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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

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Impact of COVID-19 on Poverty In Austria

Impact of COVID-19 on Poverty In AustriaThe year 2020 left its mark in history. Governments forced businesses to close down and restricted travel, people were required to wear masks, and everyone had to self-isolate. With more than 700 million confirmed cases of COVID-19 worldwide, the virus has significantly affected the world and has contributed to the growing poverty rates in many countries, including Austria. According to Statistics Austria, more than 17.5% of the country’s citizens faced the risk of experiencing poverty in 2022. The following are some reasons why the impact of COVID-19 on poverty in Austria is so significant.

Increase in Automation

Due to COVID-19 and the inability of many people to work in person, many employers turned to automation or the use of robots and machines to do the work of employees.

According to an OECD report, the emergence of COVID-19 “accelerated automation, putting additional pressures on places with relatively high shares of jobs at risk”

The jobs at risk of automation are “predominantly in the private sector and in larger, single-site workplaces.” Additionally, 15.5% of workers on a temporary contract have a high risk of automation compared to just 13.5% without a contract.

The increased automation has significantly affected many people’s lives and has caused thousands of Austrians to become unemployed and eventually impoverished. According to a 2022 World Bank report, the unemployment rate was 4.7%.

Increased Prices

During the second half of 2020, Austria’s economy struggled with inflation, as commodities such as food alongside industrial services recorded price hikes.

These hikes occurred due to “significant supply chain bottlenecks”  resulting from increased demand when the government lifted COVID-19 restrictions. Additionally, the Russia-Ukraine war put extra pressure on Austria’s economy by increasing energy prices.

According to the World Bank, COVID-19 caused inflation to increase by more than 7%, going from 1.2% to 8.5% in 2022, the highest it had ever been. So, at the same time that Austrians were getting laid off or had to close their businesses, the cost of everyday necessities was increasing, pushing more people toward poverty. Alongside other factors, this issue of inflation represented the impact of COVID-19 on poverty in Austria.

Hope

According to KPMG, which supplies tax assistance to many organizations, the Austrian government made €100 million worth of loans available to hotels that lost 15% in sales.

Additionally, on March 13th, the Austrian government implemented a €38 billion fund for “COVID-19 crisis management.” This fund went solely toward stimulating the Austrian economy. Some efforts of the fund include helping businesses affected by COVID-19 by giving them subsidies for fixed costs and providing them with €4 billion worth of aid. In addition, restaurants benefitted from “value-added tax relief.”

As a result of government aid and subsidies, the economy improved remarkably. Fewer businesses had to shut down, and as a result,  the unemployment rate decreased from 5.4% in 2020 to 4.7% in 2022. Additionally, The GDP growth skyrocketed from -6.5% in 2020 to 4.6% in 2021.

Finally, as a result of the government providing aid to hotels in Austria, the tourism industry continued to stay afloat in 2020. According to World Data.info, “Austria recorded a total of 15 million tourists in 2020, ranking 18th in the world.” Furthermore, the industry generated at least $15 billion, which might have been impossible without the government’s help in keeping hotels open.

Looking Ahead

Despite the significant impact of COVID-19 on poverty in Austria, there are reasons for hope. Government initiatives and financial aid programs have provided support to businesses and individuals, leading to a decrease in unemployment rates and an improved economy. The tourism industry also received assistance, allowing it to continue operating and generating revenue. These positive developments highlight the efforts of the country to recover from the challenges posed by the pandemic and alleviate the effects of poverty.

– Hope Yonehara
Photo: Max Pixel

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Poverty Eradication in Democratic Republic of Congo 

poverty eradication in Democratic Republic of CongoThe Democratic Republic of Congo boasts a generous supply of natural resources and opportunities, including the ability to use hydropower, but the country’s history of political instability and economic turmoil prevents its citizens from utilizing these assets. In fact, it ranks as one of the top five poorest countries and around 60 million, or 62% of its population, Congolese lived on less than $2.15 a day in 2022. Despite these statistics, the government seeks to help its citizens through efforts to further poverty eradication in the Democratic Republic of Congo.

Digital Aid Program

During the pandemic, Togo launched the Novissi program. This initiative was partly led by Joshua Blumenstock, co-director of the Center for Effective Global Action (CEGA), with an aim to identify those affected by poverty using “machine learning combined with mobile phone records and satellite data.” Novissi provided Togo’s poorest with cash transfers as a form of aid as the pandemic ravaged the nation.

Modeling this example, in December 2021, the Democratic Republic of Congo’s government also initiated a COVID-19 relief program. With financial help from the World Bank and technical assistance from GiveDirectly, Congolese citizens receive access to $25 online payments over a period of six months. The transfer of cash and the aspects of financial independence play significant roles in poverty eradication in the Democratic Republic of Congo.

National Development Plan

The International Monetary Fund’s (IMF) National Development Plan (NDP) for 2022-2026 seeks to create “wealth upstream, in order to have, downstream, the necessary levers to deal with the country’s problems.” By focusing on strengthening the country’s economy and enlisting help from foreign aid, this program aims to resolve its most glaring poverty difficulties. It operates on six pillars:

  1. Agriculture – The growth of the agricultural sector in the Democratic Republic of Congo could not only provide a stable source of healthy food for a nation that experiences food insecurity but also expand the economy and increase national growth.
  2. Industry – Similar to the development of agriculture, the growth of an industrial sector could transform the economy by creating new jobs and increasing entrepreneurship.
  3. Special Economic Zones (SEZs) – SEZs “contribute to the intensification of industrial development.” The SEZs could allow the DRC to appear competitive on an international level, thereby increasing the number of exports received while also building domestic entrepreneurship.
  4. Tourism – The tourism sector could attract international attraction by utilizing the country’s natural resources for development. This also includes moving away from the country’s reliance on oil to diversify the economy. Expanding the national economy and implementing new resources serve as essential innovations in poverty eradication in the Democratic Republic of Congo.
  5. Digital Economy – The growth of a digital economy could place the country on the global market, allowing it to experience relative productivity. Digitalization could also provide young individuals with access to new jobs and financial opportunities.
  6. Real Estate Development – The Democratic Republic of Congo’s need for housing and office and business buildings calls for an intensive reconstructive focus on updating real estate properties.

Opportunity International’s Programs

Around 10 million hectares of the Democratic Republic of Congo’s 80 million hectares of plowable land are currently under cultivation, leaving a vast amount of fertile soil bare and untouched. Because of this discrepancy, which leaves families without a stable food supply, Opportunity International, a nonprofit organization that assists individuals in starting businesses, attending school, cultivating farms and reducing poverty, spearheaded the Agriculture Finance program across Africa, including the Democratic Republic of Congo.

This initiative focuses on the market research of crops and collaborating with cooperatives to provide people with financial and agricultural training. Agricultural Finance also opens banking services for farmers and provides them with ready-to-use seeds and fertilizers in addition to enlisting a market of buyers. Positively, this program aided more than 540,000 farmers in sub-Saharan Africa.

Looking Ahead

These crucial developments to further poverty eradication in the Democratic Republic of Congo signal hope for a better future. As things stand, the trends suggest that focusing on technology-based solutions in the financial and industrial markets expands opportunity and paves the path for stability.

– Maddy Grieco
Photo: Flickr

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7 Reasons to Invest in Albania

Invest in AlbaniaEver since Albania seceded from the Soviet Union, and tilted toward the European Union, the country’s economy has grown from strength to strength. Between 2010 and 2021, the economy grew by a remarkable 37%. And according to forecasts, it could grow by a further 20% by 2025.

Albania’s economic growth has had a positive impact on the country’s poverty levels. It has also represented huge opportunities for investors looking to make money amid Albania’s success. In light of this, the following are seven reasons to invest in Albania:

7 Reasons to Invest in Albania

  1. Tight Ties With Europe As a Central European Free Trade Agreement (CEFTA) member, Albania has complete free trade among its seven other member countries. This means Albania has unfettered access to a combined market of 26 million customers. Given that all CEFTA members try to comply with EU objectives and regulations, trade between Albania and the EU tends to be relatively frictionless. With ports on the Adriatic and Ionian Seas, the Albanian market also occupies an ideal position for these exports. These facts allow exports to the EU from Albania to grow year on year, accounting for more than €2 billion in 2021 alone.
  2. A Liberal Business Environment Ever since 2009, when Albania applied for EU membership, the country has undergone a series of economic reforms to ensure its application’s success. Importantly for investors’ bottom line, Albania now has a very favorable tax regime. Property tax is just 1%; corporate income tax is 15% (the U.K. has a rate of 19%); and residents in Albania only pay 15% tax on their income, no matter how much they earn. The Law On Foreign Investment covers most of the regulatory framework foreign investors need to be aware of in Albania. The Albanian Investment Development Agency (AIDA) says this all-important law allows for “100% ownership for foreign companies and outlines specific protections for foreign investors”. What is more, a government paper has openly said it gives “high priority… to potential foreign investors”. In a nutshell, compared to other EU countries, investing in Albania appears to be a more seamless process.
  3. A Serious Anti-Corruption Drive Along with necessary economic reforms, Albania transformed its political landscape to accelerate its EU application. This includes various anti-corruption drives, ranging from a €3 million EU-funded project (the biggest of its kind in the West Balkans) to setting up an online portal, allowing citizens to anonymously record corrupt activities. It is perhaps not unsurprising then, that Albania improved its ranking on Transparency International’s Corruption Perception Index by 27 places, since 2016. Less corruption means foreigners need to pay less in bribes to get their businesses up and running. Plus, falling corruption numbers are a good bellwether for a stabilizing political environment and a fairer, more equal society. Due to the economic and political reforms, Albania is in open accession talks with the EU.
  4. Less Poverty than Ever Before As a result of economic and political reform, Albania has achieved staggering growth. This has been mirrored by the country’s labor sector. Jobs in textiles, tourism, trade and administrative services have been on the rise since 2013. Tourism in particular is booming; it is the 25th most visited country in Europe, with The New York Times ranking it as the fourth best tourism destination in the world. According to the World Bank, the economic and employment growth resulted in “Poverty in Albania is estimated to have fallen significantly to 22% of the population in 2021.”
  5. Affordable Unused Land To encourage people to invest in Albania, the government consistently advertises its “competitive land prices”, “a lot of unused lands” and the fact that its value will only “increase even more” over the next 10 years. This is great news for investors. Constructing the necessary infrastructure for any business in Albania is likely to cost far less, and rise in value far more, than most other Western European countries.
  6. Competitive Labor Costs Not only are 57% of Albanians under 35 making for a big labor pool, but they are also relatively economical to hire. For reference, the minimum wage in Albania is $335 per month, compared to $1160 per month in the U.S. But Albanian talent is also very well-educated. Every year, more than 100,000 Albanians enroll in universities, with a large number studying in EU countries like Germany and France.
  7. A Conscious Investment While the poverty problem in Albania has indeed reduced significantly, 5.8% of its population still lives in extreme poverty. Apart from being a potentially smart financial decision to invest in Albania, doing so could also go a long way to help fund the country’s continued drive to tackle poverty and get more Albanians into well-paying jobs. The Albanian energy sector makes an excellent example. In 2022, foreign investors came in to invest in Albania by putting €103 million into the energy sector, and this represented an increase of more than 145% compared to 2021. Not only did this boost the number of Albanians employed by the sector to more than 2% of its population but much of this investment also went into renewables such as wind and solar. A new solar project in the Korça region, for example, was approved in 2022 and was supported by foreign investment. This will supply new, high-skilled jobs, help energy-deprived residents gain access to cheaper energy and hopefully give foreigners a healthy return on their investment.

Looking Ahead

Albania’s remarkable economic growth and favorable investment environment offer lucrative opportunities for investors. With tight ties to Europe, a liberal business environment and a serious anti-corruption drive, Albania presents a seamless and secure investment destination. Moreover, the country’s success in reducing poverty and its conscious efforts to tackle societal challenges make investing in Albania not only financially rewarding but also impactful in promoting further development and creating well-paying jobs for its population.

– Sam Rucker
Photo: Unsplash

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The United Nations’ Fight Against Poverty

The United Nations' Fight Against Poverty
The United Nations’ fight against poverty began as early as 1945. The U.N. General Assembly declared the years 1997 to 2006 as the First United Nations Decade for the Eradication of Poverty. The Second U.N. Decade for the Eradication of Poverty then ran from 2008 to 2017 and the Third U.N. Decade for the Eradication of Poverty began in 2018 with an end date of 2027. The United Nations Millennium Declaration, signed by U.N. member states in September 2000, is a commitment from global leaders to “combat poverty, hunger, disease, illiteracy, environmental degradation and discrimination against women.” The Millenium Development Goals (MDGs) formed part of this Declaration and set targets to reach by 2015.

Progress in Reducing Extreme Poverty and Hunger

The target of reducing global extreme poverty rates by 50% occurred “five years ahead of the 2015 deadline,” the U.N. website notes. Since 1990, more than 1 billion individuals rose out of extreme poverty. Close to 50% of people in underdeveloped countries in 1990 survived on less than $1.25 per day. In 2015, this rate declined to 14%.

Furthermore, since 1990, the percentage of undernourished individuals in developing regions has decreased by about 50%. However, the percentage of employed working-age people reduced from 62% in 1991 to 60% in 2015, with a particularly notable decline occurring during the global recession of 2008/2009.

Here are three significant programs and funds aiding in the United Nations’ fight against poverty.

United Nations Development Programme (UNDP)

A pledge to “eradicate poverty everywhere, in all its forms and dimensions by 2030” is at the core of the Sustainable Development Goals (SDGs), which came about in 2015 after the MDG deadline. The UNDP is the “U.N.’s global development network” that works across 170 nations and territories to help further the SDGs. Its work also centers around “democratic governance and peacebuilding” as well as “climate and disaster resilience.”

From 2019 to 2021, thanks to the UNDP, 71 million individuals in 36 nations obtained “access to essential services” and labor market policies safeguarded 1 million jobs globally, the UNDP website highlights.

About 81 nations adopted “policies based on COVID-19 socio-economic impact assessments” and “82 countries adopted more than 580 digital solutions for e-commerce and e-governance.” While “2.4 million rural households in 33 countries benefited from clean, affordable and sustainable energy,” about 3 million individuals across 29 nations “benefited from jobs and improved livelihoods in crisis or post-crisis settings,” the UNDP website notes.

UNICEF

In more than 190 nations and territories, UNICEF strives to protect children’s lives, uphold their rights and assist them in realizing their full potential from infancy through adolescence. Thanks to UNICEF, several million children by 1950 received “garments made of wool, leather and cotton” and more than 6 million received meals on a daily basis.

By 1973, UNICEF had assisted approximately 70 nations in reducing the number of deaths resulting from ingesting contaminated water. The Child Survival and Development Revolution, which UNICEF started in 1982, aimed to save more children by implementing four main strategies: tracking development, delivering immunizations, encouraging breastfeeding and providing oral rehydration therapy.

Compared to the end of World War II, life expectancy rates had climbed by more than 33% by 1993. A rise in school attendance coincided with a sharp decline in child mortality rates. The standard of living was also fast increasing; many households who had previously struggled to find clean water now had easy access. More recently, in 2012, polio saw eradication in India thanks to UNICEF’s global immunization program for the poor. Africa celebrated one year without any confirmed cases of polio on August 11, 2015.

World Food Programme (WFP)

The WFP is the largest humanitarian organization in the world, saving lives in dire situations and utilizing food aid to create a road to peace, stability and prosperity for those recovering from war, natural disasters and the effects of environmental changes.

The WFP collaborates with governments and humanitarian partners on the front lines, responding to an increasing number of disasters, such as droughts and floods, which can destroy crops, disrupt markets and demolish roads and bridges. The WFP also implements preventative measures that lessen the number of people in need of humanitarian aid. In 2021, 12.2 million individuals from 47 different nations benefited from climate risk management strategies, including 2.7 million in 14 nations who were insured against climate-related risks.

The WFP has shifted its emphasis in recent years from emergency interventions to tackling all types of malnutrition, including vitamin and mineral deficiencies, overweight and obesity. In 2021, 23.5 million people, a 36% increase from 2020, mostly children, pregnant and lactating females, benefited from WFP programs to treat or prevent malnutrition.

Smallholder farmers produce most of the world’s food yet also ironically suffer from hunger. In 2021, WFP and partners provided assistance to around 947,000 smallholder farmers in 44 countries. In 2021, WFP purchased 117,000 metric tons of food from smallholder farmers in 27 countries, valued at $51.9 million.

Looking Ahead in the United Nations’ Fight Against Poverty

Apart from these three programs, other U.N. initiatives also play a significant role in supporting the world’s most impoverished. For example, the United Nations Population Fund, the United Nations Environment Programme, the United Nations Relief and Works Agency for Palestine Refugees, U.N. Women and U.N.-Habitat. The World Bank, the IMF, the WHO, the ILO, the FAO and other U.N. Specialized Agencies play a significant part in addressing emerging global issues. Overall, the United Nations has had a positive influence on the eradication of poverty worldwide.

– Karisma Maran
Photo: Flickr

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Everything to Know About Poverty in Colombia

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

Quick Facts

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

Factors Contributing to Poverty

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

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

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

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

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

Recent Trends

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

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

New Challenges

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

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

Hope for the Future

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

– Ramona Mukherji
Photo: Flickr

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Poverty in the UAE and Sheikh Khalifa’s Death

Poverty in the UAE
The president of the United Arab Emirates, Sheikh Khalifa bin Zayed Al Nahyan, passed away on May 13, 2022, at the age of 73. The leader’s health had been declining since suffering a stroke in 2014. Many expect that his brother and Crown Prince of Abu Dhabi, Sheikh Mohammad bin Zayed, will step into the role of president. Mohammad served as the de facto leader of the UAE since Khalifa’s 2014 stroke, which limited his public appearances.

Khalifa led the UAE through a period of great technological and societal advancement. He strengthened the economy of the nation and secured its place among the other powerful nations of the world. Khalifa also leaned pro-West. He worked to strengthen the connection between the UAE and the U.S. and its allies, a bond that Biden promised to maintain following the leader’s death. The ensuing transition of leadership raises questions, most notably about future policy decisions and poverty in the UAE.

The Policy Impact of Khalifa’s Death

Sheikh Khalifa was a respected and well-liked leader, with many mourning his death in the UAE and around the world. Since the predecessor people expect spent the last eight years handling the majority of presidential matters, not much could change concerning foreign policy. However, the internal politics of the nation may look slightly different.

Being the Crown Prince of Abu Dhabi, Mohammad’s presidency could strengthen the already empowered emirate. Abu Dhabi grew in influence under Khalifa and may grow even more so now. It is likely that Mohammad will not need to consult with the other emirates before coming to any important decisions. This development, though expected, could prove to be divisive.

Poverty in the UAE

Many hope that the new leadership will address the underrecognized prevalence of poverty in the UAE. While the UAE is indeed a very wealthy nation, it is a common misconception that no poverty exists there at all. It is estimated that around 19.5% of Emiratis live below the poverty line. This is an estimation because the UAE does not formally update these statistics themselves. Despite the underreported number of impoverished people in the nation, the government provided support to only 27.1% of Emiratis in 2011.

The high poverty rate derives in part from the nation’s high cost of living, which results from the wealthy stature of the upper class. According to the Beit Al Khair Society, around 17,000 families living in the UAE need help from the government. It is a sad reality that many ordinary people have experienced neglect in the nation’s pursuit of becoming a global powerhouse. UAE invested unprecedented amounts of money into its large cities, particularly Dubai, along with notable developments such as the construction of the Burj Khalifa and The Jumeirah Golf Estates.

The Positives

Poverty in the UAE is far from a lost cause. The government does issue help for those families in need. The government has also formed specialized foundations and ministries to aid with the effects of the high cost of living. Of those families in need of help, few live in completely unbearable conditions. Most just need help to support their families, with the average size of an Emirati family being six people. It is also possible that the poverty rate is lower than estimated because of the underreported statistics. All in all, the UAE is quickly rising up the ranks of world powers. The nation’s economy continues to grow, but people should not ignore the individuals living in poverty in the UAE.

– Thomas Schneider
Photo: Pixabay