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Innovations in Poverty Eradication in Ethiopia

innovations in poverty eradication in ethiopiaEthiopia, officially known as the Federal Democratic Republic of Ethiopia, is located in East Africa. It has historically struggled to keep a majority of its population out of extreme poverty. In 1995, 71.1% of Ethiopia’s population lived on less than $1.90 a day. However, thanks to innovations in poverty eradication in Ethiopia, this figure has decreased to 30.8% as of 2015. The top innovations in poverty eradication in Ethiopia include economic development plans and the expansion of social services. Foreign aid from allied nations, like the U.S., has helped make these innovations in poverty eradication in Ethiopia possible.

Economic Development Plans

The main mechanism for successfully reducing poverty in Ethiopia is its chain of innovative economic development plans. Beginning with the Plan for Accelerated and Sustained Development to End Poverty (PASDEP) in 2005, Ethiopia has implemented a series of these plans. Each last five years in order to adapt to the new market. In 2010, the First Growth and Transformation Plan (GTP I) replaced the PASDEP. The Second Growth and Transformation Plan (GTP II) succeeded this plan in 2015.

The GTP II remains in place but is nearing the end of its five-year installment. The plan doubled down on the previous strategies’ prioritization of human resource and infrastructure development. As such, it has sustained economic growth in Ethiopia. This was most evident in Ethiopia’s huge spending increase in the education sector. Roughly one quarter of the nation’s total expenditures go toward education and training. Importantly, this far surpasses the allocated budget in every other nation in the region. Access to “universal primary education” also rose exponentially—an important milestone for the country. In addition, the plan called for large investments in roads, railways, power and agriculture.

The plan also focused on industrial development, strengthening the manufacturing industry to increase economic growth. Analyst for the Development Initiatives, Peace Nganwa, writes that “interventions that increase economic growth also contribute directly to poverty reduction.” Since the GTP II’s implementation, Ethiopia’s GDP has grown substantially. The total GDP grew from $64.6 billion in 2015 to $96.1 billion as of 2019, a whopping 48.8% increase.

Expansion of Social Services

Ethiopia’s focus on improved social services has dramatically increased the welfare of its citizens. Besides education, health, transportation, energy infrastructure and water and sanitation have expanded greatly. Health coverage in particular has been a priority for Ethiopia in the past few years. Substantial increases to healthcare funding brought Ethiopia’s access to health coverage to 98% in 2018. This was an important mark to hit, especially before the coronavirus pandemic reached the country.

Furthermore, water scarcity has historically been problematic for Ethiopia. The nation accounts for 7.5% of the global water crisis, affecting more than 62 million citizens. However, Ethiopia’s focus on the issue has helped reduce it significantly. This work has brought the country’s access to potable water to 66%. All of these social service expansions contributed to increasing the overall life expectancy of Ethiopians. Specifically, it now rests at 64.6 years.

International Assistance

Foreign development assistance made these innovations in poverty eradication in Ethiopia possible. In 2010, for instance, the $3.5 billion Ethiopia received in total foreign donations covered more than half of its spending. The largest contributor to this was the United States, giving $875 million.

As the nation plans another five years of poverty eradication measures, it faces one of the hardest challenges the world has come by: COVID-19. Ethiopia has proven that it can strategize to eradicate poverty within its borders. However, it needs assistance from foreign nations to make it truly achievable, now more than ever in the face of a pandemic.

– Asa Scott
Photo: Wikimedia

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Poverty Alleviation in Muslim-Majority Communities through Zakat

poverty alleviation in muslim majority communitiesZakat refers to the religious obligation for all Muslim individuals to donate a set percentage of their income each year to charitable causes. Due to the size of the global Muslim population, zakat could play a major role in poverty alleviation in Muslim-majority communities around the globe. Muslims make up about 22% of the world’s population. However, estimates suggest that roughly 35% of the 2 billion people facing poverty worldwide are in Muslim-majority countries. In their 2014 study on zakat, Isahaque Ali and Zulkarnain Hatta reported that over half of the population in Muslim countries are very poor. Further, the regions of the world with the most significant Muslim populations, including Africa and Asia, are facing increasing poverty levels.

What Is the Purpose of Zakat?

Zakat is one of the five pillars of Islam. As such, it is mandatory for all Muslims who have the means to meet their basic annual needs. Zakat is generally set at a minimum amount of 2.5% of income and total wealth. Muslims believe that giving zakat purifies the giver. Megan Abbas, assistant professor of Middle Eastern Studies and Islamic Civilization at Colgate University, spoke to The Borgen Project about zakat.

“The Arabic term ‘zakat’ can be loosely translated as purification, a fact that helps us understand the spiritual components of this practice,” Abbas said. “Specifically, giving zakat is often seen as a way to purify the soul of selfishness and to remind Muslims that their worldly wealth is not really theirs at all but rather exists thanks to the mercy and kindness of God.”

Many Muslims see poverty as both a social and religious problem. As a result, giving zakat aims to alleviate poverty and achieve socio-economic justice. Further, the Quran explains that zakat should reach certain groups of people in need. This includes those who have no or few means of livelihood, zakat workers, new Muslims, those who are indebted, stranded travelers and enslaved people.

“Zakat is also tied to Islamic conceptions of egalitarianism and socio-economic justice because it mandates economic redistribution from the wealthy to the marginalized and poor every year,” Abbas said. “This redistributive function complements other aspects of Islamic economics, including the prohibition on interest-bearing loans and exhortations to engage only in fair and transparent business contracts.”

The Potential Impact of Zakat

Zakat is an underutilized resource for poverty alleviation in Muslim-majority communities and non-Muslim communities around the world. The Guardian reported that zakat is one of the largest redistributions of wealth. Estimates suggest that between $200 billion and $1 trillion goes to zakat annually. In comparison, experts predict that ending global poverty would cost only $175 billion per year for 20 years. As states within the Organization of Islamic Cooperation increase their amount of humanitarian aid to 14%, zakat will rise. As such, the potential of zakat for poverty alleviation in Muslim-majority communities increases as well.

Noor and Pickup of The Guardian believe zakat address the United Nations Sustainable Development Goals (SDGs). This would help meet the $2.5 to $3 trillion annual funding gap to achieve the SDGs. Importantly, this aligns with zakat’s socio-economic goals. The World Bank also acknowledges the potential of Islamic financing to achieve the SDGs. Specifically, zakat can help by closing financing gaps and building affordable housing with the help of technology to organize zakat funds.

How Zakat Can Help Fight Global Poverty

The Guardian reported that only one-quarter of global zakat goes to formal donations. In fact, Muslims give the majority of zakat individually and casually. This leaves an opportunity for a more organized donation system. Such a system could have a greater, sustained impact on poverty alleviation in Muslim-majority communities.

There are a variety of ways to collect formal zakat. One way is through the government, in a system that may resemble a tax or state collection directly from bank accounts. Organized zakat could also go through independent collection agencies specific to a chosen cause. Finally, mosques could collect funds to spend themselves or redistribute to other organizations.

Chloe Stirk of Development Initiatives outlines important steps to increase the impact of zakat. Stirk promotes greater collaboration between humanitarian organizations, Islamic scholars and academics. This would improve collection and distribution as well as increase revenue. In addition, Stirk’s process encourages more tracking and documentation of zakat. This could create a zakat fund, allowing for streamlined distribution locally and internationally. However, the logistical and ideological challenges of streamlining zakat extend beyond the global Muslim community.

In the Journal of Global Entrepreneurship Research, three researchers propose that zakat could best be used in a “small business entrepreneurial framework.” Instead of a zakat fund, they suggest global interest in entrepreneurship to address poverty. Few entrepreneurs in the Muslim world make this an ideal space for development.

Demonstrated Success of Zakat

Case studies on zakat funds show immense success and powerful potential in poverty alleviation in Muslim-majority communities. Indonesia, home to the world’s largest Muslim population, demonstrates this. There, zakat has an estimated value of 1.59% and 3.82% of the country’s GDP. This equates to $13.8 billion to $33.2 billion each year.

Indonesia has already begun to incorporate zakat into poverty alleviation systems with two centralized zakat organizations. As a result, zakat is an essential method of redistributing wealth to support those in poverty in Indonesia. Further, the amount of zakat collected by institutions continues to rise. Indonesia’s success with zakat suggests that this is a promising method of poverty alleviation in Muslim-majority communities worldwide.

– Emily Rahhal
Photo: Flickr

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Initiatives to Improve Lives in South Sudan

South_SudanThe Republic of South Sudan is the newest country in the world, founded in 2011 following a secession from Sudan. The secession resulted from years of bloody civil war in Sudan. However, as recently as 2013, there was a new wave of conflict in South Sudan, with more than two million people displaced from their homes in the past two years. With this conflict, people are unable to maintain agriculture or other jobs, and food prices are rising. The poverty as a result of this conflict is leaving people malnourished and without access to food or clean water. Thankfully, some organizations are coming up with initiatives to improve the lives of the South Sudanese.

Organizations and governments initiated different forms of help for the situation in South Sudan. Some of the main strategies have been promoting peace, increasing access to food and sanitation, and encouraging foreign investment.

Oxfam America, a nonprofit organization aiming to “fix the injustice of poverty,” has initiatives to combat multiple issues caused by poverty and conflict: improve access to clean water, food and sanitation, and promote peace. Some of the response includes rebuilding wells and sanitation facilities for hospitals. In order to further people’s self-sustainability, Oxfam also gives materials to help communities get food, such as seeds and fishing equipment. For Oxfam, initiatives to fix issues caused by poverty is the focus, while for others, the encouragement of international investment is the way to help South Sudan.

South Sudan has mineral deposits and oil reserves. The South Sudanese government is encouraging foreign investors to invest in this sector of the economy. They formed the Investment Protection Act of South Sudan in 2011 to protect the land and intellectual property rights of national and foreign investors.

The African Centre for the Constructive Resolution of Disputes, or ACCORD, is a South African organization aiming to relieve conflict in Africa. ACCORD has a South Sudan Initiative, or SSI, which focuses on building and maintaining peace between Sudan and South Sudan, as well as among the South Sudanese citizens. Some of the conflict identification and resolution efforts include “coordinating the efforts to develop a standardized conflict management training toolkit,” and “providing conflict management, mediation, and negotiation trainings for South Sudanese, officials, diplomats” and “United Nations Mission in South Sudan civil affairs officers.”

Some see bolstering the economy as the solution that will better the lives of those in South Sudan, some view access to sanitation and food as the place to start, and some believe peacebuilding techniques will help end the conflict and give way to a healthier, more efficient society. While separately, these initiatives may not combat every issue that exists within the complicated and historical conflict in South Sudan, with all of these initiatives acting simultaneously, a better future for the South Sudanese seems possible.

– Rachelle Kredentser

Sources: Accord 1, Accord 2, About, Oxfam America, Oxfam America 2, Goss-Online
Photo: Flickr

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Improved Data Standards Will Improve Development Efforts

data_standardsSetting higher standards for data reporting and compatibility is essential to track and foster progress in initiatives all over the world. That’s why two networks, Development Initiatives and Publish What You Find, are heading a project to develop more universally applicable data standards and help organizations and projects transform their data to match the new standard.

Improving data standards for organizations, particularly those administering aid in countries abroad, will help elucidate the work being done and facilitate collaboration and communication between groups in different sectors. These standards also allow for interoperability, which is defined as the ability for technology and software systems to communicate, exchange data and use this data for researchers to draw conclusions about projects.

Needless to say, higher standards for information will improve the efficiency and speed with which organizations analyze and improve their efforts and also allow them to share their efforts with other groups who can replicate them. Doing so will not only improve the way information it is collected but it will also make it more widely available — improving access to and understanding of the latest projects organizations all over the world that they are engaging in.

In investments directly related to foreign aid, such as those in healthcare, education, agriculture and water access, higher data standards will allow organizations to share the outcomes of their projects with donors who can track the flow of their funding. They can also publicize their findings with other organizations that can then compare and collaborate to find more efficient, cost-effective solutions.

Something as seemingly small as transforming and improving the way with which organizations report their statistics can make drastic improvements to people’s health and way of life all over the world. Examples of this are logging administration and efficacy of immunizations, schools or communities with the highest risks, spread of disease and robustness of food resources. Interoperability allows organizations and donors to link up and improve the work they are doing.

Development Initiatives and Publish What You Find hope their data allows people to make more efficient use of data, whether by directing the flow of funding or improving aid projects. Efforts like these will improve access to information on development flows and therefore their efficiency. This project is ambitious in its design of overhauling sector-level systems, but the change it will bring about will be much broad, influencing the lives of people all over the world.

– Jenny Wheeler

Sources: Omidyar, Devinit
Photo: University of Mary Washington

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Global Foreign Aid Reaches $22 Billion

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The Development Initiatives research group reports that the total amount the world’s governments and private organizations spent on foreign assistance rose to $22 billion in 2013, the highest ever recorded. Private aid was $5.6 billion, an increase of over $1 billion from 2012, while government aid was $16.4 billion, about $3 billion higher than the amounts spent in the previous five years.

Most governments in developed countries considerably increased their international assistance spending last year. The United States in particular spent 18 percent more than it did in 2012 and contributed the most money of any country at $4.7 billion. Other countries, like Brazil and China, saw 97 percent and 84 percent drops in spending respectively, but most, including the United Kingdom, Japan, Canada and Germany, as well as the European Union governmental organizations, increased their foreign aid investments.

Why did governments increase their foreign aid spending so suddenly? Much of the aid increases occurred because of worsening violent conflicts and natural disasters around the globe. Much of the private aid increases went to help rebuild the Philippines after Typhoon Haiyan, while other aid went to help victims of clashes in South Sudan,the Central African Republic and Syria.

Syria in particular has received enormous support to help victims of the civil war. According to the World Bank, global aid to Syria increased from $335 million in 2011 to $1.67 billion in 2012, and that number continues to rise as more countries offer help. Turkey was the third-highest foreign aid donor after the U.S. and the UK because of its $1.6-billion effort to care for Syrian refugees. Even Kuwait, a small country not known for its foreign aid budget, raised so much money for Syria that its aid spending increased by 2,315 percent in 2013.

Despite this recent surge in funding, governments tended to concentrate their foreign aid spending on specific countries. The World Bank found that Afghanistan, the country receiving the most aid, got nearly $7 billion in 2012, but many countries in need received substantially less. “Just under a quarter of the total international humanitarian response went to the top five recipient countries, while other countries such as Nepal, Myanmar and Algeria continued to be de-prioritized,” said Dan Coppard, Development Initiatives’ director of research. World Bank data shows that Algeria received less than $200 million in 2012, while Nepal and Myanmar got less than $1 billion.

What does this new spending mean for long-term foreign aid policy? On one hand, it demonstrates that nations are willing to come together and offer help to suffering people. However, they responded to immediately visible natural disasters and conflicts, and there were many countries in need that received very little help. The desire to give foreign aid exists, but advocates must work to make issues requiring international development spending more visible and relevant to governments and their constituents.

– Ted Rappleye

Sources: The Guardian, The World Bank
Photo: NY Times

Ultimate Value of Millennium Development Goals

millenium-development-goals-value
Not all of them will be met, but that does not mean that they have not been effective. The deadline for the Millennium Development Goals (MDGs) will expire at the end of this year, and certain goals, like universal primary education and reducing maternal mortality by 75%, won’t be achieved. But the progress towards these goals is undeniable, and, while it may be hard to quantify, these gains likely would not have occurred without the MDGs.

The goals have effectively highlighted certain issues. The U.N.’s developmental outline was embraced by a multitude of countries upon its release in September of 2011. As such, it has been a focus of the international policy and development strategies of many countries, as well as providing a yardstick against which to measure progress.

While progress can be attributed to many diverse factors, including individual countries’ economic growth or political stability, one area where the impact of the MDGs is clearly perceptible is in foreign aid. Global aid reached $128 billion in 2009, twice that of a decade earlier. The majority of that aid is going to the world’s poorest countries, particularly for organizations including the Global Health Initiative, the Global Climate Initiative, and Feed the Future.

These initiatives, as well as all other aid and funding aimed at reaching the Millennium Goals, have already reached millions of people globally. And already in the works is a framework for a new set of development goals, to supplant the current MDG’s. For the long term, the impact of the Millennium Development Goals has only just begun.

– David Wilson

Sources: Christian Science Monitor
Photo: Oxfam