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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

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The Historical Battle to Put an End to Poverty in China

End to Poverty in China
In a speech on February 25, 2021, Chinese President Xi Jinping declared that China had eliminated extreme poverty. China defines extreme poverty as surviving on $1.69 a day. Over an eight-year period, President Xi Jinping stated that almost 100 million individuals rose out of poverty in China, ultimately putting an end to poverty in China. As the news of President Xi Jinping’s official declaration of China’s successful fight against poverty spreads worldwide, China’s anti-poverty legislation has become a popular topic for anti-poverty advocates, especially considering the vast history of poverty in China. China’s anti-poverty initiatives and reports have also acquired a fair amount of international criticism as the country continues to claim victory in eliminating extreme poverty.

China’s Battle Against Poverty: A Brief History

Following the impact of Chairman Mao Zedong’s failed Great Leap Forward initiative in the 1950s, approximately 10 to 40 million people died between 1959 to 1961 in what is labeled as the “most costly famine in human history.” However, economic reforms beginning in 1976 reshaped the economy as Deng Xiaoping granted farmers rights to their own plots, which led to better living conditions and more food security.

Since China opened up its economy in 1978, GDP growth has averaged about 10% a year and an estimated 800 million people have been lifted out of poverty over the past 40 years, according to the World Bank. After China joined the World Trade Organization in 2001 and lifted trade barriers and tariffs, growth increased even more as China grew into the economic superpower it is today.

Under President Xi Jinping’s leadership, eliminating extreme poverty in China became even more of a priority. Over the last eight years, China has spent 1.6 trillion yuan, or $248 billion, to put an end to poverty in China. Local officials even traveled door-to-door in some communities, delivering assistance either in the form of loans or farm animals. U.N. Secretary-General António Guterreś describes China’s anti-poverty efforts within the last decade as the “greatest anti-poverty achievement in history.”

China’s Anti-Poverty Infrastructure

China has issued a large number of subsidies to create jobs and build better housing over the last decade in order to put an end to poverty in China. Since 2015, local governments have constructed “more than 700,000 miles of roads.” As the most impoverished province in China, the Guizhou province alone spent RMB 1.8 trillion ($280 billion) on anti-poverty projects. Beijing has invested $700 billion in loans and grants for poverty reduction efforts in the past five years, amounting to about 1% of the nation’s annual economic output, according to The New York Times.

Critics and Sustainable Solutions

With China’s tremendous recent success in ending extreme poverty, critics globally questioned the sustainability of China’s anti-poverty strategies. The World Bank country director for China, Martin Raiser asserts the World Bank’s standing that “China’s eradication of absolute poverty in rural areas has been successful.” However, due to the resources utilized, Raiser is uncertain whether the poverty reduction is “sustainable or cost-effective.”

Critics also point out that China’s poverty relief programs only aid people in extreme poverty and do little to help the population just above the poverty threshold. The government’s poverty aid program eligibility excludes car owners, people with more than $4,600 in assets, homeowners and people who recently rebuilt a house. According to a New York Times report, “people hovering just above the government’s poverty line struggle to make ends meet, but are often denied help.”

The World Bank reports that China’s growth from “resource-intensive manufacturing, exports and low-paid labor” has reached its limits and has led to social and economic imbalances across society. The World Bank also reports that while China is the only major economy that has achieved positive growth in 2020, that growth has been uneven as wealth inequality and other societal imbalances in China have increased throughout the COVID-19 pandemic.

China’s Influence and Anti-Poverty Progress

While organizations, including the World Bank, are urging China to focus on societal imbalances informing sustainable anti-poverty solutions, the recent success of China’s anti-poverty legislation is a significant accomplishment for the nation and the world. As reported by the United Nations, China’s anti-poverty efforts contribute significantly to advancing global efforts to alleviate poverty by 2030, the U.N.’s first Sustainable Development Goal.

China’s anti-poverty work has raised the current standard for all world leaders aiming to combat poverty within their own nations, especially when understanding how far China has come in anti-poverty efforts over the last few years and even the last century.

– Lillian Ellis
Photo: Flickr

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Eliminating Poverty in Peru

Poverty reduction in Peru
Peru, a small country of 32 million located on the western coast of South America, has made significant reductions in poverty in the 21st century. Over the last 20 years, Peru’s GDP quadrupled and its poverty rate decreased by nearly 30% by 2019. Peru’s rapidly growing economy, combined with substantial social welfare programs, resulted in a drastic increase in quality of life for poor and middle-class Peruvians. But notably, these gains largely concentrate in urban areas. While the Peruvian economy was not exempt from a COVID-19 induced recession, expectations have determined that it could rebound in 2021. Here is a review of how things stand in regard to eliminating poverty in Peru.

Eliminating Poverty in Peru

Prior to the COVID-19 pandemic, Peru experienced 14 consecutive years of poverty reduction. Its economy ranks as one of the 21st century’s fastest-growing economies due to the high demand for its natural resource exports of copper, petroleum and zinc. While Peru’s middle class enjoys substantial growth due to its booming economy, inequality persists, especially in rural areas. A web of social welfare programs has been integral to Peru’s successful war on poverty as well as increased access to education and financial institutions. Previous administrations successfully balanced growth and poverty reduction in Peru, but more work is necessary.

Rural Poverty in Peru

Despite Peru’s strong growth and successful anti-poverty initiatives, much of the rural population still suffer material deprivation. In 2014, Peru’s rural poverty rate was nearly 50% with an estimated 15% of rural children suffering from chronic malnutrition.

Past administrations created several initiatives to expand welfare access in rural areas. However, Peru’s diverse geography and mountainous rural terrain make them difficult to implement. Rural Peruvians experience limited access to social programs and high transaction and transportation costs. Additionally, they enjoy far less economic opportunity or connection to growing markets than their urban peers.

Rural poverty concentrates most widely among the indigenous population, who often live in geographically isolated areas. Exacerbating the urban-rural cleavage are conflicts between the government and indigenous rights groups over mining and energy projects in the Andes. This conflict highlights the friction between extractive policies that constitute the base of Peru’s growing economy and the lived experience of rural Andeans who bear the cost of these industrial initiatives.

Peru’s New President

Pedro Castillo of the socialist Free Peru party won the June 2021 election. His election marked a paradigm shift in Peru’s political landscape. The former teacher and son of rural peasants, Castillo won a close election against Keiko Fujimori, daughter of Peruvian dictator Albert Fujimori who ruled the country from 1990 to 2000. Fujimori claimed that election fraud was responsible for Castillo’s victory, but the Peruvian election authorities ultimately dismissed her claims. Representing his rural constituency, Castillo declared that “Votes from the highest mountain and farthest corner of the country are worth the same as votes from San Isidro and Miraflores” in response to the baseless claims of election fraud.

Castillo promises to aggressively fight poverty and increase the state’s role in the economic response to the COVID-19 pandemic. Castillo’s posture as an anti-establishment populist will make his economic revolution difficult in the face of elite opposition. However, Peru’s difficult year increased the appetite for radical reforms to the neoliberal economy. Peru has experienced the highest deaths per capita of any country in the world and has seen its poverty rate increase due to the 2020 recession. Castillo’s five-year term will be a new chapter for a country that has not seen a truly left-wing president in a generation.

Snowballing Success in Eliminating Poverty in Peru

Peru has made impressive gains against poverty in recent decades. However, a multitude of factors has prevented these gains from undergoing equal distribution among urban and rural Peruvians. COVID-19’s impact led to the election of a socialist president who has pledged to take aggressive steps toward poverty reduction, especially in rural areas. While Peru’s poverty rate is less than half of what it was two decades ago, there is still a long road ahead to ameliorate the material deprivation that nearly 7 million Peruvians experience.

– Will Pease
Photo: Flickr

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Impact of COVID-19 on Poverty in Portugal

Impact of COVID-19 on Poverty in PortugalCOVID-19 has heavily impacted the way people live, even more so for those living in poverty. According to a report published by Agencia EFE Portugal, 21.6% of Portugal’s citizens were already at risk of poverty before the outbreak of COVID-19. Unfortunately, the socio-economic consequences of COVID-19 have pushed thousands of people to poverty.

The Effect of a Pandemic on Poverty

The social, economic and health consequences the pandemic provoked worldwide are undeniable. While eradicating poverty has always been at the core focus of many nonprofit organizations, since the beginning of COVID-19, many nonprofit organizations have prioritized sanitation and clear water programs to eradicate COVID-19 and diminish poverty levels.

Poverty in Portugal is partly due to the enormous social and economic inequalities governing the country. Furthermore, COVID-19 has only exacerbated existing poverty rates. As reported by the World Bank, poverty in Portugal had been decreasing since 2017. During 2018, approximately 17% of the population lived in poverty. However, the situation has dramatically changed. The outbreak of COVID-19 has led to 400,000 additional impoverished citizens in Portugal and “a 9% increase in inequality,” according to a study by PROSPER published in June 2021. Unquestionably, COVID-19 is directly linked to a social and economic crisis that is bringing instability to many countries. As this health crisis evolves, economic hardship increases too.

How Portugal is Managing the COVID-19 Pandemic

The United Nations has published a country report analyzing how the Portuguese government is dealing with the economic situation amid COVID-19. As reported, poverty in Portugal is becoming a core issue for the country. As such, the government has designed several programs covering education, health and social security to combat inequalities. For example, there is a compelling need to adjust pensions as many pensions equal €180 a month. If pensions increase, pensioners will be able to access and afford higher quality products and services and poverty will be alleviated.

Poverty in Portugal is also being addressed by several NGOs. The Portuguese Non-Governmental Development Organizations Platform (NGDOs) is a nonprofit society composed of 62 NGDOs. Cuerama and Caritas are two of the major organizations helping the most vulnerable communities in the country.

Caritas has steadily diminished poverty rates in Portugal. As Caritas published in 2018, the level of citizens demanding social services decreased by 12.7%, which is a historical record. Due to the outbreak of COVID-19, disparities have increased again. The Social Observation Centre has been concisely preparing a platform to gather and track as much data as possible to improve the performance of Caritas.

Additionally, in Portugal, the coalition Global Action Against Poverty concisely combats poverty and inequalities. Since 1990, poverty in Portugal has been diminishing. However, as stated above, since the outbreak of COVID-19, the situation has worsened and Portugal is still one of the most unequal countries in Europe. As published by The Portugal News, Portugal “comes ninth in the ranking of most unequal countries out of the 34 the OECD measured.” Tax benefits are one of the most efficient policies introduced by the authorities trying to alleviate inequalities and poverty.

Tackling Poverty in Portugal Amid COVID-19

Poverty in Portugal has always been present. Yet, the outbreak of COVID-19 has tremendously aggravated the situation. As displayed above, figures have been dramatically increasing as social and economic inequalities have risen from the crisis. However, poverty in Portugal has become one of the main focuses for authorities and organizations. Policies like increasing pensions and tax benefits are already in place to combat poverty. Besides creating policies, there is a need to strengthen communication and education to ensure all these programs are successfully implemented.

With the efforts made by the government and NGOs alike, Portugal will hopefully be able to tackle poverty and COVID-19 simultaneously.

– Cristina Alvarez
Photo: Flickr

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Environmental Solutions to Poverty

Environmental Solutions to PovertyChanging ecosystems from economic development have increased the risk of poverty and food insecurity around the world. Informal sectors, which mostly exist in lower-income countries, sidestep environmental regulations. This further degrades the environment and puts more people at risk of poverty. However, these high-risk environments also provide an opportunity to implement environmental solutions to poverty and lower the risk of environmental destruction.

Demi-Lune Agriculture to Stop Desertification

In the past century, deserts have expanded rapidly due to industrialization and rising global populations. This threatens millions of people living on the periphery of deserts who farm for a living, people who may see their crops dry up in coming years. Environmental solutions to poverty often focus on stopping the expansion of deserts.

For example, farmers on the periphery of the Sahara Desert have adopted a new style of farming to adapt to the desertification of their farmland: half-moon agriculture. This environmental solution to poverty, introduced in the 1980s, has many benefits.

Half-moons retain water much more efficiently than traditional agricultural techniques, an important feature in water-scarce climates. Farmers can easily understand and execute the process, which only requires basic tools, increasing its usability in communities with poor education and literacy.

In West Africa, half-moon agriculture has led to an incredible transformation of the landscape, with formerly arid land now covered in grass, trees or crops. Binta Cheffou, a farmer in Niger, planted half-moons in the 1990s when her community’s land was bare and unproductive.

Now, according to Cheffou, “Many people are no longer hungry” due to increased livestock yields and more agriculture. Communities using this environmental solution to poverty have witnessed a large increase in biodiversity as well, a useful safeguard against ecological disasters.

Planting Trees to Reduce Landslides

Natural disasters pose a large barrier in the fight against poverty, causing $210 billion in damage in 2020, according to major insurers. Landslides, a common disaster in developing countries, kill nearly 4,500 people each year, according to earth scientist Dave Petley. There are several environmental solutions to poverty and natural disasters, including a simple one: planting trees.

Landslides largely occur in environments where erosion is widespread and the ground can no longer hold its weight. These conditions often emerge just after deforestation and unregulated mining, where people extracting resources leave hillsides barren and organic structures rotten.

The lack of organic structure holding the slopes together leads to these tragic natural disasters. Reverting the hillside to its natural state with biodiverse trees can provide the structure necessary to prevent landslides while also providing revenue to those caring for the trees.

This strategy, popularized worldwide in the past few years, has seen major success in preventing landslides and reducing poverty. In Ethiopia, studies in communities with tree-planting initiatives noted a dramatic increase in community income and food supply. In Indonesia, research confirmed a decrease in landslides where trees were present. The study found that coffee trees prevent landslides especially well with the added benefit of providing coffee beans for communities to harvest and sell. This would decrease the motivation for unregulated logging and mining, further reducing landslide risk.

Cleaning Rivers for Clean Water

Rivers serve as key assets for countries to fuel their development. Rivers can provide power, food, drinking water and trade routes. Furthermore, recreational activities on rivers provide economic stimulation. However, many of the world’s key rivers, especially in developing countries, are experiencing a crisis of pollution and wastewater. This pollution costs countries billions of dollars. As such, key environmental solutions to poverty should focus on cleaning rivers and ensuring proper wastewater systems to prevent pollution.

In Indonesia, where riverway pollution costs $6.3 billion each year, or 2.3% of GDP, the government aims to make river water drinkable by 2025. Indonesia is implementing several strategies to address river pollution and protect the environment, including tree planting to combat erosion and regulations to ensure water factories produce drinkable water from rivers. Indonesia also focuses on environmental education as many people discard domestic trash in rivers without considering the consequences.

India also suffers from polluted rivers. The Ganga River, sacred to Hindus, serves almost 400 million people, providing water for drinking, irrigation and industry. It also deposits significant amounts of plastic into the Bay of Bengal and is filled with damaging pollutants which cause waterborne diseases that kill 1.5 million children per year.

The Indian government is focusing on the tributaries to the Ganga, ensuring clean water flows into the major river for a long-term cleaning strategy. So far, the government has spent $3 billion on cleanup initiatives since 2015 and has doubled sewage capacity.

The Future

These environmental solutions to poverty can increase both wealth and living standards. Studies show that access to a green and clean environment can boost mental health and life expectancy. Clean rivers, green hillsides and re-purposed desert land can provide access to these benefits worldwide. Going forward, governments should focus on innovative solutions to both improve the environment and reduce poverty.

– Justin Morgan
Photo: Flickr