Posts

 

z1_world_globe_borgen_africa
In the past decade, Ethiopia has opened its doors to foreign investment. Fashion retailer H&M and Walmart already have factories there, or plan to build them. There are also proposals to build the Grand Ethiopian Renaissance Dam, which will be a source of hydropower and accelerate agriculture development.

For Africa’s second most populous country, this will spur an economy that has traditionally been state-led and isolated.

These investments have already had positive impacts beyond their monetary value. Due to financial and economic stability, women are now having fewer children than before. Literacy rates are on the rise, and infant mortality rates have fallen by half.

Just over three years ago, the world’s population crossed the 7 billion mark. By 2100, the United Nations projects that the world population will be roughly 9.1 billion. With distress over resources and a changing climate, overpopulation is a growing concern among world leaders.

While the populations of Europe and North America are beginning to stabilize, Africa is still experiencing accelerated growth. The United Nations cites economic development and the education of woman as solutions to slowing fertility rates.

It has already worked in Ethiopia.

The average number of children women have has fallen from 6.5 to 4.8 in just a decade. In the capital, Addis Ababa, one of the most developed regions in the country, women are now having the replacement level number of children — two.

Although Ethiopia’s fertility rate ensures population growth for the foreseeable future, there remains some hope. Over 64% of Ethiopia’s population is 25-years-old or younger. As this demographic enters an economy catalyzed by foreign investment, continued development will lift many out of poverty, thus slowing the fertility rate even further.

With continued investment, the fertility rate could plummet to 2.5 by 2030.

Ethiopia’s population is well on its way to being sustainable by 2050. International investment works and it is essential if poverty-ridden regions want to experience the success Ethiopia is currently having.

– Kevin Meyers
Sources: CIA, CNBC Africa PRB UN
Photo: U of T Magazine

China's_War_On_Poverty
The rhetorical phrase “War on Poverty” is commonly used to describe programs and policies aimed at reducing or eliminating poverty. It has been used in the context of United States politics but is now also being applied by the media to Chinese efforts to reduce poverty, especially in rural areas. China has experienced a meteoric rise to economic prominence in a few decades, yet much of the country lies in the past, still experiencing economic hardship without the benefits of the recent successes. What is China doing to fight poverty?

Hundreds of millions of people have been salvaged from poverty since China’s rise to prominence, however, in 2012, China’s GDP per capita was less than other developing countries, including Iraq and Colombia. Part of this statistic lies with the fact that the Chinese economy has to sustain a huge number of people, but another reason for this surprising statistic is that economic growth in China has benefited some more than others. Specifically, those in urban areas have tended to gain more from recent economic advances than those in rural China.

In the past, the millions lifted out of poverty in China were a result in part of strong economic growth. Additionally, less people are working in agriculture and moving into other businesses and improving human capital systems. Anti-poverty actions by the government also played a role but perhaps have not been enough.

In the 1990s, China changed its definition of poverty to a level that was about two-thirds of the international standard, artificially lowering its poverty statistics. However, China has also thrown billions of dollars at the problem in the form of subsidized loans, grants and programs such as “Food For Work,” which aimed to stimulate the economic situation of the poor while at the same time improving infrastructure for water systems and roads.

Whether poverty reduction government programs like Food For Work were strong factors behind China’s first burst of poverty reduction between the 1970s and the late 1990s is hard to determine. Some believe that China’s staggering growth in those decades was the biggest driver for poverty reduction. If that is the case, then a slowdown in the Chinese economy (still at 7% growth approximately) could hurt the reduction in poverty unless new government programs can pick up the slack.

As previously mentioned, many of the poor in China have already benefited from economic growth, but many more are still impoverished. In the past month, President Xi Jinping reaffirmed the government’s responsibility to fight poverty in rural areas while at a conference about China’s 13th Five-Year Plan. A rash of suicides among children in a rural area of China and the death of five homeless children in 2012 (carbon monoxide poisoning from lighting a fire in a trash container where they were taking shelter) has caused hard questions to be asked and for government officials to talk about action. Recognition of the continuing problem by the Chinese government is a positive sign. The additional fact that the Chinese economy is becoming more dependent on a consumer class sheds light on the need for the Chinese economy to pull more out of poverty and into the consumption class. China’s war on poverty — the incentive to work towards ending poverty — is apparent, from both a public relations standpoint and an economic one.

– Martin Yim

Sources: Reuters, The Diplomat, Journal of Chinese Economic and Business Studies, IMF, Asia Society
Photo: Yibada

Quanzhou

Urbanization in China experiences challenges when expanding out to rural areas and having to reclassify villagers as urban citizens. One consequence of expansion is the sale of farmers’ land in order to create space for urbanized living or development.

Quanzhou’s gross domestic product is about $84 billion, and the city hosts one of the lowest unemployment rates in the world at 1.22 percent. The economy is driven by textile factories, food processing plants and emerging industries such as petrochemicals and automobiles.

In 2014, protests over the urbanization and development plans through the sale of land became heated, as rows of villagers held up banners to show their dissent. The government did not negotiate with the villagers before selling their property, which forced some residents into poverty.

“The land belongs to the farmers, but the government sold it off, and the farmers haven’t received any of the money,” said Chen, a resident of the Xunbu village in Quanzhou.

The government’s seizure of rural land resulted in violent suppression and pressure for the local villagers to comply with Beijing’s actions.

While property is being sold off for the government to expand their business expenditures, there have been many successful developments and labor changes to alleviate poverty in Quanzhou. For example, improved working conditions make the city attractive to migrant workers. These workers will then be less likely to leave Quanzhou city, softening any labor shortages.

The Quanzhou Federation of Trade Unions has a new model to protect immigrant workers and benefit both workers and employers. These efforts provide individual contracts as well as collective contracts that extend their rights to neighborhood levels, such as street, village, or enterprise. Due to the success of their new model, $12.91 million in salaries have been paid to workers. This has alleviated the poverty felt by many migrant workers of Quanzhou.

With over 13,000 foreign enterprises reaching a total of $34.5 billion in investments, Quanzhou has the ability to expand and become the national center of urbanization and development that China is hoping to accomplish. As long as working conditions continue to improve and wages continue to climb, Quanzhou will be able to fill vacant positions and keep migrant workers returning. If their business model continues to succeed, Quanzhou may become the most important investment city to get the 82 million people below the poverty line out of extreme poverty.

– Donald Gering

Sources: China Daily, China Knowledge, Harvard, International Business Times, RFA, Rappler
Photo: China Mike

baobab_fruit
In The Little Prince by Antoine de Saint-Exupéry, the baobab tree questions the prince’s discipline and represents the unpleasantness of nature. In Ghana, however, the baobab tree brings health and hope to women. Its fruit has the potential to change millions of lives.

Baobab trees grow in dry, remote areas in over 30 African countries. In many of the rural households, the crop already grows nearby yet the fruit goes to waste because of the lack of demand for and knowledge of the fruit. This is where Aduna comes in. Aduna is an African inspired health and beauty brand that uses baobab as a key ingredient.

Aduna’s goal is to create a demand for this under-utilized natural resource and empower women in business. Aduna already sources for their products from 1,000 women baobab producers in Ghana’s poverty-stricken Upper East Region, increasing their annual income from £12 ($18.88) to £120 ($188.81) as a result.

The baobab fruit is a win-win situation: it helps the people and helps the market. Baobab fruit is rich in vitamin C, calcium, potassium and iron. Many pregnant women consume baobab fruit as a source of calcium. It can be used to make jams and juices or stirred into stews and sauces. Aside from the fruit itself, the leaves and roots are known to lower fevers and help treat diseases.

They are not only versatile and healthy to consume but are also the ideal trade product for villagers: the fruit is light to transport, easily dried and readily accessible. The baobab market gives women the opportunity to harvest and sell their own product, and to actually have ownership in their own business.

Traditionally, women are in charge of the baobab trees. Because of this, Aduna focuses on womanpower to spark global interest in baobab fruit. Aduna is marketing to the superfood consumers, to the well off and to first-world health nuts in order to generate interest in baobab fruit.

Their campaign is to #makebaobabfamous. It is a combination of supporting women all over the world, supporting small businesses and promoting healthy eating. They hope to create a market that will help over 10 million households across Africa. Baobab fruits have the capability to connect the Third World with the First through the new superfood trend.

– Hannah Resnick

Sources: Aduna, Marie Claire Mother Nature Network, Powbab Seed
Photo: jacabswellappeal

helping_the_poor
One doesn’t automatically think of making money by giving it to the world’s poor, but through the eyes of a business leader, a wealthier population means dollar signs. Millions of new consumers around the globe are always great for business and they come in the form of emerging markets.

Dr. Vladimir L. Kvint, one of the world’s leading economists and strategists defined emerging markets for forbes.com as a society transitioning from a dictatorship to a free-market-oriented economy with increased economic freedom, gradual integration into the global marketplace, an expanding middle class, improved standards of living, social stability and tolerance, and increased cooperation with multilateral institutions.

Simply put, an emerging market is a national market in the early stages of economic development that is expected to grow rapidly.

The four largest emerging markets are often referred to as the “BRIC” economies–Brazil, Russia, India and China. These markets are watched very closely by Multinational Enterprises (MNE) because of the increased availability of whole populations to their products, many of which are U.S. based.

One example of the importance of emerging markets is the sale of iPhones. According to the Economic Times, Apple CEO Tim Cook said emerging markets such as China and India were among Apple’s biggest consumers during the first few months of 2015. The California based company sold 6.12 million iPhones during the first three months of this year, 40 percent of which were sold to buyers in emerging markets.

For someone who has trudged with soaked feet through the floodwaters drowning a tiny village in Cambodia, it might be easy to tell the difference between an underdeveloped and a developed country. For those who don’t, however, it comes down to statistics such as life expectancy rates, literacy rates and per capita income. A nation rated lower in this statistical criteria would be considered underdeveloped and a prime candidate to grow into an emerging market full of Apple iPhone users.

As an underdeveloped nation grows and its population’s quality of life increases, so too does the probability that it will become a contributing member in the global economy.

According to the United Nations, 900 minority families in Vietnam have escaped poverty through projects backed by the United Nations Development Program (UNDP). With funding from the Global Environment Facility Small Grant Program (GEF-SGP), thousands of Vietnamese minorities are now able to make a living wage through a lost tradition of insect farming, which produces a resin used in food, fine arts and medicine.

Programs such as the ones backed by the UNDP are important examples of aid to underdeveloped nations that can make the difference between a population in poverty and the emergence of a middle class with purchasing power.

Most of the world’s population lives outside the U.S. Foreign aid accounts for less than one percent of the U.S. budget. If this was increased to fund even more programs like those in Vietnam, how many more people around the globe could afford to buy U.S. products?

– Jason Zimmerman

Sources: International Invest, Economic Times Forbes UNDP
Photo: Flickr

dutch_government
The Dutch government has given entrepreneurs a way to do business in developing countries, without jumping through hoops to do so. The Dutch Good Growth Fund offers a source of financing for development-related businesses to improve the economies of developing countries, create jobs and increase production capacity locally.

The Dutch Good Growth Fund (DGGF) is seeking win-win situations: helping locally and fixing globally. The DGGF is divided into three subsections:

  1. Financing small to medium businesses looking to make development-related investments in low-income countries. These are companies located in the Netherlands, investing in business in other countries.
  2. Financing enterprises within low-income countries. These are small businesses in other countries that a Dutch company will support.
  3. Financing small to medium businesses wanting to export to low-income countries. These are Dutch companies exporting to other countries.

This Netherlands based loan fund is comprised of 700 million Euros from the Ministry of Foreign Affairs. Out of the total loans, 20 percent of the funding goes towards businesses in fragile states, and another 20 percent goes to women entrepreneurs.  The funding applies to 66 countries throughout the globe, all of which have emerging markets and low incomes.

The program was launched in 2014, and has yet to make any significant progress. The idea is promising—helping us while helping others—but it does not seem to be working as efficiently as the Ministry of Foreign Affairs had hoped. By targeting small businesses, the waves of success are inherently smaller.

These small waves of success, however, could amount to something big. The Dutch Good Fun Program is still only in its second year and it has already reached out to over 66 countries, helping their own local economy and boosting the morale of small business entrepreneurs. This is a program to watch out for.

Hannah Resnick

Sources: Agripro Focus, Berenschot, Centre of Research on Multinational Corporations, Government of Netherlands
Photo: GNBCC

Azerbaijans_Oil_Money_What_Will_it_Do_With_it
Since 2005, the Baku-Tbilisi-Ceyhan pipeline has brought Azerbaijan a newfound prosperity, but the money from the oil windfall is still tightly concentrated, and inequality remains a huge issue. Even with the enormous bounty from the pipeline, it is still a struggle for the average Azerbaijani to make a living.

Azerbaijan, a former member of the USSR, is home to some of the richest people around the Caspian Sea. Despite its lack of universities, public services, or manufacturing sectors, it has a plentiful supply of oil.

This is the first time in centuries that Azerbaijan has had a lucky break in geopolitics. It has been occupied by Cyrus the Great, Alexander the Great, the Seljuks, the Mongols, the Persians, the Russians, the Ottomans and, finally, the Soviets over the centuries. Now, finally, Azerbaijan has a chance of controlling its own destiny. Between 2006 and 2008, Azerbaijan’s economy grew at an annual average rate of 28 percent, the fastest in the world.

Many would argue that Azerbaijan is not spending its new money wisely. Instead of overhauling its creaking social security system, or investing in schools, it is building sports stadiums and luxury mega-developments. Gulnara Suleymanova, an impoverished mother living in the shadow of Azerbaijan’s brand-new stadium, built especially for the European Games, said that she can barely afford to feed her children, let alone provide them with an educated and treatment for their health problems.

“They build sports complexes, construct roads, but who benefits from them? Why don’t they help children? Why don’t they think that there are small children, sick and poor people living in this country? Why don’t they help them?” she asks.

Huge undertakings like the stadium and the mega-development can be argued to have some merit, as the publicity from the games and the over-the-top extravagance of the mega-developments can signal to investors that the country’s government supports growth. They serve as a kind of international billboard, advertising a friendly business climate to anyone who wants to build anything spectacular.

That being said, experts at USAID have said that Azerbaijan must diversify its economy if it wants to maintain a high rate of growth. Right now, there is too much emphasis on the extraction-sector and not enough focus on other sectors, or on investments for the future. Without movement into other sectors, a failure in the oil supply could send Azerbaijan back into an agrarian economy.

Azerbaijan used to rely primarily on its exports of pomegranates and hazelnuts to make money, but even high-worth crops like these are subject to droughts, floods, blights, and other events outside of the country’s control. USAID hopes to help Azerbaijan achieve a diverse and sustainable economy, with much less inequality than is present now.

If USAID succeeds, Azerbaijan may be able to mold its new-found wealth into a well-rounded and diverse economy.

– Marina Middleton

Sources: USAID, Doing Business, New York Times, Massispost, The Guardian
Photo: Flickr

acdi voca
Dating back to the 1997 merger of the Agricultural Cooperative Development International and Volunteers in Overseas Cooperative Assistance, ACDI VOCA is a nonprofit devoted to improving global economic development.

The merger of the two nonprofits increased the individual organizations’ capabilities and scale, combining the complementary strengths of ACDI’s long-term development approaches and VOCA’s people-to-people volunteer activities.

ACDI VOCA works to help others on a large scale, expanding economic opportunities around the world, increasing social benefits and promoting food security solutions. In order to accomplish these goals, the organization implements development projects.

While the number of projects underway is impressive in itself, the scope and lasting impact is even more significant for countries in need.

While initially the organization began with strictly an agricultural focus, today the organization embraces comprehensive economic development approaches in the fields of food security, value chain-oriented enterprise development, poverty alleviation, access to financial services, farmer organization, self-help community development and efforts to stabilize fragile states.

Strategizing to obtain results through expertise, accountability, collaboration and innovation, ACDI VOCA seeks to understand problems through a comprehensive lens. Proving it can tackle complex and international interactive projects, the organization staffs experts in areas ranging from financial services to health and nutrition to community development.

An important benefit of ACID VOCA’s services is that most assignments provide short-term expertise to complement long-term development projects. For example, after the fall of the Soviet Union, a substantial number of assignments were carried out in Central and Eastern Europe providing entrepreneurs in these countries with their first exposure to the dynamics of the private sector and modern commercial operations.

ACDI VOCA provides U.S. and international career opportunities, summer internships for graduate students studying international development or a related field and a volunteer program.

The development program provides employees with extensive in-house training and tuition reimbursement where appropriate, such as if an employee takes an online language course for a project. The organization also offers numerous programs for its staff through e-Cornell and the Harvard Business School.

Programs that are currently under way include a business oriented agricultural cooperative in Ethiopia, a farmer’s fertilizer cooperative in India and cooperative banking in Poland. The projects are diverse, and the experts placed on each case depend on the needs of that particular community.

ACDI VOCA receives funding from the U.S. Agency for International Development, the U.S. Department of Agriculture, the Millennium Challenge Corporation, the World Bank and various regional banks, the Bill & Melinda Gates Foundation and private sector firms.

Although the lasting impact of ACDI VOCA is immeasurable, success is certainly apparent in a record of over 11,000 assignments carried out in 146 countries by highly qualified volunteer specialists and on-staff experts.

– Caroline Logan

Sources: ACDI VOCA, DEVEX
Photo: Africaag

Trickle Up Program
The Trickle Up Program empowers people living on less than $1.25 a day to take the first steps out of poverty.

Trickle Up does this by providing those less fortunate with the resources to build sustainable livelihoods for a better quality of life. They use their partnerships with local agencies in order to provide training and use capital grants to launch or expand microenterprises to support and build assets.

There are an estimated 1.4 billion people living in extreme poverty, which means there is an immense need for economic development programs that can produce sustainable change in the lives of the poorest people.

The Trickle Up Program was founded in 1979 to ensure that the poorest people in any nation could have a chance to build a better life for themselves. In three decades, the program has successfully increased income levels of extremely poor households around the world.

Three years ago, Trickle Up served nearly 8,000 participants with an average of five people benefiting from each Trickle Up-supported enterprise.  This means over 41,000 people will improve their quality of life as a result of the program’s work this year alone.

Trickle Up aims to serve people at the very bottom of the socioeconomic scale. The program’s unique approach is designed for households whose per capita income is less than $1.25 a day.  Households living at this level of poverty lack the security to qualify for formal credit services and are not in a position to benefit from any strategy that carries a risk to plunge them further into debt.

This is where the Trickle Up Program comes into play.  Their poverty reduction strategy includes a one-time capital grant, called a Trickle Up Spark Grant.  This provides the participants with the necessary startup capital to launch or expand microenterprises.

This, in conjunction with highly structured business and livelihood training can facilitate the formation of community-based savings and effectively boost household incomes to make continued progress out of poverty.

Their end goal is to empower the world’s poorest people so that they can develop their potential and strengthen their communities from within. Trickle Up pursues this goal in a way that encourages innovation and leadership while promoting communication and cooperation among all their communities.

– Cara Morgan

Sources: Ford Foundation, Trickle Up
Photo: Trickle Up

April 11 marked the official opening ceremony commemorating the completion of a new, groundbreaking water supply system made possible by the Haitian government, the Red Cross Society of the Republic of China and the International Cooperation and Development Fund of Taiwan (TaiwanICDF.) The new water system will reportedly supply safe and clean domestic water for over 90 percent of the area’s inhabitants.

In January 2010 a magnitude seven earthquake devastated Haiti and rendered about 1 million Haitians homeless, a number of which relocated from its capital, Port-au-Prince, to New Hope Village in Savane Diane. As a result, the need for accessible and clean water  increased exponentially, and the new system accommodates this need and serves as a sustainable, long-term solution. TaiwanICDF reportedly showed residents how to maintain and fix the system in the event that it breaks down.

The Taiwanese ambassador to Haiti, Peter Hwang, attended this special celebration, as did TaiwanICDF’s Secretary General, Tao Wen-lung. Wen-lung said the system would provide enough water not only for over 200 homes, but additionally for the village’s health facility, school and nearby agricultural irrigation needs. He described it as “a real godsend for local residents.”

In a video on the TaiwanICDF website, a local resident describes the arduous three-hour process he formerly endured to transfer water from a far-away source back to his home. Now, he has a quick and easy water source practically in his backyard. In the video, the resident also thanks TaiwanICDF for their instrumental role in developing and maintaining the system in his village.

China and Taiwan are hosts to numerous humanitarian organizations. TaiwanICDF is particularly focused on infrastructural and economic development for long-term stability in needy nations and regions, as well as technical cooperation, humanitarian assistance and international education and training. This type of maintainable, long-term investment in developing nations has provided a model by which helpful contributions in such countries can make significant long-term differences.

– Arielle Swett

Sources: ICDF, Taipei Times
Photo: Taiwan Today