Rwandan Economy

Rwanda is located in the heart of Africa. Although the Rwandan economy is dependent on agriculture, Rwanda’s infrastructure has made progress through its Urban Development Project. Kigali Innovation City is an effort to further develop the economy and invite businesses to invest in key areas such as commercial and retail real estate, biotechnology and education. Africa50 partnered with the Rwanda Development Board to improve basic infrastructure such as roads, drainage, solid waste management and sanitation. Thanks to these and other major projects, Rwanda has one of the fastest-growing economies in Africa. President Paul Kagame hopes to transition the economy from a subsistence farming economy to a service-oriented, middle-income economy by 2020.

Rwanda Urban Development Project

The Urban Development Project for Rwanda, approved in 2016, completed Phase 1 in October 2018. The project began in September 2017 and focused on infrastructure improvement and urban management in secondary cities such as Nyagatare, Rubavu, Rusizi, Muhanga, Musanze and Huye. Infrastructure is lacking in the country, yet the Urban Development Project is a solution to the following component: roads, solid waste management, sanitation and stand-alone drainages. The end date for the $100 million project is June 2021. About $80 million are directed towards component one – provision of basic infrastructure in secondary cities. The rest of the funds go towards three other components, such as technical assistance for sustainable urban management.

According to Minister of Infrastructure, Honorable Claver Gatete, “Phase 1 implemented under the World Bank funding in all six secondary cities is meeting the main objective to provide access to basic infrastructure and enhance urban management.” About 28.3 kilometers (17.6 miles) of urban roads and 13.8 kilometers (8.6 miles) stand-alone drainages were completed during phase 1. Another major component of the project is upgrading unplanned settlements in the capital city called Kigali. The last two components involve technical assistance for sustainable urban management and support for project management, as the scope of the project and funds involve substantial risks. The project’s progress was successful. Phase 2 began in July 2019.

Kigali Innovation City

Kigali Innovation City is a giant project garnering investors from across the globe. The main goal is to create an innovative business hub in the heart of Africa that’ll include four first-rate universities, innovative agriculture, healthcare, technology, financial services, biotech firms and both commercial and residential space. The targets include creating 50,000 jobs, generating $150 million in ICT (information and communications technology) exports annually and attracting more than $300 million in foreign direct investment. Africa50, the pan-African infrastructure investment program, partnered with the Rwanda Development Board to invest $400 million in the tech hub. The Africa50 investment shows interest in diversifying the Rwandan economy and promise in private investors developing the country through infrastructure and innovation.

Clare Akamanzi, CEO of Rwanda Development Board, stated the deal between the board and Africa50 is a key milestone in transforming Rwanda from an agriculture-dependent economy into a knowledge-based economy. About 75 percent of the labor force is agriculture-related, yet the service sector is gaining higher importance due to the fast-growing economy. The GDP growth rate rose from 4.6 percent in 2013 to 8.6 percent in 2018. It has steadily averaged about eight percent growth since 1999, which was after the country rebounded from the 1994 genocide that produced a devastating recession. The plans for university development in Kigali Innovation City shows promise in not only infrastructure development but also progress in improving education, a long-term solution to reduce poverty in Rwanda.

Future Outlook

The Rwandan economy is strong, and the progress made in the Rwanda Urban Development Project shows promise that the country can transition into a middle-income, service-oriented economy by 2020. A South American technology firm, Positivo BGH, saw growth in Rhanda’s emerging market and decided to open up a business in Kigali. Positivo BGH creates laptops made in Rwanda and employs more than 100 locals. With Africa50 investing a massive $400 million into Kigali Innovation City and firms such as Positivo BGH expanding to Kigali, external investors are seeing potential in the fast-growing Rwandan infrastructure sector.

– Lucas Schmidt
Photo: Flickr

Infrastructure Development in Micronesia

The Federated States of Micronesia relies heavily on foreign aid, yet under its Infrastructure Development Plan 2016-2025, it plans to gain self-reliance and growth in six main areas. In addition, the Sustainable Energy Development and Access Project and the Maritime Investment Project, funded by the World Bank, are two major projects that are already underway. The developments are in key areas, such as fishing and island connectivity, which many Micronesians rely on for their livelihood.

Federal States of Micronesia Infrastructure Development Plan 2016-2025

As part of Micronesia’s Infrastructure Development Plan, economic growth and self-reliance are two areas of improvement. Micronesia is a remote region containing more than 600 islands northeast of Papua New Guinea, 74 of which are inhabited. Due to its remoteness, tourism and investment in the main regions of Micronesia are sparse. The Infrastructure Development Plan is focused on six main areas: macroeconomic stability, good governance, developing a private sector-led economy, health and education services, infrastructure improvement and long-term environmental sustainability.

Under this umbrella, Micronesia already has a number of accomplishments under its belt. Specifically, the School Facility Repair and Construction Master Plan came to fruition in 2013. Likewise, the Airport Master Plan was completed in 2012 and involves safety and security in air transportation. There are four international airports, and development in air transportation is another step to attracting tourism to Micronesia, and therefore, income to those employed in the tourism industry. Although infrastructure development in Micronesia covers many areas, positive economic growth and progress in becoming self-reliant are two important goals for developing its economy.

Sustainable Energy Development and Access Project

The World Bank donated $30 million to Micronesia’s Sustainable Energy Development and Access Project in December 2018. The project aims to increase electricity access and quality and to reduce the reliance on fossil fuels. The four main states of Micronesia, Pohnpei, Kosrae, Chuuk and Yap rely on fossil fuels like diesel. About 96 percent of electricity use in Micronesia comes from fossil fuels, and about 75 percent of the total population has access to electricity.

The project’s goals are the following: increase electricity status in the state of Chuuk, increase renewable energy generation in the states of Chuuk, Kosrae and Yap, improve performance of the Pohnpei Utility Cooperation and provide technical assistance relating to governance, accountability and financial performance of the energy sector. Electricity access varies on the islands. Only 27 percent of the population in Chuuk has access to electricity, yet Pohnpei has a 95 percent electrification rate. The project aims to provide access to renewable energy to the islands for long-term use.

Federated States of Micronesia Maritime Investment Project

The Maritime Investment Project is another source of infrastructure development in Micronesia that was approved on May 9. At a cost of over $38 million, its focus is to increase efficiency, safety, security and climate resilience of maritime infrastructure and operations in Micronesia, including upgrades or repairs to terminal structures at Kosrae, Pohnpei, Chuuk and Yap ports. The project will also improve the connection between the islands with regards to access to food, water and emergency response services.

More than 90 percent of exports are fish. The project benefits not only for infrastructure development in the major ports but also for Micronesians that work in the strong fishing industry. The project ends on August 1, 2024. Sihna Lawrence, Microneisa’s Secretary of the Ministry of Finance, said, “Guided by our Infrastructure Development Plan, we look forward to working with the World Bank to improve our maritime transport and develop stronger connectivity across the archipelago.”

Ongoing Infrastructure Developments

Micronesia’s goal of self-reliance is given through the development plan and projects. Infrastructure development in Micronesia is a major move toward reducing the 41 percent poverty rate and improving health, education and the overall wellbeing of Micronesians.

– Lucas Schmidt
Photo: Flickr

Industrialization of the Ivory CoastAlthough the Ivory Coast has a high poverty rate of 46 percent, its gross domestic product growth rate ranked number 10 out of 224 countries. High GDP growth implies increased productivity, which also leads to industrialization. The Industrial Revolution caused productivity to skyrocket along with mass industrialization and thus brought the poverty rate down. The industrialization of the Ivory Coast might be the key to eliminating the high poverty rate.

The Current Economy of the Ivory Coast

Rising prices of cocoa in 2018 and increased crop production marked a positive turn for the Ivory Coast since at least two-thirds of its population works in the agricultural industry. The Ivory Coast is the world’s biggest producer of cocoa. Although the amount of cocoa in the market surprised even analysts, the Ivory Coast must still transition from agriculture into manufacturing and service industries. This follows the same pattern of evolution that the U.S. and Japan took as they were industrialized. The transitional period will be long and gradual as industrialization is a major change to an economy.

To sustain one of Africa’s fastest-growing economies, the government is investing more than $7 billion in infrastructure between 2018 and 2023. Most of the investment was directed to the capital and major port city Abidjan. “We want to be an emerging country but to achieve that, we will need high-quality infrastructure to support the economy,” states Amede Koffi Kouakou, Minister of Economic Infrastructure. Kouakou explains work must be done to fix the roads damaged by floods. A train network and bridges to Abidjan are other investments currently underway. The roads are in poor condition. However, an infrastructure boom is a sign that the country is prepared to become an emerging economy.

The Benefits of Industrialization

Japan presents an industrialization success story. From the 1880s to 1970, Japan grew rapidly and became a powerful economic leader by the 1980s. Japan is now highly developed and is the third-largest economy in terms of nominal GDP, just behind the European Union and the United States. The process of becoming one of the most powerful economies took enormous effort and focused on infrastructures, such as building roads, schools and hospitals. Japan decreased its poverty rate from an unusually high number, the exact figure is unknown, to 16 percent as of 2013. In comparison, the U.S. has a poverty rate of about 15 percent. Ultimately, the progress Japan made originated with industrialization.

Job creation would be a major benefit of the industrialization of the Ivory Coast. Poor farmers flock to jobs and receive training. In turn, they become a valuable asset to companies and the particular industry. Another benefit is the advancement in farming equipment and machinery. These advancements will increase productivity and improve the quality of crops. This results in a more automated agricultural industry where machines do the arduous work and leave extra income to buy products and services.

“In developed countries, economic growth is driven by industrialization underpinned by strong manufacturing. We need to engage African leaders and policymakers to promote industrialization on the continent if we are to accelerate Africa’s transition into a middle-income continent,” states Joseph Mungarulire, director-general of the National Industrial Research and Development Agency in Rwanda. Mungarulire explains that Africa is mostly supported by agriculture, not industry, which leads to slow industrialization and high poverty.

A Pre-Requisite for Industrialization

Industrialization of the Ivory Coast must begin with a strong, stable government that welcomes private investment whether abroad or within its borders. Thankfully, China sees opportunity in investing in Africa. By 2018, China had invested more than $60 billion in Africa. Part of this investment is for building railroads, a simple but life-changing idea that brings jobs and people, just as it did in the U.S. from the 1830s to 1860s. The industrialization of the Ivory Coast, along with investments by the public and private sector, might be the solution to reduce poverty in the country.

Lucas Schmidt
Photo: Flickr

Poverty in Ethiopia

Ethiopia is set to become the first low-income sub-Saharan African country to achieve one of the U.N. Sustainable Development Goals of eliminating poverty by 2030. Tremendous efforts have been made to reduce poverty in Ethiopia. The poverty rate fell from 44 percent in 2000 to 21 percent in 2018. An estimated four Ethiopians escape poverty every minute. Infrastructure developments and continued growth in the agriculture and service sectors helped bolster the nation’s economy and improve living conditions for its people.

Extensive Infrastructure Developments Underway

The Government of Ethiopia (GOE) has been heavily involved in the development of its economy. Infrastructure projects, such as roads, national parks, power production and distribution, airports and railways have bolstered growth and created jobs. The Addis Ababa-Djibouti Railway is a major international railway inaugurated in 2018 that runs from the capital, Addis Ababa, to the port city of Djibouti. The railway remains an important mode of transportation for passengers and freight. Aschale Tesfahun, a political science lecturer at Dire Dawa University, noted that “[his] life has become easier because of this train, but it’s also a major advantage for all Ethiopia.”

Even external investors, such as Zhang Huarong, find developing African countries like Ethiopia to be lucrative opportunities. Huarong emigrated from China to create a shoe business in Ethiopia. He employs more than 7,500 locals who produce footwear for companies such as Guess and Nine West. His goal is to create 100,000 jobs for Ethiopians. External investors providing jobs for the local population is one way of indirectly reducing poverty in Ethiopia. China has created more than three million jobs on the African continent in markets such as manufacturing, trade, real estate, services and construction.

Energy Sector

Another important contributor to Ethiopia’s real GDP increase is energy production and distribution, which has averaged about ten percent growth between 2006 and 2018. Ethiopia struggles to provide electricity as its population is more than 100 million people. The nation is creating more hydropower plants to keep up with the fast-growing economy and plans to increase power production from 4,500 MW to 5,000 MW by 2022. About 90 percent of power in Ethiopia is generated from hydropower plants.

The Grand Ethiopian Renaissance Dam has been under construction since 2011 and is expected to be the largest dam in Africa. The power source will generate 6,450 MW of electricity and functions as a major factor in the economic growth of Ethiopia. It is also anticipated to export 400 MW of electricity to Tanzania and 400 MW to Kenya. About 30 percent of Ethiopians have access to electricity, yet the dam and several hydropower projects will provide a larger portion of the country with power.

Model for Successful Development

Ethiopia serves as an excellent model to other impoverished countries for poverty reduction and successful economic development. Poverty in Ethiopia was sliced in half within 20 years. Infrastructure developments and external investors, particularly China, have furthered its progress in improving its economy and progressing with 1.1 of the Sustainable Development Goals—reducing poverty.

Other developing African countries could learn from the failures and successes Ethiopia has endured while becoming a leader in Africa’s development and innovation. For example, Ethiopian Airlines is the fastest growing and most profitable passenger and cargo carrier in Africa. The airline expresses that infrastructure development is a main driver in developing an economy, especially when there is room for growth. Former head of the U.N. office in Ethiopia, Eugene Owusu, stated that Ethiopia’s fast development “reflects the bold ambition and the political commitment of the leadership.”

Final Challenge

The last challenge Ethiopia faces is transitioning from an agricultural-based economy to an industrial-based economy. Although the idea is simple, execution sometimes includes decades of evolving and continued external investment from investors that might be blind or wary to potential future profitability. Structural changes to the Ethiopian economy are necessary for further progress in reducing poverty in Ethiopia. With government initiatives, such as improving access to clean water and sanitation services, the economy will continue to grow and eliminate poverty in Ethiopia.

– Lucas Schmidt
Photo: Flickr

Reduce Poverty in Burundi

Burundi is a small country in Central-East Africa with a poverty rate of over 60 percent. It’s difficult for many Burundians to access basic necessities, such as clean water and health care. This is due to so many people in the country living on less than two dollars a day. There are many ways to reduce poverty in a developing country. The following describes four essential areas to improve in order to reduce poverty in Burundi.

Health Care

As of 2016, the degree of contracting an infectious disease in Burundi is very high. Food or waterborne diseases are common. For example, typhoid fever and hepatitis A. Health care spending in 2016, as a percentage of GDP, was 6.19 percent. The U.S., on the other hand, spent 17.07 percent of GDP on health care. Investment in the health care industry would only help reduce poverty in Burundi. Therefore, it would create jobs and improve the livelihood of Burundians.

The functionality of a society relies on good health. So, this is why investing in the health care industry spurs development. A disease, such as malaria, holds back an individual from performing at work. With more than 80 percent of the population working in the agriculture industry, jobs which require manual labor, it’s difficult to work under sickness. About 81.5 percent of patients have to go into debt or sell a portion of their crops, land or livestock to pay for basic health care needs.

Education

Burundi spent 4.3 percent of GDP on education in 2017. The country is ranked 95 out of 175 nations for government expenditure on education. Investing in education can help increase profits in agriculture, which are minuscule. As a result, this can drive farmers to innovate and use efficient means of producing and storing crops for sale. About 15 percent of crops are sold for profit; the rest are consumed for survival. There are no long-term means of storage, so there is little reason to try to produce more crops; they would just spoil.

Education induces innovation and a more educated population. Provided they have the right tools, this leads to business developments. Agriculture accounts for more than 80 percent of all jobs in Burundi. This makes investing in other sectors, such as the power sector, appealing. With affordable and widespread electricity, farmers could afford better equipment, solar power, for example, to store and use energy when needed. As shown above, investment in education has a widespread effect on an economy, especially in a developing economy.

Infrastructure

In terms of GDP, Burundi grew little since 2015. But, investing and improving in the above sectors are a good start to developing the country, creating jobs, improving health and education and reducing poverty. Even simple bus transportation systems would cut the travel time Burundians have while walking over an hour to the market. Electricity, roads and bridges are areas for growth. Subsequently, their development in Burundi would create jobs. For instance, these jobs could be involved with building schools, providing electricity to over 90 percent of Burundians without electricity and supplying farming equipment to help increase productivity and wages.

According to Bertrand Badre, CFO of the World Bank, “Infrastructure is the backbone of any country, generating jobs, improving the quality of life for the poor and boosting economic growth.” Infrastructure creates jobs and therefore helps increase profits of those employed in the industry. Additionally, the infrastructure helps those who would use public transportation and electricity for their occupation. Electricity access is only five percent. Therefore, increasing access would only help grow the struggling economy, thus helping to reduce poverty in Burundi.

Business

Burundi must also improve the business environment so that external investors and internal investors will view the potentially lucrative opportunity of producing products and services in the country. A stable and predictable business environment can be formed as a result of the government providing an incentive to entrepreneurs who are looking to expand to the country. Without government involvement, it’s difficult to improve health care, education and infrastructure. In order to reduce poverty in Burundi, development begins with responsible governments that take initiative in helping its people.

– Sara Olk
Photo: Flickr

Infrastructure Projects in Armenia

Armenia is a landlocked country in the Caucuses region, bordered by Azerbaijan and Turkey. Azerbaijan and Armenia have been in a state of frozen conflict since 1994 with things heating up briefly in 2016. Turkey and Armenia have been at odds for around 100 years over the Ottoman Turks treatment of ethnic Armenians throughout the history of the Empire, especially during the First World War. Due to these sour relations, the borders are closed. Armenia is forced to trade through the two other nations that it borders, Georgia and Iran. Many infrastructure projects in Armenia are focused on increasing the ease of the flow of goods between Armenia and Georgian Ports.

Armenia’s most important railroads used to be owned by a Russian company. Now they are in a state of disrepair. These three railroads run to Georgian ports where Armenian trade goods are then shipped to globally. However, further improvements to rail transport have been halted due to expenses. This has been attributed to lower than expected Russian investment in Armenia.

The World Bank

The World Bank has been working with both the government and private sector on infrastructure projects in Armenia. Due to a stagnant economy, much of this is not only aimed at improving the basic living conditions for Armenians but also at increasing job creation. By building and improving infrastructure, the government and the World Banks hopes to create jobs in the construction sector through government and private programs.

For example, in December 2015, the World Bank approved a $55 million local economy and infrastructure project. The project was aimed at both improving municipal infrastructure to increase the standard of living as well as to protect and sustain cultural heritage sites in order to boost tourism. The project end date is in 2021.

The European Bank

Infrastructure projects in Armenia are also funded by The European Bank for Reconstruction and Development. The EBRD has funded 171  projects in Armenia to the tune of 1.24 billion Euros since Armenia joined in 1992. Of the current 309 million Euros the EBRD is funding for projects in Armenia, 21 percent is going towards infrastructure projects. This includes improving municipal and urban transportation infrastructure.

This money is not only going to roads, rails and vehicles but it is also being invested in improving how commuters pay for transportation. This includes modernizing the ticket system. By making it easier and cheaper for people to purchase tickets for buses and trains, more tickets will be bought and fewer people will hop on for a free ride. The EBRD is also financing greener infrastructure projects in Armenia. At least 23 percent of the funding is going towards the energy market.

Paying It Forward

Despite the help with infrastructure projects in Armenia that the country is receiving to boost its economy and infrastructure, the nation is also giving. In 2015, the Armenian government donated 1 million Euros to the Eastern European Energy Efficiency and Environmental Partnership. Although Armenia also receives funding and expertise from this organization, so do many of its lost family of ex-soviet states. Armenia’s 2015 donation possibly went on to light homes in another country facing a similar situation.

Nick DeMarco

Photo: Flickr

Infrastructure projects in the Republic of Georgia

The Republic of Georgia has been doing fairly well despite a shaky recovery after gaining independence from the former Soviet Union in 1991. The Republic of Georgia and the Russian Federation are still important trade partners despite past conflicts. Trade between Russia and Georgia accounted for 14.5 percent of Georgia’s exports in 2017.  The government has recognized this and, in 2017, it laid out a 3-year plan outlining infrastructure projects in the Republic of Georgia. Its goal is not only to increase the ease of trade but also increase the standard of living for Georgians.

Infrastructure Projects in the Republic of Georgia

Railroads, roadways, seaports, airports, pipelines and electrical transmission lines are all in need of either an upgrade or an overhaul. Infrastructure projects in the Republic of Georgia are being handled organized by the Georgian government, but they are being financed by companies and countries all around the world. For example, Japan signed $38 million agreement to fund investments for improvements on one of Georgia’s main highways.

Much of this investment is organized and promoted by the Georgian International Investment Agency. The agency was developed and established in 2002 outside of direct government control due to the laws at the time. In 2015, the agency was moved under the direct control of the office of Prime Minister as a result of its growing importance and investments. The job of the agency is to ensure that investors and the nation are treated fairly.

Western Trade Partners

As the government of Georgia is seeking closer ties to the west by looking to join both the European Union and NATO, it has formed an important trading partnership with the United States. USAID has been working with Tetra Tech, an international engineering firm, on infrastructure projects in the Republic of Georgia, specifically in the energy sector.

USAID along with Tetra Tech have been working together with the government of Georgia, and other nations in the Caucasus region, on the Georgia Power and Gas Infrastructure Oversight Project (PGIOP). The project includes the construction of 119 kilometers of gas pipelines and the replacement of substations and power lines that were damaged or dismantled during the 1992 Georgian Civil War.

Improved Infrastructure Benefits Trade

Georgia’s other neighbors, Azerbaijan, Turkey, Armenia, Bulgaria and Ukraine, are all important trade partners that share either a land or sea border with the Republic of Georgia. Improving infrastructure in Georgia will facilitate important trade between the county and its neighbors, helping the economies of all countries involved. The World Bank is working with the government of Georgia to help improve the infrastructure needed for this trade.

The World Banks has been investing millions into the Republic of Georgia not only to help stimulate trade within Georgia’s sphere of influence but also though the Caucasus Transit Corridor. The area is an important corridor between Asia and Europe. Modern infrastructure will help facilitate trade across the Black Sea and through all of the nations that border it. Both natural gas and trade goods will need to move faster as consumption increases.

Georgia is a nation tucked in a region with ever-growing tensions. The wars in Iraq and Syria are not far away. Its neighbors Armenia and Azerbaijan are in a constant state of alert. Russia, Turkey and Iran are all beginning to flex their muscles on the world stage more freely. Through improving infrastructure projects in the Republic of Georgia, the country can hope to become too important for any side to lose, allowing it to continue to grow freely and democratically.

Nicholas Anthony DeMarco
Photo: Unsplash

 

transportation impacts poverty
Transportation impacts global poverty in ways that are both obvious and subtle. If the job market is centered in an urban area and potential workers live in a distant, rural area, their immediate survival depends on access to transportation. On a larger scale, the ability for a developing country to transcend poverty and become productive and prosperous depends a great deal on the transportation systems that are implemented with the help of foreign aid. This article analyzes five ways transportation impacts global poverty.

Five Ways Transportation Impacts Global Poverty

  1. Rural isolation arguably deserves its own list of ways transportation impacts global poverty because it has so many consequences that perpetuate continued destitution. For example, farmers in isolated rural environments often fail to reach their economic potential because they cannot easily access marketplaces that offer seeds, fertilizers and other tools for agricultural success.
  2. Other casualties of rural isolation are the elderly or otherwise infirm. Healthcare services are usually in centralized urban locations. Even if the poor and sick or even the old, pregnant or injured can afford the costs associated with health services, they are often unable to get to where the providers are if they live in rural communities. World Bank has helped to address this in developing regions of India, Georgia and Vietnam by subsidizing travel costs and making health professionals available in more remote areas.
  3. Investing in basic infrastructure is often one of the most significant ways in which transportation impacts global poverty. The building of roads, trails and bridges creates greater accessibility even for those who can only travel on foot. Jobs are created to facilitate these developments, and there are often new modes of public transportation implemented to make use of newly created roads or railroad tracks. This helps to minimize the travel time between rural and urban regions. Bill Gates asserts that while domestic resources can and should be utilized for infrastructure investment, global aid is a critical component as well. An investment in a developing country ultimately benefits the entire world, including the wealthiest nations.
  4. It stands to reason that the more easily a population can access educational facilities, the more educated that population is likely to be. People living more than an hour’s walk from the main road in Papua New Guinea were shown to be experiencing twice as much poverty as those living closer to the road. Building new roads and providing greater access to transportation resulted in an increase in education enrollment and literacy as well as an overall decrease in poverty.
  5. A theory known as “spatial mismatch” describes a phenomenon in which those who can easily pay for transportation, whether by automobile or public means, move away from congested urban regions. This creates a problem for the poor because the market often follows the wealthy as do the jobs. In developing countries, this is especially problematic since it feeds a cycle of poverty in which cheap housing options are only available in areas where there are few amenities, poor transportation options and limited jobs.

Writer Wilfred Owen asserts, “Continuing global prosperity is contingent on the very large volume of trade with developing countries and on the foreign investment opportunities they provide.” This will not be feasible without a short-term investment in the infrastructure and transportation systems of those developing countries. While the governments of the developing nations play a vital role in upgrading transportation options in their countries, foreign aid must also play a part. As this article shows, transportation impacts global poverty; therefore, it is not a simple matter of charity but rather a wise investment in our global future.

Raquel Ramos
Photo: Flickr

Failed statesA country is considered a ‘failed state’ when it cannot control its territory and population as well as when fails to secure its borders. A failed state has barely functioning executive, legislative and judicial institutions, which in turn, breeds corruption since the honest economic activity is not rewarded by the state. Here are 10 facts about failed states.

10 Facts About Failed States

  1. Throughout history, civil wars, ethnic cleansing and human rights violations have led to states losing the capacity to regulate and control themselves. When a state loses the capacity to implement policies throughout the country, when it cannot establish public order and equity, and when the government cannot assure the independence of institutions, instability and insecurity reign.

  2. North Korea is often called the ‘hermit kingdom’ due to its isolated nature. The country frequently receives low scores on its legitimacy of state. Aid organizations estimate that around 2 million people have died from food shortages since the mid-1990s. Part of this can be traced back to the economic institutions that prohibit people from owning property as the state collectively owns most land and capital.

  3. Another sign of a faile state is forced labor. In Uzbekistan, students are forced to pick cotton, one of Uzbekistan’s biggest exports. In September, while teachers are relegated to the role of labor recruiters. The children are given quotas of between 20 and 60 kilograms, which varies according to their age. Thus, the children are unable to break out of the cycle of poverty due to their lack of learning.

  4. Syria can be considered a failed state as it is experiencing a civil war that has claimed 100,000 lives and has no end in sight. The country receives an extremely low score for security apparatus, according to Foreign Policy magazine’s annual metric data.

  5. Egypt’s elite is monopolizing the economy to block the entry of new competitors. Under Hosni Mubarak, the military and government own large portions of the economy. According to some estimates, they collectively own up to 40 percent. Even after liberalization, the economy was privatized into the hands of Mubarak’s friends and sons’ companies. Big businesses put a stranglehold on the economy while Mubarak’s family accumulated an estimated $70 billion fortune.

  6. In most failed states, it is typical for the regime and its leaders to prey on its constituents. The regime tends to be motivated by ethnic or intercommunal hostility or even the insecurities of the elite, which lead to the victimization of their citizens or a subset demographic which is deemed ‘hostile.’ This is the case in Mobutu Seke Soso’s Zaire, where the ruling elite oppress and extort the majority of citizens while expressing preferential treatment for a specific sect or clan.

  7. Failed states can often be identified by weak infrastructure. As the rulers or ruling class becomes more and more corrupt, there are often fewer capital resources available for road crews, equipment and raw materials. For example, in the Democratic Republic of Congo, refurbishing navigational aids along aerial waterways was not prioritized.

  8. In order to have a successful economy, a country must have a strong, centralized nation-state. Without this, it becomes exceedingly difficult to provide law and order as mechanisms to solve disputes and provide basic public goods. Somalia exemplifies this failure to exercise control over territories beyond its capital. This can be attributed to the traditional social structure in Somalia where clans made decisions according to the adult males as opposed to adhering to a central authority figure. This persisted in the colonial era and into the modern day with Mohammed Siad Barre’s dictatorship failing to change it.

  9. An economy based on extreme extraction breeds political instability as it incentivizes the non-elites to depose the ruling class and take over. In Sierra Leone, Siaka Stevens and his All People’s Congress (APC) party ran the country from 1967 to 1985 as a dictatorship until he handed control to his protege Joseph Momoh. This invited would-be strongmen such as Foday Sankoh to plunge the country into a vicious civil war in 1991. He was only interested in power in order to steal diamonds. The government revenue went from 15 percent of national income to essentially zero in 1991.

  10. Corruption flourishes on a governmental, nationwide level. Examples include benefitting from anything that can be put to fake tender (medical supplies, bridges, roads, textbooks), wasteful construction projects and licenses for non-existent activities. The corrupt ruling elites mostly invest their ill-gotten money overseas, which worsens the economic situation domestically. Military officers too are guilty of profiting off these corrupt regimes.

In an earlier era where the world was less connected and globalized, it might have been possible to isolate the effects of a failed state from the others. However, in the connected state of today’s global economy and political system, the failures of one state poses grave threats to the security of others. These 10 facts about failed states shed a little more light on sign to look out for when identifying states that have failed or are going in that direction.

Maneesha Khalae

Photo: Flickr

Infrastructure Projects in Romania
Perhaps the most well-known motoring experts and critics, the host of the BBC’s Top Gear, named Romania’s Transfagarasan Highway the best road in the world in season 14, episode 1. In general, infrastructure has not been Romania’s strong suit; however, both Romanian politicians and the European Union alike see large infrastructure projects in Romania as the key to Romania’s social and economic future. There are plans to build roads, railways, ports and a variety of buildings to support the health and safety of Romania.

Unfinished Business

Mismanagement has always been a problem for a post-communist Romania. In 2003, the country began construction on what was supposed to be a nation-changing Autostrada Transilvania highway project that would have stretched from Brasov to Oradea, near the Hungary border, spanning the length of the nation. Construction was canceled in 2013 after high costs and poor management forced the government to abandon the project.

In 2014, the European Union guaranteed 9.5 billion Euros for infrastructure projects in Romania through 2020. Due to shifting government policies and elections in Romania, the EU has had a difficult time effectively following through with the project. Unfortunately, the initial plans went nowhere.

New Commitments to Infrastructure

In 2018, the President of the European Bank of Reconstruction and Development (EBRD) met with the President of Romania, giving the world its vote of confidence when it was announced that the EBRD would increase their commitment in funding infrastructure projects in Romania.

Road projects are important. Only 4.3 percent of roads in Romania are highways. To remedy this Romania is planning two major highway expansions. In 2019, Romania will begin planning a 51-kilometer highway called the Bucharest Belt. The Craiova-Pitesti Expressway is the second highway for which Romania has begun to plan and accept bids. It will be 121 kilometers in length and is projected to cost nearly 820 million Euros.

Railways are another important way to move goods and people through and around the country. The Romanian government has big plans for the rehabilitation and upgrading of its rail system. There are 58 investment projects underway to improve Romania’s railway system at an estimated cost of 2.8 billion Euros.

Other Projects in Place

Infrastructure projects in Romania are not only dedicated to roadworks. The Danube river is one of the most important rivers in European history. In Ancient History, it served as the border of the Roman Empire, from which Romania gets its namesake. The Danube has served as a major artery for trade, bordering 20 countries starting in Germany and ending in Romania and Ukraine at the Black Sea. The Romanian government plans to upgrade the Port of Constanta from 2020 to 2025. Improvements to the piers are estimated to cost $991 million dollars.

Other improvements underway are plans to upgrade and expand Romania’s sewage and water treatment systems. The EBRD and the Romanian government have earmarked 2.2 million Euros for the project. The project will help provide more clean water and better water waste removal to the people of Romania. The EBRD will not only provide money but will also provide expertise in the planning process so that the funds are used most efficiently.

It will not be a quick process. Romania has many years of improvement ahead of it. It will be an expensive and long-term task. Hopefully, the commitment of those involved will not falter like earlier projects but will use future roadblocks as opportunities to grow as they work together.

Nicholas Anthony DeMarco
Photo: Flickr