financial difficulties such as finding affordable rent and paying taxes. Board games also help people develop real-work skills such as creativity, the ability to plan and prepare and empathy. Board games can even teach social activism. By overcoming adversity in board games such as Peacemaker, players grab hold of newfound mental tools that help them achieve success for their own causes. One truly noteworthy cause that some board games focus on is global poverty.

Across the World

Poverty is defined as living on less than $1.90 a day. The United States falls in the lower quarter of countries in terms of its poverty level. Most of the countries in the top quarter having the highest poverty levels have percentages in poverty that are more than 50%. South Sudan has the highest poverty level of 82.3% with Equatorial Guinea following close behind.

The highest poverty levels are located in Africa. For example, sub-Saharan Africa is the poorest region in the world. Of the 430 million people living there, 40% are recorded as living in extreme poverty as of 2018. Countries with the resources to help others have come together to form organizations such as the United Nations, World Bank and the European Nations to help these people in need.

Playing a board game helps people develop the skills and empathetic mindset to support organizations that are already addressing these issues. There are several examples of board games that even go as far as to address global poverty and social inequality specifically.

Development Monopoly

Multiple versions of Monopoly have undergone development. Development Monopoly is one version that focuses on raising awareness of poverty levels and inequality in developing countries. The board game revolves around the idea that not all individuals are born with the same privileges and opportunities. Players must negotiate and compromise depending upon their socio-economic group.

In original studies at universities in Belgium, students from different nationalities such as European, Asian and Latin American had the assignment of developing rules for Monopoly based on developing countries. Each time a new game began, the rules changed. In the second game, the players designed the rules around wealthier countries. The diversity of the nationalities involved forced the students to learn more about their fellow players and the poverty issues facing their homelands.

Players received salaries as a percentage. For example, a rich player may receive an 80% higher salary than a poor player. The advantages given to the rich and middle class allowed them to dominate and control the poor. The board game revealed that the rich players did not seem to mind taking advantage of the poor. After the games were completed, students were then asked how the rules of the game could be made to be pro-poor.

The Perspectivity Challenge

The Perspectivity Collective has also launched multiple poverty-related games. Notably, the Perspectivity Collective is a partnership of a dozen professionals who have lived and worked in areas such as Europe, the Middle East, Africa and more with polarized groups. The Collective’s goal is to foster social innovation and teach people how to navigate the difficulties and complexities of life.

One solution it developed is called the Perspectivity Challenge. The players play on one board that represents the world and navigate the game based on various challenges. These challenges focus on issues related to climate, food, human security, decision-making and more. The Food Challenge focuses on malnutrition and food availability and affordability, which are poverty related to the issue of global poverty. The goal of The Food Challenge is to develop and manage a country that can feed an entire population. Each player represents a different country and all must work together in order to prevent starvation.

This board game addresses the poverty issues of starvation, malnutrition and being able to feed one’s family. Players learn about the importance of world collaboration. It takes every country being invested in ending world hunger to be successful. This game is offered in multiple languages and has been played all around the world in countries such as the Netherlands, the United Kingdom, the United States, China, Cambodia, Vietnam, Thailand, India, Singapore and Manila. People at the World Bank in Washington even played it to help leaders learn collaboration and planning skills.

Ending Global Poverty

While amidst a continuing fear of the recent pandemic and a newfound necessity to find fun ways to entertain at home, a board game is a great way to educate people about the issue of poverty. Board games will always appeal to large masses of all kinds of people across the globe and can be used to reignite empathy for those around us who are struggling.

– Tara Boehringer
Photo: Unsplash

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Everything to Know About Poverty in Colombia

Poverty in Colombia
Despite its economic growth, with Colombia being the fourth-largest economy in Latin America as of 2021, the COVID-19 pandemic exacerbated poverty in Colombia where the poverty rate in 2020 was 42.5%. However, with long-term trends toward declining poverty and better economic policies, there is hope for better living conditions in Colombia in the near future. Here is everything you need to know about poverty in Colombia as of 2022.

Quick Facts

  • In a population of 50.9 million, around 2.5 million people live on less than $1.90 as of 2019.
  • The poverty rate in 2021 was 39.3%, with a large gap between rural and urban poverty.
  • The Gini Index, a measure of inequality, is 51.3 as of 2019, according to the World Bank.
  • Annualized gross domestic product per capita growth is 1.02% from 2014 to 2019.

Factors Contributing to Poverty

When learning about poverty in Colombia, it is integral to note that it has a number of factors, including internal conflict, government policies, unequal distribution of land and more.

From the 1960s, Colombia engaged in a decades-long internal conflict between the government, paramilitary groups and antigovernment guerilla groups, which was funded primarily by the drug trade. Peacemaking efforts have been actively worked on since the 2000s and the Colombian government officially signed a peace deal with the main guerilla group, the Revolutionary Armed Forces of Colombia, in late 2016.

Many Colombians faced internal displacement due to the conflict when they had to abandon their homes and land due to threats to safety. Internally displaced people find it difficult to rebuild their assets and find stable housing or employment after they move, which often leads to living in poverty or extreme poverty. The World Bank estimates that Colombia still has around 5 million internally displaced people as of 2021.

During the conflict, paramilitary groups also seized large amounts of land from citizens, using it to fuel the drug trade. This had a disproportionate impact on the rural population — 18% of the total population as of 2021 — who still largely rely on agriculture, causing higher rates of poverty in the underdeveloped rural regions of Colombia.

Many accuse the Colombian government of pursuing a “pro-rich” model when it comes to the economy, according to Transnational Institute (TNI). Among these policies is an unregulated taxation system in which the wealthiest 20% contribute little in terms of tax revenue, despite receiving 55% of the country’s income in 2018. In addition, the government invested in international and private corporations as well as encouraging domestic export and international fair-trade agreements, leaving small-scale farmers vulnerable to price fluctuations and unable to compete with large agricultural operations.

Recent Trends

Despite these factors contributing to poverty, Colombia made significant improvements through other measures in the past two decades. According to the World Bank, Colombia worked on a debt management system, invested in the domestic market and improved policy coordination between various financial institutions in the country. The government also worked on better welfare programs, such as improving education outcomes as well as restoring land rights taken away during the conflict. The result of these efforts is steady economic growth and a long-term trend of declining inequality and poverty.

Although the COVID-19 pandemic initially disrupted this progress, Colombia’s economy recovered quickly due to its strong economic policy framework in place. Poverty decreased from 42.5% in 2020 to 39.3% in 2021 and extreme poverty is down from 15.1% to 12.2%.

New Challenges

Due to recent global economic trends and the Russia-Ukraine war, Colombia joins a host of Latin American countries grappling with rising inflation. The country experienced the highest rate of inflation in 21 years in April and food prices. The Russia-Ukraine war has disrupted the trade of wheat and fertilizer, which has contributed to food prices rising by 26%.

The United Nations Economic Commission on Latin America and the Caribbean expects another spike in Colombia’s poverty rate, meaning that as many as 880,000 people could enter poverty in 2022 — the largest impact of any Latin American country — due to the economic effects of the Russia-Ukraine War.

Hope for the Future

On June 19, Colombia elected President Gustavo Petro, its first leftist leader, who promised to tackle inequality and poverty in the country. His plans include the improvement of social programs, such as increasing access to higher education, revamping the health care system and more. Petro’s focus on Colombia’s socioeconomic inequalities has the potential for a path toward poverty reduction.

– Ramona Mukherji
Photo: Flickr

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What Boric’s Election Means for Poverty in Chile

Boric’s Election
Following a highly polarized election, Chile elected Gabriel Boric, aged 35, as Chile’s youngest president in December 2021. Running as a fierce advocate for poverty and inequality reduction, Boric has pledged to overhaul the country’s economy and society to become more inclusive and prosperous for all Chileans. Winning 56% of the people’s votes, Boric’s election means he has achieved the mandate needed to push through such transformative policies. Through these policies, Chile can become a model for more inclusive economic development that promises adequate living standards for all in a country nonetheless deeply divided over the direction Boric is proposing to take.

Democracy is Critical to Reducing Poverty in Chile

Boric has led to commitments to protect Chilean democracy and avoid the paths taken by other autocratic regimes in Latin America, such as those of Cuba, Venezuela and Nicaragua, in pursuit of socio-economic equality. Boric says that poverty in Chile can only reduce by protecting the institutions that safeguard democratic regimes, such as rule of law, freedom of the press, free and fair elections, constitutional government and support for human rights.

Overhauling Chile’s Economy to Reduce Poverty and Inequality

Between 2019 and 2020, Chile saw a wave of national protests over increased transportation fees that catalyzed into general protests over socio-economic inequality and corruption throughout the country. This allowed the political environment for Boric to thrive to emerge.

After Boric’s election, he pledged to overhaul an economy in one of the most unequal countries in the world to benefit all Chileans and reduce poverty in Chile. Boric has much work to do as 1% of Chileans control 25% of the nation’s wealth. Chile also has a 44.9 Gini index ranking as of 2020, indicating a high level of wealth inequality.

Boric proposed a series of sweeping reforms that include reducing the 45 hour-workweek to 40, expanding pensions and universal health insurance, investing in renewable energy and raising tax rates on corporations historically favored in Chile’s economy to fund investments in infrastructure, education and health care.

Such policies promise to transform Chile’s economy and reorient it to focus on poverty reduction and higher living standards for all Chileans rather than economic growth alone. Boric’s proposals could also address a troubling national problem. About one in five Chileans live in multidimensional poverty as of 2017, a measurement by the World Bank that takes into account “additional deprivations experienced by the poor in addition to the extreme poverty threshold of $1.90.”

These policies could also reduce Chile’s unemployment rate following Boric’s election. Unemployment in Chile as of 2021 stands at 9.1%, indicating that the economy is still struggling with the destabilizing effects of the COVID-19 pandemic where Chilean unemployment peaked at 11.2% in 2020 and stood at 7.3% at the pre-pandemic 2019 level.

Boric’s election offers hope for a better quality of life through investments in infrastructure, education, health care and housing to raise living standards for all Chileans and stimulate the economy at the same time.

Gender Equality: A Critical Component of Reducing Poverty in Chile

Another major strategy of Boric to reduce poverty in Chile is to increase the role of women in the Chilean economy. Boric announced a goal of creating 500,000 new jobs for women over the course of his presidency. Boric intends to prioritize women, who constitute about 50% of Chile’s population, to ensure higher living standards for all Chileans and reduce poverty in Chile in the process. Currently, female labor participation in Chile stands at 41.3% as of 2021. This statistic indicates that there is significant potential for Chilean women to contribute to the economy and reduce poverty if given the equal opportunities Boric pledges to create.

One can also see Boric’s attempts to empower Chilean women in the unprecedented level of representation in his cabinet as 14 out of 24 ministers are women, making Boric’s cabinet the first female majority cabinet in Chile’s history. This unprecedented level of female representation in Chile’s government signals that Boric intends to politically and economically empower Chile’s historically excluded female population. Female economic participation results in dual-income earners, which will help strengthen the economy and build a middle-class society.

Every Citizen Can Play a Role in Reducing Poverty in Chile

Boric’s story itself inspires hope in Chileans that anyone can play a role in reducing poverty in Chile. Boric started out as a student activist from 2011-2013, leading protests for more affordable education opportunities. In 2013, Boric was “elected to congress for Magallanes as an independent.” He then became Chile’s youngest president, inaugurated in 2022.

Boric’s story shows how everyday people can play a role in fighting for equal opportunities and effecting change in Chile and beyond. Given his age, Boric’s election presents the potential for youths to play a part in reducing poverty and achieving a better world for future generations.

Chile is a country that has experienced mass upheaval in recent years due to impoverishment and inequalities that have lingered beneath the surface of its stable economic growth relative to other Latin American countries. Boric offers solutions both for addressing this poverty and demonstrating to a nation hungry for socio-economic security that everyday people have a role to play. Boric’s election serves as an inspiration to the youth of all countries, encouraging them to undertake grassroots activism to address poverty and effect change.

– John Zak
Photo: Wikipedia Commons

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Gentrification in South Africa: A Remnant of Apartheid

Gentrification in South Africa
Cape Town, South Africa, is a booming city with ocean views and surrounding mountains that attract many visitors, developers and wealthy foreigners each year. As a result, gentrification in South Africa is becoming a serious issue that is increasing the barriers that low-income black and mixed-race residents face. Hotels, shops and luxury apartments are taking over predominantly mixed-race neighborhoods and threatening the livelihoods of many longtime residents as wealthier white people replace these communities. As a result, many low-income Black, Indigenous and people of color (BIPOC) residents are facing eviction. Due to the influx of these wealthy investors, real estate prices have skyrocketed, pushing low-income residents into townships or underdeveloped informal settlements.

Segregated Townships

During apartheid, the government racially segregated townships and reserved these areas for non-white residents only. Following the end of apartheid in 1994, the elite white population took ownership of “land and other assets” left to them by the apartheid government, thus retaining their power in the nation. This demonstrated the apartheid government’s resistance to a potential loss of international investors in that the Black population continued to be sequestered into townships with little resources or agency and foreign investors continued purchasing the power of the state.

As gentrification in South Africa continues, the remnants of apartheid remain with many BIPOC South Africans living in townships. The government builds these townships on the edge of cities, creating long, expensive work commutes for their low-income residents who do not legally own the township land, thus perpetuating a cycle of poverty. As U.S. News states of advocates in the field, “Gentrification, they argue, is draining the color from one of the so-called rainbow nation’s most prominent cities.”

The Reconstruction and Development Programme (RDP)

Following apartheid, the implementation of the Reconstruction and Development Programme (RDP) resulted in the establishment of more than 3.6 million new homes throughout the nation, offered for free to those with an income of less than 3,500 rand (about $218) per month. Despite this progress, in reality, the RDP is strengthening the remaining apartheid systems by continuing to push poor residents into settlements at the edges of cities, thus allowing for increased gentrification in South Africa. Oftentimes, after obtaining an RDP house after a 10-15 year waiting period, RDP house recipients will illegally sell the house for about one-third of the price the government paid to construct it. In the yard of the property, individuals choose to build shacks to live in and run businesses using the money from the RDP house sales.

The Statistics

  • The barriers that exist for low-income BIPOC residents are particularly evident in the workforce and in access to resources. As The New York Times states, “During apartheid, Black education had been a consignment to permanent poverty. The Bantu educational system had been set up to churn out vast numbers of low-skilled, low-wage Black workers to feed into mining operations.” A significant barrier that Black residents face is the lack of access to capital needed to start a business.
  • In 2017, The New York Times reported an unemployment rate of about 28% in South Africa.
  • The same New York Times report states that less than 50% of the employable population in South Africa is officially employed.
  • The report continues to state that about 10% of the South African population owns 90% of the nation’s wealth, with white people accounting for a majority of this 10%, indicating deep wealth disparities among South Africa’s residents.
  • About 80% of South Africa’s populace, mostly Black, “owns nothing at all.”

Recent Progress

On March 24, 2022, the legislature passed the Township Economic Development Bill in the Gauteng province of South Africa. This bill introduces measures that will increase economic opportunities for those living in townships, lessen the class divide and promote more supplier development and active enterprise. Instead of acting as just reserves for unemployed individuals, townships will actively employ job-creating activities with the support of this bill.

Parks Tau, Gauteng MEC for Economic Development, Environment, Agriculture and Rural Development, has stated that the Township Economic Development Bill is a “developmental legislative framework that addresses economic, geographical and social inequalities” by way of “bringing Gauteng townships closer to mainstream economic opportunities.”

Looking Ahead

Many people living in townships in South Africa inherited the burden of the inequalities that existed in the apartheid system. Gentrification in South Africa reinforces the remnants of apartheid by pushing out low-income BIPOC residents into townships. By introducing legislation to protect these neighborhoods, South Africa can lessen the socioeconomic divide.

– Kimberly Calugaru
Photo: Flickr

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2023 Budget Prioritizes Gender Equity and Equality

Gender Equity and Equality
On International Women’s Day in March 2022, U.S. government officials revealed that the President’s Budget for 2023 will seek $2.6 billion for foreign assistance initiatives promoting global gender equity and equality. This is more than twice the requested amount for gender equality initiatives in the previous year’s budget. This increase coincides with the broader objectives outlined in the Biden administration’s National Strategy on Gender Equity and Equality. The strategy highlights the importance of advancing the economic security, health and rights of women and girls around the world. In 2019, “women were 35% more likely to live in poverty than men.” Should Congress grant this budget request, the United States federal agencies will have more resources to address the issues that lead to this disparity.

Global Gender Inequality in Numbers

Globally, in 2016, “700 million fewer women than men” participated in the workforce. Additionally, women who do participate in the labor force are likely to make less money due to gender wage gaps. This economic disparity produces a significant gender poverty gap. For every 100 men aged between 25 and 34 that live in impoverished households, 122 women live in the same conditions.

This $2.6 billion funding request will go far in addressing this issue through U.S. federal agencies and programs. USAID will take the majority of the budget increase with the purpose of promoting gender equality and the empowerment of women worldwide. Among USAID’s plans, supported by this funding, is the expansion of education among women and girls. Educational attainment can have a profound impact on poverty. It offers an opportunity to develop valuable skills that prepare people to enter the job market.

In fact, according to a study sponsored by the World Bank, every additional year of education has the power to increase a woman’s pay by more than 11%. Despite this, as of 2020, 130 million school-aged girls are not receiving a regular education. The good news is that global enrollment rates are reaching parity. In 2019, UNESCO found that “more than two-thirds of countries have reached gender parity” in primary education enrollment. USAID is already undertaking multiple efforts to promote these positive educational outcomes.

USAID Programs to Promote Education

  • Girls Leadership and Empowerment through Education (GLEE). This Malian project ran from 2018 to 2021 and provided education to almost 14,000 girls who were not attending school. GLEE plays an important role in boosting literacy skills in a country where only 38% of young Malian women aged 15-24 can read and write as of 2020.
  • Girl Rising: Empower New Generations to Advance Girls’ Education (ENGAGE). This project is an ongoing collaboration between USAID and various private sector partners that seeks to increase awareness and action on gender disparities in education around the world through a variety of activities. In 2018, Girls Rising began in Guatemala, promoting community-based programming involving 900 participants exploring the harmful effects of “rigid gender norms.” In the Democratic Republic of Congo, the program worked with youth groups to address “sexual violence in schools” through leadership camps and storytelling workshops.
  • Quality Instruction Towards Access and Basic Education Improvement (QITABI) 2. A Lebanese program aimed at improving literacy as well as “social and emotional learning skills” for more than 300,000 public school students. Planned to run from 2019 to 2024, QITABI 2 supported at-home learning for more than 174,000 students through the distribution of learning materials during the COVID-19 shutdown.

Other Focal Areas

With the additional funding, USAID also plans to strengthen its impact in other areas such as the inclusion of women in civic and political leadership, promoting the participation of women and girls in solutions that address the climate crisis and increasing access to health care for young people.

The budget request increase also sets aside $200 million for the Gender Equity and Equality Action (GEEA) fund. Established in 2021 by the Biden administration, the GEEA fund addresses gender-based violence and promotes economic security for women around the world.

The Biden administration’s support of the GEEA fund, USAID and other agencies through this historic funding increase signals its commitment to gender equity. With the wider participation of government in reaching this objective, a greater impact on reducing poverty is forthcoming.

– Gonzalo Rodriguez
Photo: Flickr

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Addressing Inequality in Indonesia

Inequality in Indonesia
Over the past 20 years, the disparity between wealthy Indonesians and the rest of the population in Indonesia has increased exponentially. Special Staff of the Vice President of Indonesia, Bambang Widianto said at a 2021 guest lecture that Indonesia is the fourth most unequal country globally. According to Oxfam, “the four richest men in Indonesia have more wealth than the combined total of the [most impoverished] 100 million people.” This increase in inequality in Indonesia undermines the fight against poverty while slowing the nation’s economic growth.

How Inequality Affects Citizens

Inequality in Indonesia affects the nation’s inhabitants in many ways. Some groups including women face harsher impacts of inequality. Poverty impacts women disproportionately as does low wages and job insecurity. In terms of Indonesia’s Gini coefficient, “a measure of national consumption inequality,” the country notes an increase from 31.1 in 1999 to 38.2 in 2019. This means “income distribution has become much more unequal.” The Asian financial crisis brought impacts mostly affecting the wealthiest, however, “since 2003, Indonesia’s richest 20% have enjoyed much higher growth in incomes and consumption,” thus contributing to inequality in Indonesia. According to the Asian Development Bank (ADB), almost 10% of the nation lived below the national poverty line in 2020.

5 Facts About Inequality in Indonesia

  1. Geographic Disparities. Indonesia has a complex geographical setting as it comprises about 7,500 islands and more than 43% of the population lives in rural areas. In these areas, access to basic infrastructure and services, such as electricity or decent roads for transportation is rare. In addition, large corporations control some territories and their business activities contribute to increasing inequality by benefiting mostly the wealthy.
  2. Education Inequalities. The Indonesian education sector suffers from underfunding and there are many barriers to equal access, such as poverty. This is notable in secondary education where net secondary school enrollment rates stood at 78.7% in 2018 while the primary school net enrollment rate was 93% in the same year. Without a complete education, impoverished Indonesians cannot access higher-paying, skilled jobs to break cycles of poverty. In addition, children from wealthier families have the benefits of a high-quality private school education while others attend average schools with lower-quality education standards. Impoverished children are more likely to drop out of school because education in Indonesia is only free until Grade 9. These inequalities are notable within the job market: “High-salary, formal jobs for highly qualified workers on the one hand and informal, low-wage jobs requiring low skills on the other.” The Jakarta Post said that “unequal access to skills and rising wages for the skilled has increased wage inequality.”
  3. Economic Growth Inequalities. According to a 2016 article by The Jakarta Post based on World Bank findings, just 20% of Indonesians reaped the benefits of the country’s economic growth over the past decade. This means that the economic growth did not benefit 80% of the nation, equating to 205 million people.
  4. Children Face the Impacts of Inequality. Due to poverty stemming from inequality, inadequate nutrition means that 37% of Indonesian children endured stunting in 2016. Stunting impairs mental and cognitive development, increasing children’s struggles in attaining an education, which limits their skills and thus limits their chances of securing higher-paying jobs.
  5. The Family Hope Program (PKH). This program provides “conditional social assistance” to impoverished families in Indonesia. It began its operations in 2007 as an initiative of the Ministry of Social Affairs. The program’s assistance improves access to “basic social services in health, education, food and nutrition, care, assistance and other social protection.” In 2019, the Indonesian government provided 10 million households with conditional cash transfers worth $2.21 billion. The program allocated each household “a base benefit” of Rp 550,000 (Indonesian rupiah) with additional benefits “such as an additional Rp 2 million per annum” for every secondary school student in the household. In 2020, a study shows that the PKH program improved by 53% the school re-enrollment rates of unenrolled or drop-out students aged seven to 15 years old from beneficiary families. PKH also decreased by 48% “the number of children engaged in wage work.” In relation to health outcomes, “toddlers of recipient families are now 23% less likely to suffer from stunting.”

The Path Going Forward

There is a desire on the part of the Indonesian government to reduce inequality in Indonesia. President Jokowi’s administration made addressing inequality a priority during 2017. To further reduce inequality in Indonesia, a 2017 report by Oxfam indicates that “a living wage for all workers” is important as is ” increasing spending on public services” and raising the tax obligations of wealthy individuals and companies. With a commitment to reducing inequality in Indonesia, nationwide poverty can simultaneously reduce.

– Ander Moreno
Photo: Flickr

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Social Inequality in Germany and COVID-19

Social inequality in GermanyResearch shows that levels of social inequality in Germany could increase COVID-19 transmission rates among people experiencing poor living and working conditions. Evidence does not conclusively determine that poverty directly causes Germany’s COVID-19 cases. However, it is apparent to scientists and medical professionals that a large number of COVID-19 patients come from low socioeconomic standing. In 2015, 2.8 million German children were at risk of poverty. The influx of migrants flowing into Germany has also increased rates of poverty in Germany.

Poverty and COVID-19

According to the CIA World Factbook, 14.8% of the German population lives below the poverty line as of June 2021. According to data from the World Health Organization (WHO), the North Rhine-Westphalia area has the highest number of COVID-19 cases. The area is home to Gelsenkirchen, the most impoverished German city based on a 2019 report by the Hans Böckler Foundation.

Risks of Overcrowding

Overcrowded living areas are more susceptible to airborne illnesses, medical sociologist Nico Dragono said in an interview with The Borgen Project. In 2019, 8% of Germans lived in overcrowded dwellings, meaning there were fewer rooms compared to inhabitants. This percentage has increased in recent years, according to Statistisches Bundesamt (German Federal Office of Statistics).

In November 2020, statistics showed that 12.7% of the population residing in cities lived in overcrowded dwellings. Comparatively, 5.5% reside in small cities or suburbs and 4% reside in rural areas. Dragono says that social inequality in Germany plays a significant role in the spread of disease across the country’s large cities. This especially impacts those living in close proximity to others. “Infections clustered in the areas of the city where the poor live because there simply was no space,” Dragono says. He says further that with many people living in one household, traveling to school, work and other places holds an increased risk of bringing infections into the home.

The Centers for Disease Control and Prevention stated on February 26, 2021, that COVID-19 is transferable through respiratory droplets from people within close proximity of each other. This puts those in poverty at a higher risk of contracting COVID-19. Those living in areas such as refugee camps and impoverished neighborhoods are especially vulnerable. Therefore, social inequality in Germany may contribute to the spread of COVID-19.

Migrants Potentially at Higher Risk

Dragono says that, unlike the United States, Germany does not document patients’ ethnicities. In other words, Germany cannot collect the demographics of who contracts COVID-19. He said it appears the association between COVID-19 and social inequality in Germany is universal for migrants and non-migrants. However, many hospitals across Germany reported that close to 90% of COVID-19 patients in the intensive care unit have an immigrant background, according to Deutsche Welle.

“Migrants are more often poor because they do many of the bad jobs,” Dragono says. There are indications that COVID-19 is more prevalent in the areas inhabited by migrants. “Migrant workers, as they grow older, many have diseases, because in general, they are doing hard work… so their hospitalization rates could be a bit higher.” Dragono says Germans’ social status and income determine how much access they have to quality resources. It is easier for upper-class citizens to purchase masks and use personal travel and they do not have to rely on public transportation or low-quality protective gear.

On June 5, 2021, the German health ministry came under fire regarding a report that dictated its plan to dispose of unusable face masks by giving them to impoverished populations. However, the health ministry released a statement that all of its masks are high quality and receive thorough testing. Any defective masks are put into storage.

Assistance From Caritas Germany

As the virus continues to spread, many organizations are extending assistance to disadvantaged citizens in Germany. Some services translate COVID-19 information into migrants’ languages or modify other services to fit COVID-19 guidelines. Caritas Germany, one of the largest German welfare organizations, typically operates childcare services, homeless shelters and counseling for migrants.

To comply with COVID-19, Caritas began offering online services such as therapy and counseling. The organization also travels to low-income areas and focuses on providing personal protective equipment to those working with the elderly. Many Caritas volunteers use technology to maintain distance while also maintaining communication with patients. Since the beginning of the pandemic, hundreds of volunteers have trained in online counseling.

However, Dragono says that while the country has systems in place to avoid broadening the poverty gap, the serious implications of COVID-19 on social inequality in Germany are yet to emerge. Fortunately, organizations are committed to mitigating some of the impacts of COVID-19 on disadvantaged people in Germany.

– Rachel Schilke
Photo: Unsplash

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Globalism Reduces Poverty: Insights From South Africa

Globalism Reduces PovertySeveral factions surround globalism, some cite statistical reduction in poverty, while others decry effects on local communities. As in all reductive thinking, oversimplification misstates the complexity, succumbing to the facility of a universal perspective. What is absolutely clear, however, is the initial decades of global trade created categorical winners and losers — the most impoverished 5% gained $.07 in daily income, while the top 1% averaged $70. The theory that globalism reduces poverty is multifaceted, and such, globalism is best described as a “two-way street.”

Global Inequality

As the global pool of wealth undeniably grows, financial resources are increasingly concentrated among a powerful economic cadre, actually increasing global inequality. Subsequently, inter-national economies are seeing more parity, but intra-national wealth distribution is increasingly unequal.

Absent the economic investment from global trade, however, developing nations struggle to modernize. Lacking foreign capital investment to create sustainable industries, an estimated 95% of Indian youth are forced into informal child labor. In the nation-state equivalent of “Sophie’s Choice,” governments are forced to participate while the premise that globalism reduces poverty remains dubious.

Relative and Absolute Poverty

Early returns from globalism showed a reduction in extreme poverty from 36% to 19% between 1990-2008 and capitalists trumpeted imminent eradication of poverty by the benevolent “invisible hand” of market forces. Undoubtedly a monumental achievement, millions have benefited from access to foreign markets.

As always, the devil is in the details. Poverty is an indiscriminate measure, a theoretical categorization defines the powers that be. For the World Bank, poverty is a function of daily income. But, between 1990-2018, the threshold indicating extreme poverty has preposterously risen a mere $0.90 while global GDP grew by $60 trillion during the same period. Given such disproportionality, it is difficult to see how globalism reduces poverty.

Global Poverty or Global Inequality

Ambiguous poverty metrics belie a true consequence of globalism, that the top percentile claimed more than 60% of growth. To retain these substantial gains, it is the providence of influential international corporations and institutions to promote globalism. Exceedingly fungible, poverty metrics become a prism through which various interests and policymakers justify exploitative agendas, often accompanied by stifling conditionalities.

As the International Monetary Fund and European Union counsel draconian measures to fledgling economies, local “governments often find it politically easier to cut the public expenditures for the voiceless” impoverished as connected wealthy classes are “disinclined to share in the necessary fiscal austerity.”

Equally as true in developing nations, entrenched hegemonies have little incentive to shoulder the burden of globalism and frequently siphon economic growth for personal enrichment. Irresponsible stewardship of finances and resources, as always, disproportionately affects voiceless and impoverished communities.

Generations after the ouster of foreign monopoly United Fruit Company from Latin America, indigenous farmers’ share of profit is essentially stagnant as corrupt domestic entities pocket revenue. Globalism reduces poverty only when sufficient protection is guaranteed to populations most at risk of exploitation and achieved only when international, federal, corporate and municipal institutions communicate with disenfranchised communities.

Paternalism in South Africa

Under the best of circumstances, sudden inundation of investment and foreign influence is devastating. For countries without robust legislative institutions, it is cataclysmic. The hyper-racialized-apartheid bureaucracy of South Africa was particularly ill-prepared for the rapid modernization required by globalism.

Despite democratic revolution, political bodies could not address the dual responsibilities of erasing paternalistic and racist policies while simultaneously reentering international trade. After centuries of protectionism and isolation, South African society was a manicured house of cards temperamentally opposed to foreign influence.

The draconian society, which enslaved the Black majority, created a delicate homeostasis and the post-apartheid government was manifestly incapable of protecting the citizenry as globalism began in earnest. A systematically underprivileged class was ripe for exploitation.

Skills-Based Bias

During apartheid, underpaid, low-skill labor provided the engine for economic growth in South Africa. Known as “lumpenproletariat,” these peri-urban shantytown workers relied on the largesse of landed aristocracy for survival.

As a matter of course, economic opportunities through education represented an existential threat to White hegemonies. Because “it is surely the lack of opportunities of the less advantaged that is the real concern” in reducing poverty, undereducated South Africans were dispositionally unable to profit from economic growth.

Compounded by exclusion from land ownership, Black South Africans possessed neither the capital nor the skills for socio-economic gain. Various policy initiatives for Black Economic Empowerment (BEE) have targeted inequality, but generations of subjugation cannot be erased during the short lifespan of South African democracy.

Case Study: South African Winemakers

Overregulation and heavy subsidies throughout the 20th century created an extremely inefficient South African wine industry. Traditional focus on bulk production for domestic markets encouraged widespread plantation of high-yield, low-quality cultivars that were antithetical to international demand for higher quality. With a contorted supply chain entirely unfit for global competition, South African winemakers responded by replanting 50% of vineyards between 1990 and 2005.

To finance these changes, producers required foreign investment. At the behest of multinational distributors, conglomeration through a spate of mergers destabilized traditional market structures — the consolidation of Distillers and Stellenbosch Farmers Winery eliminated 2,000 jobs alone.

Moreover, a weak currency forced producers to rely on foreign capital for infrastructure improvements to replace apartheid-era slave labor. As South African winemakers became increasingly dependent on external financing, mechanization reduced permanent employment by 60%.

The Unequal Distribution of Benefits

Nonetheless, foreign investment allowed the wine industry to grow. Exports increased tenfold during the 90s, and by 2002, South Africa was the fastest-growing sector in the all-important British market. Representing 45% of domestic exports, the fortunes of South African winemakers were existentially linked to unpredictable foreign markets.

But, native producers have seen little benefit. As of 2018, the average return on investment for those costly infrastructure upgrades is an abysmal 2%. And after three decades of democratic rule and countless land reforms, Black ownership in the wine industry is 3%. However, a goal of 20% by 2025 was established in 2007.

A Two-Way Street

In the hyper-competitive wine trade, “survival is not made any easier by the fact that globalization is a two-way street.” The South African wine industry is just one example of countless local communities at the mercy of free markets.

Nonetheless, increased trade and economic growth from globalism affect poverty. The 21st century will be judged by how well the fruits of international wealth are distributed to the most vulnerable populations. As early growing pains subside, poverty eradication is within grasp if the world so chooses.

–Kit Krajeski
Photo: Flickr