, , ,

Is the Discovery of Oil in Kenya Good or Bad News?

Oil in KenyaThe county of Turkana, Kenya, is currently situated over an estimated 750 million barrels of oil. From the outside looking in, the oil is a winning lottery ticket for Turkana, with 90 percent of its 1.3 million people living below the poverty line. Jobs and business opportunities have increased due to the oil wells, and the oil is expected to make billions of dollars annually for Kenya in just a few years, 20 percent of which will go to the Turkana County government.

However, many people in Turkana do not see the oil in Kenya to be a glimmer of hope; rather, they fear that the new wells will contribute to conflicts over scarce pasture and water resources. Turkana is home to millions of pastoral animals that now have no access to pasture due to the oil rig installations, and they must be herded long distances to find drinkable water and a specific type of grass.

The oil in Kenya has also been said to be killing goats in the county and has caused a stench problem throughout some families’ homes, making it hard to live. The Kenyan government must address the consequences of the oil as well as Turkana residents’ feelings toward the oil to avoid intense conflict, violence or even a civil war.

Turkana, as a county, has been struggling with poverty and human development for many years. Turkana County has the highest maternal and infant mortality rate in the country, the lowest rates of education enrollment and the lowest life expectancy in Kenya. Turkana also suffers the worst of all the counties in Kenya from the ongoing drought that has now been recognized as a national disaster.

Furthermore, the United Nations and Kenyan government estimate that 2.7 million people in Kenya as a whole are facing a food shortage. With all of these struggles that both the country and Turkana County have been facing, it is easy to see why many people feel the oil in Kenya is a sign of hope for a better future. With regards to the infamous possibilities that could be Turkana’s future, as well as Kenya’s, it is important for the government to have regard for the animals, farmers and land.

– Chloe Turner

Photo: Flickr

, , , ,

Kuwait’s Stateless Population

Kuwait's Stateless Population

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

– Briana Fernald

Photo: Flickr

, , , ,

Why Is Kuwait Poor?

Why Is Kuwait Poor?Kuwait, a small country located in the Middle East, is a country that tends to be stereotypically characterized as stricken with poverty. A common question that is asked is, why is Kuwait poor?

But this stereotype is not necessarily true. Kuwait is indeed small, but its oil reserves have made it one of the richer countries in the region. In terms of purchasing power, Kuwait’s GDP is ranked 55th in the world by the CIA World Factbook.

Due to Kuwait’s small population size, this success directly correlates to its people’s standard of living. As of 2016, Kuwait’s GDP per capita ranked 11th in the world at $71,900. This figure is much higher than many major economies such as the United States, which ranked 20th at $57,400.

Based on these figures alone, Kuwait appears not to be a poor country, but one of the most prosperous in the world. So, why is Kuwait poor? On the international stage, it is not. When one looks further, however, key figures may legitimize that question.

What is interesting about Kuwait is that the country’s poverty rate is extremely difficult to find. Neither the World Bank, the CIA World Factbook nor UNICEF have access to it, which raises a lot of questions. Why do these trusted international organizations not have this information? Is this information being withheld, and if so, for what reason?

Based on other metrics, it is hard to see Kuwait as a stereotypical poor country. The figures mentioned above related to GDP show that the nation as a whole is seeing economic success, and an unemployment rate of 3 percent suggests that its poverty rate must be low.

Still, the lack of specific data in this area is unsettling. If Kuwait is as prosperous as it seems to be, there should be no issue in providing data relevant to its poverty rate and income distribution. In order for the world to know for certain, the international community needs this data.

So, why is Kuwait poor? It technically is not poor, but that is not necessarily the right question to be asking. By asking questions regarding Kuwait’s poverty rate, its income distribution, and the general livelihoods of its people, we can better analyze the country’s successes, its shortcomings and its opportunities for growth long into the future.

– John Mirandette

Photo: Flickr

, , , ,

Addressing Four Main Causes of Poverty in Algeria

Causes of Poverty in AlgeriaWith a population of approximately 40 million, Algeria is geographically North Africa’s largest country. It is also the world’s fourth largest gas exporter and the tenth largest exporter of oil. Algeria is a rich nation and the third most important economy in the Middle East and North Africa, but its people are poor. Reports show that the national rate of poverty in Algeria is as high as 23 percent.

What are the causes of poverty in Algeria? Why are up to half of young men from a country tempted to flee to Europe as illegal immigrants to escape misery at home?

Poverty and Unemployment

A high rate of unemployment among youth is one the causes of poverty in Algeria. Although the official figure is 12.48 percent, in reality it is much greater than that. One report from 2008 shows that unemployment among people under 30 was 70 percent. Such high unemployment rates and difficult quality of life have forced the country’s youth to take on desperate measures, such as illegal immigration to find work in Europe.

Political Conflict

Many Algerians blame the unresponsive and ineffective political leadership for the fall of the country’s economic position. One analyst claims that the “doctrinaire socialism” of the National Liberation Front (FLN), a political party which led the struggle for independence against France, rendered the country bankrupt. The Algerian Civil War between the Algerian government and various Islamic rebel groups from 1991 to 2002 and post-war political tensions further weakened the country’s political and economic stability.

Lack of Democracy

Lack of democratic institutions is another cause of poverty in Algeria. The struggle for power between the progressive FLN and conservative Islamic Front prompted military intervention on a number of occasions. The country’s current 80-year old President Abdelaziz Bouteflika has been in office since 1999 by “winning” four successive elections. Although he is respected as an elderly statesman for taking the country out of the civil war and eliminating radical and militant jihadi groups, the government under his rule has grown increasingly intolerant of press and political opposition.

Cuts in Government Spending

Another cause of people’s discontent and poverty in Algeria is the recent decline in oil price. Because Algeria relies heavily on oil and hydrocarbons for a strong economy, the sharp decline in oil price has prompted the government to implement spending cuts and tax hikes. Such measures without “improved safety nets, a cash transfer system reaching the needy, a solid media campaign to ensure better public understanding during its implementation and a stronger statistical system that allows monitoring of households’ living conditions more frequently” will pose a risk for Algeria.

Nevertheless, the pleasant news is that poverty in Algeria has decreased by 20 percent in the past two decades. While this number is promising, it is still not enough development. There is a need for a shift toward a more diversified economy that will move the country to sustainable growth and more employment opportunities.

– Aslam Kakar

Photo: Flickr

, , , ,

U.S. Sanctions and Venezuela’s Poor

Sanctions and Venezuela's PoorWith the recent political unrest in Venezuela surrounding the controversial election of President Nicolás Maduro, the United States has placed financial sanctions on Maduro and some of his high-ranking officials. These sanctions are aiming to freeze any of Maduro’s U.S. assets as well as halt all business between him and U.S. citizens. However, there may be an unfortunate connection between U.S. oil sanctions and Venezuela’s poor.

These individual embargoes may not be enough, though. The Trump administration is still considering whether or not to place economic sanctions on Venezuela’s oil sector, according to Reuters. This would hit the country hard, as the oil industry accounts for upwards of 95 percent of Venezuela’s export earnings. Venezuela is also the third largest supplier of oil exports to the United States.

While it is important to analyze the effects of economic sanctions on a nation’s elites, what are the effects of these actions on Venezuela’s general populace? More specifically, what effects will these actions against President Maduro have on his people, and are there potential collateral effects linking U.S. oil sanctions and Venezuela’s poor?

First, it should be noted that there are multiple types of sanctions that a country can pass. In terms of U.S. embargoes pertaining to Venezuela, the kinds of sanctions being enacted and debated are in regard to the Specially Designated Nationals and Blocked Persons (SDN) List and the Sectoral Sanctions Identification (SSI) List, respectively.

As described in a case study by the U.S. State Department, sanctions targeting the SDN List are against individuals and entities, such as President Maduro and his high-ranking officials. SSI sanctions, on the other hand, target sectors in a foreign economy, such as the oil and gas industries in Venezuela.

According to the Council on Foreign Relations, the U.S. uses economic and financial embargoes more than any country or any body of countries in the world. As of 2015, the most notable U.S. sanctions historically have been levied against Cuba since 1960, Iran since 1984, North Korea since 2008, and the Ukraine/Russia since 2014.

U.S. embargoes against Venezuela began in 2015 when President Barack Obama issued an executive order targeting seven of Maduro’s high-level officials. New sanctions from late July added President Maduro himself to the SDN List.

In general, embargoes levied against individuals on the SDN List appear to have minimal collateral effects on that person’s respective regional economy. This is what the Obama administration argued when it placed sanctions on Venezuelan officials in 2015, and it is what the Trump administration is arguing now.

Sectoral sanctions, however, seem to have a broader impact on the country at large. The more a sanctioning country is a contributor to the economy of its target, the higher the potential is for collateral damage to occur.

For example, after monitoring the effects of sanctions placed on Russia by the United States and the European Union in 2014, U.S. State Department Deputy Chief Economist Daniel Ahn and Georgetown University professor Rodney Ludema concluded in a study that “sanctions [on Russia]…appear to be ‘smart,’ in the sense of hitting the intended targets…while causing minimal collateral damage.”

The E.U., however, who is Russia’s largest trading partner, had a different story. A study by the European Parliament in 2015 noted that Russian officials predicted an 8-10 percent loss of the country’s GDP due to the E.U. sanctions, resulting in a multitude of indirect collateral effects on the Russian economy and its people.

The scale of trade relations, therefore, directly correlates to the collateral damage sanctions have on an economy, and this must be considered when discussing U.S. sanctions and Venezuela’s poor. The oil sector accounts for 95 percent of Venezuela’s export earnings and 25 percent of their GDP, and because the United States is the country’s largest export destination according to OPEC, a sectoral sanction of this size could potentially have massive effects on Venezuela’s populace.

If Venezuela were to cease relations with their primary trade partner and lose the respective export earnings from their primary resource, the result would be a substantial decrease in national revenue. Money that would normally be used for social programs would be stifled, bringing more harm to a population that is already suffering from economic and political hardships plaguing the country.

Because of all this, it is important to watch the Trump administration and see how the President decides to handle the complex issues surrounding Venezuela. There is a viable argument that collateral damage would result from U.S. oil sanctions and Venezuela’s poor would bear the brunt of that damage.

– John Mirandette

Photo: Flickr

, , ,

Malaysian Government Stifles Poverty

Malaysian GovernmentMalaysia is currently on the rise as far as its economy. The country is now considered an upper-middle income economy that has become a leading exporter of electronic appliances, electronic parts and components, palm oil and natural gas.

Malaysia has been successful in eradicating most poverty in the country with less than 1 percent of households living in extreme poverty. The states of Penang, Selangor, Malacca and the federal territories showed marked improvements in 2012 with no extreme poverty in these regions.

“This is proof that the Federal Government’s initiatives to eradicate poverty have succeeded and been of benefit to the rakyat regardless of differences in political ideology,” Malaysia’s economic planning minister Tan Sri Nor Mohamed Yakcop said.

The Malaysian government has done an admirable job of exceeding the Millennium Development Goals which were introduced in 1990. Malaysia succeeded in halving the number of people living on less than a dollar a day much before the 2015 expectant date.

“This is a result of rapid economic development and the effectiveness of poverty eradication programs carried out by the government,” Yakcop said.

According to the Malaysian government, fewer than 110,000 people were living in poverty and that the poverty statistics had nearly been halved within the span of three years. According to this information, the overall poverty rate in Malaysia dropped to 1.7 percent in 2012 which is a significant change compared to the 3.8% in 2009.

The fall in poverty rates was felt in both urban and rural areas. In urban areas, the number of impoverished people fell to just 1 percent in 2012 compared to 1.7 percent in 2009. In rural areas, the numbers were staggering. Poverty rates dropped from 8.4 percent in 2009 to 3.4 percent in 2012.

The focus of the Malaysian government has shifted toward the well-being of “the bottom 40” or poorest 40 percent of the population. Between From 2014 the average household of “the bottom 40” grew at 11.9 percent a year compared to 7.9 percent from 2009 for the total population.

Income inequality still remains a major issue in Malaysia compared to other East Asian countries but the disparity is gradually declining. According to its Gini coefficient, a measurement of income inequality where 0 and 1 indicates perfect inequality, Malaysia scored around 0.49, one of the highest in the region.

Though Malaysia still has some significant work to do as long as income equality, state programs have been put in place to alleviate much of the disparity. With the help of its own government, Malaysia stands as a significant example of a success in the region.

– Drew Hazzard

Photo: Flickr

, , , ,

Poverty in Angola: Oil, Corruption and Land Grabs


Poverty in Angola runs high; roughly 40 percent of the population currently lives below the poverty line. The combination of a long, drawn-out civil war, systematic political corruption and economic crisis have prevented the country from establishing itself as a stable and prosperous state since Angola received its independence from Portugal in 1975.

While Angola does not have many lucrative exports, oil does make an important contribution to the country’s economy. Between 2006 and 2016, it accounted for as much as 97 percent of exports on average each year and, while there has been some reinvestment into national infrastructure, the president, José Eduardo dos Santos, has received criticism for not redistributing the profits fairly and using the financial boost from oil exports to reduce poverty in Angola as much as he could have.

Beyond its meddling in the oil industry, other forms of government corruption and nepotism are also rife in Angola. One particularly prominent example is the appointment of the president’s daughter, Isabel dos Santos, to the position of chief executive of the state-run oil firm in 2016. Forbes ranks her the richest woman in Africa, and she has an estimated net worth of more than $3 billion. Meanwhile, there is extreme poverty in much of Angola and subsistence farming is the main source of income for the majority of her countrymen and women.

This over-reliance on oil causes another problem: Angola is especially vulnerable to the fluctuations in the global oil market. Just last year, a global drop in oil prices resulted in an economic catastrophe for Angola. This triggered a rise in prices on everything from food and fuel to healthcare, putting an even greater strain on the country’s poorest inhabitants. The situation was exacerbated when the government imposed tough austerity measures, a move the U.N. Committee on Economic, Social and Cultural Rights deemed regressive and concerning.

Meanwhile, in a bid to diversify the economy with additional sources of revenue, huge land grabs have taken place at the hands of government officials and private businesses. In many cases, citizens have been forcibly evicted without adequate housing alternatives and proper compensation. Instead, they have been resettled in makeshift housing with little access to amenities such as healthcare, education, water and electricity.

Even before this move, access to healthcare and education has been severely limited, helping to reinforce a cycle of poverty. So while progress – although slow – has been made in both areas since peace was established in 2002, there is still much progress to be made. More investment is needed in the country’s public services to alleviate levels of poverty in Angola.

– Rosie McCall

Photo: Flickr

, , ,

Economic Inequality in Saudi Arabia

Saudi Arabia
King Salman of Saudi Arabia traveled to Indonesia in March to promote economic ties, and the visit sparked some discussion on the current state of inequality in Saudi Arabia. The cost of the trip was estimated at $18 million, involving six Boeing passenger jets and a military transport aircraft, which held two electric elevators and a limousine.

The Saudi family is the richest in the world, worth an estimated total of $1.4 trillion, predominately due to its assets in petroleum. However, Saudi Arabia is still relatively poor; with 20 percent of people living in poverty, the problem of income inequality in Saudi Arabia is quite evident.

Despite an annual oil revenue of more than $200 billion, most Saudis lack adequate housing, healthcare, sanitation and education. Author Karen House highlights these issues in her book On Saudi Arabia. Most of the oil revenue flows right into the hands of the royal family. At least 80 percent of the revenue in the Saudi treasury comes from petroleum, but the average Saudi citizen does not benefit from those gains. The central government in Riyadh, where the royal family is settled, receives most of the oil profits. This sustains a strong monarchy and keeps the majority poor and powerless. The public simply has no say in how the government spends its money.

Moreover, with so much revenue coming in from oil, the government is still unable to provide jobs for its citizens. Saudi Arabia provides one in four barrels of oil exported around the world, yet 40 percent of Saudi youth between twenty and twenty-four are unemployed. The unemployment is partly due to the fact that 90 percent of all employees in the private sector are foreign workers.

The consequences of having a corrupt government are highlighted in times of chaos. In January 2011, during the Cairo revolution, the city of Jeddah flooded because the monarchy failed to establish basic protections against the weather. Ten people died due to improper sewerage and drainage. The inadequate preparation was blamed on corrupt businesses and the government stealing money from both sewer and drain-related construction projects.

Education in Saudi Arabia is of a poor quality and tends to exclude females. The government restricts the economic opportunities of women, who are denied the same rights as men. The lack of economic freedom also correlates with the high rates of poverty, as 40 percent of Saudis live in poverty and at least 60 percent cannot afford a home.

Saudi Arabia is one of the richest nations in the world, yet the majority of the population lacks basic amenities. The poverty rates show clear income disparity in Saudi Arabia and it needs to be further addressed.

– Marcelo Guadiana

Photo: Flickr

, ,

Potential Rise in Poverty Among OPEC

Potential Rise in Poverty Among OPECThe drastic plunge that oil prices have taken from record figures of over $100 a barrel, down to averaging between $40-$45 a barrel, has left the economies of several OPEC countries beleaguered.

A potential rise in poverty among OPEC (Organization of the Petroleum Exporting Countries) is expected as oil is indeed the cornerstone of a majority of their exports and revenue has swung drastically since 2014.

The combined effects of excess supply and competition among markets over the years have impacted OPEC nations like Algeria, Nigeria, Venezuela, and Iraq. The economic uncertainty has deterred these large developing economies adversely.

An estimated 250,000 jobs have been lost as a result of the progressive decline in oil prices and many more are threatened owing to the 50 percent drop over the last two years. This crisis will result in a potential rise in poverty among OPEC, with declining national incomes overall.

Moreover, the presence of Boko Haram in Nigeria has also been a factor that is currently impacting its oil exporting capacity. The 50 percent price decline has only fueled this.

To combat a potential rise in poverty and economic instability, the African Development Bank plans to provide loans worth $10 billion by the year 2019 to bolster various sectors, including energy and electricity. Despite Nigeria’s depreciating currency and 70 percent poverty rate, this method can greatly increase investment capacity and attract more investment.

The Abidjan, a bank based in the Ivory Coast, also resolved to provide $1 billion for supporting the Nigerian budget.

A report by Nigeria’s Leadership newspaper has commended its diversification projects as a means to boost economic growth amid uncertainty.

Existing tensions between oil-producing nations have also escalated as a result of the plummet. Many nations argue about freezing and regulating their output. Consequently, mediating between countries is a viable way to ease the pressure. Iraq is currently heading a conciliation with Iran and Saudi Arabia in an attempt for both countries to reach a consensus regarding the crisis.

Ecuador, OPEC’s smallest member, was especially plagued by the plunge in oil prices as the government has to control and curtail public expenditure. The government has looked to OPEC remedy the situation in some way.

President of OPEC and minister of energy and industry in Qatar, Mohammed Saleh Abdulla Al Sada, is also working actively to agree upon a benchmark price and output level for all countries to adhere to. A renewed benchmark output of 32.5 million barrels has recently been discussed. This could alleviate the price volatility and circumvent a potential rise in poverty among OPEC countries.

Similarly, Algeria has also been a strong advocate of cutting production among OPEC nations as a means to raise oil prices again. Algeria is expected to see a 3 percent drop in its GDP this year.

Furthermore, political and economic turmoil in Venezuela, owing to the oil price decline and President Nicolas Maduro’s ration laws has resulted in food shortages and a 700 percent crippling inflation rate. Venezuela already has a concurrent poverty rate of 32.1 percent.

However, many neighboring countries like Chile, Peru, Argentina and Colombia are in the strategic position to aid the people and reach out to Maduro. Peru’s President Pedro Pablo Kuczynski recently called upon leaders to engage in the situation.

He believes that Peru’s pharmaceutical industry can be effectively used to help the country. Venezuela’s democratic Unity Alliance also echoes this view. Foreign aid is the only sustainable way for Venezuela to find its way through this major economic and financial bulwark.

Overall, a potential rise in poverty among OPEC countries may be the outcome of the drastic tumbling oil prices. It is vital that countries comply with OPEC proposals and guidelines to safeguard the interests of the economy and the people.

– Shivani Ekkanath

Photo: Flickr

, , , ,

How the Oil Industry Could Reduce Poverty in Senegal

Poverty in Senegal
Senegal is a rapidly developing nation in West Africa. Like many developing nations, it is gaining access to lots of new technologies but still lacks many key tools for effective education among other issues.

More specifically, many schools in Senegal do not have electricity. While many technologies exist to foster education that can help to raise people out of poverty, few of these technologies can be used without a stable power source. However, the oil industry is emerging in strength and may be able to help end poverty in Senegal.

According to the International Monetary Fund, Senegal’s economy has been stable and growing at a rate of 6 percent. This is in part due to the development of the country’s oil industry. Oil is one of the world’s most demanded commodities. Despite this fact, the oil resources of Senegal and West Africa are mostly untapped.

Yet, interest in the region is increasing. The Scottish-based company Cairn Energy has stated they plan to spend nearly $70 million exploring projects to drill in Senegal; Australia’s FAR Ltd is considering setting up commercial operations in a basin off of the coast. This basin is speculated to contain at least 200 million barrels worth of oil.

The managing director of FAR’s development plan said that the expansion plan will yield “a world class oil field that can support a commercial development.” FAR has also noted that the costs of operating offshore have decreased by more than 20 percent since 2014. Because poverty in Senegal affects so many citizens, the government must take advantage of its emerging position as a major oil producer for the region.

Senegal’s economy is based largely on the agricultural sector. In addition to the lack of educational technology, poverty in Senegal often stems from agricultural workers who face the threats of drought and climate change.

However, the country benefits from peaceful leadership and one of the most stable democracies on the continent. With this in mind, the burgeoning oil industry may be able to help end poverty in Senegal.

– Nathaniel Siegel

Photo: Flickr