Poverty in Panama
In the past decade, Panama’s economy has been one of the fastest-growing among its Latin American counterparts, its growth largely due to the expansion of the Panama Canal in 2016. Yet, the growth of the economy does not translate to the prosperity of the entire country. According to a CIA analysis, Panama’s income distribution is the second-worst in Latin America. This means that even with a growing economy, poverty in Panama is still a significant issue with many Panamanians living under the poverty line.

Though the Panamanian government allocates fundings to education and social programs, poverty continues to be a significant issue in Panama. Poverty is more significant in certain areas of the country, highlighting the economic inequality within Panama. Factors such as ethnicity, income level and education level all hold influence over one’s access to basic services and opportunities such as education and health care. Here are five facts about poverty in Panama.

5 Facts About Poverty in Panama

  1. Panama’s urban and rural areas have a large wealth disparity: According to the World Bank, 31.94% of the entire population of Panama lived in rural areas in 2019. These areas rarely see the benefits of the recent boost in economic activity, as 27% of the rural population lives in extreme poverty in comparison to 4% in urban areas.
  2. The national poverty rate is decreasing, but it is still high: In 2005, the national poverty rate of Panama was at 38.3%. In 2016, the figure dropped to 22.1%. Although the poverty rate is seeing a downward trend, it is important to put these figures in perspective: over one in five Panamanians is living in poverty.
  3. Poverty affects indigenous people in Panama in particular: Seven indigenous groups exist in Panama and the government often overlooks their rights, such as the rights to their territories. Poverty is especially dominant in rural areas that include mostly indigenous populations. In fact, 86% of the indigenous population lives in poverty and over 90% cannot meet basic needs.
  4. There is a significant gap in health care access: Rural areas often lack the resources to give Panamanians equal access to health care. As indigenous people largely populate rural areas, they often have 11 fewer years in life expectancy than the overall population, at 67.75 years and 79 years respectively.
  5. Some cannot easily obtain education: Because of better access to resources and job opportunities, urban populations are the most educated and enjoy comparatively affluent and healthy lives. Meanwhile, non-indigenous rural poor are more likely to escape poverty through labor migration from rural to urban areas. However, rural areas lack the schools and resources (such as internet connection) to educate their children. According to the World Bank, the gross enrollment rate at primary schools in 2017 was about 87% of the figure in 2007.

The COVID-19 Pandemic and Unemployment

There is a sharp difference between the rich and the poor in Panama. In 2017, the top 20% of the population generated 54.2% of the income, while low-income communities had high poverty and unemployment rates. One such community is Colón, a coastal city in Panama that has a 50% unemployment rate. There, inhabitants struggle to pay rent as a result of Panama’s building boom.

Panama’s economy relies heavily on global trade through the Panama Canal as well as its service section, which makes up 75% of the country’s GDP. Both saw a sudden drop in activity as a result of the ongoing COVID-19 pandemic. As a result, the country expects to see a rise in unemployment and poverty rates, reversing the Panamanian government’s push to improve poverty rates.

Reducing the Poverty Rate

Though expectations are that Panama’s poverty rate is going to rise due to the COVID-19 pandemic, the overall trend appears to be positive. From 2010 to 2018, the percentage of the population living on under $3.20 USD per day halved, dropping from 10.7% to 5.2%. There has also been an increase in secondary education among rural and indigenous communities. Panama’s $326 million portfolio oversees five active projects that push to improve social protection, governance, disaster risk management, wastewater management and support to the Indigenous Peoples Plan. With economic growth and government policies, Panama has made progress in reducing poverty in recent years.

The government hopes that its continued and further investment in infrastructure and social programs will foster prosperity within the general population through increased opportunities in education and jobs, improving the overall poverty rate of the country and among the poor, rural population.

SOS Children’s Villages International

SOS Children’s Villages International is a nonprofit organization that operates in Panama, fighting poverty through assisting children. At each of its four locations – Panama City, Davíd, Colón and Penonomé – the organization supports the youth population by providing daycare, education, vocational training, playgrounds and sports facilities. In the case that children do not have a home to stay at, the organization provides families for them to stay with. By providing these means of assistance, the organization hopes to decrease the child labor that is prevalent in the region as a result of extreme poverty. With education more accessible and families less financially-burdened, the organization provides crucial resources to improve poverty in both rural and urban areas of Panama.

SOS Children’s Villages International has been operating in the capital city of the Chiriquí province, Davíd, since 1999. Davíd is a city with 180,000 inhabitants and its population is mostly reliant on its agricultural sector. However, 34.6% of the population lives in poverty, over 4,000 children in the province engage in child labor and 58% do not attend school. The organization has helped the children in this province by providing 13 SOS houses for them to live in, assisting them with education and other basic necessities.

While poverty in Panama is a significant issue, it has managed to reduce it in recent years. With continued attention by Panama’s government and organizations like SOS Children’s Villages International, the country should be able to continue its progression in making poverty a thing of the past.

– Mizuki Kai
Photo: Flickr

Man in Yemen, one of many countries affected by poverty in MENA
The Middle East and North African region, commonly referred to as MENA, is traditionally considered to include the geographical area from Morocco in northwest Africa to Iran in southwest Asia. Rich in history, culture and natural resources, this region consists of approximately 20 nations. As a result of vast reserves of oil, natural gas and petroleum, MENA has quickly grown in geopolitical importance. However, the region is also afflicted by persistent conflict and poverty. Here are seven recent trends in the rates of poverty in MENA.

7 Facts About Poverty in MENA

  1. MENA is the only region that has seen significant increases in extreme poverty. Between 2011 and 2015, extreme poverty in MENA has nearly doubled, rising from 2.1% of the population to 5%. As of 2018, an estimated 18.6 million people in the region are living on less than $1.90 per day. Additionally, studies have shown that the region’s population is particularly vulnerable to poverty. MENA’s poverty rates further increase when multidimensional poverty is included, which is an index of several poverty indicators including, among others, lack of education, poor health, standard of living and levels of violence. In 2017, the Arab Multidimensional Poverty Report estimated the total number of multidimensional poor at approximately 116.1 million – nearly 40% of the region’s population. Factored into the previous figures of poverty in the region, recent studies suggest that about 20% of the region is extremely poor, with an additional two-thirds of the region poor or vulnerable to extreme poverty.
  2. Class mobility is incredibly limited. Once a family falls into poverty, they are increasingly likely to remain poor for several generations. Largely due to insufficient job growth, much of the MENA population relies heavily on informal labor, such as unofficial taxi services or in-home services like cleaning or childcare. These forms of labor tend to be erratic, with low pay and minimal protections, yielding a larger population vulnerable to poverty with very few resources to pull themselves out of it.
  3. Recent studies suggest that MENA is the most unequal region in the world. Throughout the region, the top 10% of the population holds 61% of the wealth, compared to 47% in the United States and 36% in Western Europe. Many political and economic commentators in the region further suggest that this inequality has become deeply ingrained in the value system of the society as a whole, rather than just being the current condition.
  4. The increases in poverty are linked to conflict. The aforementioned increase in poverty between 2011 and 2015 was concentrated very heavily in Syria and Yemen, two nations that are experiencing intense conflict. The rate of extreme poverty in Syria has increased from nearly zero to about 20% over the course of its civil war. Similarly, extreme poverty in Yemen has doubled over the past decade, in line with its continued conflict. Despite the increasing number of people in poverty, these findings do indicate that major improvements in poverty in the region may not be too far off, considering the root cause is well known.
  5. Conflict has done severe damage to the region’s employment sectors. Even outside of the main crisis states, such as Syria, Libya and Yemen, the job market across the region has suffered greatly — either directly due to conflict or indirectly through sanctions, disrupted trade or population displacement. Throughout the early 20th century, the region relied heavily on its tourism, industrial, service and agriculture sectors. However, many aspects of these industries have been seriously impeded by persistent conflict. The International Monetary Fund estimated that the region needs to create between 60 and 100 million jobs by 2030, 27 million in the next five years, in order to significantly reduce unemployment and poverty.
  6. While it has undoubtedly created additional economic problems, the COVID-19 crisis has also inspired steps towards progress. Governments throughout the region took very cohesive and divisive steps from the beginning of the pandemic, restricting movement across borders and even within cities. Despite varied levels of outbreak preparedness, the MENA region has been notably effective in limiting the spread of COVID-19, with many countries beginning to ease travel restrictions and turn their attention toward phasing out of quarantine. The pandemic has had a major economic impact, particularly with the sudden collapse of oil prices. However, many in the region have been rather optimistic, considering this to be an opportunity for nations to begin addressing the systemic issues in the region, such as private sector development and social protections. Governments have been surprisingly receptive, with several states already mobilizing to protect both the public and private sectors.
  7. Governments have been largely ineffectual in dealing with economic problems, but the tides are turning. Largely due to persistent conflict, MENA regimes are typically focused on minimizing violence and war, allowing poverty to grow rapidly without policy changes. This has made the population especially vulnerable to recruitment by radical religious, ethnic or sectarian groups, such as Hezbollah and the Muslim Brotherhood. However, more recently we have seen an influx of civilians beginning to demand more from their governments — a call that political leaders are beginning to answer. Since the onset of Lebanon’s current economic crisis and subsequent protests, the Lebanese government has approved sweeping economic reform being referred to as a “financial coup.”  The World Bank has also projected modest continued growth in the economy of the MENA region overall.

The past 50 years have been incredibly tumultuous for the MENA region, characterized by an abundance of violence and poverty. As recent data has confirmed, the region’s poverty is not subsiding anytime soon and the succession of Western-backed conflicts is not helping. Despite these difficulties, the region is very quickly evolving into a state of uniform solidarity. With more regimes beginning to reject foreign intervention and more civilians addressing their governments directly, particularly in the cases of Egypt and Lebanon, structural change could come to the region soon. However, this area of the world continues to be a prime example of just how dangerous extreme poverty can be when mixed with conflict, both for the host state and the international system.

Angie Bittar
Photo: Flickr

Healthcare in Australia
Australia has a blend of public and private healthcare systems. While every citizen receives guaranteed public healthcare, the government encourages middle- and upper-class Australians to acquire private insurance if they make above around $62,000 per year. They pay a specific tax if they do not take out private coverage. Private healthcare facilities in Australia are generally “nicer” than public ones, with shorter waiting times and more attentive care — but they are also more expensive.

Younger Australians, generally healthier than the rest of the population, are growing frustrated with the private healthcare system’s rising out-of-pocket costs. As these young people lean away from private insurance and pay to stay on the public plan, premiums will rise for older and sicker Australians with private healthcare plans.

Care for Indigenous Populations

Indigenous Australians face greater barriers in the healthcare system than non-indigenous Australians. The United Nations has recognized human rights concerns in Australia when it comes to indigenous populations and their healthcare. There is a gap of around 17 years in the life expectancy of indigenous and non-indigenous Australians.

Wealth is a factor behind this inequality. Indigenous Australians earn only 62% of the weekly earnings of other Australians. Education barriers also make the healthcare system harder for indigenous Australians to navigate. The Australian government underfunds schools in majority-indigenous areas, and indigenous students are half as likely as non-indigenous students to continue onto year 12 of education. Higher levels of education usually lead to higher income, which makes the healthcare system more accessible. In addition, increased education can help people understand vital health information.

Reforms for Greater Accessibility

Wealth seems to be a common theme throughout the story of healthcare in Australia. While many are unsure of what to do, there is a consensus that things need to change. Some experts have suggested changing resource allocation and tracking patient care outcomes. With people waiting up to four months for healthcare treatments, some experts have argued that hospitals must become more efficient.

One notable organization working for change is Indigenous Allied Health Australia (IAHA), formed in 2008. This network connects indigenous members of the Australian healthcare industry — or those pursuing a healthcare career — to other indigenous people working toward health education, resources and research for their communities. It also provides cultural responsiveness training so that Australian healthcare workers can learn to better connect with indigenous patients. Overall, IAHA aims to increase indigenous participation in the healthcare industry and make healthcare more accessible to indigenous peoples.

Australia may seem like a progressive paradise to some Americans, but it has its flaws. Age, race and wealth all factor into how someone accesses healthcare in Australia. Groups like IAHA are working to make health coverage more equitable in a troubled system. They have made positive changes and provided the necessary training to marginalized communities that their government often neglects. The land down under still has a long way to go to create a fair healthcare system for all, but Australians may look toward a brighter future under improved policies and protections.

Tara Suter
Photo: Flickr

Top 6 Water NGOs in Latin America

A number of countries in the Latin America and Caribbean region are experiencing water crises which present an obstacle in achieving the U.N.’s Sustainable Development Goal of universal access to clean water access by 2030. Fortunately, there are a number of organizations actively working to help them get there as quickly as possible. Keep reading to learn more about the top six water NGOs in Latin America.

Top 6 Water NGOs in Latin America

  1. Founded in 2007, Water Charity’s first project focused on improving the health of garbage dump workers by providing water filters in Guatemala City. Since then, the NGO has executed numerous water missions throughout 12 Latin American countries, among other projects worldwide. Each of its projects is innovative and tailored toward the specific needs of the communities in which they work. For instance, through the Dajabon Latrine Project in rural northwestern Dominican Republic, 110 families now have access to safe and sanitary latrines. Moreover, the initiative strives to educate families on the importance of health and hygiene given Dajabon’s poor education system.
  2. Living Water International in Mexico has been working to improve water access, hygiene and sanitation throughout the country’s poorest and often most rural communities. With operations spanning from water systems to hygiene education, the organization aims to focus on the marginalized regions of southern Mexico. Living Water’s “Lazos de Agua” program from 2013 to 2016 promoted WASH (“water, sanitation and hygiene) services to 68,000 beneficiaries in Oaxaca and Puebla. The organization’s projects, such as a new initiative to serve beneficiaries in 65 Mexican rural communities, continue to emerge across the nation and beyond.
  3. blueEnergy knows that the most efficient way to create change is through community consultation and working with local actors. Recognizing the context of a changing climate, blueEnergy has delivered water and sanitation to more than 30,000 people in marginalized regions of Nicaragua. Regarding a recently built water filter, Victorio Leon, a resident of Bluefields, Nicaragua only had positive feedback. “This filter has helped me economically and helped me avoid being sick a lot of the time… now we know we can drink this water with confidence.” Indeed, according to the World Bank, lack of water and sanitation results in a loss of 0.9 percent of Nicaragua’s GDP. Promoting health, and ultimately economic opportunity is among blueEnergy’s primary goals.
  4. WaterStep recognizes that making a true difference in developing countries requires planning for the long-term. For this reason, the nonprofit educates vulnerable communities on why and how to use safe water solutions such as bleach making as well as how to use WaterStep’s on-the-ground technologies. One of its ongoing projects includes that in Ecuador, which began following the country’s 7.8 magnitude earthquake in 2016. Thousands of Ecuadorian survivors were misplaced and lacked any source of clean water. WaterStep responded to the situation by implementing water technologies and training people in refugee settlements on how to use this equipment.
  5. Water For People has targeted Honduras’ marginalized and rural regions such as Chinda and San Antonio de Cortés, since 1997. The NGO invests in public and private sectors alike to provide proper water and sanitation solutions. Since the nineties, Honduras has seen success not only in meeting the Millennium Development Goal of reducing the percentage of people lacking clean water by 50 percent. Moreover, at least 84 percent of the rural population now have access to improved water. Grassroots efforts such as those by Water For People are making clear steady strides towards achieving SDG goal six: providing clean and safe water to all regions.
  6. Solea Water acknowledges the clear inequalities between rural and urban Panama. While Panama City has seen outstanding economic growth in recent years, in marginalized indigenous areas, extreme poverty affects nine in 10 inhabitants. Consequently, clean water access remains a critical issue in these regions. One of the organization’s many projects includes work in Sinai, Panama, where seven in 10 people lack safe drinking water. In addition to implementing a municipal water system which utilizes sustainable technologies to pump water, the organization has supported WASH education to locals. Solea Water’s goals of better health, education and overall improved standards of living within regions like Sinai are made a reality through the organization’s tireless dedication.

What Happens Now?

While access to water has improved in poor and marginalized regions in-line with the decrease in global poverty, disparities remain. These disparities are clear between regions, where 94 percent of citizens in the United States and Europe have access to safe drinking water compared to 65 percent in Latin America and the Caribbean. Moreover, even larger disparities can be seen within a given region, such as the gap between urban and rural regions within Latin America. While 96 percent of citizens living in the Dominican Republic’s cities can obtain piped water, less than 25 percent of Dominicans in rural areas have this same access.

While the fight to universalize access to clean water and sanitation remains a pressing matter, these top six water NGOs in Latin America present the importance of civil society’s proactive planning, hard work and progress.

– Breana Stanski
Photo: Flickr

 

Rising World Hunger

According to a recent report regarding world hunger trends in 2018, titled “The State of Food Security and Nutrition in the World, ” over 820 million people worldwide are undernourished, up from 811 million in 2017. This is continuing a fairly recent trend of rising world hunger since 2016 when the number increased for the first time in over 10 years. Prior to that, world hunger had been decreasing at a fairly consistent, slow rate since 1992. This marked a trend of over 20 years.

History of Rising World Hunger

Overall, this is not the first time there has been an increase. From 2000 to 2005, numbers began increasing for the first time since 1992, before decreasing again. That trend continued for about ten years, decreasing at a solid rate until 2015. In 1992, the number of individuals undernourished in the world was just over one billion.

In 2015, the number was 784 million. Likewise, over 200,000 people were freed from hunger during this time. This is about a 22 percent decrease in the number of hungry people. This was all accomplished over the span of 25 years.

Why Rising World Hunger Is a Cause for Concern

Considering the history of overcoming an increase in world hunger, is this recent increase cause for concern? According to the UN report, it is still a cause for alarm.

The report details that world hunger is rising due to multiple supplemental factors. For one, the global economic downturn of 2008-2009 caused uneven recovery. It has also led to unstable GDP growth. Reliance on global commodities, which were disrupted around that time, has caused volatility and unpredictability in the economies of those countries. Due to these events, households often experience a decrease in purchasing power. As a result, they cannot purchase as much food.

What Can Be Done?

Economic stability would alleviate hunger for many people, so what can be done to increase economic stability in these countries? According to the UN, this has much to do with socioeconomic inequalities. In the report, economic growth is not always enough to ensure the reduction of poverty and hunger. Even if a country’s GDP is rising, inequality means that those of lower socioeconomic standing will not see nearly as much of the positive impacts.

The report ultimately calls for countries experiencing severe hunger problems to implement policy change in protecting the income of those living in poverty. Additionally, it identifies the need for diversification of economies to avoid over-dependence on global commodities. Reliance on more unstable commodities does provide massive short-term profits and boons for the GDP. However, that reliance damages the integrity of those economies in the long-term run.

Overall, the Food and Agriculture Organization of the UN believes there are ways to fight rising world hunger. Tackling inequalities via effective policy and strengthening the consistency of individual economies will be the keys to reversing this trend.

A Number of Efforts

Other nonprofit organizations such as Rise Against Hunger, The Hunger Project, and Heifer International are also taking the approach of targeting long-term stability in order to reverse the trend that world hunger is rising. For instance, Rise Against Hunger has initiatives in countries such as the Philippines, Vietnam, Cambodia, Nicaragua, Mali and Senegal. Each initiative focuses on giving impoverished communities the tools to become more economically stable. All of these organizations have their own similar initiatives which follow the UN report.

Ultimately, with the continued effort on the part of the UN, nonprofit organizations and individual action, world hunger can be overcome. Though world hunger is rising, the trend is still reversible. The fight is far from over.

– Jade Follette
Photo: Flickr

Facts about Poverty in Mongolia

Mongolia experienced a relatively democratic revolution in the early 1990s. As a result, the country formed a multi-party system, wrote a new constitution and even created new means of economic growth. Mongolia is abundant in resources and its economy has been supported by the country’s established mining and agricultural sector. The country also boasts some successes as it has worked to pass a variety of new legislation. For example, legislation that strengthens inclusive governance and reduces gender disparities. Despite engagement in its future, there are still challenges of continuing poverty in Mongolia. Furthermore, Mongolia faces a lack of access to equal opportunities that would improve livelihoods. Here are ten facts about poverty in Mongolia which present some of those challenges in more detail.

10 Facts About Poverty in Mongolia

  1. There has been a decrease in the prices of coal and copper – These were previously two of Mongolia’s main export products. This has influenced the decrease in growth percentage over the last decade. Compared to 11.6 percent growth in 2013, Mongolia has been experiencing decreasing economic growth in the single digits. In 2016, the growth percentage was at a low 1.2 percent.
  2. Development growth is reducing poverty rates – Though there has been a recent economic downturn, Mongolia’s overall development growth has helped to reduce poverty rates in the country. Poverty rates decreased from 38.7 percent in 2010 to 27.4 percent in 2012. That difference is greater than 11 percent.
  3. Poverty rates are barely decreasing – According to an estimation conducted by the National Statistical Office and the World Bank, Mongolia’s recent estimation in 2018 shows that 28.4 percent of the population is below the poverty line. This is a decrease of slightly over one percent from the 2016 estimate.
  4. Income inequality is continuing the cycle of poverty – What continues to reinforce poverty in Mongolia is its income inequality. Poverty rates are higher in rural areas compared to urban areas at 35.5 percent versus 23.2 percent. Subsequently, many people move to Ulaanbaatar. That is Mongolia’s most densely populated city, home to 60 percent of the population. The living conditions in the outskirts of the city lack basic services, resulting in a lower quality of life. For example, sanitation or primary education is not available there. Additionally, jobs in the larger city require more qualified skills which newcomers do not have. With these factors, poverty rates are constant and unemployment rates stagger in Ulaanbaatar.
  5. Rural areas lack access to sanitation – In urban areas, two-thirds of the population has access to working sanitation. However, in rural areas, only 36 percent of the population has access. In the poorest households of rural areas, slightly over 10 percent have access to those resources.
  6. The “100-Day Plan” aims to improve the economy – In April of 2014, Mongolia’s prime minister launched a “100-day action plan” intended to boost the economy. The plan has a 50-point agenda that covers various areas of the economy such as manufacturing and the development of small businesses, to lift more people out of poverty. An economic council oversees the action plan, jump-starts the projects and reports back to the Prime Minister. The plan works to address current needs but the country will need a sustainable strategy to benefit the economy and populations long-term.
  7. People who escaped poverty are in danger of becoming impoverished again – Even those who make it above the poverty line in Mongolia are vulnerable to slipping back under. In fact, this is a sign of unsustainable economic support. The National Statistical Office noted that this is due to the consumption level of people who get out of poverty being at the bare minimum. Their report presents that those who were above the poverty line in 2014 returned under in 2015 and 2016. This was due to sudden and negative socioeconomic decreases.
  8. There is a lack of educational opportunities – Families living in poverty, especially in rural areas, have trouble finding consistent and equal educational opportunities for their children. However, organizations like UNICEF are impacting changes in education among all students. The Basic Education Programme has assisted the Mongolian government in providing socioeconomic services to families in poor regions. Additionally, the program has helped to reduce secondary school drop-outs by 68 percent.
  9. Infant mortality is high – A vast household survey conducted in 2010 uncovered that infant mortality rates in rural areas are double that of urban areas. Additionally, children in poor households are three times more likely to be underweight than children in wealthy households. Growing up below the poverty line can influence a Mongolian child’s survival rate.
  10. Urban area populations are growing which can result in a geographical transfer of poverty rates – The World Bank stated that between 2016 and 2018, the poverty rate decreased by four percent in rural areas, though the rate is still high. It also increased by 0.1 percent in urban areas. Poverty is highly concentrated in these urban areas.

Looking to the Future

These 10 facts about poverty in Mongolia show that the country’s transition has come with many struggles in its fight to better people’s livelihoods. However, as the country gains more income, there is a chance for more diverse opportunities in job placement which will raise economic growth. As long as poverty-reduction measures are included in the development of the country, poverty rates can decrease in the future.

– Melina Benjamin
Photo: Pixabay

wealth in inequality in china
It is a well-known fact that China is one of Asia’s -and the world’s- wealthiest nations. In the past two decades, China has made strides in eliminating poverty by reducing 60 percent of the population living in extreme poverty in 1990 to 10 percent in 2010. However, using the Gini coefficient, an inequality measurement that ranges from 0-1, where 0 means complete economic equality and 1 means the richest person has all the income, wealth inequality in China verges on 0 .5, with 0.4 being regarded as the international warning level of dangerous inequality.

Unrealistic Precedents

The rising average income of 21,586.95 yuan or about $3,142.11 is not as realistic, however. The median income for China is 18,371.34 yuan or about $2,674.06. The downsizing of poverty and growing economy has not impacted all parts of China equally. There is still a large amount of wealth inequality in China. Depending on the region and type of economy, certain areas make more than others. According to 2015 data, Shanghai and Beijing, both very urban areas, make almost 50,000 yuan each, while the poorer, rural areas like Xizang, Gansu, and Guizhou make less than 40,000 yuan combined.

When data like living standards and housing prices are compared by province, there is a stark disparity between the economic conditions of rural and urban areas. Urban areas tend to make much more money than their rural counterparts. Along with this, despite rapid urbanization, 50.3 percent of China’s population, almost half a billion, is rural.

The Role of Education and Finance

One of the underlying causes of wealth inequality in China is the lack of education. Many rural areas lack access to schools and higher education, so although there is a large amount of higher-level jobs available, many Chinese cannot lift themselves up academically in order to access these jobs successfully. Because of this, rural Chinese are more likely to have lower-paying jobs or be self-employed in agricultural jobs. Thus, they will not make as much money.

Another cause of wealth inequality in China is that food costs are more. The Engel coefficient, which works the same as the Gini coefficient but measures food costs, is lower for urban areas than rural areas, even though urban areas have higher gross incomes. Housing is also less expensive in urban areas, leading to a higher surplus of disposable income for already-wealthy urban inhabitants.

According to China’s banking regulator, at least 50 counties in Tibet, Yunnan, and Sichuan are unbanked, which means they even lack access to banks and financial services. Rural Chinese lack a lot of other basic resources like cars and clean water as well.

Hope for the Future

While it may seem like not much is being done to help the rural poor, some policies are being put in place by China to address the issue. In 2013 China started its “35 Point Plan” also known as the Income Distribution Plan. It has goals to increase the minimum wage, spend more on public education and affordable housing, and provide overall economic security. In 2006, the Chinese government also abolished the agricultural tax and prohibited local governments from collecting fees. Social welfare policies and taxation reform, along with policies to improve the equality of education combined have slowly but steadily decreased the Gini coefficient to below 0.5 from 2008, which was its all-time high.

Nadine Argott-Northam
Photo: Media-Public