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How the Breakdown of the Nuclear Deal has Affected Poverty in IranAs the relationship between Iran and the U.S. deteriorates, Iran’s quality of living is plummeting, the cost of living is soaring and Iranian citizens are feeling the pressure.

Since the dissolution of the Joint Comprehensive Plan of Action, more commonly known as the Iran Nuclear Deal, in May 2018, extreme hardship has hit the West Asian country. Economic sanctions that were thwarted by the nuclear agreement have been reimposed and are damaging Iran’s oil and precious metal sectors, handicapping the country’s export potential.

The primary component of the economic decline is the dent that sanctions are making in the oil sector–which, according to the World Bank, accounts for two-thirds of Iran’s economic growth.

Post-Breakdown Economic Turmoil

Iran’s oil production has already fallen steadily every month since the breakdown of the nuclear deal, according to the U.S. Energy Information Administration, and the resulting impact on the economy is devastating. On April 2019 the World Bank reported that Iran’s economic growth slowed to 1.8 percent in the first quarter of 2018/2019–down by 4.6 percent from the previous year. Compounded with years of corruption and mishandling of public funds, the breakdown of the nuclear deal has positioned the Iranian economy in a state of stagflation (negative GDP growth) estimated to continue until April 2020.

Compounding the decline in GDP, the national currency has depreciated by around 60 percent on the U.S. dollar. An IMF senior official revealed that the inflation rate could reach 40 percent by the end of 2019. This economic turmoil has reduced accessibility to living essentials, increased societal instability and swelled poverty rates.

Increased Poverty

The World Bank reports that the upper-middle class poverty rate, which is classified as at or under $5.50 PPP (Purchasing Power Parity), is at an estimated 11.6 percent for 2018/2019 and forecasted to grow to 12.6 percent in 2019/2020.

It is essential to note that $5.50 PPP is not daily income–that figure is usually much lower. According to the Global Basic Income Foundation, PPP is defined as the amount a person can afford to spend on any given day, taking into account both earnings and savings. To put this into perspective, 11.6 percent of people in Iran could not afford to buy something today that costs $5.51.

Higher Prices

With the reimposed sanctions resulting from the breakdown of the nuclear deal, accessibility to living essentials is rapidly shrinking. Even humanitarian organizations struggle to acquire adequate supplies to carry out their work due to soaring prices.

A recent report from the Statistical Centre of Iran reveals eye-opening inflation statistics. Between 2018 and 2019, the price of food and drink increased by 43.5 percent,  clothing and footwear by 33.9 percent, housing and utilities by 18.2 percent and health and medical services by 18.8 percent. The overall Consumer Price Index is up by 30.6 percent.

The amalgam of decreasing wages and currency devaluation is restricting Iranian citizens’ ability to acquire necessities. The World Bank expects Iran’s poverty rate to rise to 12.8 percent by 2021.

Humanitarian Response

With poverty levels rising in Iran, humanitarian agencies are stepping up to meet the need. Moms Against Poverty is a nonprofit organization that is working to alleviate poverty in Iran through hunger relief, education and orphan care. Since the breakdown of the nuclear deal, Iran has had a 6.3 magnitude earthquake and major flooding. Moms Against Poverty provided natural disaster victims with food, water and blankets, distributed safe heaters and helped rebuild and furnish health clinics and pre-schools in the flooded areas. The organization also funded 2,000 food baskets for the Persian New Year across three Iranian provinces.

The breakdown of the nuclear deal has been economically painful for Iran. Tensions have only risen since the reimposition of sanctions and, as of now, show no signs of alleviating. There have already been multiple conflicts between the U.S. and Iran in the Strait of Hormuz, Iran’s main shipping route, since the breakdown.

Organizations like Moms Against Poverty provide some poverty relief and help the quality of life for many citizens. However, relief on a nationwide scale could be achieved if U.S.-Iran relations are restored or if Iran can boost its economic growth and halts the devaluation of the national currency. For now, the citizens of Iran are feeling the pressure.

– Zach Brown
Photo: Flickr

Hospital Infrastructure in VenezuelaVenezuela— Since their declaration of an economic crisis, hospital infrastructure in Venezuela has been depleting. In the midst of the economic chaos, hospitals are being flooded with patients who are exposed to its decaying environment.

During a walk-through of Jose Manuel de Los Rios children’s hospital in Venezuela’s capital city Caracas, BBC spoke to Dr. Urbina-Medina in regards to the quality of the hospital. Medina compared the hospital to a building site, saying that it was not how a hospital should be.

Many hospitals in Venezuela have peeling walls with exposed pipes and electricity cables. Patient rooms are often full of trash and dirt. Electricity is faulty, leaving several lights not working. There are not enough operating rooms for surgeries. There is also a major problem with sanitation. Venezuela has little to no money to repair their decomposing hospitals. There is little access to clean water, which has caused several patients with kidney failure who attended Jose Manuel de Los Rios to contract an infection. After further inspection of the water tanks in the hospital’s basement, garbage, shoes and a dead cat were found inside.

In instances of electricity blackouts that shut down machines used for live-saving procedures, doctors have resulted in manually pumping oxygen into premature babies’ bodies. Since there are not enough operating rooms in good shape, patients stay on wait lists longer than expected. The new way of operating is improvising. Since there is little access to proper supplies and the hospital environments are in disrepair, doctors have to find any way to provide the help their patients need.

The failing economy has not only caused problematic hospital infrastructure in Venezuela, but medicine shortages have increased mortality rates. In 2016, 11,500 infants died and 756 women died during or after childbirth. Many people need more than one type of medicine to assist them. Unfortunately, it can be difficult to find just one of the list of medicines needed. If the medication is found, often the price is too steep to purchase. For instance, a patient who needed an antibiotic that cost 40,000 bolivars, or 56 U.S. dollars, per packet of six could not afford the quantity needed, which was 224 blisters total. The amount of bolivars needed to buy just one packet is equal to the monthly wage for many. Jose Manuel de Los Rios Hospital has run out of antibiotics and medical supplies such as inhalers, bandages and syringes. Their lack of machines, especially x-ray machines, has delayed the diagnoses of possible brain-related issues in patients. The lack of antibiotics specifically has caused many to lose limbs because of severe infections.

Foreign Minister Delcy Rodriguez has been working with United Nations organizations such as the Pan-American Health Organization in order to assist in the shortage of medications. Their assistance has helped them to negotiate with suppliers to provide more affordable medicine to countries like Venezuela. With assistance from various organizations, improving hospital infrastructure in Venezuela is a possibility and it needs to be seriously prioritized.

– Brianna Summ

Photo: Flickr

 

Education in Spain

Education in Spain is a broad and extended topic. Although the federal form of government in the country resides in Madrid, and is lead by the prime minister Mariano Rajoy, the country is divided within 17 autonomous regions that have smaller forms of government within each one. This leads to some schools in Spain teaching Spanish in the particular dialect from each region, such as in Catalonia, the Basque country, Galicia and more.

The Spanish schooling system is divided within three categories: public schools, private schools and state-funded private schools. Regardless of public schools being completely funded by the state, thus free of charge for the students who attend such schools, class materials, books and sometimes uniforms still need to be paid with citizens’ own money.

Sunken within the 2008 economic crisis, the European country of Spain has just now started to recover its economy and generate interest, breaking the loop that has positioned the country at the second highest unemployment rate within the European Union, Greece taking the first place. The sector that has been most affected by the economic crisis of the past several years has been public education in Spain. This issue has been a notoriously increasing one since the economic crisis started, due to extreme budget cuts on the public schooling system within the European country.

Prime minister Mariano Rajoy declared José Ignacio Wert as the minister for education in the year of 2011, and from then to 2015, when Wert was substituted by Iñigo Méndez de Vigo, education was greatly affected. From the year 2012 to 2013, public schools’ teaching systems declined when sharp cuts forced the government to leave up to 25,000 teachers unemployed. Public universities’ tuition fees increased by 66 percent, taking Spanish citizens out on the street to protest the dreadful management that increased the numbers of people who could not afford education for their families.

The main consequence regarding these issues has been the increase of school dropouts, which stood at an alarming rate of 25 percent in 2014, the highest school dropout rate in the European Union. However, there is good news. Even with high levels of poverty, education in Spain was ranked as having the 12th lowest inequality gap for students of all the countries in Europe.

Spanish residents fight for a better schooling system and education in Spain everyday. The lack of teachers, economic resources and the increase of students per class have lead to a series of educational strikes in order to make the Spanish government understand and respond to the gravity of the issue.

Paula Gibson

Photo: Flickr

Economic Crisis in VenezuelaOn Saturday, May 14, Venezuela’s president, Nicolas Maduro, issued a state of emergency in response to widespread discontent that had risen throughout the country. Protests and calls for a reform in the government came about because of the historic economic crisis in Venezuela.

Since the beginning of 2015, inflation within the country has been on a steady increase. During the months of June and July, it began to accelerate upward. By the close of the year, Venezuela was left with an inflation rate of 180 percent, the highest in the world. This has led to deficiencies in food, medicine and hygiene products.

However, the recent explosion of economic inflation is only a symptom of deeper troubles within the economy that have been building for the past years. Many are criticizing Venezuela for failing to diversify in products and services. Gretchen Bakke of the New Yorker summarized the economic crisis in Venezuela using the adage, “putting all its eggs in one basket.”

Various occurrences have led Venezuela to the brink of economic collapse, but three in particular bear mentioning:

1. Venezuela’s Dependence on Oil as a Profitable Export

Petroleum products made up roughly 93 percent of the $63 billion in exports that Venezuela made in 2014. This is not surprising, since Venezuela is sitting on the largest proven oil reserves in the world. Historically, various Venezuelan presidents have used petroleum production and exports to increase development, yet they failed to diversify their economic productions. In the 1920s Venezuela registered a third of its GDP as agricultural products, but almost a century later, these products make up six percent of GDP and less than one percent of the country’s exports.

Its identity as an oil-producing state has served Venezuela well in the past, but the tide is turning. With lifted sanctions on Iranian petroleum and increased oil production in the United States, Canada and Iraq, petroleum prices have been driven down by a saturated global market. The New York Times reported a barrel of oil to be 70 percent cheaper now than it was two years ago.

2. Venezuela’s Dependence on Water as its Primary Electricity Source

Almost 80 percent of Venezuela’s electricity comes from hydroelectric power. The international community has recently been pushing for cleaner energy (that which does not rely on fossil fuels) and hydroelectricity is one way to achieve these goals. However, hydro-power can be problematic when water turns into a limited resource.

Venezuela has currently been suffering through a three-year drought which many are attributing to El Niño, an intermittent weather pattern that has been accentuated by the recent rise in global temperature. In addition to the normal problems that are generated by water shortages, Venezuela is now facing a shortened work week due to the rationing of electricity for the many shortages.

These newly-prescribed measures are criticized for accelerating the process of economic collapse, since workers now have a shortened period in which they can earn money to pay for the necessities of life.

3. Venezuela’s Unipolar Political System

For years, the socialist party has dominated the branches of the central government, and in the recent escalations of the economic crisis in Venezuela have caused the government to “become more authoritarian,” as the Council on Foreign Relations wrote.

In December of last year, the opposing party finally took control of one part of the government, The National Assembly. Though a referendum is being constructed to oust Maduro from his seat, very few immediate solutions are being proposed to relieve the collapsing economy.

The economic crisis in Venezuela is provoking protests throughout the country. Various citizens of the country told the Wall Street Journal that they have to stand for hours in line to receive a small portion of food for the day. These individuals have hopes to change the trajectory of their nation, and with the majority of the people on their side, they may still have time to do so.

Preston Rust

Photo: Flickr

stock_markets
The recent collapse of the Chinese stock markets has been tumultuous. Millions of Chinese middle-class citizens were caught up in the fervor; many of the stock-buyers have been Chinese without high school diplomas. Many observers in the west had feared that the meteoric growth of the stock markets in China was unsustainable. In 2014, the Shanghai Composite Index rose 21 percent in one month alone — a warning sign to many that this type of growth could not continue forever.

Since the beginning of the falling stock prices, at least 3.2 trillion dollars in value has vanished. The bubble was seemingly inflated — in part with government encouragement — with lax policies put in place to encourage further investment in stocks. Many people began to pour savings and accrue debt in order to pump more money in the over-valued stock prices. The government’s role in encouraging the bubble has now led to a loss of face for Chinese leadership and policy makers.

The ramifications of the Chinese stock market collapse could be widespread. A large fraction of the investments made were done not by large businesses or businessmen, but by middle class urbanites and even rural villagers. Much like the housing bubble in 2008, a tremendous loss in assets for middle and lower class Chinese could be hugely detrimental to the country. In light of the fact that the Chinese economy has been attempting to transition into a more consumer-based economy and the slowdown in growth in recent quarters, this financial crisis could be a major setback in China’s economic ambitions for the future.

The loss of value for stocks owned by every-day Chinese citizens means that demand would suffer and begin the cycle into lower economic health and greater uncertainty about the future of the markets. In general, an economic downturn is bad for everyone, from the most impoverished, to the well off. The poor in China will almost certainly suffer more, should the economy take a turn for the worst.

The Chinese Government has taken strong steps towards avoiding a complete collapse in stock prices. Pouring money into the teetering markets, the government is attempting to push back against the tide of sellers and avoid what many consider to be inevitable. Forty percent of stocks have stopped trading in an effort to stop the bleeding prices, but many argue that this is will do little. Market corrections will occur regardless — the bubble has already popped.

The secret is out — the majority of these unsustainably growing stocks belong to companies who are simply not worth even close to the price tag. Many of these Chinese companies have suffered huge blows to their reputation and legitimacy. Stopping trading is more likely than not, a desperate measure to allow for some leeway and time to think. The market is no longer in a psychological craze, and all the freezes will do is delay the inevitable market corrections.

The real question now is, how much value will be lost and how much will this hurt the middle and lower classes in China?

Martin Yim

Sources: New Yorker, Bloomberg 1, Bloomberg 2
Photo: Gbtimes

Economy Failing Japan
Japan is currently facing a dour economic situation comparable to  2011, when a tsunami struck Japan’s eastern coast. Following the tsunami, Japan’s economy started to shrink to 6.9 percent and is now down to its lowest rate since the environmental disaster.

Economists attribute Japan’s most recent third-quarter recession to lack of investment in housing in addition to a rise in taxes enacted as a part of a series of reforms. The value-added tax (VAT) has caused the world’s third largest economy to shrink into recession.

The unpopular rise in taxes comes at an unfortunate time for current Prime Minister Shinzo Abe who is seeking reelection.

Another burdening issue for Japan is the vast economic debt it has garnered. The debt is due to the inequality between revenue and expenditures and Tokyo’s inability to address this serious problem.

As a major player in the world economic system, Japan’s recession is affecting U.S. markets as well. It could negatively impact the U.S. economy because Japan consumes a large number of U.S. goods as its fourth-largest trading partner. A surprising number of American-brand luxury retailers rely on Japanese consumers to buy their products.

On the bright side, however, the country is currently projected to increase the quantity of exports as demand is likely to rise. Japan is currently pursuing low interest rates offered by the central bank on long-term borrowing. This will allow Japan to rise slowly out of public debt while not incurring the backlash of high interest rates.

Prime Minister Abe outlined a three-step solution to resolve the economic crisis in 2012. First, the Bank of Japan increases inflation followed by increased government monetary spending including a hefty stimulus package. The last step of “Abenomics,” as the Prime Minister’s plan has been dubbed, is to completely restructure the system by implementing tax cuts and other long-term reforms.

Abenomics is essentially the coupling of short-term policies with long-term, structural reforms aimed at strengthening the overall economy. However, the projected benefits of “Abenomics” have yet to be seen and increased taxes have plunged the economy into recession.

Eventually the system is meant to result in higher wages that will allow an increase in consumer spending over time.

Maxine Gordon

Sources: Yahoo Finance, The Economist, Trading Economics, CFR, Reuters
Photo: Foreign Affairs

isler_miss_universe
Last week, Venezuelan Gabriela Isler became the sixty-second Miss Universe. The twenty-five-year old won the title during the greatest economic downturn in her country’s history.

Venezuela possesses the largest known oil reserves in the world but nearly 60 percent of its population is considered poor. Inflation continues to plague the country, rising to over 50 percent in the last year alone. And the current exchange rate has fallen to 6.3 bolivars for each U.S. dollar.

In an effort to combat the economy, President Nicolás Maduro mandated that prices be lowered in stores around the country. The mandate is the result of the government’s recent decision to grant Maduro power to rule by decree without legislative support.

Moreover, the country’s national debt has increased in recent years. Recent figures estimate that Venezuelan business owners owe between $700 million and $1.2 billion to their Panamanian suppliers.

In spite of its economic woes, Venezuela has continued to lend support and resources to maintain its participation in the Miss Universe pageant. Isler became the seventh Venezuelan to win the coveted title on November 9.

Along with the other contestants, Isler stayed at the Crowne Plaza World Trade Centre in Moscow whose accommodations cost between 6,500 to 95,000 rubles or $197 to $2,900 USD per night. Several candidates arrived as early as October 21 to prepare for the event.

The 86 participants also enjoyed products from a variety of luxury sponsors including IMAGE skincare, Yamamay swimsuits and Chinese Laundry shoes.

As the newest Miss Universe, Isler was asked to unveil a $1 million swimsuit designed by Yamamay for the occasion.

– Jasmine D. Smith

Sources: The Guardian, BBC, IB Times, Miss Universe

farm_girl
According to the annual report from the Organization for Economic Co-operation and Development (OECD), government support for agriculture rose during 2012, ending a long-term downward drift and reversing the record lows recorded in 2011.

This support was documented in the 47 leading farming nations, which provide nearly 80 percent of the global farm output. This includes seven “emerging economies” that will soon be major players in the food and agriculture markets.

The OECD defines “support” as transfers to agriculture from government policies designed to support it. This money comes from consumers and taxpayers. This year, the Producer Support Estimate has risen to 17 percent of gross farm receipts in 2012 from 15 percent in 2011.

OECD Trade and Agriculture Director Ken Ash said wasteful policies of the past need to be moved away from to make sure “much needed innovation” is fully funded. This will also allow farmers to “respond to market signals” and governments to support wide-range farm reform.

Though this report saw a general rise in government support, the levels per country of this support vary widely. The highest support that countries recorded saw further increases, and countries with relatively low support continued to fall.

Some of the countries that saw sharp increases in this support have begun turning their policy toward a focus on self-sufficiency, according to the OECD. They also said food systems would be more efficiently improved by developing “safety nets” and reducing poverty.

The OECD said several multi-dimensional efforts are necessary to raise domestic production and improve access to imports and export markets. These efforts would also allow for the construction of emergency food reserves.

The report released by the OECD said “public investments for the sector overall should receive more attention.” They suggest investments that have “high social returns in the long run,” such as education, research and development, technology, and advisory services.

Food safety and food quality assurance systems contribute to long-term profitability, the OECD said.

– Alycia Rock

Sources: The OECD Newsroom, OECD Report, Huffington Post
Photo: Feather Down

 

US_revolution_occupy
A little more than 12 years ago, Americans came together to support one another after one of the worst terrorist attacks on U.S. soil. But after a decade of costly wars, financial calamities, cuts to social programs, political gridlock, corporate welfare, and massive surveillance leaks, Americans are anything but unified. In fact, some say that the U.S. may be ripe for revolution.

While revolution is a prospect that nobody can accurately predict, there are certain factors that may help determine the probability of a social uprising. One relevant factor is that revolutions often occur in sequential patterns with one social movement spurring another, as was the case in the aftermath of the American and French revolutions.

In the last few years, the world has witnessed the Arab Spring, as well as uprisings in Greece, Turkey, and Bangladesh. Subsequently in the U.S., dissident groups such as Occupy Wall Street and Strike Debt are advocating a revolutionary approach to bringing about political and economic change.

While this may all be coincidence, it may also be the manifestation of a collective sense of frustration with the current cadre of politicians, authorities, and financial elites. Another important factor in all of this is the widening gap between the ultra-wealthy and the ultra-poor. Logical deduction suggests that a growing class of people struggling to sustain their livelihood would destabilize social, cultural, and political balances to such a degree that an adjustment would be necessary. That adjustment, of course, is revolution.

In the U.S., economic stagnation and austerity measures are making it more difficult for lower class Americans to maintain a modest standard of living. The economics of the system are simply not sustainable. In circumstances such as these, governments are tasked with protecting and defending the well-being of their citizens. But in the U.S., politics has devolved into corporate-backed kabuki, culminating with a do-nothing Congress and a government shutdown.

Though the U.S. may be far from revolution, the symptoms of social distress are becoming more readily apparent. Chris Hedges, in a recent article entitled “Let’s Get This Class War Started,” wrote, “It is not a new story. The rich, throughout history, have found ways to subjugate and re-subjugate the masses. And the masses, throughout history, have cyclically awoken to throw off their chains.”

Are we experiencing one of those grand cyclical awakenings or a mere blip in the comedy that we call human history? It may not matter for many Americans, but for others it may well be a clarion call to advocacy, activism or rebellion. Perhaps, there is a new generation of John Browns, Jean Paul Marats, Ghandis and Malcom Xs coming up through what remains of the American education system.

Regardless of outcomes, one element in all of this already feels very certain: there is a revolutionary spirit in the air.

Daniel Bonasso
Sources: Truthdig, Salon
Photo: Waging Nonviolence

Karl Marx Correct Income Inequality Communism Socialism Wealth Redistribution
Was Karl Marx correct? Considered one of the fathers of modern communism, Karl Marx is not exactly a celebrated figure in western culture. Nor is he well understood. It is not possible to provide an adequate summary of his political or economic theories in this space, but a general discussion of some of his ideas may prove beneficial to understanding the current global economic crisis and the growing crisis of income inequality. Whatever our preconceived notions about Marx may be, one cannot deny the thought-provoking nature of his ideas.

Marx envisioned history as a kind of evolution in the modes of production, each mode being defined or characterized by class struggle. Marx theorized that the capitalist mode of production relies on profits that are generated by the exploitation of workers’ time and labor. The desires of the workers–higher wages and better working conditions–will always be pitted against that of the capitalist, who seeks only to maximize profits.

Naturally, this idea is not popular in western societies where “free markets” and “capitalism” are considered canon. But Marx’s theories may need to be revisited. Since 2008, the world’s economies have experienced sluggish growth, stagnant incomes and widening gaps in income inequality. As a result, there is an increasing tension between the rich and working classes as evidenced by movements such as Occupy Wall Street and the fast-food workers’ strike in the United States and the garment workers’ protests in Bangladesh. Though these events garner little mainstream media attention, they are worth exploring and understanding.

If there is one Marxist idea that is particularly relevant today, it is this–capitalism will impoverish the working masses and concentrate wealth in the hands of a very small but very powerful class of über-rich individuals. According to a study by the Economics Policy Institute, between 1983 and 2010, 74 percent of the gains in wealth in the U.S. went to the richest 5 percent while the bottom 60 percent suffered a decline. There are plenty of troubling statistics like these that evidence a crisis of wealth inequality in the United States and across the world.

Marx wrote, “Accumulation of wealth at one pole is at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole.” Any objective view of global economics today can see how this statement makes practical sense.

This is not to say that Marx developed a perfect worldview or flawless economic theory. But perhaps the critical question is not whether Karl Marx was correct, but whether western policymakers are (at best) the victims of dogmatic groupthink or (at worst) well-compensated puppets of the über-rich.

To change current economic trends, people everywhere will need to come together to generate new ideas and begin thinking about alternatives to capitalism. Marx might be a good place to start.

– Daniel Bonasso

Sources: Time, Economic Policy Institute, Stanford Encyclopedia of Philosophy
Photo: Critical Theory