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Revitalising Private Sector Growth in Sierra Leone

Private Sector Growth in Sierra LeoneIn fragile economies like Sierra Leone, where political instability and economic challenges have slowed growth, developing a resilient private sector plays a critical role in driving economic recovery and reducing poverty. With 26.1% of the population living on less than $2.15 a day and a GDP per capita of just $433.4, the country faces profound economic challenges that underscore the need for sustainable development. The U.K. government in collaboration with British International Investment (BII), is bolstering private sector growth in Sierra Leone through targeted programs like Invest Salone. These initiatives provide risk-sharing facilities, technical support, and access to markets, empowering Sierra Leone’s high-impact sectors, such as agriculture, manufacturing, and water services, to thrive and contribute to the nation’s economic resilience.

Challenges for Private Sector Growth in Sierra Leone

Entrepreneurs and private businesses in Sierra Leone face multiple challenges, from limited access to capital and restricted market access to structural infrastructure issues. Political instability further deters foreign investment and creates an uncertain environment for growth. In this context, U.K. aid is supporting initiatives like Invest Salone and BII’s Africa Resilience Investment Accelerator (ARIA) to help the private sector overcome these barriers and foster sustainable growth in key sectors, including agriculture, manufacturing and services—areas pivotal for job creation and poverty reduction.

In partnership with local organizations, the U.K. has implemented the Invest Salone project, which offers grants, technical support and market access tailored to the Sierra Leonean business environment. By targeting sectors with substantial growth potential, Invest Salone aims to help local businesses build resilience, expand into larger markets and support the broader economic recovery through increased employment and improved infrastructure, according to its website.

British International Investment

British International Investment (BII), the U.K.’s development finance institution, has played a crucial role in strengthening private sector growth in Sierra Leone. Through ARIA, BII provides risk-sharing facilities and access to capital, allowing local financial institutions like Ecobank to lend more freely to SMEs in high-impact sectors. BII’s strategic investments focus on boosting local employment, generating economic opportunities and fostering a more resilient economy, according to Ecobank. By focusing on industries that drive sustainability and self-sufficiency, BII helps Sierra Leonean businesses access larger markets and improve production capacity.

Catalysing Growth in Key Sectors

Through U.K. aid initiatives, several businesses in Sierra Leone’s high-impact sectors have successfully expanded their operations and contributed to economic resilience.

The Water and Sanitation Promotion Company (WaSAP) participated in Invest Salone’s investment-readiness bootcamp, which enabled it to grow annual revenue from $129,000 to more than $500,000. By focusing on financial management and diversifying its customer base, WaSAP demonstrates how targeted pre-investment support can prepare businesses to scale sustainably and attract additional investment.

Through the ARIA, BII’s $25 million risk-sharing facility with Ecobank Sierra Leone allows for an estimated $50 million in lending capacity to high-impact sectors, including agriculture and manufacturing, according to Ecobank. This facility supports businesses facing collateral constraints by enabling larger loans and extended repayment terms. Such financial flexibility allows these enterprises to expand operations, hire more workers, and contribute to local economic stability.

These examples illustrate how U.K. aid, through initiatives like Invest Salone and BII partnerships, is driving sustainable growth by empowering Sierra Leone’s private sector to overcome structural barriers and access larger markets.

Economic Recovery and Poverty Reduction

These U.K. aid initiatives play a key role in bolstering Sierra Leone’s private sector growth and reducing poverty. The Invest Salone program focuses on empowering high-impact sectors such as agriculture and manufacturing by providing financial support and market access to small and medium-sized enterprises (SMEs). Combined with ARIA’s $25 million risk-sharing facility, these programs enable local banks to extend crucial financing to SMEs, allowing businesses to grow, create jobs and increase income stability within communities. By helping local businesses overcome market barriers, these initiatives not only stimulate economic resilience but also support poverty reduction efforts across Sierra Leone.

Through the FCDO and BII, U.K. aid is revitalizing private sector growth in fragile economies like Sierra Leone. By providing risk-sharing facilities, grants, and technical support, these initiatives help develop high-impact sectors such as agriculture, manufacturing, and water services. This targeted aid not only fosters job creation and income growth but also builds a resilient, self-reliant economy capable of withstanding future challenges.

– Safa Musa

Safa is based in London, UK and focuses on Good News for The Borgen Project.

Photo: Unsplash

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The Gender Wage Gap in Sri Lanka: Bridging the Divide

Wage Gap in Sri LankaSri Lanka, renowned for its achievements in education and health care, still faces significant gender inequality, particularly in wages. According to the United Nations Development Programme (UNDP) report, “Making Our Future: New Directions for Human Development in Asia and the Pacific,” social disparity remains prevalent, with a persistent gender wage gap limiting economic opportunities and exacerbating poverty in Sri Lanka. Closing this gap is crucial not only for gender equity but also for fostering economic growth and reducing poverty.

Current Status of the Gender Wage Gap in Sri Lanka

The gender wage gap in Sri Lanka remains significant. A recent International Labour Organization (ILO) report shows that women earn, on average, 30-36% less than their male counterparts. This gap is even wider in the informal sector, where many women are employed. They are often concentrated in low-wage sectors like agriculture, textiles and services. In contrast, high-paying sectors such as IT, engineering and finance remain male-dominated, widening the income divide.

While Sri Lanka performs well on global gender indices, particularly in education, the wage disparity highlights a deeper issue: economic progress has not translated into pay equity. Women still face wage discrimination and are often steered into lower-paying jobs, pointing to systemic barriers that need addressing.

Key Factors Contributing to the Gender Wage Gap

Occupational segregation remains a key issue. Despite women’s critical economic contributions, they are concentrated in lower-wage industries. Sectors like agriculture and textiles, where women predominate, tend to be undervalued. Cultural norms further compound the issue, with societal expectations often prioritizing women’s roles as caregivers, pushing them toward part-time or informal work. This “double burden” limits their full-time employment and career progression opportunities, constraining their earning potential.

Education and skills gaps also play a role. Although Sri Lanka has made strides in female education, women remain underrepresented in high-paying fields like science, technology, engineering and mathematics (STEM). Without targeted initiatives to encourage women’s participation in these fields, wage disparities will likely persist. Workplace discrimination and unconscious bias further entrench wage inequality. Women face obstacles in promotions, salary negotiations and leadership roles. Although legal frameworks exist to promote gender equality, weak enforcement leaves many women vulnerable to wage discrimination.

The Impact of COVID-19

The COVID-19 pandemic has widened Sri Lanka’s gender wage gap. The economic downturn disproportionately affected Women, particularly those in low-paying, informal jobs. Sectors such as hospitality, textiles and domestic services—where women are heavily represented—suffered severe losses during lockdowns.

The burden of unpaid caregiving also increased during the pandemic, with many women leaving the workforce to care for children or elderly relatives. This prolonged absence from the labor market has long-term repercussions on their earning potential, threatening to reverse years of progress toward wage equality.

Addressing the Gender Wage Gap in Sri Lanka

To close the gender wage gap in Sri Lanka, a comprehensive approach involving government intervention and support from nongovernmental organizations (NGOs) is essential. Enforcing existing equal pay laws and conducting regular wage audits are necessary first steps. According to U.N. Women, strengthening labor laws to ensure equal pay for equal work across all sectors is crucial for narrowing the gap.

NGOs play a pivotal role in advocating for women’s economic empowerment. For example, the Women’s Development Federation (WDF) in Sri Lanka has been actively working to empower women through skills training, entrepreneurship programs and advocacy for fair wages. Its initiatives have enabled thousands of women to gain financial independence by entering nontraditional sectors or starting small businesses. This has helped to bridge the wage gap in local communities.

Another notable organization, CARE International, has launched initiatives like the Made by Women movement, which focuses on improving working conditions and wages for women in the textile industry. Its advocacy has led to partnerships with local businesses to ensure better pay and opportunities for women workers, serving as a model for other industries.

The government can also expand women’s access to high-paying fields through targeted education and vocational training programs. According to recommendations from the UNDP, providing scholarships and incentives for women to pursue careers in traditionally male-dominated fields like STEM can help bridge the skills gap and diversify the workforce.

Addressing the caregiving burden through policies like affordable childcare and family-friendly work environments would enable more women to participate fully in the workforce. Such measures would encourage women to return to work after caregiving responsibilities, reducing career interruptions and ensuring better career progression.

A Path Forward: Economic Growth and Gender Equality

Addressing the gender wage gap is not just an issue of fairness—it’s crucial for Sri Lanka’s economic growth. Studies indicate that closing the wage gap could significantly boost the country’s gross domestic product (GDP) by increasing women’s labor force participation and productivity. Reducing gender wage inequality could lift many families from poverty, contributing to national economic resilience.

While Sri Lanka has progressed in some areas of gender equality, the wage gap remains a substantial barrier to true economic equity. A coordinated effort from the government, private sector and civil society is necessary to dismantle the barriers that keep women in low-wage roles and ensure equal opportunities.

– Nandini Bhatia

Nandini is based in the United Kingdom and focuses on Politics for The Borgen Project.

Photo: Flickr

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3 Innovations Reducing Poverty in Kosovo

3 Poverty Reduction Innovations in KosovoThe Republic of Kosovo lies in Southeast Europe, bordering Albania to the southwest and Serbia to the North. The nation has struggled with poverty over the years. According to the BTI project, Kosovo is one of the poorest countries in Europe, with more than 40% of Kosovo’s population of 1.67 million living below the poverty line. The nation faces high unemployment rates in an economy heavily dependent on remittances from its diaspora, leaving it vulnerable to economic shifts abroad and rising corruption levels. However, recent initiatives by the government and various organizations have successfully reduced poverty rates in Kosovo.

Economic Growth

According to the World Bank, since declaring independence in 2008, Kosovo has experienced a 50% increase in per capita income and a 35% decrease in poverty. Instead of relying on foreign aid for economic growth, the government has increased investments, with help from projects and a stronger financial system. Kosovo has also faced challenges like inefficient economic management and a weak government, which have impacted the economy’s growth.

As a result, the Kosovo Economic Governance Activity (KEGA) was implemented, which is a five-year initiative funded by USAID to help the Kosovo government make reforms in policies to promote growth in the private sector and strengthen public financial management. This initiative resulted in €1.2 billion in formalized buildings that secured citizens’ property rights and an 86% increase in tax revenues, rising from €457 million in 2018 to €852 million in 2023. 

Decrease in Unemployment

Focus Economics reported the rate of unemployment in 2019 at 26.7%, and in 2023, it decreased to 10.9%. This rapid decrease resulted from initiatives such as the electronic platform K-GenU, which UNICEF launched to provide opportunities for Kosovo youths to access paid internships and to establish connections with employers. The platform helps young people with skills in job searching. Another initiative by UNICEF, Generation Unlimited, prepares young people for the labor market and has provided internships for around 500 young people in 57 businesses.

Social Protection Initiatives

Many people in Kosovo do not have access to health care, education and protective services. This is due to the ineffective programs to help reduce this shortcoming. To combat this, UNICEF increased support for the Law on Social and Family Services, which aims to broaden services and ensure that everyone in need has the right to access these services. UNICEF in Kosovo also focuses on ensuring that policies that are aimed at aiding children lead to real change in their lives. This involved planning and managing the money for certain programs and directly helping municipalities to ensure that children most in need are receiving the help. 

Moving Forward

While Kosovo faces challenges ranging from high rates of unemployment and ineffective social programs, the Kosovo government and international organizations have taken successful steps to tackle this problem. The World Bank reports on a new strategy called the Country Partnership Framework (CPF) for Kosovo for the years 2023 to 2027. This aims to help the country improve its economy over the next five years to create more jobs and improve living standards. 

– Nouf Hunaiti

Nouf is based in Rancho Cucamonga, CA, USA and focuses on Good News for The Borgen Project.

Photo: Flickr

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Fragility and Rule of Law in CAR

Fragility and Rule of Law in CARThe Central African Republic (CAR) is a landlocked country in sub-Saharan Africa and has a population of 6.1 million, ranking among the lowest on the human capital and development indices. Poverty in CAR is widespread, with nearly 70% of its population living in extreme poverty. Its history of conflict and political displacement has undermined economic growth for several reasons, such as reduced business investments. The country suffers from fragility. Its weak government has limited legitimacy and struggles to provide basic public services, including the rule of law. Fragility and the rule of law in CAR need addressing.

Politics, Violence and Economy

CAR has a long history of instability, state disintegration and political violence. It straddles the Sahel region, with a majority Muslim population, while savanna communities are mainly Christian. The conflict has regularly broken out between the Muslim ex-Seleka rebels and the Christian anti-balaka rebels. In 2013, Seleka rebels stormed the capital, Bangui and the country descended into a brutal civil war that continues in some parts of the country.

CAR suffers acutely from gender-based violence (GBV) against women and girls, recording 23.644 cases of GBV in 2022. Inadequate food and water resources, poor health care and weak housing infrastructure exacerbate tensions within households. These challenges, along with socio-cultural norms that are unfavorable to women, have led to sub-optimal survival strategies.

An unstable economy also influences fragility in CAR. Its government has failed to provide basic public goods, including water, food and health care. Poor education and job insecurity have stunted its growth. CAR has a rich endowment of natural resources but has not benefited due to mismanagement. According to the World Bank, the country has also suffered from flooding, fuel shortages and declining international timber trading. These challenges risk an already fragile economy.

Solutions

MINUSCA is a multidimensional United Nations peacekeeping operation set up by the Security Council in 2014. Its mission is to assist CAR in building national stability. It prioritizes the country’s security, rule of law, human rights and political crisis. MINUSCA provides military and police services from regions such as Rwanda to handle disarmament, demobilization and reintegration in CAR.

Cooperazione Internazionale (COOPI) focuses on supporting victims of GBV in CAR. Women and girls gather in a welcoming home in Bangassou where they are encouraged to participate in activities such as knitting and patternmaking, providing them with psychosocial support.

Pelvia, an 18-year-old girl spoke about the positive effect COOPI has had on her life. She spoke about the skills she has learned and how they have provided her with an income to buy necessities that she would otherwise be unable to afford. Pelvia is also glad for the company and support of the other women and girls who have shared similar traumatic experiences, UNOCHA reports.

Economic Growth

CAR receives most of its financial aid from the International Monetary Fund (IMF). In June 2024, the IMF approved an extended $25 million disbursement to continue the push for economic growth in CAR. The aid has been distributed to assist the economy and sustain priority spending on basic public services. The IMF forecasts that CAR’s economy will grow by 1.4% in 2024.

Looking Ahead

Fragility and rule of law in CAR are improving. The country has a long road to stability but there are positive forecasts for its future. 

The Economist Intelligence reports that the country’s economic activity will continue to rise over the next few years, with help from the IMF’s funded program. Whilst many areas of CAR are still overrun by rebel groups, the government, with assistance from Russian and Rwandan forces, has control over several major cities, including the capital. This allows for a more stabilized political structure and open rule of law in these areas.

– Millie Trussler

Millie is based in London, UK and focuses on Politics for The Borgen Project.

Photo: Flickr

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Projects in Tunisia Combat Food Insecurity and Boost the Economy

Projects in TunisiaOn March 15, 2024, the World Bank’s Board of Directors approved two loans worth $520 million to strengthen Tunisia’s economy. The loans will be used for two projects aiming to address and combat food insecurity and reduce regional inequalities in Tunisia. High unemployment, a five-year drought and the nation’s dependence on agricultural imports have amplified inflation rates and led to many food shortages in the country.

The Emergency Food Security Support Project (PAUSAT) will have a range of objectives that will help combat the food insecurity problem while also strengthening Tunisia’s economy and self-sufficiency. Meanwhile, the second loan will focus on the Tunisia Economic Development Corridor Project. This will address the urban infrastructure along the Kasserine – Sidi Bouzid – Sfax corridor.

PAUSAT

This project will help to strengthen Tunisia’s economy by increasing resilience to future food crises. This is by supplying short-term agricultural inputs for farmers to guarantee the next cropping season. A difficult cereal harvest of 2023 contributes to the string of droughts that Tunisia has suffered. By focusing on long-term solutions, this project will also provide barley and climate-resilient seeds to small-scale farmers and milk producers.

This assistance will help to rebuild Tunisia’s economy as it aims to prevent future agricultural challenges. With 30% of children aged less than 5 and 32% of pregnant and breastfeeding women having been affected by malnutrition, the economy is not Tunisia’s only focus. Ensuring access to bread for impoverished and vulnerable households is one of PAUSAT’s short-term objectives.

PAUSAT also aims to combat food insecurity in the short term by offering the vulnerable percentage of the population bare necessities such as bread. With women making up 46%-51% of the family farm labor force and are also 50% of Tunisia’s rural population, PAUSAT’s supply of soft wheat and barley to local markets will also help reduce food insecurity and prevent malnutrition among children and pregnant women.

Tunisia Economic Development Corridor Project

The Kasserine–Sidi Bouzid–Sfax corridor faces regional economic disparities that this project seeks to address. By adding 65 km of new roads and 117 km of feeder roads, the initiative aims to enhance accessibility to inter-regional areas, facilitate business financing and improve mobility for Tunisia’s rural population. The creation of these feeder roads and roadworks will benefit small and medium-sized enterprises (SMEs) and encourage small businesses to open up further.

The Tunisia Economic Development Corridor Project also benefits households that depend on roads. By improving mobility and expanding access to more regions, the enhanced rural infrastructure enables isolated households in the countryside to reach nearby towns and cities more easily. Significantly, this connectivity opens up new employment opportunities, allowing access to businesses and fostering the growth of new SMEs.

Toward a More Connected, Well-Fed Future

Tunisia continues to face extremely challenging conditions regarding cereal harvests, droughts and rural mobility. These two new loans bring new hope as they commit to two projects dedicated to fighting food insecurity and strengthening the economy of Tunisia. By addressing important issues with these two projects, Tunisia will be able to provide both long and short-term solutions for a more sustainable and self-sufficient future.

– Chelsey Saya McCloud

Chelsey is based in Southampton, Hampshire, UK and focuses on Good News and Technology for The Borgen Project.

Photo: Pixabay

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Renewable Energy in Georgia

Renewable Energy in GeorgiaGeorgia is a country rich in history, situated at the eastern end of the Black Sea in Eastern Europe. Once home to the ancient kingdom of Iberia, Georgia is now charting its course with one of Europe’s most significant and rapidly growing renewable energy sectors. The Georgian people aim not only to promote renewable energy but also to use it to alleviate poverty.

Pushing Toward a Green Future

This push toward a green future goes hand in hand with the country’s economic policy. Specifically, Georgia has always maintained the goal of creating a liberalized economic environment for its people. This economy would be governed through minimal state interference, reduced taxation and free trade. These principles have already been put into place. For example, Georgia achieved an average annual economic growth of 3.6% between 2017 and 2021. The country achieved this by stimulating capital and investments through a system of structural reforms. Its renewable energy sector is one such reformation that has expanded into an industry of its own.

Georgia has been involved in the energy sector since the mid-’90s and its efforts have steadily progressed, yielding significant results. Approximately 70% of the country’s electricity comes from hydropower, with the remainder generated from coal and natural gas. This positions Georgia for potential energy independence from its neighbors, opening the door to becoming an electricity exporter to other European nations. For context, the country’s total energy consumption was 4.49 million tons of oil equivalent (Mtoe) in 2020, presenting a lucrative opportunity for sustainable economic growth.

In addition, the country’s energy sector is on pace for rapid growth. The state electricity producer Georgian State Electrosystem (GSE) currently produces 4,600 megawatts (MW) of electricity, which is expected to reach 10,000 megawatts by 2033. Furthermore, new hydropower plants are being proposed to aid this development. Even more, there are plans to construct photovoltaics and wind farms in the country. The fruition of these projects would have significant implications for the country’s renewable energy output.

Potential Economic Impact

The jobs created by this initiative could spark a significant economic boom for the nation. Citizens could engage in meaningful work within an industry, revitalizing their country and promoting a healthier environment. This potential is reflected in economic forecasts, which project Georgia’s gross domestic product (GDP) to rise to 5.5% by 2025, a 0.5% increase from the previous year.

Looking Ahead

There is still much work ahead and progress continues to be made. Georgia’s legislators are focused on realizing their vision of a green future by integrating and strengthening the economic and environmental sectors. Increasing these areas would foster sustainability and financial security for the nation and its citizens. In conclusion, renewable energy has brought much-needed attention to Georgia, establishing it as a significant player on the global stage in the pursuit of a brighter future.

– Drew Ellison

Drew is based in Laurel, DE, USA and focuses on Technology and Solutions for The Borgen Project.

Photo: Pexels

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Grameen Bank: The Power of Microfinance

Grameen BankIn a remote village in Bangladesh, a group of women gather under a large tree to discuss their businesses—small shops, livestock farming and weaving.  With just a few hundred dollars from a local microfinance institution (MFI), these women—who once struggled to make ends meet—now run small businesses that can sustain their families and employ others in their community. This story, even though it takes place in Bangladesh, represents countless regions and people worldwide, showing the power of microfinance in poverty alleviation.

What Is Microfinance?

Microfinance is the practice of offering small loans and financial services to those who don’t have access to formal banking and marginalized groups who face systemic poverty. However, beyond the individual stories, the question remains: can microfinance truly reduce poverty?

The University of Maryland, Baltimore County (UMBC) Department of Economics found that a 10% increase in MFI loan portfolios per capita reduces poverty by between 0.091 and 0.159 percentage points. While these numbers may seem minor, they represent millions moving closer to financial independence.

Grameen Bank

At the heart of the microfinance movement is Grameen Bank, founded by Nobel Peace Prize winner Dr. Muhammad Yunus. Grameen’s model is unique, as its focus is on empowering women, who make up 97% of its borrowers. “We don’t empower women. They already have an inherent power in them because, without that, you cannot survive poverty,” explained Zubaida Bai, CEO of the Grameen Foundation. Its model focuses not only on providing financial resources but also on creating long-lasting, sustainable change by addressing systemic issues such as gender and power dynamics.

Furthermore, Grameen works closely with local partners to dismantle traditional gender roles and enable household dialogues where it challenges male-dominated financial decision-making. “People look at gender issues and say that women are very immobile,” Bai added. “But in reality, they know their system very well. They can be the change-makers within that system and if you enable them, they can make it long-lasting.”

Successes

The success of Grameen Bank is not just anecdotal—data backs it. According to Morduch, Grameen has provided millions of loans, with repayment rates as high as 98%. This high repayment rate reflects not only the bank’s successful lending model but also how committed the borrowers are to improving their livelihoods. Morduch also mentions that even though some institutions need external funding, the social returns on these investments far outweigh their costs. With every dollar lent, microfinance initiatives create a ripple effect that drives community-wide economic growth.

Grameen Bank’s success has benefited millions worldwide. In Uganda, for example, Grameen has worked with refugee communities, particularly women, to bring them into a financially inclusive system. These women undergo gender and power dynamics training and entrepreneurship courses and are given access to digital tools. As a result, “their income goes up by an average of 26%,” says Bai. In India, Grameen has focused on agriculture, working with farmer-producer organizations to bring women to the forefront of decision-making. In the past two years, women’s participation in these organizations has risen by 200%, showcasing how much of an impact women can have if allowed to do so.

The Broader Economic Impact

According to Khandker, microfinance programs have helped significantly reduce poverty, as seen in Bangladesh. His research shows that microfinance participation reduced moderate poverty by 5% and extreme poverty by 10%. Moreover, when applied at a community level, these reductions in poverty were not just for the borrowers alone; non-participants also benefited indirectly from the improved economic conditions. Khandker’s study revealed that more than 40% of the reduction in poverty in rural Bangladesh between 1991 and 1998 was attributed to microfinance programs.

Crépon, Devoto, Duflo and Parienté found in rural Morocco that microcredit increased ownership of assets, such as livestock and household goods. This shift toward increased assets is crucial because it gives families a buffer against economic shocks, allowing them to survive crises like illness or natural disasters. Microfinance also supports financial literacy. Programs like Grameen don’t just provide loans; they offer training in basic financial management so that borrowers can manage their resources properly. As a result, microfinance promotes saving and investment, leading to sustainable economic growth in low-income communities.

Criticisms and Challenges

While there are numerous benefits of microfinance, it still has its flaws. Some argue that microloans can lead to over-indebtedness, particularly when borrowers take out multiple loans from different MFIs. Additionally, high interest rates in some regions have raised concerns about the long-term viability of microfinance programs. However, Grameen has implemented measures to mitigate these risks, such as peer lending groups that foster accountability and household dialogues that address gender imbalances in financial decision-making.

A Path to Poverty Alleviation

Microfinance could be a powerful tool in the fight against poverty. From Bangladesh to Uganda, Grameen has shown how small loans can lead to significant social and economic change. By focusing on empowering women, addressing gender dynamics and leveraging digital technology, Grameen Bank continues to make a change in the field of microfinance. With every loan that helps an individual, a family and a community, these small steps are what create significant change in the fight against global poverty.

– Danica Lourdu Nelson

Danica is based in Parker, CO, USA and focuses on Business and New Markets for The Borgen Project.

Photo: Pexels

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Reducing Poverty Via Social Entrepreneurship in Indonesia

Social Entrepreneurship in IndonesiaThe largest economy in Southeast Asia, Indonesia, has achieved impressive economic growth in the last decade, with a steady gross domestic product (GDP) growth rate after overcoming the effects of the Asian financial crisis in 1998. However, a significant portion of the country’s population is still living in poverty. As of March 2024, Indonesia’s poverty rate stood at 7.09% for the urban region and 11.79% for the rural area. In total, more than 25 million Indonesians are living below the national poverty line.

Social Entrepreneurship in Indonesia

Social entrepreneurs or entrepreneurs who pursue innovative ideas with the potential to solve a community problem, can contribute to poverty reduction in Indonesia. As of 2018, there were an estimated 34,205 social enterprises in Indonesia, including nongovernmental organizations (NGOs), cooperatives and micro, small or medium businesses. The study also found that young people are strongly represented in social enterprises, suggesting the increasing popularity of social entrepreneurship among young people and the growth potential of social entrepreneurship in the future. Social enterprises in Indonesia are mostly in the creative industry (22%), followed by the agriculture and fisheries industry (16%) and the education sector (15%).

Social entrepreneurship in Indonesia can support business opportunities and economic development in the country. Researchers found that amid economic crises like the COVID-19 pandemic, social entrepreneurship plays an important role in encouraging the creation of existing and new social entrepreneurial business opportunities to help solve economic development problems. Besides, social entrepreneurship also contributes to sustainable environmental policies in Indonesia. Research on green space development in Indonesia suggests that social enterprises serve as catalysts for ecological impact, effectively converting community perceptions that favor sustainability into sustainable practices.

Facilitating Positive Changes

For instance, Azzura Solar, a social enterprise co-founded by Hemant Chanrai, is a social enterprise that focuses on solar energy and empowers communities with its businesses. The Bright Future Program (BFP) of the company installs solar panels for the population in the Marga Mulya area of North Jakarta, a more impoverished region of the country with limited access to electricity. The enterprise developed its own indigenous, low-cost system that not only promotes access to electricity for needier populations but encourages the reuse of drinking bottles. The receivers of the services can pay what they can afford, with the rest of the cost covered by sponsors and Azzura Solar.

Javara, on the other hand, focused on assisting local indigenous farmers to earn their livelihood from traditional agricultural products. Through ethical partnerships with farmers, fishers and food artisans, the enterprise brings biodiversity-based food products from rural Indonesia to a broader market. With a wide range of products from honey and coffee to pasta, the company has exported sustainable agricultural products in Indonesia to 33 countries on five continents.

Looking Forward

Policymakers in the Indonesian government have promoted social enterprises mainly through financial assistance and training. The Kredit Usaha Rakyat (KUR) Program, for instance, has been in place to provide bank loans to small businesses in Indonesia since 2007. The Beginner Entrepreneur Program also provides funds for young entrepreneurs with training certificates from the Ministry of Cooperatives and Small and Medium Enterprises.

The ProKUS program in 2021 assisted impoverished and vulnerable families with activities and social and business approaches to prevent and overcome social risks after the COVID-19 pandemic. The program collaborated with social workers and 26 business mentors to incubate social enterprises across 33 districts of the country, improving entrepreneurship skills for the recipients.

With significant government commitment and existing successes, social entrepreneurship in Indonesia is a highly promising solution that can promote poverty reduction in the country. By further promoting social entrepreneurship, the government can empower the local community and contribute to sustainable development in the long term.

– Wangruoxi Liang

Wangruoxi is based in Ann Arbor, MI, USA and focuses on Business and New Markets for The Borgen Project.

Photo: Pexels

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Seaweed Farming in Zanzibar: Lifting Farmers Out of Poverty

Seaweed Farming in ZanzibarZanzibar, an archipelago in the Indian Ocean, is an autonomous part of the United Republic of Tanzania. Tanzania is one of the most populous countries in Africa and one of the fastest-growing economies on the continent. Key to its economic growth is the local seaweed industry. Seaweed farming in Zanzibar is one of the region’s largest sources of income, is women-run and has immense environmental benefits.

Warming sea temperatures due to adverse weather have recently disowned the industry’s future and farmers’ livelihoods. However, a joint operation between The Nature Conservancy, The C-Weed Corporation, Cargill and the Zanzibar government stepped in to train the farmers on more sustainable practices.

The Seaweed Boom

Only trailing behind tourism and clove production, seaweed farming in Zanzibar is the archipelago’s third-largest industry. An overwhelming majority of the seaweed is used to produce carrageenan. This thickening agent appears worldwide in ice cream, toothpaste and cosmetic products. According to a United Nations (U.N.) report in 2018, farmers produced 15,000 metric tons of seaweed, accounting for 90% of Zanzibar’s marine exports and bringing in $8 million a year.

Additionally, seaweed farming requires no fresh water, feed or land and creates no carbon emissions. “It’s incredible from an ecological standpoint,” said Robert Jones, director of The Nature Conservancy. Seaweed also acts like a sponge, removing excess waste from the sea, improving water quality and providing new habitats for fish and other aquatic life. Around 25,000 people are employed and 80% of these farmers are women. Wading out into the ocean every morning, the women farmers of Zanzibar plant cultivate their yield in shallow waters along the coast. Doing so has brought them an essential source of income, as a quarter of the Zanzibari population lives in poverty.

Excluded from fishing and tourism jobs because of their gender, Zanzibari women turned to seaweed farming, which required no need for a boat or knowledge of how to swim. “Seaweed farming gave us our independence. I want the same for the next generation,” said Mwanaishia, a seaweed farmer in Paje, a village in the southern Island of Unguja. “I can say that seaweed farming lifted us up as women in Paje.” She can earn up to $85 a month in a good year. From her income, Mwanaisha became a landowner and built a second house that she rented out.

A Helping Hand

In 2020, seaweed farming in Zanzibar took a heavy hit. Warming waters, coastal degradation and international competition threatened the livelihoods of the Zanzibari women. “When I would check the harvest, I found that a lot of it was rotten. That’s when I realized that the environment was no good,” said Sada Hemed Suleiman, a local seaweed farmer. In response, The Nature Conservancy, one of the largest environmental nonprofits in the world, along with Cargill, a global food giant and the largest privately held corporation in the United States (U.S.), partnered with the Zanzibari Government and a local seaweed corporation known as C-Weed to revitalize the industry.

They trained farmers in sustainable practices to protect the environment and boost productivity. Mondy Muhando, a seaweed farming trainer for The Nature Conservancy, explained that the training “taught farmers on better sight selections for their farms, as well as introduced a farming technique that increases production two to three times more.” Additionally, Cargill introduced red seaweed, a new and more resilient species to Zanzibar that performs better on the international market. In total, the initiative improved the management of 528 coastal areas. The Zanzibari government then started replicating the training in more villages.

A Bright Future

This year, the state-owned Zanzibar Seaweed Company (ZASCO), in cooperation with Tanzania’s NMB Bank, announced a $3 million project to build a new production facility. According to ZASCO director Dr. Masoud Rashid Mohomed, “this will become not only the largest seaweed processing plant in Tanzania but also across the entire African continent.” As a result, Zanzibar’s seaweed farmers will be better positioned to compete internationally, with the future of seaweed farming in Zanzibar poised for growth. The hard-working women farming in the shallow coastlines will earn more money, pull themselves out of poverty and increase their voices within their communities.

– Mason Borden

Mason is based in New York, NY, USA and focuses on Technology and Solutions for The Borgen Project.

Photo: Wikimedia Commons

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USAID in the Central African Republic

USAID in the Central African RepublicThe Central African Republic is one of the world’s poorest countries, despite its abundant valuable resources such as diamonds, gold, oil and uranium. The government has faced instability since its inception in 1960 when the country became an independent country. It has since seen multiple military coups which have become especially disruptive since 2013 and more than 60% of the country lives in poverty. This amount of poverty combined with weak governance has led to multiple humanitarian issues, such as high maternal mortality rates and low life expectancy. Many people and organizations within the country and around the world work to aid struggling or displaced people in the Central African Republic. The United States Agency for International Development (USAID) has programs committed to focusing on humanitarian aid and responding to crises in the Central African Republic but also invests in economic growth, trade and the environment.

Economic Growth and Trade

Currently, USAID programs in the Central African Republic are restoring an 85-mile stretch of road in the northwest region. The construction of this road creates jobs for locals and upon completion it connects two northern cities, opening their markets to each other. Unemployment in CAR stood at 6.34% in 2022. While little information is given on this project, USAID boasts community involvement and job creation as well as the potential for new trade, all of which can aid in reducing unemployment.

Environment

USAID programs in the Central African Republic also fund the Central Africa Regional Program for the Environment (CARPE) which aims to protect the world’s second-largest rainforest. Located in the Congo Basin, the rainforest is threatened by deforestation, biodiversity loss, environmental destruction and growing global demand for resources.

About 70% of the country’s population depends on agriculture and nearly half of its population is food insecure. It is also facing an increasingly common issue with cattle farmers who cannot find grazing land. They have to travel farther than they used to graze, often causing them to cross borders into the Central African Republic because of its abundant fields. This puts a heavy strain on CAR’s resources and causes possibly violent disputes.

USAID supports the region by building up local, regional and national organizations to mitigate natural disasters, improve management of natural resources and sustain biodiversity. It also enforces logging regulations, reforms natural resource policy, engages communities in resource management and shares the benefits of forest resources.

CARPE is the largest environmental program from USAID. Its mission is to create a Congo Basin with healthy ecosystems and dynamic local leadership that supports stability and prosperity in communities. USAID works with partners such as the World Wildlife Fund to fund conservation, development, and community projects and improve the livelihoods of farmers across the region.

Crises and Conflict

Although recognizing the importance of economic growth and the environment, USAID places most of its focus on humanitarian crises in the Central African Republic. Fighting between the national army and rebel forces permeates across the country, regularly affecting civilian safety. In 2022, the government tried to remove the president’s two-term limit from the constitution, which only fueled the fire. This has led to an increase in abductions and hostages from both sides.

Because of ongoing instability, violence and displacement within the country people are often left without necessities. USAID works to combat food shortages and delivers medical aid such as measles vaccines and malnutrition treatment, according to its website. In places with more extreme conflict, they also provide emergency relief supplies, food aid, health and nutrition supplies, protection, water, sanitation and hygiene supplies and coordinated humanitarian efforts.

Food and Water

As of March 2024, USAID works with different partners to provide food security, health and nutrition, logistics support, water, protection and shelter and settlement in the Central African Republic. UNICEF, for example, partners with USAID to provide access to safe water for nearly 100,000 people through the rehabilitation and repair of more than 90 boreholes, the implementation of emergency water supply systems, and the distribution of household water treatment kits.

The World Food Program (WFP) implements cash transfers, locally procured food, food vouchers, and some U.S.-sources crops and supplementary feeding programs for young children and pregnant or breastfeeding women. These are just two of their many partners and programs which also include things such as humanitarian air transportation due to insufficient roads, latrines and hygiene kits, community safety awareness sessions, emergency case management, emergency shelter kits and more.

The Central African Republic is facing political and economic instability and a major climate crisis at the same time, leading to skyrocketing poverty and food insecurity rates. USAID programs in the Central African Republic are designed to target these issues and help remove people from violence, poverty and hunger.

– Anna Thibodeau

Anna is based in Omaha, NE, USA and focuses on Good News for The Borgen Project.

Photo: Flickr