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Green Jobs and Economic Growth in Low-Income Countries

Economic Growth in Low-Income CountriesA green economy could be defined by three characteristics: low-carbon, socially inclusive and resource-efficient. Focusing on renewable energy, sustainable agricultural practices and opening new horizons for eco-friendly industries, the green economy holds the potential to serve as a powerful tool for boosting economic growth in low-income countries. Using investments as a focal point, green economies target renewable energy such as solar power, wind power and hydrogen to grow employment and income as well as prevent loss of biodiversity. By integrating environmentally sustainable practices into these key sectors, nations that adopt a green economy could create jobs and mitigate long-term poverty.

Green Jobs as a Catalyst for Economic Opportunity

In many low-income countries, poverty as a result of unemployment is a widespread issue, particularly in rural areas. In this case, the green economy presents itself as an occasion to diversify job markets and offer employment opportunities in areas that have not yet been brought to mainstream industries. By expanding into sectors such as renewable energy, sustainable agriculture and waste management, green jobs create a stronger bond with the social sphere of communities instead of just an environment-based one.

The renewable energy sector alone could offer significant job creation potential as the installation, operation and maintenance of solar power systems, wind turbines and hydroelectric systems require skilled workers in both urban and rural communities. These jobs could provide stable income and improve the lives of many by reducing dependency on costly alternatives such as imported fossil fuel-based energy and thus, increasing energy affordability on a larger scale. In the past decade, employment in renewable energy has nearly doubled, reaching a whopping 13.7 million in 2022, an increase from a total of 7.3 million in 2012.

Sustainable Agriculture

For many low-income economies, agriculture is the backbone of society. Smallholder farmers produce at least one-third of the world’s food, yet many of them continue to face poverty due to escalating issues such as outdated farming practices, environmental degradation and poor yields. In Rwanda, projects such as Land Husbandry, Water Harvesting and Hillside Irrigation (LWH) have positively contributed to a wider socioeconomic understanding of the need for agroforestry projects. The LWH has improved crop yields and land degradation, leading to an increase in incomes for smallholder farmers. This has also significantly alleviated poverty concerns as well as strengthened food security in local areas.

Thus, for the agriculture sector, green jobs can provide solutions to these issues by creating and encouraging sustainable farming methods that raise productivity and prevent environmental degradation. Investing time and effort into methods such as organic farming, agroforestry and soil conservation as well as into training smallholder farmers the value of these practices is a step towards improving long-term land fertility and crop yields.

Boosting Local Economies

Increasing interest in eco-friendly industries offers another opportunity to reduce poverty in low-income countries as these industries focus on sustainable manufacturing and construction. Activities such as these are labor-intensive and difficult to outsource, meaning they create local job opportunities.

With the right training, green industries require a diverse range of skills that workers—from technicians and engineers to managers and urban planners—can develop to adapt to the demand for environmentally responsible products. An example of this is the World Bank’s Energy Efficiency Improvement in Commercial and Industrial Sectors (VEEIE) project based in Vietnam. This project works towards helping local factories to adopt energy-efficient technologies to reduce costs and increase productivity. This project contributes to the creation of green jobs that have employed local workers to carry out installation and maintenance-related services in this industry.

Economic Growth in Low-Income Countries

Green jobs have already shown considerable success in addressing unemployment-driven poverty. In Kenya, for example, solar energy projects such as the Green Mini-Grid Program have successfully used incoming investments to create jobs in rural areas. By employing local workers who are in charge of installing, operating and carrying out maintenance for the solar energy products, this initiative provides affordable access to energy as well as employment opportunities for those in need.

Green jobs have the potential to significantly contribute to economic growth in low-income countries by providing a wider range of economic opportunities at the local level. Sectors such as renewable energy, sustainable agriculture and eco-friendly industries hold the potential to contribute to long-term economic growth, job creation and providing relief for those that live under poverty. With the appropriate policies, training programs and investment in the green economy, low-income countries can stimulate local economies and play a central role in economic well-being, environmental preservation and poverty reduction.

– Mashal Aman

Mashal is based in Kyoto, Japan and focuses on Business and Technology for The Borgen Project.

Photo: Flickr

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Economic Growth in El Salvador: Key Areas

Economic Growth in El SalvadorEl Salvador, once known for its high crime rates and violence, is now witnessing a remarkable transformation. The nation’s economy has significantly improved, contributing to peace and stability. This article explores five key ways of economic growth in El Salvador: an increase in tourism, a surge in foreign investments, substantial infrastructure development, the implementation of rehabilitation and social programs, and the growth of entrepreneurship and small and medium enterprises. These changes are paving the way for a brighter future for El Salvador, highlighting the profound economic benefits of a more stable society.

Tourism

El Salvador has experienced significant growth in tourism in recent years, highlighting its appeal as a travel destination. Reforms in public security and government efforts to improve safety have resulted in a safer environment for tourists. According to the World Travel and Tourism Council (WTTC), El Salvador has had an exponential growth of 157% during the first six months of 2023 compared to previous years. The organization forecasts El Salvador to be the leading country in international tourism in Latin America in 2024. Improvements in public security have created a more favourable environment for tourism, contributing to the country’s economic growth and sustainable development in the tourism sector.

Foreign Investments

El Salvador has seen a noticeable increase in foreign investments, reflecting growing confidence in the country’s economic potential. As the country has become safer, international businesses and investors have started to take a big interest in the opportunities available. This surge of foreign capital has stimulated economic growth which could create more jobs. This has opened the door for sustainable economic progress, positioning El Salvador as an attractive destination for future investments. A recent report by the Central Reverse Bank reflects a notable surge in foreign investments in the first three months of 2024; investments from abroad increased by 8%. El Salvador’s economy expanded by $14.33 million more than in 2023.

Infrastructure Development

El Salvador’s government has made significant strides in several major projects, including the construction of a new international airport and a port in La Unión. These projects are at various stages of development, alongside the modernization of road infrastructure and the health care system with new hospitals and roads. These achievements reflect the government’s commitment to the country’s development and set the stage for a more prosperous and stable future in El Salvador.

Entrepreneurship and Small and Medium Enterprises

The reduction of violence in El Salvador could significantly impact entrepreneurship and the growth of small and medium enterprises (SMEs). According to the Bloomberg article based on Moody’s Investors Service information, the decrease in crime could encourage local companies to increase their investments. This is largely due to the implementation of the Territorial Control Plan (PCT) and the Exception Regime by the government, which has restored peace of mind and confidence among both the population and business owners. With more than 64,000 terrorists captured and one of the lowest homicide rates in the world, the safer environment has allowed SMEs to prosper, contributing to the country’s economic growth and creating new opportunities for employment and development.

Community Development Programs

The government, in collaboration with organizations like the Peace Corps, is providing training in entrepreneurship, employability skills, financial management and life skills. These programs aim to empower communities, especially the youth and women, to take advantage of new economic opportunities. By focusing on these areas, El Salvador is promoting economic security and mobility, ultimately contributing to the nation’s growth and stability.

Conclusion

To conclude, economic growth in El Salvador illustrates the significant effects of stability and growth on national prosperity. The boost in tourism, rise in foreign investments, extensive infrastructure improvements, community development programs and the expansion of entrepreneurship and small businesses are key factors driving this transformation. These developments not only emphasize El Salvador’s potential but also set the stage for a brighter and more prosperous future, pointing out the substantial benefits of a stable and succeeding economy.

– Maria Urioste

Maria is based in Maspeth, NY, USA and focuses on Good News for The Borgen Project.

Photo: Unsplash

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CERF Releases $100 million For Underfunded Crises

CERFOn August 30, 2024, the Central Emergency Response Fund (CERF) of the United Nations released $100 million for critically underfunded crises. CERF provides funding for essential supplies and services during conflict, natural disasters and other emergencies, aiming to support timely and reliable responses in under-funded crises.

Twice annually, the CERF’s Acting Emergency Relief Coordinator (ERC) allocates special grants from the Underfunded Emergencies (UFE) Window to support essential life-saving activities in neglected humanitarian emergencies. Here are the country allocations and the underfunded crises they face.

Underfunded Crises in West Africa

CERF will allocate $10 million to Burkina Faso, where more than 2 million people were internally displaced due to armed conflict between internal militias — part of a broader Sahelian violence caused by Islamic extremism and political instability. Twenty-seven percent of the country requires humanitarian assistance and millions face severe food insecurity.

Similarly, Mali faces a security crisis compounded by economic shocks. More than 7 million require humanitarian assistance, 1.37 million face crisis levels of food insecurity, 1.4 million children face undernourishment, approximately 2,600 individuals face famine and more than 350,000 are internally displaced, according to CERF. Mali will receive $11 million to help displaced populations and alleviate food insecurity

Underfunded Crises in Central and East Africa

Ethiopia is struggling with civil conflict and the aftermath of flooding that has caused deaths, displacement, and food insecurity. Up to half a million could be struggling with displacement and more than 15.8 million are food insecure, according to CERF. Meanwhile, Ethiopia faces cholera and malaria epidemics. CERF will provide $15 million to Ethiopia to help provide access to critical services and to reduce morbidity for 12.3 million vulnerable people.

Malawi is also dealing with weather patterns causing food insecurity among 5.7 million people. Aid worth $11 million could help the country deal with the effects of drought.

Since 2017, Mozambique has experienced violence that has displaced hundreds of thousands of people while weather patterns devastate the agricultural sector, according to CERF. Funding of $7 million is going towards preventing a food insecurity crisis.

Burundi faces food insecurity, violence, epidemics and natural disasters. Heavy rainfall caused flooding by the end of last year and displaced thousands. More than 1 million people are food insecure and landslides have displaced more than 47,000 people, according to CERF. Funding of $5 million will support flood recovery and displaced people.

Cameroon experiences several forms of internal violence and natural disasters. Recent floods exacerbate the situation and an estimated 1.8 million people are without adequate water and health services. Receiving $7 million could help vulnerable populations, particularly women and children, against exploitation and malnutrition.

Middle East, South East Asia and the Caribbean

Yemen is considered the largest humanitarian crisis, an eight-year civil war in Yemen between Houthi rebels and Saudi-backed government forces created an economic, social and health crisis. There are 19 million people experiencing a food insecurity crisis while flooding disrupts access to essential services, according to CERF. Many lack sanitation, water and health care access. CERF will provide $20 million to support food security and health for millions in need.

Following a brief period of democratic rule, a 2021 coup in Myanmar devolved into a civil war between a military government and various ethnic militias. Intensified fighting this year increased displacement to 3.1 million people. Almost 13 million people face moderate or severe food insecurity, according to CERF. The organization will provide $12 million to Myanmar which could hopefully help 18 million people who need funding for essential services and support for displaced populations.

Natural disasters and internal gang violence leave 5.5 million people requiring humanitarian assistance in Haiti. There are 578,000 people who are internally displaced, 8.5 million faced food insecurity earlier this year and many face gang violence, according to CERF. Funding of $9 million will support critical needs in the country.

Conclusion

These countries experience underfunded crises despite dire situations and donor pledges. This demonstrates the need for increased attention. The allocation of $100 million by CERF is a crucial step but support from international donors and organizations is essential to address the ongoing challenges these countries face.

– Luke Ravetto

Luke is based in Boston, MA, USA and focuses on Politics for The Borgen Project.

Photo: Flickr

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Declining Poverty Rates in Indonesia

Poverty Rates in IndonesiaThe Republic of Indonesia, the fourth most populous nation, sits in Southeast Asia between the Indian and Pacific oceans. Known for its breathtaking landscapes and vibrant tourist attractions, Indonesia has faced challenges with high poverty rates. In 2014, the World Bank reported that poverty reduction in Indonesia has begun to stall, with a rate of 11.3%, reflecting only a 0.7% decline since 2012. A report by the Asian Development Bank also noted that 28 million Indonesians lived below the poverty line, with most of the country’s residing in rural areas.

Significant Progress in Poverty Reduction

Currently, this trend has changed, with poverty rates in Indonesia at an all-time low. In March 2024, the Central Statistics Agency recorded a decrease in the number of people living in poverty to 25.22 million, with the poverty rate at 9.03%.  A 0.33% decline compared to the previous year and a 2.22% decline compared to the past 10 years.

According to the Cabinet Secretariat of The Republic of Indonesia, poverty rates decreased in rural and urban areas. In March 2024, the poverty rate in rural areas decreased to 7.09%, a 20% decrease compared to March 2023. The poverty rate in rural areas dropped to 11.79%, compared to a drop of 12.22% from the previous year. With the government facing challenges given the country’s large population and increase in poverty rates during COVID-19, from 9.2% in 2019 to 9.7% in 2020, poverty reduction has become a national priority, needing different approaches and efforts. 

Agricultural Services

Agriculture services were at the forefront in helping Indonesia reduce its poverty rates. A study by The Smeru Research Institute reveals that this was the largest factor in reducing poverty in Indonesia. Agriculture growth was responsible for 66% of overall poverty reduction, 55% of the reduction in urban poverty and 75% of the reduction in rural poverty. In contrast, the industrial sector, part of Indonesia’s development strategy, only reduced poverty in urban areas. These findings highlight that boosting productivity in agriculture is the most effective way for Indonesia to reduce poverty.  

Passing New Economic Policies

To address high poverty rates in Indonesia, the government introduced financial and administrative changes, known as fiscal decentralization reforms. This change aims to shift the power from the central government to local governments. 

According to Springer Link, the government passed village fund policies between 2014 and 2019 to support Indonesia’s villagers, successfully in reducing rural poverty. According to a report by the Central Bureau of Statistics, that compares the years 2015 and 2022, data reveals that the number of people in poverty has decreased from more than 28 million to 26 million. By improving infrastructure in rural areas, such as providing education, health care services and clean water, the Indonesian government effectively reduced poverty. 

Social Protection Program

The Indonesian government continues prioritizing the social protection program as part of its 2045 vision. This includes cash transfers, food assistance and labor market programs. Social protection programs particularly benefit vulnerable people in Indonesia, such as the elderly, whose numbers are expected to rise to 25% of the population by 2045, making them highly susceptible to poverty. 

The Program Keluarga Harapan (PKH) is a cash transfer program that helps low-income households alleviate financial pressure and access health care and education services. According to a report by the World Bank, this program led to a 13 to 17% increase in the number of births attended by medical professionals and a 5% increase in the number of children receiving vaccinations. 

Moving Forward

Indonesia has made significant efforts that continually contribute to the decrease in poverty rates. Indonesia has taken major steps forward to help its people, while there have been fluctuations in poverty, the government has consistently prioritized different strategies to reduce it. Indonesia’s success in decreasing poverty rates is not just a national achievement but also a great contribution to global poverty reduction efforts. Acting as a blueprint for other nations that aim to help their populations and reduce poverty.

– 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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Child Marriage: An Obstacle to Education for Girls in South Sudan

Education for Girls in South SudanIn South Sudan, about three-fourths of girls don’t attend primary school. As the world’s newest country, South Sudan has struggled with economic and political downfalls, resulting in war, violence and the destruction of schools. Alongside high child marriage and teen pregnancy in South Sudan, it’s difficult for girls to attend school or even to have the option of an education at all.

Economic, social and political changes have to be made to provide a better education for girls in South Sudan. From state-issued fundraising to environmental amendments, more girls will be able to attend school. With more girls in school, cases such as child marriages will begin to decrease, resulting in a brighter future for girls nationwide.

Social Issues

One of the many social, controversial issues plaguing South Sudan is the high rate of child marriages. Approximately 52% of South Sudanese girls are married before age 18. According to Girls not Brides, “Child marriage is driven by gender inequality and the belief that girls are somehow inferior to boys.” Additionally, “Increased school dropout rates push young girls toward marriage and early pregnancies.” Without key motivating factors to keep girls in school, many choose to drop out or not attend at all.

Economic Issues

In 2023, the United Nations Children’s Fund (UNICEF) reported that 70% of the South Sudanese population lives in poverty. According to Girls not Brides, “Child marriage is used as a coping mechanism in response to economic and food insecurity. Families from the poorest households in South Sudan marry off daughters in order to receive dowry.” This is a common practice in South Sudan and raises little to no concerns among citizens.

A 16-year-old South Sudanese girl by the name of Atong was forced to marry a 50-year-old man in July 2011. A 16-year-old South Sudanese girl by the name of Atong was forced to marry a 50-year-old man in July 2011. “I did not know him before. I did not love him,” she said. “I told my family, ‘I don’t want this man.’ My people said, ‘This old man can feed us, you will marry him.”

Political Issues

According to Human Rights Watch (HRW) on child marriage, “There are also gaps in the Transitional Constitution, Penal Code and Child Act related to this harmful practice—including no minimum age of marriage —and no systematic or comprehensive programs to address the root causes of child marriage at the community level.” The Transitional Constitution, for example, “…does not set a minimum age of marriage. Instead, it states that every person had the right to marry a person of the opposite sex and that no marriage shall be entered into without free and full consent.”

This makes it nearly impossible for girls to attend school due to their responsibilities as a wife. According to Broken Chalk, “Shockingly, a girl in South Sudan is more likely to die in childbirth than to complete primary education.” South Sudan lacks a legal framework surrounding many things, including educational requirements. Therefore, the rules and laws are fuzzy and underdeveloped. Additionally, “A lack of quality teaching staff and inadequate school buildings are challenges that add to extreme poverty, as families desperately work for the next meal.”

Solutions

While South Sudan is far from exemplary in educating girls and young women, there are possible steps that could be taken to move toward improvements. Child marriage hinders a girl from receiving an education,and to combat this, organizations like the African Union and UNICEF have been collaborating with the government and other partners to raise awareness about the dangers. They are advocating for laws to protect young girls and working to change cultural and social norms that negatively impact them.

For example, UNICEF’s flagship Communities Care Program, designed to “promote gender-equitable and positive social transformation norms,” established 29 community discussion groups and engaged more than 800,000 people in awareness-raising activities. In 2020, the program expanded to tackle sexual violence, teenage pregnancies and child marriage in South Sudan, with 74% of participants reporting positive changes in their beliefs and attitudes.

Although child marriage is still prevalent in South Sudan, with continued efforts from the government and nonprofit organizations like UNICEF, the nation is making great strides toward reducing the incidence and improving the well-being and rights of its young girls.

– London Collins Puc

London is based in West Palm Beach, FL, USA and focuses on Global Health, Politics for The Borgen Project.

Photo: Flickr

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Economic Growth and Trade in India

The Transformative Impact of Trade on Economic Growth in IndiaIndia has transformed from a minor player to a formidable economic force in the global market over seven decades. The country’s trade journey reflects resilience, strategic foresight and transformative policy shifts. Starting with a modest trade volume in 1950, foreign trade in India has surged to about $776 billion in recent years.

Evolution of India’s Trade Policy

After gaining independence in 1947, India implemented a protectionist trade policy to foster domestic production and self-reliance, heavily regulating industries and maintaining high import barriers. This strategy emerged from India’s colonial history and its pursuit of economic independence. By 1948, India’s merchandise exports exceeded $1 billion, dominated by jute, cotton, oil seeds and tea, while imports focused on food grains and basic consumption goods. From the 1950s to the late 1980s, India operated under the ‘licence raj’ system, which required businesses to secure permits and adhere to production quotas. By the 1980s, the drawbacks of this model became evident, as the economy grew at a mere annual average GDP rate of 3.6% and the trade deficit widened significantly.

Shift Toward Economic Liberalization

In 1991, facing a severe balance of payments crisis, India dismantled the licence raj, liberalized trade and shifted toward a market-oriented economy. This change opened India to global trade and investment, sparking rapid growth in the services sector, especially information technology. In 1999, a World Trade Organization ruling required India to remove remaining import restrictions on consumer goods, further enhancing trade and economic efficiency. These reforms contributed to accelerated economic growth and significantly reduced poverty.

Impact of Recent Policies

The Foreign Trade Policy (FTP) of 2004-09 launched initiatives to support economic sectors, introducing the Vishesh Krishi Upaj Yojana for agricultural exports and the SEZ Act of 2005 to boost exports. However, the 2008 financial crisis significantly impacted global trade, leading to a decline in India’s exports. In response, the 2009-2014 FTP aimed to diversify exports to stabilize and reverse the downturn. Despite becoming the world’s fifth-largest economy in 2019, India recently adopted a more protectionist stance with initiatives like Atmanirbhar Bharat (Self-Reliant India) to reduce the trade deficit and promote domestic industries, while still seeking to attract foreign direct investment and integrate into global value chains.

Looking Ahead

Trade has significantly boosted India’s GDP growth, job creation and poverty reduction, yet challenges persist. The trade deficit, intense global market competition and the need for infrastructure improvements continue to be prominent issues. Moreover, bureaucratic red tape hampers economic progress and the COVID-19 pandemic has intensified these ongoing challenges. Despite these obstacles, India remains committed to trade reform and economic liberalization, promising sustainable development and inclusive growth across all societal segments.

– Sandeep Kaur

Sandeep is based in Manchester, UK and focuses on Business and New Markets for The Borgen Project.

Photo: Flickr

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Zimbabwe’s New Currency: A New Start?

Zimbabwe’s New CurrencyZimbabwe is a country in Southern Africa that has faced a volatile economy and high poverty and unemployment rates in the last decades. Amid surging inflation, which reached 55% in March 2024, the government announced the creation of a new currency, the ZiG, indexed on market prices and backed by gold. The hope is that this new currency could stabilize the economy and restore market confidence. Zimbabwe’s new currency and poverty situation are now closely interlinked.

Zimbabwe’s Economic Situation

The 2023 elections, which saw President Emmerson Mnangagwa get reelected, largely happened under the sign of economic concerns plaguing the country. The foregone rule of Mugabe left the country in dire financial circumstances. Among other problems, high inflation, corruption and a suspension of aid from the World Bank and the International Monetary Fund (IMF) as part of sanctions have yielded a cutthroat economic situation.

Although real gross domestic growth (GDP) reached 5.5% in 2023, this number is expected to fall to 3.3% in 2024 due to the effects of an El Nino induced drought and the general macroeconomic instability. However, the country’s economic foundations are considered decent as several sectors, such as agriculture and mineral production, remain locally and globally competitive. Yet, structural economic challenges will have to be tackled head-on to fulfill Zimbabwe’s economic potential truly.

Zimbabwe and Poverty

The decades of economic instability have stunted the country’s ability to fight poverty. As of 2023, it’s estimated that 42% of the population still lives in extreme poverty, with a quarter of the population being food insecure. With certain economists claiming the country’s unemployment rate is as high as 85%, much of the burden for the slow progress in diminishing poverty rates falls upon the country’s economic situation.

Zimbabwe’s New Currency and Poverty

Finance Minister Ncube announced the creation of the ZiG (Zim Gold) as part of a series of measures that sought to restore economic stability to the country. Since its election, the government has increased taxes on products such as sugar to repay some of the debt that has caused much of the country’s structural problems.

The new currency, indexed on the country’s gold reserves and precious minerals, would be less volatile than its predecessor. Indeed, backed by hard value items, this would prevent the currency from losing its worth. If successful, the new currency could help restore the country’s economy, where currently 85% of transactions are recorded in the United States (U.S. dollars). The government’s main objective is to regain strength and trust in a national currency as a path to leave the U.S. Dollar.

Suffering from high exchange rates, confidence in a national currency could lend itself to a better overall context for small and private businesses if restored. Zimbabwe’s new currency and poverty both rely upon stability and forthcoming measures.

Looking Ahead

The currency debuted and Zimbabweans were asked to exchange their remaining Zimbabwean Dollars for the ZiG in early April. Since then, mixed reports have come out. The general mistrust of the population regarding the historically chaotic management of the country’s economic institution leads many to remain keen on prioritizing the U.S. Dollar in most exchanges.

However, the ZiG does stay at a much lower exchange rate than its predecessor, the U.S. dollar. The choice of backing up the currency with hard assets still yields questions as economists wonder if the country’s gold and mineral reserves are large enough to back a currency. Whether this new approach will bear its fruits for Zimbabwe’s new currency and poverty alleviation requires close monitoring in the future.

– Felix Stephens

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

Photo: Flickr

Poverty and Income Diversification — The Escape

Poverty and income diversification The World Bank estimates that 78% of the world’s poor live in rural areas. Most individuals who reside in these areas depend on farming and agriculture not only for sustenance, but also for household income. There is consequently a correlation between poverty and having one, dominating occupation. Yet according to researchers, there seems to be a solution to this relationship through increased income diversification.

Farming

There is an issue of volatility that is inherent in farming. Variability in conditions can adversely affect crop yield, which ultimately impacts the income received by farmers. According to Farm Europe, competition can also be problematic. If all the poor in a given region take up farming as a means of earning income, then at some point, the supply outweighs the demand. When that happens, either crop prices will either decrease or crops will waste away in storage. This effect is further amplified when governments are unable or unwilling to offer adequate compensation for farmers’ excess crops.

Even in the United States, abundant in resources and well-developed in agricultural techniques, farming is a constantly changing industry. The USDA reports a wide fluctuation in income earned by a typical commercial farmer between 2000 and 2014. As a result, there is a need for income diversity worldwide, and this is particularly illustrated by some of the success stories in impoverished countries.

Vietnam

Since the 1990s, Vietnam has experienced high rates of economic growth. Researchers with the IFPRI (International Food Policy Research Institute) assert this is due in large part to income diversification.

Vietnam’s highest concentration of poverty is located in the Northern Hills. An analysis of the region suggested that those able to earn income by way of agricultural production, as well as non-farming activities, experienced the highest spike in their earnings over time. However, where does that leave those solely reliant on farming?

Residents limited to farming only managed to earn a living by applying the principle of diversification to their crops. They deviated from the typical crop grown, rice, and added cash crops, like coffee and tea, to their output. The cash crops yielded a much higher profit per unit of sale and required less land, labor and resources to grow and maintain. Even so, their spike in income did not match that of those who participated in both farming and non-farming activities. Nonetheless, the practice of diversification provided a much more stable source of income overall.

Niger

Niger currently ranks as the fifth most impoverished country in the world, and it is actively striving to end its poverty issue. People are seeing positive results attributed to the dynamic between poverty and income diversification.

A study conducted on over 600 smallholder rice farming families in Niger revealed that those who also participated in non-farming wage employment were better off than those who strictly farmed or were self-employed in some capacity related to farming. An important effect of a second stream of income was the ability to maintain the size of a given farm. The ancillary job could generate enough profit during a poor season to cover overhead costs for the following season.

Conclusion

The relationship between poverty and income diversification has become a central focus for policymakers across the globe. It is an effective way for individuals to mitigate the impacts of poverty. Empowering impoverished families to earn steady income can solve many issues embedded in poverty. If a family can individually afford food and water, they can pay to keep their lights on or go for a visit to a doctor. Moreover, the idea of attaining an education or further developing their current form of income becomes a realistic possibility. Diversifying income creates a pathway to not only sustaining livelihoods, but lays the groundwork for prosperity.

– Christian Montemayor
Photo: Flickr

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Hunger in Paraguay

Hunger in ParaguayParaguay is one of the smallest countries in South America but is still home to more than seven million residents. Many Paraguayans residing in the landlocked region struggle to survive, with nearly 17% of the population living in poverty. The poverty rate is even higher among rural and indigenous communities. As a result, hunger in Paraguay continues to be a significant problem.

The Causes of Hunger: Exports and Inequality

A prominent yet paradoxical cause of hunger in Paraguay is its growing export rates. As the UN reports, “Only 6% of agricultural land is available for domestic food production, whilst 94% is used for export crops.” While the country produces considerable agricultural resources each year, exporters ship most of this produce and livestock overseas and leave very little in the country. This lack of domestic production means that many Paraguayans cannot afford expensive imports. As a result, many must contend with food insecurity and hunger in Paraguay.

To make matters worse, the divide between the wealthy and the working class in Paraguay is drastic. Roughly 3% of the population owns more than 85% of its land and resources. This unequal distribution of land and resources leaves small landowners impoverished and unable to compete, with many turning to urban areas in search of marginal work.

Agricultural Industry

The Paraguayan agricultural industry’s oligarchical nature makes it challenging to reallocate Paraguay’s land and natural resources. The 3% of landowners hold tremendous financial and political influence in the country, making it difficult for the Paraguayan government to reallocate resources or reappropriate land toward domestic production. The extremely wealthy are also only interested in producing a handful of different crops that do well in the global market.

However, this makes Paraguay’s economy and exporting gains very dependent on a temperamental world market. The market’s fluctuations can be particularly tricky and potentially harmful for the underserved and impoverished in the country, who are already struggling to survive. Without much opportunity for social mobility, those threatened by hunger in Paraguay must routinely find cheap alternatives to sustenance. High-quality, nutritious food remains an unaffordable commodity for many Paraguayans.

Hunger and Malnutrition

Poverty leads to food insecurity and malnutrition, two issues symptomatic of hunger in Paraguay. As nutritionist Nadia Quintana notes, “About 15% of Paraguayan children suffer from malnutrition. And that is if you do not count the children from indigenous groups. According to a United Nations estimate, if we include indigenous tribes, more than 45% of Paraguay children are at risk of hunger or malnutrition. But the problem is not lack of food. The problem here is poverty and lack of work and education. And housing is very precarious.”

While instances of undernutrition and starvation are trending downward, malnutrition and obesity rates are rising in Paraguay as poverty forces impoverished citizens to subsist on cheaper, less nutritious foods. These low-nutrient, high-calorie options may be cheap, but they have had an outsized impact on an average Paraguayan’s diet. Residents are in an impossible situation, forced to choose between going hungry or eating foods correlated with increased vulnerability to chronic diseases.

Global Pandemic and Rising Unemployment Rates

The COVID-19 global pandemic has further complicated hunger in Paraguay. While the small Latin American country was one of the first to begin quarantining measures to counteract the March 2020 outbreaks, the nationwide lockdown has crippled many of the country’s workers. Although the country has the fewest coronavirus cases in the region, many of its workers have lost their primary sources of income. The loss of employment means that nearly 60% of the population is without access to any benefits or financial support during the ongoing pandemic.

According to the Guardian, though the government has secured $1.6 billion in pandemic crisis loans, a tiny percentage of Paraguayans have received the promised $76 and food packs. As a result, the dependence on cheap, non-nutritious foods and correlated instances of malnutrition and obesity continue to rise. Rising unemployment rates and lack of federal support will inevitably exacerbate the ever-present issues poverty of hunger in Paraguay.

Indigenous Communities and Hunger in Paraguay

Among the most affected by poverty, pandemic and hunger in Paraguay are indigenous peoples with minimal economic and social resources to combat their current circumstances. Under the lockdown, many are unable to secure food and must rely on communal meals and donations to survive. The Paraguayan government has offered aid but has struggled to deliver it as it has to the rest of its people. Amnesty International has partnered with local initiatives to lobby for sufficient assistance to these indigenous communities waiting and hungry for action.

Moving forward, the Paraguayan government faces an uphill battle in providing its citizens with adequate resources to sustain healthy diets. The government finds itself in a difficult place as it struggles to assist and feed its people amid the ongoing coronavirus pandemic, especially as its workers are out of jobs. With so much of its economy tied to a small minority of extremely wealthy agricultural exports, Paraguay must find a way to help those who are not part of the top 3%, especially those living in indigenous, underserved and impoverished areas. Though extreme poverty trends downward, malnutrition and obesity will continue to characterize hunger in Paraguay.

– Andrew Giang
Photo: Flickr

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5 Ways Demonetization in India is Affecting the Poor

demonetization in India
In 2016, India’s new government, run by Prime Minister Narendra Modi, launched an initiative that replaced all 500 and 1,000 rupee bills with the new 2,000 rupee bills. The initiative sought to eliminate illegal money, or “black money,” and prevent people from conducting illegal business deals. Unfortunately, the initiative also affected the poor the most. The replacement of bills brought on a massive disruption to the overall economy, especially due to the cash shortages experienced by many throughout the nation. Here are five ways demonetization in India has affected poor communities.

5 Ways Demonetization in India is Affecting the Poor

  1. Market vendors had to shut down their shops. Typically, market vendors farm on a daily basis and sell their production. The drop in customer traffic, however, forced the market vendors to shut down their shops. Since these laborers work without an official employment contract, they make up a part of an informal economy. As a result, without a regular flow of customers, it becomes hard for these people to survive. The majority of this informal economy depends upon cash transactions.
  2. The ban of the 500 and 1,000 rupee bills has tremendously affected migrant labor workers. Migrant labor workers are those who travel to find work every year. Similar to the informal economy, these laborers typically rely on cash transactions. Due to the fact that such cash transactions occur privately, without the interference of the banks, the demonetization policy makes it even more difficult for these migrant laborers who already travel far from home, leaving their families behind, in hope for a decent job.
  3. Demonetization has also negatively impacted small business owners who serve food on streets. Due to the fact that the citizens had only 50 days to exchange their notes, customer flow completed stopped for many businesses. Additionally, many of these small business owners could not afford to stand in the long lines outside of the banks. For a wealthy family, losing an income of a few days does not make a big difference. However, for the poor, losing the income of even two days has an impact. As a result, people began skipping meals to keep their businesses running.
  4. The low-income, working class people suffer from the new policy. Typically, working class people have basic jobs with fairly low wages. Due to the fact that there is a shortage of cash flow, many low-income workers are experiencing delayed salary payments. As a result, it becomes difficult to run households. This especially becomes a problem when there are children who are going to school with high fees, or if there is a wedding in the house. Additionally, young adults getting ready for college also faced difficulties, since their parents were unable to afford to pay high college tuition.
  5. Demonetization in India has also negatively affected daily-wage workers. Since the implementation of demonetization, daily-wage workers, such as maids and housekeepers, have found it increasingly difficult to manage their lives. Cash shortages makes it difficult for them to get paid on time, which leads to skipping meals or working twice as much but for low wages. It also becomes hard for these workers to buy basic necessities or even pay education fees for children. As a result of financial strain, some children might have to do small jobs in order to bring in more money.
While demonetization in India initially had a negative impact on the poor, this was caused mainly by the transition. The Modi government has described the policy as a “fight for the poor against the corrupt rich,” and the problems poor communities faced are alleviating now that the economy is rebounding. Despite the chaos demonetization created, Modi has high approval ratings in India. In the future, it is essential that the government put in place better protections for the poor when making such a significant change, to ensure Indians are not suffering.

– Krishna Panchal 
Photo: Flickr