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How Tony’s Chocolonely Is Reducing World Poverty

Tony’s ChocolonelyThe two biggest cocoa producers in 2022 were Côte d’Ivoire (Ivory Coast) and Ghana with 2.2 million tonnes and 800,000 tonnes respectively. To yield this impressive quantity of cocoa, the Ivory Coast and Ghana employ a significant portion of their population in agricultural work. In the Ivory Coast, more than 48% of its population in 2017 were employed in the agriculture sector. Meanwhile, in Ghana, an estimated 7.3 million people either owned a farm or operated a farm in 2020. The sheer importance of agriculture makes cocoa a crucial export commodity for the economies of the Ivory Coast and Ghana. These countries are also frequent production locations for many chocolate and coca-based multinational companies. 

One such company is Tony’s Chocolonely, a Dutch confectionery corporation. However, Tony’s Chocolonely differs in one important aspect. The company firmly believes that the profit-centric approach of the cocoa industry is the root cause of poverty and child labor in countries similar to the Ivory Coast. In a 2020 survey conducted by the company in Ghana and the Ivory Coast, 27.2% of farmers in Ghana and 44.9% of farmers in the Ivory Coast were considered to be poor by MPI (multidimensional poverty index) standards. Furthermore, in 2021, many West African farmers were further driven into poverty as cocoa prices fell a drastic 18.5%. To combat increasing poverty rates, the company has taken the initiative to support local farmers and has presented several outlets to escape the shackles of poverty. 

Tony’s Chocolonely’s Efforts

One of the company’s most effective strategies to reduce poverty has been through increased market prices. Specifically, Tony’s Chocolonely adheres to the Fairtrade Premium, an extra sum of money farmers can receive to improve their quality of life, and even maintains their own “Tony’s Premium.” By paying a premium price for cocoa, Tony’s Chocolonely has effectively protected local farmers. For example, in 2022, the cost of living in the Ivory Coast jumped 14% and threatened the livelihood of thousands of farmers. 

Fortunately, because Tony’s Chocolonely supports the Living Income Reference Price (LIRP) of the Fairtrade Premium, the price per ton of cocoa increased from $2200 to $2390. Additionally, the Tony’s Premium in the Ivory Coast rose significantly from $792 to $1096. The inflated market prices have enabled poor farmers to afford primary health care, educate their children and provide nutritional meals for their families. 

The second strategy Tony’s Chocolonely implements to decrease poverty is lowering child and forced labor rates. Unfortunately, in Ghana and the Ivory Coast, more than 2 million children are unethically employed to produce cocoa beans. An additional 30,000 people, confirmed by the 2018 Global Slavery Index study, were forced into the cocoa industry. Despite industry practices, Tony’s Chocolonely has made it its mission to create 100% exploitation-free chocolate. In Western African communities that Tony’s Chocolonely works with, child labor has declined to approximately 4.4%. This percentage of child labor is much lower compared to the industry standard of 46.5%. As fewer children are illegally employed, more children will have time for education, which can present them with greater opportunities to escape poverty. At the same time, ending child labor and forced labor can also improve the quality of work in the cocoa industry, thereby maximizing productivity. 

These strategies have outlined the emergence of Tony’s Chocolonely as a pioneer in reducing poverty within the cocoa industry. 

What’s Next?

As Tony’s Chocolonely grows as a major confectionery company, its vision to end poverty continues to benefit many West African communities. Tony’s Chocolonely serves as a paramount example for other companies, displaying how it’s possible to generate substantial profits while still protecting its workers from poverty. While there is still a lot of progress left to desire in the cocoa industry, Tony’s Chocolonely has proven that corporations can fight poverty.

– Manav Yarlagadda
Photo: Flickr

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Being Poor in Kazakhstan

Being Poor in Kazakhstan
While many may associate Kazakhstan with “Borat,” the country could not be further from the way the film presents it or from Sacha Baron Cohen’s depiction of a citizen of the young nation that is Central Asia’s largest country – spanning a distance equivalent to London to Istanbul. While poverty may often go overlooked in the country, as it stands tall – the wealthiest nation in the region with a booming economy, many Kazakh families struggle with access to necessities and 15.5% of residents live below the poverty line. Here is an examination of being poor in Kazakhstan.

Kazakhstan’s Social Security System

In Kazakhstan, the government program Target Social Assistance (TSA) is the main line of defense in aiding to lift people out of poverty. However, residents still struggle to navigate life with the social security program, as it only covers a portion of families’ basic needs.

The lack of sufficient support that the social security program of Kazakhstan provides raises concern as Article 9 of the United Nations “International Covenant on Economic, Social and Cultural Rights” recognizes social security as a right everyone should have. Article 22 of the United Nations’ Universal Declaration of Human Rights mirrors Article 9 of the “International Covenant on Economic, Social and Cultural Rights,” stating that everyone has a right to Social Security.

The Director of the Europe & Central Asia Division of the Human Rights Watch, Hugh Williamson, reflects on Kazakhstan’s Target Social Assistance program: “A relatively prosperous country such as Kazakhstan should be able to step up and meet its human rights obligations to ensure that everyone has access to social security that offers an adequate standard of living.”

Alternative Government Assistance

While Kazakhstan’s social security program might not be able to meet the people’s needs, alternative government assistance presents itself as loan forgiveness. President Kassym-Jomart Tokayev has also started loan forgiveness for over “3 of 18 million.”

Aside from the Kazakh government’s support, NGOs like Niyet, established in 2017, provide increased support for children who face various challenges with being poor in Kazakhstan whether it be that they are orphans or they meet the poverty threshold by raising funds to provide financial assistance. These funds are redistributed in the form of a certificate that may be used to buy basic necessities including food and other items that children may make use of. Over a three-year period, Niyet has raised 406 Million Kazakh Tenge.

Outlook

This action from Kazakhstan’s President, along with Kazakhstan’s involvement in China’s Belt and Road Initiative (BRI), the World Bank Reports, is projected to increase the country’s GDP, though recognizes that the impact of the GDP growth won’t affect all regions to the same extent, which will still leave inquiry across the country.

Additionally, in a different report, the World Bank projects that Kazakhstan is to undergo “moderate growth” with an increase in GDP in 2024 of 4%. However, the projections face risk due to the conflict in Ukraine and Russia lying as the gatekeeper between Kazakhstan and the West.

While poverty is still a serious and pressing issue that Kazakhstan must navigate, Kazakhstan’s economic activities will continue to improve and benefit the country.

– Noah Marshall
Photo: Flickr

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Being Poor in South Sudan

Being Poor in South SudanIn the year 2023, many people contend that there is enough wealth to ensure that all people live contently. However, worldwide areas of the global theater are rife with significant degrees of poverty. In response, the immediate question that arises is why poverty occurs in the first place – however, the answer is not simple since there are a multitude of factors. For this reason, one cannot reduce the factors behind poverty to a single cause. Be that as it may, there are emergent themes common to poverty-stricken areas such as corrupt governments which can cause the regression of rich or flourishing nations into poor nations. Furthermore, a history of exploitative colonization, weak rule of law, political strife, warfare and social unrest are contributing factors. Regarding South Sudan, many similar themes have contributed to its poverty. This article explores being poor in South Sudan.

About Being Poor in South Sudan

South Sudan is consistently cited as the most poverty-stricken country in the world. In fact, about 82% of Southern Sudanese persons are poor. In 2013 and 2016, civil wars emerged which significantly undercut South Sudan’s advances to further its independence. These civil wars manifested more strife, displacement and external shocks which caused even more economic stagnation and instability, resulting in perpetual cycles of poverty. 

In March 2022, a staggering statistic emerged asserting that more than 70% of Southern Sudanese persons will struggle to survive the peak of the annual “lean season,” because of unprecedented levels of food insecurity caused by climate shocks, COVID-19, rising costs and conflict. The United Nations further noted that Southern Sudanese people face extreme hunger, and tens of thousands are already severely malnourished because of successive and continuous shocks. If left unattended, many of these persons could starve to death. 

The World Food Programme’s Efforts

The World Food Programme (WFP) has made significant strides in combating South Sudan’s poverty crisis. In 2021, the WFP provided 5.9 million persons with food and nutrition assistance, including more than 730,000 persons in South Sudan who “benefited from livelihood activities.” Additionally, since 2005, The World Bank Group (WBG) has oriented its attention to the country ever since the formation of the autonomous Government of Southern Sudan. In efforts to combat being poor in South Sudan, WBG is taking internal measures. The WBG’s Country Engagement Note (CEN) FY 21–23 is guiding its strategy. The main goals are to first lay the groundwork for institution building; second, continue support for fundamental public service delivery; and third, promote resilience and further livelihood opportunities. 

Looking Ahead

A call to action for this global crisis is imperative. The merit of inhabiting a democracy is the ability to exercise one’s voice for not only domestic concerns, but broader global concerns which impact all persons, either directly or indirectly. In the case of South Sudan, fears of the situation growing worse are legitimately established, as espoused by the UN most ubiquitously. Therefore, calling on domestic and foreign leaders to orient their attention toward the persons of South Sudan remains obligatory. If addressed properly, South Sudan’s dire poverty crisis can be met with significant progress, if not eliminated entirely. 

– Eric Van Evans
Photo: Unsplash

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The Work Christian Aid Does To Fight Poverty

Christian AidFor more than 75 years, Christian Aid has provided an immense amount of support for poor communities on a worldwide scale, while highlighting the injustices those living in poverty are subjected to. Through working with local partners, Christian Aid ensures that it supports the fight against poverty by responding to humanitarian emergencies, campaigning for global change and enabling people to gain access to vital services. 

Christian Aid’s Mission for a Fairer World for All

Christian Aid as a charity believes that unequal distribution of power and inequalities amongst genders are the root cause of poverty and therefore, most of the charity’s work centers around fighting against this. 

Through pressing local, national and international governments worldwide, Christian Aid ensures that policies and laws are implemented that support the eradication of poverty. Furthermore, the charity also works with churches and religious institutions to challenge intolerance and promote equal treatment for all. 

Esther’s Story

An example of the work that Christian Aid does to fight poverty is displayed through a lady named Esther, who at one stage struggled to support her own family due to not being able to secure a fair price for her crop.

For 10 years Esther grew pigeon peas on a small farm, struggling to make a living and to make ends meet, the situation only worsened when, in 2021, a cyclone destroyed all the crops on the farm. 

On the brink of losing all hope of being able to support her daughter’s future, Esther decided to join a Pigeon Pea program, run by a local partner, the Nandolo Farmers Association. The program helped by supporting Esther to run the Pigeon Pea business as she was then able to start selling the crops as part of a co-operative, which enabled Esther to provide a good income to support her family. 

Esther herself states, “I was able to sell the pigeon peas at a better price with a better market” she explains. It provided financial stability.” 

By growing the pigeon peas, alongside the support of the Nandolo Farmers Association and through the work Christian Aid does to fight poverty, Esther was able to feed her family and support her daughters, as well as buy tools for her son, Zinowe’s carpentry business. 

Esther also acquired a herd of 13 goats that provide manure for the crops which saves a huge expense on fertilizer, as well as a sewing machine and a warehouse that prevents the pigeon peas from being damaged by floods and storms. 

Supporting the Youth Affected by Conflict in Syria

Further to supporting developing countries, Christian Aid also addresses areas that are affected by the turmoil and aftermath of war. Through funding provided by the European Union, alongside local partners in Syria, Christian Aid implemented a 4.5-year “education and resilience project” to address the challenges faced in war-torn Syria. 

This program ensured that young people who were impacted greatly by war could access a safe education, which meant that there would be less chance of young people becoming vulnerable to joining armed groups. 

Between October 2017 and March 2022, the work Christian Aid did to fight poverty meant that 26,804 young people between the ages of 12 and 35 years in Northwest Syria were provided with education, psychological support, vocational training, including specialized nursing courses, first response training and opportunities to get involved in community projects. 

Furthermore, Patrick Watt, currently the chief executive of Christian Aid, spoke to the “Church Times” for an interview about why he is so passionate about the role. He states, “I was attracted by the ethos and grounding in the gospel message of love and hope at Christian aid” and furthers this by talking about the “depth of engagement from our supporters.” “People who give to us take campaign actions, pray for our work, and feel a genuine ownership of what we do, often spanning multiple generations.”

During 2023’s Christian Aid week, the area of focus was Malawi, where “the costs of everyday essentials such as food and fuel are going up and up” with farmers being “exploited by big companies.” In order to gather support across the world, Christian Aid encouraged schools, organizations and churches to take part in the “Big Pea Challenge,” which took place between May 14 to 20. 

Part of the challenge included growing and selling plants, hosting a pea supper and fundraising, this is due to Christian Aid’s work in the region, whereby “farmers and communities are working with Christian Aid to form cooperatives to secure a fairer price, boost the quality of the seeds they use, adding value by baking and selling bread made from pea flour, and building warehouses to keep peas safe from weather events.” In total, the challenge raised $101,155 and had a total of 6,532 supporters across the world, thus demonstrating the power of collective efforts. 

Final Thoughts

Therefore, the work carried out by Christian aid to fight for the eradication of poverty, is invaluable, as the Charity provides the utmost amount of support for those that suffer from consequences of conflict and tension, humanitarian disasters and grave inequalities. Christian Aid arguably serves as an example of what governments and charities can do across the world to support those in need. 

– Megan Rose Miley
Photo: Unsplash

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Slovakia: The World’s Highest Rate of Income Equality

Income Equality
In today’s stark reality, the richest 10% of individuals hold more than half of global income, while the poorest half of the world’s total population shares 8.5% of it; a disparity that has doubled over the last 20 years. However, Slovakia is one of the few success stories of inclusive growth, maintaining the third-lowest risk of poverty in the EU in addition to achieving the world’s highest rate of income equality.

Defying Poverty and Disparity

Europe constitutes no exception from the global trajectory of wealth distribution. Among the EU’s most equitable nations, Denmark and Sweden have witnessed income inequality increase by approximately 14% since 2006. In contrast, Slovakia experienced a reduction of the same amount during this period. While income levels in Slovakia remain relatively low, they are nevertheless the most evenly distributed.

In fact, the Slovak Republic attained a Gini coefficient of 23.2 in 2023 — a statistical measure quantifying income inequality and economic concentration — which constitutes the lowest figure achieved by any nation today. Meanwhile, Slovakia is also recognized as having the world’s fourth-best Palma ratio, a gauge of wealth disparity between the top 10% and bottom 40% of the population.

Additionally, Europe’s income growth has generally remained stagnant over the past quarter-century, while Slovakia exhibits one of the most rapid income growth rates among OECD states. A 2019 OECD report found that in 2022, 21.6% of EU citizens were at risk of poverty or social exclusion, while the individual figure for Slovakia averaged around 12%. Finally, as poverty can be understood as an extreme expression of inequality, Slovakia’s progress towards equality attained commendable triumphs on the UN Sustainable Development Goal (SDG) 1, which is towards the eradication of poverty.

A Closer Look at Slovak Policies

Since the split of Czechoslovakia into Slovakia and the Czech Republic, the two republics have introduced a number of social policies along with the phased introduction of market-based democracy. Slovak efforts encompassed state-directed reforms aimed at improving the national level of education, labor force participation and occupational class structure in addition to a number of social safety nets. Notably, since the 1990s, Slovakia saw a significant increase in the share of university graduates, as well as an expansion of routine non-manual jobs that currently employ one-fourth of the Slovak population.

Slovakia exhibits a unique tax mix with extensive pre- and post-income distributive functions. Much of Slovakia’s tax revenue stems from the social security contribution tax, which accounts for 13.3% of Slovak GDP, while corporate income tax constitutes the state’s second-largest source of tax revenue. Slovakia’s progressive tax is attributed to a 42% reduction in the inequality rate within the country, where a 17% to 20% tax rate is enforced on the highest earners, while a 0% to 5% is taxed from the lowest incomes. On a national level, this results in the top 10% of earners in the workforce accounting for 30% of all social contributions, while the collective taxed amount from the lowest-earning half of the population contributes a quarter of the total funds. In fact, the majority of retirees’ income, about 80-90%, is derived from progressive tax, deeming it primarily funded by those with the highest incomes.

From the earliest days of independence, pension schemes introduced in Slovakia aimed to better employment rates without having to suppress wages. To reduce labor supply, Slovakia increased personal income tax for workers above retirement age along with marked increases in pension benefits. Despite earnings in OECD states averaging more than three times those in Slovakia, public spending on pensions comprises 7% of Slovakia’s GDP. In fact, 2013 studies on OECD and G20 countries revealed that poverty rates for the elderly were among the lowest in Slovakia, averaging 4.3% in 2010, while the overall OECD average stood at 12.8%.

Another notable dimension of Slovak welfare schemes includes parental leave. Early reforms in the Slovak Republic established a three-year paternal allowance, that continues to rank Slovakian parental leave policies amongst the top 10 in the world, with Slovakia being the first on the list with equal days of fully paid leave for male and female parents.

How Social Welfare Has Improved Income Equality in Slovakia

Furthermore, Slovakia’s dynamic of proactively seeking social welfare has demonstrated a remarkable capacity to endure in the face of international economic shocks. According to the projections of the European Commission, Slovakia was among the EU economies tackling the 2008 global economic crisis most effectively. Slovakia was quick to establish the Institute for Subsistence Law, which defined vulnerable portions of the populace based on fixed amounts of minimum monthly incomes below which they would become entitled to social assistance benefits. Consequently, between 2008 and 2015, the risk of poverty in Slovakia dropped by 2.5%, with an 8% decrease in the overall poverty level within the 10 years leading up to 2015.

Moreover, studies by the Slovak Institute for Financial Policy found that intergenerational elasticity in Slovakia — the extent to which an individual’s income is determined by their parents’ economic status — was at 18.4%, a figure significantly lower than that of any Western European nation. Therefore, Slovakia also stands out in the fact that parents’ income levels serve as a poor indicator of their offspring’s earning prospects, indicating a limited effect on a child’s opportunities.

In the words of the Center for Eastern Studies’ Tomasz Dąborowski, the Slovak experience is “a model of successful economic transformation,” demonstrating that a focus on economic justice and social welfare can yield transformative results amidst the current landscape of challenges to income equality.

– Nadia Asaad 
Photo: Flickr

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Disability and Poverty in Puerto Rico

Disability and Poverty in Puerto RicoAccording to the U.S. National Council on Disability (NCD), nearly one in six citizens in Puerto Rico have a disability. This equates to 22% of the population. People with disabilities (PWD) are twice as likely to live in poverty. With a national poverty rate of 44%, PWD in Puerto Rico face tremendous disadvantages, warranting a necessary examination into implementable solutions.

The Price of Poverty

There are six categorizations for disabilities: hearing, visual, cognitive, ambulatory, self-care and independent living.

According to the 2017 Disability Status Report on Puerto Rico, individuals with cognitive disabilities have the most prevalent poverty rate of 58.2%. However, despite having the lowest poverty rate for PWD, visual disabilities still result in a 52.2% rate. While the poverty rate has decreased slightly, dropping to just below 50% in 2022, there is still a concerning link between disability and poverty in Puerto Rico.

Explanations for the levels of poverty in Puerto Rico

First, there are minimal job opportunities available for PWD in Puerto Rico. In 2022, the National Council on Disability noted that only about 23.7% of Puerto Ricans with disabilities play an active role in the workforce. This is a significant contrast to the 36% of PWD in the U.S.

Second, disability accommodations are costly. The NCD found that “the cost of specialized [durable medical equipment] was 11% to 58% higher in Puerto Rico versus the [U.S.].” As of the 2021 U.S. Census Bureau, Puerto Rico’s annual income per capita is approximately $14,000, making it a massive financial burden to pay for expensive equipment like electric wheelchairs.

In the mainland U.S., citizens can qualify for supplemental income and financial assistance if they have a disability and/or fall below the annual income threshold. Despite being a U.S. territory, Puerto Ricans are not entitled to these same benefits.

For example, the Supplemental Nutrition Assistance Program, formerly colloquially known as “food stamps,” is not available in Puerto Rico. Instead, the territory is allocated a block grant, which has not been adjusted for inflation or unforeseeable disasters.

In addition, an April 2022 U.S. Supreme Court decision officially excluded Puerto Ricans from the federal Supplemental Security Income program (SSI). SSI provides direct financial assistance to low-income U.S. citizens with disabilities. This vote further entrenches the exclusion and marginalization of Puerto Ricans with disabilities.

Progress Toward Equality

In lieu of SSI, the government allocates funds to the Aid to the Aged, Blind, and Disabled (AABD) program. AABD’s supplemental assistance aims to meet the basic, daily needs of PWD in Puerto Rico. To receive this aid, individuals have to endure a “physical or mental impairment that will likely not improve and which prevents them from performing their previous job or any other paid work” and own less than $2,000 in total assets.

The Division of Human Development and Disability (DHDD) also provides early diagnosis and intervention services to aid children with disabilities throughout their development. One example of DHDD projects is the Early Hearing Detection and Intervention (EHDI) programs. EDHIs work to examine a child’s risk for hearing loss and ensure an appropriate diagnosis and accommodations are put in place.

While these services show a commitment to aiding PWDs in Puerto Rico, assistance programs such as the AABD are limited. The funding is meager and split between adult assistance, foster care and adoption assistance. Instead of the $750 for an SSI recipient, AABD participants only receive $75. Therefore, more comprehensive efforts are necessary to alleviate the impact of disability and poverty in Puerto Rico.

Despite challenges, there are gradual improvements in living conditions for Puerto Ricans with disabilities. Overall, the ongoing efforts of both the U.S. and Puerto Rico hold the potential to reduce poverty and enhance the quality of life for Puerto Ricans.

– Katrina Girod 
Photo: Pixabay

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The IFAD’s Plans for Eradicating Rural Poverty in Eritrea

Rural Poverty in EritreaEritrea, a small country in East Africa, had a staggering poverty rate of 38.9% in 2019, which is expected to decrease by only 13% by 2043. Affecting mostly rural communities, this situation is partly due to the young nation’s recent independence from Ethiopia in 1993, which led to recurrent wars, in conjunction with famine and drought. The heavy reliance on subsistence agriculture is one factor responsible for rural poverty in Eritrea. Despite the government’s efforts to address rural poverty, a shortage of resources and poorly implemented poverty alleviation programs have hindered progress. 

In 2006, the International Fund for Agricultural Development (IFAD), an agency within the United Nations that combats poverty through low-interest loans and grants, released a plan to tackle rural poverty in Eritrea. This plan was further improved and updated in 2020, aiming to create sustainable solutions by providing finance programs and projects that empower those living in poverty to overcome it.

IFAD’s 2006 Plan

The IFAD initially planned to eradicate rural poverty in Eritrea, focusing on various areas related to economic development and food security. The plan included developing export markets for livestock, fruit, vegetables and flowers, re-establishing port activities, strengthening public services for small-scale farmers to increase agricultural productivity, promoting a supportive private sector, attracting private sector investments, privatizing state-owned enterprises and developing a robust financial system. 

The strategy prioritized decentralization to improve access to services and emphasized gender equality as a crucial element in poverty reduction efforts, recognizing that households headed by women are the most vulnerable. Additionally, implementing programs that encourage wealthier households to provide loans and assistance during difficult times through asset and labor sharing has also contributed to the reduction of rural poverty in Eritrea.

Issues to Implementation

Although this plan appeared to present a solid push to eradicate rural poverty in Eritrea, many barriers hindered the application of these plans. Conflict deeply affected the country, exacerbating constraints on institutional capacity and human resources. This resulted in a scarcity of human capital to initiate and sustain new projects in these regions, despite the knowledge that these programs would offer relief. The eastern and western lowlands of Eritrea, in particular, faced severe rural poverty due to these conflicts, making social and economic improvement in these areas a top priority. Additionally, Eritrea grappled with challenges in natural resource management and lacked readily transferable technologies that could facilitate investments, management and maintenance implementation.

IFAD’s 2022 Improved Plan

The 2020-2025 plan for eradicating rural poverty in Eritrea aims to address these issues actively, maximizing the effectiveness of poverty reduction solutions. The Country’s Strategic Opportunities Programme will ensure that IFAD’s lending and non-lending support aligns with the government’s priorities, focusing on three strategic objectives: enhancing climate resilience, improving technology and infrastructure access for smallholder systems and building capacities for food security and sustainable livelihoods. These objectives are in line with IFAD’s Strategic Framework 2016-2025. 

To further alleviate rural poverty, the plan emphasizes various aspects in the agriculture and fishery sector, such as establishing a resource base, strengthening producers’ organizations, improving input delivery systems, enhancing intensification and value addition, developing institutional capacity and managing aquatic ecosystems. Additionally, IFAD’s investment portfolio in Eritrea will prioritize gender, youth, nutrition and employment opportunities for those most at risk.

Looking Ahead

The IFAD’s programs will actively contribute to reducing rural poverty in Eritrea by assisting local communities in becoming more commercial, competitive, resilient and sustainable. Sustainable development becomes achievable through the establishment of strong institutions and systems, effective policy and regulatory frameworks, enhanced production capacities and robust partnerships. Eritrea is progressing toward the goal of eliminating rural poverty, and with investments in plans like these, a poverty-free future appears to be within reach.

– Ada Rose Waga
Photo: Flickr

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Using Microfranchising to Reduce Poverty

Using Microfranchising to Reduce PovertyThe World Bank estimates that one-third of the global population resides at the base of the economic pyramid (BOP), meaning they have an income of less than $3,000 in relative purchasing power. To put this into perspective, the median household income in the U.S. was $70,748 in 2021, meaning one-third of the population earns 95% less than the average family in the US. To combat this, businesses and community organizations around the world are turning to microfranchising to bolster household incomes in developing nations.

How Microfranchising Works

According to AllBusiness, a company that provides resources to small businesses, “Microfranchising is a business model that applies traditional franchising to very small businesses.” The microfranchising model involves two parties: the franchisor and the franchisee. The franchisor owns an established business and then creates a contract with the franchisee. The franchisee is paid by the franchisor in exchange for the franchisee’s work in distributing the franchisor’s services.

The Benefits of Microfranchising

In regions with high rates of unemployment, such as South Africa and Sudan, microfranchising is invaluable. Microfranchising not only allows individuals living in these areas the opportunity to earn money, but it also teaches soft and hard skills that can be used in their own future business ventures. Coined as a “short-cut to self-employment” by Thiruchelvam at Raconteur, this opportunity is the perfect way for those who do not usually have access to information on running a business to gain experience first-hand.

Microfranchising Successes

One successful company that has utilized microenterprising is The Clothing Bank (TCB). Having been established in 2011 in Cape Town, South Africa, the company has successfully made its way onto the list of Top 100 social impact companies. The company’s model has granted over 1,000 women and men in South Africa the opportunity to buy merchandise from various retailers operating in South Africa at a discounted price in order for them to then sell this for a profit. Along with the monetary benefit of the job, individuals will receive over 1,000 hours of training over a two-year period, teaching them how to run their own businesses.

Across the Atlantic Ocean in Haiti, similar tactics are being deployed. The Social Ventures Foundation (SVF), is attempting to improve the general quality of life of Haitians with the V’ice Haiti project. With over 6 million Haitians living below the poverty line, SVF considers all aspects of livelihood. Through providing donations to V’ice, your money will go towards funding equipment that Haitians will be able to use in order to become a franchisee. For example, V’ice’s “V’ike” scheme provides self-employment to young, at-risk males by supplying them with a bike and an attached food cooler. With this, the individuals are able to distribute clean water, vitamin-infused shaved ice and much more. This is consequently decreasing the unemployment rate while simultaneously reducing the number of Haitians who are vitamin deficient — which is currently standing at a staggering 80%.

Using Microfranchising to Reduce Poverty

Many charities are now following the example set by these impressive organizations to break the cycle of poverty. With ending poverty by 2030 in the number one spot of the UN Sustainable Development goals, it will be important that more charities implement this tried and tested method for improving lives across the planet.

– Christian Vince
Photo: Flickr

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Innovations in Poverty Eradication in Finland

Poverty Eradication in FinlandAcross the world, more than 150 million people are homeless, around 783 million lack food security and more than half the global population lacks essential health services. Among countries, Finland stands out as a pioneer in implementing innovative solutions to combat mass poverty. The following is a brief look into innovations behind poverty eradication in Finland.

Decline in Homelessness

From 2006 to 2007, Finland experienced a spike in the number of homeless people, the first since 1998. This prompted a focus on addressing homelessness and led to innovations in poverty eradication. The main innovation Finland implemented was the Housing First policy. Enacted in 2008, the Housing First policy has dropped the number of homeless people from more than 8,000 to 3,686 in 2022. This correlates to a 50% reduction in the number of homeless people in Finland in 14 years. The Housing First policy works by granting homeless people access to long-term housing as opposed to the more common temporary shelters. These rental housing units are innovative as they are financially viable and provide the homeless with substantial social support, such as better employment opportunities.

As more homeless people acquired jobs, the unemployment rate dropped by 2.6% from 2015 to 2022. This has, in turn, stimulated Finland’s economy and compensated for the cost of these rental units, thereby highlighting the efficiency of the Housing First policy. Overall, the Housing First policy benefited more than 4,000 individuals through housing, and an additional 137,208 through job opportunities.

Stable Food Security

Food security has become a non-issue in Finland due to innovative approaches dominating the Food and Agriculture industry. One such innovation is the prevalence of vertical farms. Vertical farms have revolutionized food security within Finland as they maximize space (no need for arable land), are pesticide-free, decrease water usage by 90%, cultivate up to 2.5 times more yield and have rapid scaling potential (from 500 to 20,000 sq.m). Vertical farms have proven to be positively transformative as they have successfully increased access to cheaper and healthier foods. Each vertical farm, such as the one in Pirkkala, Finland, has the potential to feed more than 20,000 people.

Another innovation in Finland is the recent creation of Solein, a natural protein produced using air and electricity. The creation of Solein has the potential to increase food security in Finland as it exceeds the bounds of traditional proteins. Solein can be used in meat, cheese, dairy, bread, pasta, drinks, etc. Solein’s versatility makes it suitable for various food products, offering a cost-effective alternative for nutritious food seekers.

As a result of these food security innovations, Finland achieved a score of 83.7 on the Global Food Security Index (GFSI) in 2022, the highest among countries. As opposed to the world average of 11.7 % in 2022, Finland’s food insecurity rate remains relatively low at 2.5%. The country’s innovations have prevented 511,233 people from falling into poverty.

Effective Health Care

Finland is lauded for its health care system as it offers a variety of services at affordable prices. One way Finland achieves this is through the innovative Kela Card. In terms of health care, the Kela Card plays a key role, in reimbursing people for medical prescriptions, ill-related absences, travel and a portion of private health care expenses. The Kela Card is an integral component of Finland’s health care system because every citizen and permanent resident of Finland receives it. The Kela Card also provides social security and employment benefits. Its very design allows it to assist those who are struggling to maintain a stable income and provides them with social benefits. This has, in turn, benefitted more than 360,000 people in Finland each year.

Innovations in poverty eradication in Finland extend to medical hardware as well. Finnish tech company Sooma developed a portable medical device for depression treatment. This device is portable and requires no expertise to use, thus reducing the medical costs associated with depression. Another medical instrument, created by Optomed, captures retinal images and diagnoses diabetic retinopathy, a leading cause of blindness worldwide. This device is innovative as it is the most affordable camera of its kind. The efficiency of medical equipment in Finland has allowed people to avoid the excessive costs associated with modern health care.

What is Next?

Finland continues to pursue poverty eradication through ongoing innovation. These modern solutions have already contributed to a 1.4% drop in poverty rates between 2019 and 2020. Ultimately, the success of Finland’s innovations could serve as a model and inspiration for other countries looking to alleviate poverty.  

– Manav Yarlagadda
Photo: Unsplash

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Using the Internet to Combat Rural Poverty in China

Combat Rural Poverty in ChinaChina is the world’s largest developing economy. In 1978, 97.5% of the rural population lived in absolute poverty. Since then, the Chinese government has considered the issue of mass poverty, particularly in the rural regions of southern and western China, to be one of its central focuses. To combat rural poverty in China, the government has adopted the Targeted Poverty Alleviation Strategy (TPA) (i.e. industrialization, social security, education, housing and government compensation for the neediest families). From 2012-2019, rural poverty’s average annual reduction rate reached 51.06%. Finally, in 2020, the government announced the elimination of absolute poverty. Despite these successes, relative poverty remains extremely prevalent in China’s rural south and west, especially in ethnic minority areas. As things stand, the democratization of the Internet appears to be the next challenge to overcome in the fight against rural poverty in China.

Digital Finance in China

In 2021, China had 1.011 billion Internet users, comprising 71.6% of its total population. As smartphones and the Chinese Internet spread, so do digital finance services such as mobile payment, online banking, online insurance and online investment tools. All of these increase the accessibility of formal financial services for impoverished people who previously lacked access to them, according to PLOS ONE.

China leads the world in the ubiquitous use of digital financial services. According to PLOS ONE, for each point increase in China’s digital finance aggregation index (DFAI), the probability of rural absolute poverty decreases by 10.27% while the probability of rural relative poverty decreases by 18.31%. Specifically, digital finance alleviates rural poverty in China by spurring four developments: the decrease of credit constraints, the increase of access to information, the expansion of social networks and the promotion of entrepreneurship.

The rural poor often struggle with the high cost of agricultural loans from traditional banks. Digital finance solves this issue by compiling massive amounts of online user information to grant loans much more liberally than traditional banks ever could. Easier access to loans and capital has the effect of promoting rural entrepreneurship. Next, digital financial services offer the rural poor timely information about agricultural production, employment opportunities, etc. which help them remain economically stable. Finally, these services also provide social capital, allowing the rural poor to network with friends and family. One example is WeChat Pay, which applies the Chinese tradition of gifting red envelopes to the digital market. This increases the circulation of online money and raises income for the rural poor.

The Benefit of Internet Policies in Rural Areas

The ethnic minority areas of Aba, Ganzi and Liangshan in Sichuan Province are the most economically underdeveloped in Southwest China. It would be appropriate to use those areas as a case study of how government investments in the Internet have produced positive economic effects. Central and municipal governments have put money toward a Communication Infrastructure Investment (CII) with the intention of developing the Internet in underdeveloped regions, thus facilitating e-commerce and other economic activity.

Indeed, in recent years, villagers in ethnic minority areas have begun selling agricultural products on popular e-business sites like Taobao, Alibaba, Amazon and Jingdong, which have helped lift sellers out of poverty. The Internet also provides platforms and venues for industries like health and tourism. Data analysis from the years 2000-2018 indicates that pro-Internet investments and policies in Aba, Ganzi and Liangshan are positively correlated with local GDP for years one to four years and per capita income for the entire time.

Playing a Crucial Role

The Internet proved especially useful during the COVID-19 crisis. According to the China Internet Network Information Center, 98% of people in rural areas living in poverty had access to fiber-optic Internet in 2020, compared to only 70% in 2017. Users sold their agricultural products online to maintain a stable income amidst COVID-19 layoffs and the slowing of business. The Internet also allowed them to donate money, fostering a community-based financial support system in rural regions.

Overall, it appears that the Internet plays a vital role in combating rural poverty in China. It provides new platforms that allow people to receive financial capital while enabling entrepreneurs to market and sell their products.

– Eric Huang
Photo: Unsplash