Archive for category: Poverty Reduction

Information and stories about poverty reduction.

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Cash Handouts to Reduce Poverty in Afghanistan

Cash Handouts
As winter approached and the humanitarian situation in Afghanistan worsened, the United Nations (U.N.) proposed cash handouts to help the millions of Afghans who were struggling in the country. The U.N. announced the proposal of the program on December 1, 2021, as it believes that cash handouts will be the best and most plausible solution to deal with the increasing poverty rate in Afghanistan.

The Problem

Still reeling from the effects of the full United States withdrawal combined with the Taliban takeover of the government in August 2021, millions of people are suffering. On December 10, 2021, the United Nations humanitarian chief, Martin Griffiths, warned that Afghanistan is inching closer and closer to “economic collapse.” As such, Griffiths urges donor nations to “support basic services” along with “emergency humanitarian aid.” Griffiths said that “4 million children are out of school” and the education of another 9 million children is in jeopardy because 70% of educators in Afghanistan have not received remuneration since August 2021.

Winters in Afghanistan are especially brutal, and this season, the U.N. expects wintertime temperatures to go down to -25 C. The United Nations High Commissioner for Refugees (UNHCR) estimated in early December 2021 that as many as 3.5 million displaced Afghans require essential support to make it through the winter. On top of this, UNHCR spokesperson Babar Baloch has stated that more than half of Afghanistan’s population, equating to 23 million people, are enduring extreme hunger, which may spiral into famine without prompt intervention.

UNHCR is providing essential humanitarian assistance to 60,000 people per week, which involves providing food, thermal blankets and winter clothing as well as rebuilding shelters and supplying cash assistance. This work will continue until February 2022, according to Baloch, at which time the next round of funding will need to begin as he estimated that another $374.9 million is necessary for 2022, especially during the winter.

The Solution

As a potential solution to the severe problems that Afghanistan is facing, the U.N. proposed a program that would provide $300 million annually in cash handouts to Afghan households with children, elderly people and Afghans with disabilities.

At the same time, the U.N. Development Programme (UNDP) wishes to bolster an existing “cash for work” initiative in Afghanistan with another $100 million to increase employment rates and $90 million to support small businesses with cash payments.

The “cash for work” initiative began in October 2021 in the three provinces of Mazar, Kunduz and Herat, with the intention to expand to more provinces. So far, through the initiative, UNDP has distributed $100 million worth of cash payments in exchange for work, creating employment opportunities for 2,300 people.

UNDP estimates that poverty in Afghanistan may reach a staggering 90% by the middle of 2022. In October 2021, with the Taliban in control of Afghanistan, UNDP created “a special trust fund” with an initial $58 million pledge of financial support from Germany to supply urgent cash directly to Afghan citizens. By early December 2021, the fund reached $170 million in pledges from countries around the world.

The Effectiveness of Cash Handouts

The possibility of handing out cash directly to people who need it most seems easy enough, but will Afghans use the money effectively? The World Food Programme (WFP) strongly supports cash transfers as a form of humanitarian aid. In 2020, WFP handed out $2.1 billion worth of cash transfers across 67 nations.

According to WFP, research shows that disadvantaged households that are empowered to make their own decisions through cash transfers “make choices that improve their food security and wellbeing.” For example, in 2018, 91% of households in Lebanon put cash assistance toward food, rental fees and medical costs. Cash handouts also boost local markets as people purchase resources locally, consequently bolstering economies.

Looking Ahead

Though the situation looks dire, there is hope as global organizations step in to assist vulnerable Afghans. However, urgent assistance is still necessary to prevent the collapse of the nation. With more support from the international community, organizations can bolster efforts to safeguard the lives of the people of Afghanistan.

– Julian Smith
Photo: Flickr

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4 Ways Global Citizen Helped Reduce Poverty in 2021 

Global Citizen Helped Reduce PovertyIn 2008, Hugh Evans, Simon Moss and Wei Soo co-founded Global Citizen, a movement to reduce global poverty and create lasting change. Global Citizen is working to end extreme poverty by 2030 by mobilizing people around the world to use their “collective voice” to garner change. These are four ways Global Citizen helped reduce poverty in 2021.

4 Ways Global Citizen Helped Reduce Poverty in 2021

  1. Global Citizen Live: 24-Hour Concert. Global Citizen helped reduce poverty in 2021 on September 25, 2021, by hosting a 24-hour-long concert to raise awareness on the inequality of vaccine distribution and the extreme famine caused by the increasing spread of COVID-19. Highlights of the event include performances by Billie Eilish, Elton John, Jennifer Lopez, Ed Sheeran and Coldplay. Interestingly, the event’s main aim was not just fundraising but rather using “participation as evidence for world leaders that people support bold action on the issues.” These efforts proved successful as several leaders and companies announced their pledges. USAID Administrator Samantha Power stated the U.S. would pledge more than $295 million to fight hunger and address gender-based violence and other humanitarian issues brought about by COVID-19. Lego and Verizon also committed to donating to the cause of ending global poverty. Global Citizen was able to fundraise $1.1 billion to help fight poverty in the most vulnerable countries.
  2. VAX LIVE: The Concert to Reunite the World. On May 8, 2021, this Global Citizen event brought together various “big names,” such as Jennifer Lopez, Joe Biden and Prince Harry, pledging for help to end vaccine inequities in vulnerable countries during COVID-19. However, the televised event was not live, but rather, pre-taped. Fortunately, the event was able to raise $302 million from “several philanthropic and corporate commitments,” exceeding the event’s fundraiser goal. With this money, Global Citizen was able to obtain 26 million doses of COVID-19 vaccines for impoverished countries.
  3. Global Citizen Festival: Mandela 100. On December 8, 2018, Global Citizen hosted a festival in Johannesburg, South Africa, honoring the life and legacy of Nelson Mandela. Mandela’s vision for global peace and equality remains a struggle that Global Citizen is trying to achieve. More than 70,000 Global Citizens, world leaders and music artists attended the festival in hopes of making a difference in the fight against global poverty. At the event, “Global Citizen and its partners announced key pledges across Health, Water, Sanitation & Hygiene (WASH), Food Security, Agriculture, Environment, Education, Finance and Innovation.” In 2021, Global Citizen used about $783 million of $7.2 billion raised through commitments made during the 2018 event to improve the lives of 12.4 million additional people. In total, since the event in 2018, Global Citizen has brought positive impacts to 117.8 million people.
  4. Global Goal: Unite for Our Future. On June 27, 2020, Global Citizen held a benefit concert with music performers and world leaders to help raise awareness about the hardships impoverished countries are experiencing amid the COVID-19 pandemic. With Dwyane Johnson as the host, the event included performances by Coldplay, Chris Rock, Shakira and more. This concert was integral considering that the world hunger rate rose to 690 million people in 2020. Fortunately, in February 2021, Global Citizen distributed the $1.4 billion fundraised during Global Goal to support organizations playing an integral role in fighting the COVID-19 pandemic, such as UNICEF, the Global Fund and the World Health Organization. In particular, the U.S. pledged $545 million at the event, a pledge that is now “supporting COVID-19 response efforts in 120 countries” through USAID and the Centers for Disease Prevention and Control.

Looking Ahead

Since its inception, Global Citizen has hosted many events to help the organization reach its goal of ending extreme poverty by 2030. With the help of motivated leaders and individuals using their voices to express the change they want to see in the world, Global Citizen has garnered significant support from the international community to contribute to the cause. Through generous donations, Global Citizen is able to positively impact the lives of millions of people in disadvantaged countries.

– Kayla De Alba
Photo: Flickr

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5 Poverty Reduction Initiatives in India

Poverty Reduction in India
Since the 2000s, India has made great strides towards decreasing poverty. Between 2011 and 2019, some 262 million people rose above the poverty level. While the COVID-19 outbreak reversed this trend, India expects to make a comeback thanks to its government initiatives addressing poverty. Here are five poverty reduction initiatives in India.

  1. Saansad Aadarsh Gram Yojana (SAGY): Prime Minister Narendra Modi started Saansad Aadarsh Gram Yojana (SAGY) after considering the increasing poverty rates in October 2014. SAGY is a government program that focuses on the social and cultural development of villages. A central goal of SAGY’s is for each Member of Parliament to develop three villages by 2019. These villages serve as model villages providing basic amenities and livelihood opportunities. The overall purpose of the program is to improve the living conditions and overall quality of life for all residents. This occurs by increasing educational opportunities, raising literacy rates and updating social norms and customs. In an effort to improve the development of communities, SAGY converts schools into “smart schools.” The smart schools are equipped with IT-enabled classrooms, e-libraries and web-based teaching in an effort to make all students e-literate. If students are e-literate, they are more likely to receive a quality education. Between SAGY’s initiation in 2014 and a June 2017 referendum, it implemented 2,649 social development projects, completed 1,239 projects and had another 539 still in progress. In addition to social development, SAGY also has thousands of projects devoted to health, economic development, infrastructure and more.
  2. National Rural Livelihood Mission (NRLM): The Ministry of Rural Development started National Rural Livelihood Mission (NRLM) in June 2011 to provide the impoverished with a stable monthly income. Unemployment serves as one of the many reasons for poverty in India. In 2019, more than 75% of households in India did not have a stable source of income. NRLM provides households with the means to self-employment and skilled wage employment opportunities to improve their livelihoods. The program emerged upon the belief in the hidden skills and capabilities of those in poverty. All it takes is guidance and resources to create a sustainable life. Such resources include institutional platforms that the World Bank partially funds, entitlements, access to rights and public services. NRLM’s strategy allows the economy of the country to build from within and flourish. NRLM increases household revenue and savings by increasing finance accessibility and jobs, and decreasing loan dependency. Both men and women also experienced increased participation in the labor force. After evaluation, researchers found that the program impacted the households in the treatment villages more than in the controlled villages. Treatment households experienced a 19% increase in income over 2.5 years.
  3. Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM): The Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM) similarly works to reduce poverty and vulnerability by providing access to self-employment and skilled wage employment opportunities. The Ministry of Housing and Urban Affairs began the NULM in September 2013. The poor in India’s urbanized areas have low education rates, harsh living conditions and minimal work opportunities. DAY-NULM motivates the urban poor, trains them, provides shelter and establishes rights-based linkages with other programs. The Employment through Skills Training & Placement (EST&P) Component constitutes one of DAY-NULM’s programs that showcases great results. This initiative provides three types of programs. Firstly, it trains fresh entrants to the job market. Second, it offers skill up-gradation of those employed. Thirdly, it extends formal recognition and certification of those with both informal and non-formal skills training in any vocational trade or craft.
  4. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) passed in August 2005 and launched the following February. MGNREGA’s mission is to provide 100 days of guaranteed wage employment to inexperienced workers. It also seeks to increase economic security and decrease labor migration from rural to urban areas. A portion of the jobs is specifically for women. Since its launch, job opportunities increased by 240% in large part thanks to MGNREGA’s role. The equality and quality of labor also improved in rural India, including diminished wage fluctuation and the gender pay gap. MNREGA also provides minimum wages to employees, making basic amenities accessible and helping increase income and purchasing power. Since 2006, MNREGA gave jobs cards to nearly 900 million households. Of the nearly 315 million who demanded jobs, 98% received employment. From 2006 until 2015, an average of 45 million households received employment annually, constituting 30% of India’s entire rural household population.
  5. Pradhan Mantri Jan Dhan Yojana (PMJDY): In August 2014, Modi launched Pradhan Mantri Jan Dhan Yojana (PMJDY). Driven by financial inclusion, PMJDY endeavors to secure communities with affordable financial services. These financial services include pension, insurance, savings and deposit accounts, remittance, credit and insurance. PMJDY opened 12.54 billion accounts by January 2015, with deposits surpassing Rs 10,000 crores ($133 billion). In total, PMJDY achieved opening 17.9 billion accounts during the first year of implementation. As a result, deposits doubled between 2015 to 2020.

How Poverty Reduction Initiatives in India Have Helped

The government’s investment in these five poverty reduction initiatives in India, among others, helped decrease India’s poverty rate tremendously. Each individual initiative provides the impoverished with effective ways and resources to escape poverty. Like the NRLM states, the impoverished have strong desires to overcome poverty and have the capabilities to do so. All it takes is initiative.

– Destiny Jackson
Photo: Flickr

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The Four Pillars of the Graduation Approach to Poverty Reduction

The Four Pillars of the Graduation Approach to Poverty Reduction
After years of successful poverty reduction, the COVID-19 pandemic may cause 150 million people to return to severe poverty. Poverty is “a cyclical pattern where the multidimensional causes of extreme poverty prevent people from acquiring the resources to escape it.” However, the graduation approach to poverty reduction has proved successful in overcoming the multifaceted obstacles of extreme poverty.

What Is the Graduation Approach?

In 2002, the Bangladesh Rural Advancement Committee (BRAC) established the graduation approach to poverty reduction. The graduation approach is a way of attacking extreme poverty from multiple angles. A “set of interventions designed to address the” complexity of the issue are implemented to provide the “’big push’ people need to escape the poverty trap long term.” Since 2018, the graduation approach has reached almost 14 million people in 50 different countries. And, it is being used by more than 100 organizations. 

BRAC pioneered the approach in Bangladesh in 2002. There, it had a 95% graduation from poverty success rate. Its success is attributed “to a combination of consumption support and asset/cash transfers, followed by up to two years of training” and mentoring. The program can last anywhere from 18-36 months per household with an average cost of only $1,400.

The Four Pillars of the Graduation Approach

Over time, the graduation approach to poverty reduction has been broken down into four main pillars.

  1. Social Protection – Social protection means meeting the basic needs of participants before pushing ahead with the program. This includes providing cash stipends, consumption support and access to health care.
  2. Income Generation –  At this point in the program, households are provided with productive asset transfers that help them maintain sustainable incomes. This could be in the form of equipment, seeds or livestock. The participants are also given vocational and farm-based training in order to improve their technical skills. 
  3. Financial Support – This pillar focuses on providing training to participants on how to manage their incoming and outgoing finances. Participants are taught that savings help circumvent difficult times. They are introduced to community savings groups and mentoring that help generate income. When a household completes the graduation program the participants are connected with more conventional financial institutions to provide them with long-term support and growth.
  4. Social Empowerment – Throughout the graduation approach, participants learn many new life skills through mentoring, peers and coaching. These new skills provide participants with confidence and opportunities to become more integrated with their communities. 

Graduation Success Rate in the Philippines

From June 2018 to September 2020, 1,800 households in the Philippines participated in a pilot of the graduation approach to poverty. Findings showed that 71% of households met all the “criteria under the four pillars of graduation” and saw improvement in their life skills and financial management. The participants greatly improved their hygiene, nutrition and health practices as they retained at least 80% of their life skills training. At the start of the program, 74% of participants had access to a sanitary toilet. By the end of the program, everyone had access to one.

Despite the program taking place during the COVID-19 pandemic, the participants were still able to initiate livelihoods and earn income. As of September 2020, around 60% of individual livelihoods remained fully operational and 73% of group livelihoods remained intact. The graduation approach to poverty reduction also taught participants how to react to changing trends in the market due to the pandemic. In turn, participants were able to stay above the food poverty threshold.

The Impact

Overall, the graduation approach to poverty reduction has proved extremely successful. It provides the “big push” that individuals living below the poverty line need in order to escape the cyclical trap. With new knowledge, resources and savings, individuals that have been through the graduation program are set up for long-term success.

– Trystin Baker
Photo: Unsplash

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5 Strategies to Progress Poverty Reduction in Brazil

Poverty Reduction in Brazil
The COVID-19 pandemic placed a lot of countries in difficult positions regarding their economies and poverty rates. Those already struggling were unable to make progress, and in some cases, poverty rates even increased due to the stress the pandemic placed on society. Brazil is just one of the many countries facing an increase in poverty today. However, five strategies exist to progress poverty reduction in Brazil.

About Poverty in Brazil

Before the pandemic, Brazil already faced difficulties in the country with many lower-class citizens facing extreme poverty. Since 2014, the poverty rate grew steadily, and by the beginning of 2020, almost 11% of the population of Brazil was living on a statistically meager amount every day. Because of the pandemic, about an estimated 13% of Brazil finds itself in poverty as of March 2021. In order to combat the rising poverty rates throughout Brazil, there are certain steps that the country can take. Here are five strategies to progress poverty reduction in Brazil after the COVID-19 pandemic.

5 Strategies to Progress Poverty Reduction in Brazil

  1. A Rise in Vaccination Rates: So far, the vaccination rates in Brazil have remained quite low in comparison to other advanced countries across the globe. Though infection rates in Brazil have not returned to their pandemic peak, cases still tend to rise after they are brought down and the country opens up again. This has proven to be hard on the economy because communities have to continuously lockdown and then reopen time and time again. With a rise in vaccination rates, however, this would no longer have to be the case. As Deloitte Insights pointed out, “Evidence from the United States, for example, shows that consumer sentiment and willingness to spend has gone up with rising vaccinations.”
  2. American Involvement Can Help: The United States is equipped with resources to aid other countries with global poverty relief. Over the past century, other efforts have proved the U.S.’s ability to deliver effective assistance. Kate Schecter wrote for New Security Beat, saying, “There have been notable successes, such as the President’s Emergency Plan for AIDS Relief, which started in 2003.” As the U.S. appears to be recovering financially from the pandemic, it could utilize aid resources to assist other countries’ recoveries as well, including Brazil’s.
  3. A Commitment to Investments Within Local Communities: In order for poverty-stricken communities within Brazil to build themselves up financially, an effort to helping communities create jobs and access to resources remains essential. “These investments can both reduce poverty and mitigate out-migration by reducing ‘push factors,’ such as lack of jobs and food scarcity which force people to leave their homes and seek basic subsistence in other countries,” wrote Schecter.
  4. Open the Economy: Brazil has some of the lowest import and export rates among countries with major economies. In 2017, it recorded a less than 30% GDP sum in terms of imports and exports. International Money Fund (IMF) states that “opening up to more trade is essential to improve competitiveness and could give a much-needed fillip to investment.”
  5. Increased COVID-19 Aid from the Government: During the initial economic blow from the pandemic, the government implemented an emergency aid program to help families in need of financial support. Consequently, poverty levels throughout the country took a dramatic decline. This positively impacted the country, but “the aid program is not sustainable and the positive trend in terms of poverty reduction is likely to reverse once the benefit ends,” based on a study from the think-tank Fundação Getúlio Vargas. A better-supported and considered aid program to mitigate the effects of the pandemic could still reduce the poverty rate with careful planning.

Looking Ahead

The recovery process is still ongoing, but as Brazil continues to improve, it can now look forward to poverty reduction throughout the country. Effectively considering and enacting policies throughout Brazil could alleviate the difficulties of the nation’s poor and reduce poverty broadly.

– Riley Prillwitz
Photo: Wikipedia Commons

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5 Facts About Poverty in Nigeria

About Poverty in NigeriaThe wealthiest and most populous African country, Nigeria plays a substantial role in global poverty alleviation. Its success or failure has wider implications for the rest of the developing world. The history of Nigeria is a storied one, its chiefdoms and local tribes tracing their origins to the ancient kingdoms of sub-Saharan Africa. But, only in 1914 did Nigeria emerge in its present form under British colonial rule, followed by independence in 1960. Even then, the country suffered from the debilitation of military rule. It was not until the turn of the century that Nigeria blossomed as a full and free democracy.

Most recently, COVID-19 has dented the economy as global supply chains were sent into prolonged shock. But, a young Nigerian population meant that the human impact was minimized to a greater extent than in some Western countries. Furthermore, Nigeria is also expected to register positive economic growth in 2021. By 2100, Nigeria is slated to have the second-largest population in the world, surpassing China and trailing India. . Understanding the complexities of poverty in this highly crucial corner of the globe grows more imperative by the day.

5 Facts About Poverty in Nigeria

  1. Poverty in Nigeria is widespread. To date, around 40% of Nigerians live in poverty. The economy is dependent on oil, creating inherent vulnerabilities for supply chain disruptions. Depending on the stability of the wider world, millions of additional Nigerians could fall into poverty within a relatively short span of time.
  2. Inequality is similarly high. By the common method of international measurement, Nigeria actually has less inequality than the United States. But, this overshadows the vast challenges facing the country. Unemployment is high at 33%. Women are disproportionately impacted because of gender inequality and discrimination. Nigerian women own less property than men and a significant contingent of the female population is illiterate.
  3. The wealth gap has created the political conditions for terrorism to flourish. Boko Haram, one of the leading terrorist groups in the world, has headquartered itself on the outskirts of Nigeria. The organization is responsible for tens of thousands of deaths and the displacement of millions.
  4. Progress is possible. Over the years, life expectancy has risen. In 1960, life expectancy was 37. By 2019, that figure was 55.
  5. Nigeria is also a fast-growing economy. A recession in 2016 led to an economic contraction and the COVID-19 pandemic had a similar effect. But, these are exceptions. The economy otherwise grows quite fast. One example lies in 2014 when the economy expanded by 6.3%.

Doctors Without Borders

Times are changing. Organizations like Doctors Without Borders are taking the lead in tackling some of Nigeria’s biggest challenges. In many countries, poverty and health form a vicious cycle, with one reinforcing the other. Without adequate medical treatments, millions fall victim to poverty and lack the resources to access opportunities. Doctors Without Borders cuts the problem at its source.

Drawing on donations from across the world, the group treats more than 50,000 Nigerians for malaria, a disease mostly eliminated in the Western world but greatly affecting developing countries in sub-Saharan Africa where hundreds of thousands died in 2019 alone. At the same time, Doctors Without Borders has taken a multipronged approach by increasing hospital admission rates, allowing more than 60,000 Nigerians to receive necessary medical treatment in a hospital facility.

These facts paint an optimistic picture of Nigerian development. Increases in life expectancy and strong economic growth can also make substantive impacts on poverty alleviation. In the coming years, better resource allocation on the part of the Nigerian government can allow more flexible responses to the challenges facing the nation.

– Zachary Lee
Photo: Flickr

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Made in China 2025 Aims to Reduce Poverty

Made in China 2025Over the last few decades, the Chinese economic miracle has astounded pundits across the globe. When reforms began in 1978 under Deng Xiaoping, China accounted for about 5% of the world economy. In 2020, that figure was more than 17% and rising quickly, second only to the United States. During the same period, extreme poverty was effectively erased, down from a high of 90% in 1981. The Made in China 2025 initiative aims to reduce poverty even further and ignite economic growth so that China can avoid the middle-income trap.

Poverty and the Middle-Income Trap in China

In some ways, many of these figures paint an inaccurate picture of the Asian giant. China is wealthy but its population is enormous, meaning that average incomes remain relatively low. In the United States, GDP per capita is almost four times higher than China’s. Furthermore, Chinese economic growth is slowing. Ballooning levels of debt and an aging population create worry for Beijing, even as the Communist Party celebrates its 100th anniversary. Economists fear that China could fall into the middle-income trap, a situation where rising wages for developing countries erode their manufacturing advantage but their innovative sectors remain too small to compensate.

Radical Planning for a Radical Problem

In 2015, preempting these concerns, Chinese leadership announced the Made in China 2025 initiative, hoping to move the nation up the value chain. As Harvard University explains it, the strategy intends to “secure China’s position as a global powerhouse in high-tech industries.” Furthermore, “the aim is to reduce China’s reliance on foreign technology imports and invest heavily in its own innovations in order to create Chinese companies that can compete both domestically and globally.” If China succeeds, it will create a blueprint for other developing countries in Africa and Asia to bypass the middle-income trap and liberate their populations from the grips of poverty.

Made in China 2025 outlines 10 key industries that the nation must master if it seeks to move up the value chain.

  1. Information technology
  2. Robotics
  3. Aerospace equipment
  4. Pharmaceuticals
  5. Medical equipment
  6. Electrical equipment
  7. Farming
  8. Railway equipment
  9. New energy vehicles
  10. Ocean engineering

From artificial intelligence to quantum computing, China has poured billions into developing cutting-edge technology. The U.S. administration cast the effort as an attempt to displace U.S. technological leadership, sanctioning Chinese companies from doing business with their suppliers in the United States. In reality, much of the motivation behind the Chinese initiative stems from a more basic goal: lifting the nation out of poverty and inspiring other nations to do the same.

Avoiding the Middle-Income Trap

The middle-income trap that confronts China is daunting as only a few countries have ever escaped its grasp. Most prominent were the Asian Tigers — South Korea, Taiwan, Hong Kong and Singapore — economies that defied the odds and delivered decades of sustained growth. But, many have failed to replicate the Asian Tigers’ success. Nations like Brazil and South Africa became mired in the middle-income trap, unable to escape the hard ceiling.

The danger for developing countries around the world is a run-in with the same fate. Before COVID-19, African nations were fast-growing. The World Bank predicted that many would reach middle-income status by 2025. But, upon achieving this milestone, they would encounter the same middle-income trap that Brazil and South Africa once faced. If this occurred, the region could be forever stuck in a grey zone, one where poverty would be reduced but not eliminated.

Looking to China

China offers a solution. If nations can move up the value chain with enough speed, they can escape the middle-income trap. Governments can help. The Communist Party has poured billions of dollars into research and development for Made in China 2025, creating some of the world’s largest technology companies in the process. African and Asian nations can do the same on their path to development.

Of course, investment has its downsides. Corruption takes a significant toll on the ability of a government to distribute funds in an appropriate manner. Tackling this problem will not be easy or simple, but a roadmap to success has been laid. With the rise of Asia and Africa in the decades ahead, countries have a chance to crush poverty and increase welfare for billions of people.

– Zachary Lee
Photo: Flickr

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How Crowdfunding is Reducing Poverty

crowdfunding is reducing povertyIn 1997, modern-day crowdfunding gained global traction as British rock band Marillion funded their U.S. tour entirely through fan donations. Since then, crowdfunding has transformed into a global market. It is capable of financing aid projects, resource distribution and business ventures. Thus, crowdfunding is reducing poverty in developing countries, as proven around the world.

What is Crowdfunding?

Crowdfunding is a fundraising method performed on the internet. Investors contribute small amounts of capital to finance an idea or aid individuals. Using social media networks, crowdfunding works to draw people’s attention to situations of need. Moreover, it creates an opportunity within which anyone with money can invest.

Crowdfunding is typically performed through loans and donations. The loan system helps businesses that are developing a product or resolving a conflict. In this regard, crowdfunding is reducing poverty by giving investors an incentive to have a stake in a business’s success. Additionally, donations are a way for individuals to raise money after being impacted by natural disasters or medical expenses. In both ways, crowdfunding improves fundraising accessibility on a global scale.

Crowdfunding’s Growing Popularity

Crowdfunding became a popular option for entrepreneurs at the turn of the 21st century. Sites such as Kickstarter and GoFundMe have expanded globally. Revenue increased “from $530 million in 2009 to $1.5 billion in 2011,” contributing to economic growth. Not only does crowdfunding allow individuals to invest in campaigns directly but it also brings attention to causes around the world as a catalyst for poverty reduction.

Market Potential

According to the World Bank, crowdfunding’s popularity is spreading from developed to developing countries. In order to boost profitability, global poverty reduction legislation has created an opportunity for crowdfunding to thrive. Due to advancements in income equality and job growth, there are up to 344 million households that can contribute small investments to crowdfunding platforms. This means that by 2025, nearly $96 billion can be raised just through crowdfunding alone.

Thus, crowdfunding is reducing poverty through its ability to connect people around the world. When observing diaspora remittances, education and housing funding, crowdfunding has the potential to increase capital by 25% more in developing countries. As such, in emerging economies that struggle to provide adequate healthcare, crowdfunding can alleviate some of that pressure.

Crowdfunding and Health

A 2018 study by the British Medical Journal studied poverty in India. The Journal found that 38 million people went into poverty as a result of self-financing healthcare bills. The second wave of COVID-19 hit India hard, and as such, many citizens relied on crowdfunding instead of insurance coverage. Through crowdfunding, nearly $1.6 billion was raised from more than 2.7 million donors. Thus, while developed countries have adopted crowdfunding as a method to support innovative business ideas, the developing world is seeing money channeled into small projects or helping others afford medical bills.

Leading by Example

As crowdfunding has gained popularity, several platforms are working to help those in need. Kiva is a loan-based platform that started in 2005. This website allows people to crowdfund loans that support more than 1.7 billion people who are unable to access essential financial services. Kiva’s work spans 77 countries, funding female-led businesses, youth education and medical expenses. In total, Kiva has supported $1.63 billion worth of loans.

A forerunner for crowdfunding sites in India, Milaap, offers investors the opportunity to contribute donations for causes they are passionate about without incurring any fees. Started in 2010, Milaap’s team has been a pioneer in providing funding to rural areas and small businesses. Now, crowdfunding is reducing poverty in healthcare, making Milaap the go-to platform to raise money for treatments and operations.

Similarly, Transparent Hands is the largest crowdfunding platform in Pakistan, which also assists the health sector. Those who are in extreme poverty can rely on donations made by people around the world to help cover the costs of surgery.

Overall, crowdfunding is an emerging resource that is positively affecting the scope of global poverty. Its potential to provide funding to low-income groups is an important step toward solving inequality.

– Nicole Yaroslavsky
Photo: Flickr

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5 Ways Bees Reduce Poverty

Bees Reduce PovertyBees are an essential part of global agricultural systems. Additionally, bees reduce poverty around the world as they are responsible for pollinating 80% of the world’s plant species, including 90 different types of crops.

Study by the FAO

The Food and Agriculture Organization of the United Nations (FAO) studied 344 plots of land in parts of Africa, Latin America and Asia. The plots revealed a positive correlation between the number of bees that visited a particular plot of land and its agricultural productivity. For small farms with a landmass of fewer than two hectares, the study concluded that farmers could increase their crop production by an average of 24% by increasing pollinator traffic.

The results of the FAO study could affect approximately two billion farmers worldwide. Because of their importance to agricultural production, increasing the number of bees on agrarian lands could improve global food security. Bees also provide a valuable way to reduce rates of poverty. Bees can be especially valuable to people living in rural poverty, a very important issue to address as approximately 63% of people in poverty worldwide live in rural areas.

5 Ways Bees Reduce Poverty

  1. Beekeeping helps households increase their income. Rural families living in regions with poor agricultural yields may struggle to make ends meet. However, raising bees can help these families earn more money. In addition to potentially increasing their annual crop production, bees produce honey and beeswax which families can sell. For example, Bees Abroad and the Poverty Abroad for the Poor Initiative taught farmers living in extreme poverty how to run bee farms. As a result of this training, 30 of those farmers went on to run their own bee farms afterward, which helped increase their incomes.
  2. Beekeeping creates opportunities for entrepreneurship. Entrepreneurs use bee by-products to make commodities such as shoe polish, candles and ointments. More importantly, beekeeping presents opportunities for entrepreneurship, which helps people escape poverty and support themselves and their families. Entrepreneurs are finding ways they can use bees to reduce poverty and improve living conditions.
  3. Food insecurity and poverty are linked. Poverty is the main driving factor behind food insecurity worldwide. Across the world, roughly 80% of chronically undernourished people live in rural areas of developing countries, making food insecurity a particularly important aspect of ending rural poverty. Increasing bee populations can enhance food security by increasing crop yields. By improving food security, bees reduce poverty in a way that is especially beneficial to rural communities.
  4. Beekeeping is an effective form of occupational therapy. Occupational therapy helps people with disabilities accomplish goals such as working and attending school. People with disabilities are disproportionately affected by poverty, which makes addressing their needs critical to reducing poverty. Additionally, inaccessible work and education opportunities are major contributing factors to this problem, which occupational therapy can help address. Fortunately, beekeeping requires little capital and helps occupational therapy participants become financially independent, making it an effective form of occupational therapy.
  5. Protecting the global environment keeps people out of poverty. Environmental degradation can increase levels of poverty. For example, the loss of natural resources to environmental degradation leaves communities with fewer means to support themselves. However, bees are critical pollinators that support ecosystems and natural resources across the globe. Additionally, bees can even improve habitat restoration efforts. So, by preserving and restoring vital resources, bees reduce poverty.

Overall, bees provide unique benefits that have the potential to reduce global poverty. By garnering the help of pollinators, impoverished communities can rise out of poverty.

– Caroline Kuntzman
Photo: Flickr

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Diving into Poverty Reduction in Malaysia

poverty reduction in MalaysiaEstablished in 1963, Malaysia is a small country located in Southeast Asia. Since earning its independence, Malaysia has made considerable strides in working to reduce the national poverty rate, to the point where the country is expected to gain high-income status between 2024 and 2028. With the help of the United Nations and other organizations, poverty reduction in Malaysia is slowly reaching rural areas, which still remain disproportionally plagued by poverty.

A Flailing Poverty Line

Malaysia’s economic success cannot be explained without first noting the shift in an economic system previously dependent on agriculture to one built around commodity exportation. With about 40% of its labor force working in export activities, the country’s positive attitude toward trade and investment is responsible for the upwards trajectory in job growth and income expansion. Poverty reduction in Malaysia is apparent in its revision of the poverty line, increasing from $231.27 to $521.06 in 2019. That same year, however, rural households reported earning less than $2 per day.

Reports from government officials, which detail poverty reduction in Malaysia, ignore risks that many people face every day. The most impoverished 40% consist of rural villagers, migrant workers and refugees. These people are often left out of official poverty figures and lack a social safety net. Moreover, the dramatic economic growth seen in recent years is not accurately reflected in the poverty line, which is largely inconsistent with the current income levels of Malaysians. In his report, Professor Philip Alston explains that the impoverished have benefitted in gaining universal access to basic utilities. However, things like medical care and education are widely unattainable.

In areas such as Pulau Indah, an island not far from the capital Kuala Lumpur, many citizens live alongside heaps of garbage consisting of discarded plastic waste from Western countries. Here, sanitary living conditions are hard to come by. Education levels and medical needs prohibit people from building a life elsewhere. Most are even employed at illegal factories working to burn the waste that surrounds them. This leaves them in an inescapable cycle of poverty.

Villages Struggling to Stay Afloat

Problems are exacerbated in rural areas where the distance from hospitals, schools and jobs prevents residents from obtaining help. In water villages, which are clusters of homes sitting atop the water’s surface, the communities are subject to pollution and dangerous living conditions. While poverty reduction in Malaysia targets floating villages, providing them with basic necessities is still a hurdle. Access to clean water is a major problem as towns have no way of installing sewer systems. Even safe methods of electricity for heat or cooking are unaffordable. Thus, people resort to illegally extending power lines, risking engulfing entire villages into flames.

Casting a Safety Net

The United Nations Environment Programme (UNEP) is using an innovative strategy to aid poverty reduction in Malaysia. True to its mission of caring for the environment by improving people’s quality of life, UNEP sponsored a pilot project aimed at providing sewage treatment tanks to homes and schools in floating villages. This is major for a region like Sabah, which has 10,185 floating homes. These efforts are helping nearly 50,000 people gain access to sanitary living conditions. As part of a 36-month-long project, UNEP hopes to install 200 more treatment tanks in another village. Additionally, UNEP is encouraging the establishment of a facility where local people can work to produce the tanks themselves.

A business known as Hive Bulk Foods has also made considerable efforts at drawing attention to the waste issues in Malaysia and the impact of waste on impoverished communities. Founded by Claire Sancelot, The Hive encourages sustainable living and works with local farmers to source its ingredients. It operates as one of the only no-waste stores in Kuala Lumpur.

This push toward empowering rural communities to help eliminate poverty is apparent in the Malaysian government’s work as well. Legislation such as the 12th Malaysian Plan is based around promoting economic growth and poverty reform. Key policy measures that include providing help for undocumented citizens and re-evaluating the poverty line would ensure that poverty levels continue their downward trend for good.

– Nicole Yaroslavsky
Photo: Flickr