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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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Innovations in the Philippines for Health

Innovations in the PhilippinesOver the past decade, there have been drastic innovations in the Philippines. The country has experienced dramatic economic growth and development. In 2019, the Global Innovation Index (GII) found that the country improved on all metrics used to calculate advancement.

Economic Growth

In 2019, the Philippines appeared for the first time in the “innovation achievers group.” The country outperformed many other countries in the area.  Some of the metrics used to calculate these scores included increased levels of creative exports, trademarks, high-tech imports and employed, highly educated women.

As a country, the Philippines has risen 19 spots in the ranking since 2018, to 54th out of 129 participating countries. This indicates a significant increase in the standard of living for many Filipinos. This is apparent in the significant decrease in the poverty rate over the past few years. From 2015 to 2018, the national poverty rate dropped a total of 6.7%, or by 5.9 million people.

Prosperity is largely due to the success of local business owners and entrepreneurs. They have used their influence and prosperity to help those in need in their communities and countries, especially in the health sector. Coincidingly, there was a significant increase in global trade. Both factors have propelled the Philippines into the global economy as an important emerging market to keep an eye on.

Global Benefits

In 2018, the Philippines and the United States trade relationship developed significantly. The total goods trade was $21.4 billion collectively, in the petroleum and coal, aerospace and computer software, motor vehicles and travel/hospitality sectors. This is beneficial to the U.S. because international trade employs over 39.8 million Americans. As the Philippines becomes more prosperous, more Filipinos are able to pour money and resources into helping marginalized communities across the country. As such, there has been an increase in innovations in the Philippines, notably in the health and medical sectors.

RxBox

A distinct industry on the frontlines of innovations in the Philippines is the health sector. Increased health for a population is directly related to better access to opportunity and a higher standard of living overall. One company doing this important work in the Philippines is RxBox.

RxBox was developed by the country’s Department of Science and Technology. It is a biomedical telehealth system that provides health care and diagnoses to people in communities that are remote, difficult to access. The service is additionally available for people who do not have access or the ability to travel for health care.

It is a game-changer for disadvantaged people who would otherwise not be able to get fast, effective medical care. RxBox reduces costly hospital and medical visits, which facilitates better health for people. Communities are then better able to care for themselves and for their families, providing greater opportunities for everybody.

Biotek M

There is another player in the innovations in the Philippines: Biotek M. It is a revolutionary diagnostic kit for Dengue. A local team at the University of the Philippines-Diliman were the creators of this new technology.

Traditionally, the Polymerase Chain Reaction (PCR) test is used to confirm the disease but can cost up to $8,000 and takes 24 hours to get results. That is inaccessible to lower-income people who are oftentimes the demographic most commonly afflicted by the dengue infection. The kit helps reduce resource usage for both medical centers and patients by making the diagnosis process significantly more streamlined.

In 2017, 131,827 cases of Dengue were recorded with 732 deaths, mostly affecting young children aged 5 to 9-years-old. Being able to quickly diagnose and treat people who contract this illness makes a huge impact on people living in poverty.

When people spend less time, energy and money on being healthy, they are able to use their resources more efficiently. In this way, medical innovations in Philippines and a growing economy directly increased the standard of living for people living in poverty within the country.

– Noelle Nelson
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

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The New Frontier: China’s Investment in Africa

china's investment
For those seeking investment, look no further than the continent of Africa. While the continent has had a tumultuous couple of decades, plagued by health crises such as Ebola, and political unrest is it also gushing with economic, diplomatic, and political potential – and China is taking notice.

Government Involvement

Just last year (August 2018), President Xi of China, speaking at the Forum on China-Africa Cooperation, has pledged to invest a major sum of $60 billion in commercial loans to the African continent. This investment in Africa, as well as a plethora of other nations scattered across the Middle East, Eastern Europe and Asia, are all apart of China’s overall global strategy – what they are calling the Belt Road Initiative (BRI). Under this daring economic, political and diplomatic strategy, China is investing large sums of money to mainly developing nations as a way to not only benefit China’s economic interests but to cement its role in the world as a dominating global superpower.

A Welcoming Environment

Also, when it comes to large Chinese investments, Africa is more than welcoming. In addition to the overall loans that China is dedicating to forming some friendships, these investments, especially in infrastructure, may be a godsend. At the time of this writing, Africa has a $900 billion infrastructure deficit. The much-needed cash flow from China will not only allow many African nations to lay the groundwork for basic infrastructure projects, but it will also afford children the opportunities required to gain an education and for local businesses to trade.

In addition to the major pillars of the BRI, China is also establishing what it is calling a “Maritime Silk Road” – a chain of seaports from the South China Sea to Africa. With the construction of these ports will come: oil refineries, industrial parks, and fiber optic networks, all designed to make a trade with China easier and mutually beneficial – and thus far it seems to be accomplishing China’s goal of breathing new life into its infamous ancient Silk Road.

And while these projects are beneficial to the recipient countries, China does add that part of the developments will be helped by Chinese labor and companies, thus allowing China to take a slice of the economic cake as it were. But while many Chinese companies are profiting off BRI contracts, the projects being funded are benefiting local communities and provide steady work and cash flow to otherwise struggling areas of Africa. Economic benefits aside, this partnership is allowing many African nations to forge diplomatic relations with a world power as well.

Economic and Political Ramifications

China’s investment in Africa does, however, come with a few pitfalls. While Chinese companies become more prominent in Africa, so will “Made in China” products. This will come with some obvious knock-on effects, for example, for the last couple of decades these products have had a devastating effect on what was once a thriving South African textile industry. But, the pendulum does swing the other way as well. Ethiopia has seen positive outcomes from Chinese investments.

Investment in Africa began as an opening of windows of opportunity around the globe for China. The United States has been the worlds primary loan superpower for the last several decades – investing billions of dollars in foreign aid and development projects through USAID and starting working establishment programs in various nations. But with loans from the West coming with strings attached – mainly strict ethical standards – China saw a chance to offer billions in loans with fewer conditions.

Due to China’s willingness to loan large sums of money to nations torn apart by conflict and instability, the global community has raised concerns. These nations will eventually need to pay back these loans, and the worlds less than reliable recipients could threaten global economic stability if they default.

However, China isn’t necessarily concerned if these countries can’t pay them back, in the literal sense. In exchange for the economic clout that comes with Chinese investments, nations such as South Africa’s Djibouti are lending naval ports as a means of reciprocation – forming a “String of Pearls” which gives China a foothold in the naval Indian ocean. But while some of these loans may be risky investments on the continent of Africa, China understands the cost-benefit analysis and is treating Africa as a new frontier.

A Positive Outcome

China’s investment in Africa, while risky, may end up paying off. With Africa’s willingness to accept loans from China, and listening with open ears to China’s overtures for stronger diplomatic relations, Africa is in a good position to begin funding its own economic and development programs. Programs that will address issues of poverty, inequality, and education.

– Connor Dobson
Photo: Flickr

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Child Poverty in Spain Among a Booming Economy

child poverty in spain
Since the end of Spain’s economic recession in 2014, the country is the largest grower in the EU, with a GDP almost twice that of the average European country. Despite a six-year recession that impacted both the entire population and other countries in the Eurozone, the economy seems to have recovered. However, despite Spain’s economic recovery, the rate and likelihood of children in poverty have increased exponentially. Curiosity arises as to how an issue like poverty could arise in a country as developed as Spain.

The Problem

The rise of child poverty in Spain despite the recovery of the economy seems counterintuitive. However, studies show that one in three children are likely to be impoverished or socially excluded, according to the EU’s latest figures. As the results of their studies show, Spanish children are not only encumbered by a lack of income, but also lack of socialization, meaning that child poverty in Spain is multidimensional; this means a lack of proper education, nutrition, future employment, and social time on top of the financial crisis that has remained in many middle and low-class families despite the national economic recovery. Impoverished families are unable to prevent their children from reaching the same fate because the turn of the recession has resulted in a job market that provides no opportunity for even the most qualified candidates.

This issue is most dominant in middle and low-class families, and the middle class is already dangerously small. The trademark economic concept of the rich getting richer and the poor getting poorer is true in the Spanish socioeconomic classes and results in the stretching and thinning of the middle class. These larger socioeconomic effects are only symptoms of child poverty in Spain. The reason why the focus of the recession is on children is that they are the most at-risk demographic; when parents are impacted, it extends to their children.

The Larger Issue

Child poverty in Spain has adverse effects on the rest of society, including senior citizens, young adults, and parents. The growing number of impoverished children puts pressure on the social pension systems that account for one of the fastest aging populations in Europe. Children trapped in poverty will grow to be adults who remain reliant on social and governmental assistance. Many young adults avoided higher education due to attractive employment opportunities before the recession, leaving a large population of eager, unaccredited workers in a job market that no longer needs it. Because of the lack of opportunity in the job market, parents are reliant on unemployment benefits or the pension of their parents.

Effects of The Problem

Because child poverty in Spain is a multidimensional issue, the effects correspond to their complexity. In terms of education, Spain has experienced a drop out rate 23 percent higher than the EU average since the beginning of the recession in 2008. In general, Spain’s dropout and unemployment rates are high, specifically among those of disadvantaged socioeconomic backgrounds.

Studies show that even very brief bursts of intense poverty can impact child development for the rest of their lives. Economists and child development specialists predict that if this poverty persists, the adults of the future will have been stunted in their development due to their reliance on pensions.

What Is Being Done?

Even Sevilla, the fifth most populated city in Spain and a huge tourist destination, falls victim to increasing child poverty rates. There are many gaps in the welfare system that are unaccounted for, which are essential to the development of children. For example, because of limited monthly income but the need to continue to feed their children, families are buying enough food for everyone, but without the necessary nutrients for developing bodies. As such, children in Spain aren’t necessarily hungry, they are impoverished. So, NGOs like Save the Children fill in the gaps in children’s diets by providing nutrient-rich meals.

Save the Children works in several domains that benefit the needs of at-risk or impoverished Spanish children, including nutrition, health and education. By filling in the dietary and academic gaps in these children’s lives, their families will have some security. In 2014, Save the Children reached 14,889 children and 5,635 adults through programs that combat educational poverty, social exclusion, and workshops that prevent the issue from furthering. The hope is that as the recovery continues, economic reform will result in a balancing of socioeconomic classes and the disparity will vanish. Until then, NGOs like Save the Children will continue to try and cover up the remaining holes in the system left by the recession in the hopes that the children they serve will grow up to lead a generation where poverty is the exception, not the expectation.

Hope for The Future

Child poverty is a major issue because these children will grow up to be the leaders of their nation. The increased rate of child poverty in Spain is an alarming problem that is fueled by an economic crisis and a weak social infrastructure. Child poverty in Spain is different than in other countries. Spanish children are not poor in the traditional sense. They are fed and have access to education. The nature of poverty is more nuanced than a lack of resources. Children in Spain are fed, yet malnourished, have access to school, but often drop out. The other key issue is the lack of socialization among peers. However, with NGOs like Save the Children who provide programs to areas in need, this issue can perhaps be alleviated. With directed efforts towards these specific problems and programs that are tailored towards the specific nature of these issues, child poverty can be eradicated, securing Spain’s future prosperity.

– Andrew Yang
Photo: Flickr

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New Resorts Accommodate Growth in the Dominican Republic

Growth in the Dominican Republic

The Dominican Republic, a Caribbean nation of 10.77 million people, shares the island of Hispaniola with Haiti and is primarily known for its beautiful beaches and resorts. With a 13.5 percent youth unemployment rate in the country, these resorts provide necessary jobs, economic stimulation and growth in the Dominican Republic. Despite the recent negative media attention, the growth of resorts shows no sign of stopping. Four new resorts opening in late 2019 and 2020 will continue adding to the burgeoning tourist industry, increasing numbers of workers in the service sector and establish mutually beneficial U.S. and Dominican exchanges.

The Pillar of Tourism

According to the Canadian Trade Commissioner Service, the tourism industry is one of the “four pillars” of the Dominican economy. It forms 7.9 percent of the economy. Growth in the Dominican Republic focuses on projects encouraging tourists to spend more money. There are already 65 such projects approved by the Dominican Republic Ministry of Tourism for 2019.

Speedy development will continue the trend of success in the tourism sector. The Dominican Republic Association for Hotels and Tourism statistics for 2018 displayed a 6.2 percent increase in the sector, which now makes up 20 percent of Caribbean trips. There was also a six percent increase in hotel rooms, and people filled 77 percent of total rooms. Overall, the industry reaped immense revenues of $7.2 billion in 2017. Tourism’s success contributes to GDP growth. The University of Denver predicts $89.54 billion in 2019, and GDP rising to $161.4 billion by 2030.

More Rooms, More Jobs

New resorts will extend the tourism industry’s prosperity by increasing the amount of occupied rooms and the jobs required to service visitors. The World Bank reported that the Dominican labor force was 4,952,136 workers in 2018, up from 3,911,218 only eight years before. Service sector workers made up 61.4 percent in 2017, illustrating the prominent role tourism and related industries play for the growth of the Dominican Republic. Here are four vacation spots heating up employment progress in late 2019 and 2020:

Grand Fiesta Americana Punta Cana Los Corales: This resort, owned by the Mexican Company Posadas, will have 558 rooms and various amenities necessitating more staff. The Director-General of Posadas, José Carlos Azcárraga, expressed hopes that the new resort will aid one of the fastest-growing Caribbean economies. The Dominican president visited the cornerstone to show his support. The resort opens in late 2019.

Hyatt Ziva Cap Cana: This American-owned Playa Hotels and Resorts brand also had a groundbreaking ceremony attended by the Dominican president. There will be 750 rooms requiring staff attention, alongside the various dining and fitness services provided. It opens in November 2019.

Club Med Michès Playa Esmeralda: This newest edition to Club Med’s resort collection will be an eco-friendly environment with four separate “villages” for new employees to manage. In an email to The Borgen Project, Club Med stated it will hire more than 440 Dominicans and help lead vocational training for approximately 1,000 locals to extend the resort’s positive impact. It opens in November 2019.

Dreams Resorts and Spas in El Macao: AMResorts, a subsidiary of the American-owned Apple Leisure Group, will have 500 rooms for the staff to manage. Bars, pools and a litany of eateries will require service sector employees as well. It opens in 2020.

A Vacation for Two

The development of new resorts is mutually beneficial for both the U.S. and the Dominican Republic. The island nation’s tourism is highly dependent on American visitors, who formed 33.85 percent of guests in 2013. The Dominican Embassy reported that individual tourists spent $1,055 on average in the same year. Americans received a pleasant vacation in exchange for growth in the Dominican Republic.

Two of the above resorts are branded by American companies as well. Their earnings not only benefit the Dominican economy but also benefit the American economy. Resort companies are part of a larger exchange where 53 percent of 2017 Dominican trade was with the U.S.. The Canadian Trade Commissioner Service found that the Dominican Republic imported 42 percent of its goods from the U.S. in the same year.

Unfortunately, the four new resorts will not solve all of the Dominican Republic’s problems. Poverty remains high at 30.5 percent, although it has dropped from 41.2 percent in 2013. However, new resorts contribute to this decrease by providing employment opportunities in one of the nation’s most lucrative sectors.

– Sean Galli
Photo: Flickr

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Economic Diversification in Guinea-Bissau

Economic Diversification in Guinea-Bissau
Guinea-Bissau is a small West African country with a poverty rate of more than 60 percent. Poor infrastructure and a stagnant business climate fostered a reliance on its main income producer, subsistence farming. Despite this, its GDP growth rate has remained fairly high. Real GDP growth rate in 2017 was 5.9 percent, one of the highest in Africa. Though a recession increased debt and caused Guinea-Bissau to seek assistance from the International Monetary Fund (IMF), the country has slowly rebounded. The nation stands to benefit from a diversified economy.

Current State of the Economy

Guinea-Bissau consistently ranks among the top 10 poorest countries in the world. About 80 percent of the population works in agriculture, while industry and services make up the remaining workforce. As is typical for a developing country, many residents rely on subsistence farming. Cashew production is an important export and source of income for Bissau-Guineans, making up more than 80 percent of income. Economic diversification in Guinea-Bissau could add jobs, begin infrastructure developments and lead to further investment in health and education.

A Cashew Economy

In a visit to Guinea-Bissau in January of this year, an IMF team led by Tobia Rasmussen discussed the importance of favorable cashew prices and production. “Ensuring a transparent and competitive cashew marketing season will be critical,” stated Rasmussen. Cashew production and pricing are important to most Bissau-Guineans. The issue, as with most developing countries, is an over-reliance on the agriculture industry.

Although economic diversification in Guinea-Bissau could be partially achieved by emphasizing crops other than cashews, there would still be a more widespread effect by focusing on services and other industries that have been left untapped. Further investment in the agriculture industry, such as through equipment and green technology, could also provide some relief to poverty-stricken residents.

Areas for Development

Guinea-Bissau lacks strong energy infrastructure and general infrastructure. Adding roads, bridges, railways, ports, hospitals and schools are examples of infrastructure developments that don’t just benefit the native population. Both tourists hoping to visit and business people interested in investing in a country that has the potential for growth stand to benefit, as well. Mineral resources, such as phosphates, mineral sands, bauxite, diamond and gold all are untapped. There are currently only small-scale mining of construction materials, such as clay, granite and limestone. Further development, as well as additional funding by the government in infrastructure, would provide a suitable foundation for the basis of a developed country. Infrastructure, such as roadways, is a necessary beginning to a developing economy. To demonstrate the current state of roadways in the country, only 10 percent of the national road network is tarred.

Energy Infrastructure

Only 21 percent of the population has electricity. There are also no telephone lines. Opening investment to the energy sector, especially to external corporations, is often foundational for further development. Current President of Guinea-Bissau Jose Mario Vaz has promised to reduce poverty and drug trafficking, both of which are rampant. At the 73rd United Nations Assembly President Vaz stated he wished to “eradicate poverty and hunger, combat major endemic diseases, as well as guarantee education and potable water for all.”

Promising Ports

The key location of the country is often overlooked. Guinea-Bissau is a western port of Africa that enables it to be a strategic location for trade. Fishing is usually grouped with the agriculture industry but could become a new income source for the 60 percent of Bissau-Guineans in poverty. Advancements in fishing, such as sonar technology that allows the user to find fish, is one example that provides simple and modern solutions to poor countries.

External Investment

China is a major investor in Africa and has announced it would invest more than $60 billion to help developing countries. One way it achieves this is through investment in infrastructure. China has built Guinea-Bissau’s parliament building, a government palace and a national stadium. The most economical investment China has made for Guinea-Bissau is its $184 million investment in a 30-kilowatt biomass power plant. The partnership is a major step in providing electricity to its residents while also adding to economic diversification in Guinea-Bissau.

With a continued focus on economic diversification and energy infrastructure Guinea-Bissau holds the potential for boundless development. The aforementioned initiatives and investment products indicate that positive change is already occurring in the West African nation.

– Lucas Schmidt
Photo: Flickr

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7 Facts About Living Conditions in Australia

7 facts about living conditions in australia
In 2015, Australia was ranked as the second-best country in the world in terms of quality of life. This report was based on a number of living condition factors, including financial indicators, like average income, and health standards, education and life expectancy. The following 7 facts about living conditions in Australia further illustrate what life is like in the Land Down Under. Many of these facts are based upon data retrieved from the Organisation for Economic Cooperation and Development (OECD), comprised of 36 member countries and founded to stimulate world trade.

7 Facts About Living Conditions in Australia

  1. Children Are an Impoverished Group: As of 2018, 13.2 percent of Australians (around three million people) were living below the poverty line, 730,000 of which are children under the age of 15. According to the Poverty in Australia 2018 report, a large reason for the overwhelming number of impoverished children is the high poverty rate among single-parent families relying on a single income. In terms of money, living below the poverty line in Australia translates to earning $433 per week for a single adult, or $909 per week for a married couple with two children. Most individuals experiencing poverty in Australia rely on Government allowance payments, like Youth Allowance and Newstart.
  2. Sanitation is Good: The percentage of homes in Australia that have access to an indoor flushing toilet is more than 95.6 percent, which is the OECD average. Additionally, more than 90% of Australians report satisfaction with their water quality. Access to running water and the high quality of water makes Australia above average in relation to the other 36 OECD member countries.
  3. A Wage Gap Exists: The gap in income between the rich and poor in Australia is quite large; the wealthiest 20 percent of Australians earn almost six times as much as the poorest 20 percent of Australians. This income inequality has been steadily rising since the mid-1990’s. One attempt to remedy income inequality in Australia is a progressive system of income tax, meaning that as an individual’s income increases, they will pay a higher amount of their income in tax. Additionally, social welfare payments account for around 35 percent of the Australian government’s budget. In 2017-2018, this translated to a $164 billion budget for social security and welfare.
  4. Australians Are Staying Employed: Seventy-three percent of Australians aged 15 to 64 have paid jobs, while the percentage of Australians who have been unemployed for one year or longer is 1.3 percent. The percentage of employed Australians is higher than the OECD average. Though the Australian job market thrives, Australians have a below-average ranking in work-life balance.
  5. Strong Education: The average Australian citizen will receive 21 years of education between the ages of 5 and 39, which is the highest amount of education in the OECD. Roughly 64 percent of children in Australia attend public schools, while 34 percent attend private or Catholic schools. Additionally, not only is the education system strong for Australian citizens, but international education offered to foreign students is Australia’s third largest export, valued at $19.9 billion.
  6. Rising Crime Rates: Over the past 2 decades, the number of reported crimes has risen dramatically; for example, from 1977-1978, the number of reported break-ins was 880 per thousand. From 1997-1998, this number rose to 2,125 per thousand. In the same period, assaults have risen from 90 to 689 per thousand of population and robberies have risen from 23 to 113 per thousand. While many of these 7 facts about living conditions in Australia indicate increasing quality of life for citizens, rising crime rates affect feelings of security, which has a negative effect on standards of living in Australia.
  7. Improving Health Standards: Health standards in Australia have risen substantially since 1947. From 1947 to 1989, the life expectancy of women increased by 10.9 years, while the life expectancy of men has risen by 9.8 years. Since 1990, life expectancy has risen even more, increasing by another 1.4 years for women and 2 years for men.

With one of the strongest performing economies in the world, Australians experience thriving, stable financial conditions. The education system is well organized and accessible, and health standards have increased and driven the life expectancies of Australians up over the last 70 years.

Yet, despite the tremendous growth and development in Australia, there are areas in standards of living that demand improvement. Perhaps most importantly, income inequality in Australia is alarmingly high, and poverty rates of citizens, and especially children, plagues the strength of Australian society. These 7 facts about living conditions in Australia indicate a thriving and desirable country with a need for concentrated focus on income inequality to eradicate staggering poverty in the lower class.

– Orly Golub
Photo: Flickr

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The Urban-Rural Poverty Gap in Morocco

the urban-rural poverty gap in morocco

Though Morocco’s economic and political status has improved as a result of King Muhammad VI’s reign, the North African nation remains impoverished. Specifically, the urban-rural poverty gap in Morocco is one of the nation’s most complex issues. Morocco’s larger cities, namely Casablanca and Rabat, are evolving into flourishing economic centers, attracting companies and tourists from around the world. Simultaneously, Morocco’s rural and agrarian communities–the Amazigh people–have found themselves stuck living with little access to modern commodities.

A First-Hand Account

Sophie Boyd, an undergraduate student majoring in Middle Eastern and Islamic Studies at Colgate University, studied abroad in Rabat last summer. Boyd provided the Borgen Project some insight into the poverty situation in the North African nation. “There was a huge disparity between the living conditions of Moroccans in cities compared to the rural Amazigh villages we visited,” Boyd said. “You could be wandering around the enormous shopping mall in Casablanca and still only be an hour drive away from people who live with almost no electricity. This extreme gap was unfortunate to see and these neglected and impoverished people desperately need more accessible resources and aid.”

The Amazigh People

Unfortunately, Boyd’s observations were fairly accurate and realistic, as Morocco’s Amazigh population has faced hardship and poverty for decades. Though there are about 19 million Amazigh people living in Morocco, which makes up approximately 52 percent of the nation’s population. Their language, known as Tamazight, was not even recognized as an official language of Morocco until 2011. Not only do the Amazigh people who occupy these rural communities not have adequate means to subsist on, but they had also lost their representative voice in the Moroccan government until recently.

Urban Gains

A 2017 study conducted by the World Bank and the Morocco High Commission for Planning found that poverty was actually decreasing at a much faster rate in urban areas than in rural communities. This makes sense considering there is more room for economic growth and consumption in urban centers. Still, this phenomenon contributes to the urban-rural poverty gap in Morocco and creates an even more drastic inequality between rural and urban communities.

Poverty Rising

Another aspect of the urban-rural poverty gap in Morocco that has continued to develop over time is the concept of subjective poverty. The subjective poverty rate refers to the percentage of people, in this case, Moroccans, who consider themselves to be poor or impoverished. The aforementioned World Bank study found that from 2007 to 2014, the subjective poverty rate in rural areas increased from 15 percent to 54 percent. This drastic increase can be partially attributed to the recent economic growth in urban areas. However, it may also have to do with the daily living conditions of the rural Amazigh communities. For example, CIA World Factbook states that only 68.5 percent of Moroccans are literate. This can make life for rural people trying to emerge from poverty increasingly difficult, compounding with other factors such as the infertile, arid land.

A Hopeful Future, Still

The Moroccan government has made it a point to address the urban-rural poverty gap in Morocco. The nation has already demonstrated its interest in resolving this gap through initiatives such as the National Initiative for Human Development Support Project, a plan launched in 2005 to try and close the poverty gap. Morocco will have to continue to work toward better living conditions in its rural communities. If the nation can fix issues like illiteracy and decrease the subjective poverty rate, then it will be well on its way toward closing the urban-rural poverty gap in Morocco.

–Ethan Marchetti
Photo: Flickr

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