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Causes of Poverty in Guinea-Bissau

Causes of Poverty in Guinea-BissauGuinea-Bissau is a small country located south of Senegal. Guinea-Bissau has had tough economic times ever since its independence in 1973. As of 2010, the rate of poverty was 70 percent. Causes of poverty in Guinea-Bissau include political and economic instability.

Political instability is the root of most evils in Guinea-Bissau. There is unrest because there is lack of successful governance. No prime minister has lasted more than a few consecutive months, which shows the uncommitted approach that that has led to a country unable to develop out of dreary conditions. Guinea-Bissau has experienced two coups and a civil war, both of which have affected the political atmosphere in extreme ways. The political atmosphere, in turn, affects the economy. Citizens are not given adequate services or wages, and there is very little regulation of the economy and agricultural practices. In this way, the main causes of poverty in Guinea-Bissau stem from political instability. When a country does not have a functioning government, its economy cannot function either.

Most of the country’s agricultural sector is focused on the production and exportation of cashew nuts. The cashew nut industry provides 85 percent of all jobs, so when this production slows so do a number of jobs available. The number of exports has declined because of competing countries that export the same commodity and the overall underdevelopment of the industry. Production could triple with the implementation of new infrastructure and technology and still be behind international competitors.

The lack of exportation in the cashew nut industry causes economic difficulties on many scales. On a small scale, families are not given as many work opportunities, making it difficult to generate enough funds to live. On a larger scale, funds from the exportation of commodities, such as cashew nuts, are lacking. Unable to generate sustainable revenue, Guinea-Bissau’s economy is underdeveloped.

The main causes of poverty in Guinea-Bissau are most closely associated with political unrest and an insufficient economy. Guinea-Bissau is unable to be economically successful, relying mainly on foreign aid. Agricultural practices can be improved with the implementation of modern infrastructure that speeds up the process and develops the industry. It is important for the U.N. and international financial institutions to coordinate in the absence of a functioning government in order for Guinea-Bissau to further develop.

– Lucy Voegeli

Photo: Flickr

Five Ways Poverty in Bangladesh Has Been Reduced

Poverty in BangladeshWith a third of the world’s poor residing in south Asia, Bangladesh considerably contributes to this number. But the past few decades have seen a decline in this trend, as the population of individuals living in poverty has decreased from 44.2 million in 1991 to 28.1 million in 2010. In order to move to the status of a developed country, the number of women in the workforce has doubled, the economy is steadily growing, and Bangladesh has set a goal to end poverty by 2030.

5 ways poverty has been reduced in Bangladesh:

1. The 1950s saw a recognition of the relationship between family and poverty. The government’s National Family Planning Association implemented a voluntary family planning program in 1953. The 21st century has grown this program, as contraception is prevalent among 42 percent of women and 4 million unwanted pregnancies were prevented in 2016. This program goes beyond population growth, as it keeps women in the workforce, therefore reducing their vulnerability to poverty.
2. Education continues to be a vessel of leaving poverty. The government of Bangladesh established the Primary Education Stipends program between 1990 and 2000. Impoverished families receive a cash stipend each month to send children to school. The program has abolished school fees and textbook fees, and has helped to train teachers. The program has also increased enrollment from 60 percent to 89 percent from 1990 to 2011.
3. UKAid’s Urban Partnership for Poverty Reduction project was created to assist aspiring entrepreneurs in poverty. A grant is awarded, and the recipient usually matches the amount. The program has awarded 55,000 grants in the past five years. The grants are used in a variety of ways, but are commonly used to help people in poverty follow their dreams of starting a business.
4. Taking an unusual approach to fighting poverty, the United Nations Development Program began to compile data about producers, traders, and other professions involved in trade. To date, the project has collected the stories of 200 individuals in poverty. The vision of the project is to raise awareness of all the workers who still live in extreme poverty, and from there find solutions to the problems of impoverished farm workers.
5. Created to facilitate poverty reduction worldwide, the Millennium Development Goals have been tailored by UNICEF to fit Bangladesh. The program aims to reduce the micronutrient deficiencies among impoverished children. In addition, the goals have been altered to include a goal of 95 percent school enrollment rate, 85 percent completion rate, and provides non-formal primary education to 200,000 working children between the ages of 10 and 14.

Bangladesh has suffered the effects of poverty for generations. These programs have worked to fix the problem and are moving Bangladesh forward. With the number of people in poverty diminishing, these 5 ways of reducing poverty in Bangladesh are doing exactly what they set out to do.

– Sophie Casimes

Photo: Flickr

The Top Six Answers About the Poverty Rate in Mexico

poverty rate in MexicoMexico has the highest poverty rate in North America. Its economy is based on commodities and manufacturing, and it has the second highest degree of economic disparity between the wealthy and the poor. Here are the top six answers about the poverty rate in Mexico:

1. What is the poverty rate in Mexico?

The poverty rate in Mexico in 2014 was 26.2 percent. In a population of 120 million, 55.3 million live below the poverty line. This number is a slight decrease from 2010, revealing that the modest economic growth in the country was not enough to better the poorest people’s circumstances.

2. How is the poverty level determined in Mexico?

Poverty rates are measured by Mexico’s National Council for the Evaluation of Social Development Policy (CONEVAL). The council examines the current per capita income, level of education, access to health securities, access to social security, quality and the size of one’s home and access to food. CONEVAL defines poverty as, “People with an income below the wellbeing threshold and with one or more social deprivations.” In 2014, poverty was defined as living on less that 2,542 pesos ($157.70) a month in urban areas and 1,615 pesos in rural areas.

3. What areas of Mexico have the highest poverty rate?

Regions of the the southern pacific coast traditionally have the highest poverty rates. Chiapas has a poverty rate of 76.2 percent and is the poorest state in the country. Oaxaca is the second poorest state with a poverty rate of 66.8 percent. Both of these states are along the southern pacific coast.

4. What about extreme poverty?

The rate of extreme poverty has dropped 0.3 percent from 2010 and is now at 9.5 percent. Extreme poverty is defined as 1,243 pesos in cites and 868 pesos a month in rural areas. Government services have been successful in supporting the least well off in the country. Government programs such as a conditional cash transfer program, Oportunidades, and expansion of health care coverage have reduced the rates of extreme poverty. The majority of people in extreme poverty are the indigenous population of the country.

5. How does economic growth affect the poverty rate in Mexico?

Consistent research shows that economic growth and development is the best way to reduce poverty. Unfortunately, Mexico’s economic growth rate has been stagnant around two to three percent for the past 20 years. The growth rate needs to increase in order to reduce the poverty rate in Mexico. The income of the poor has not increased although Mexicans have seen an increase in services, such as education and healthcare.

6. How does the population size relate to the poverty rate?

The poverty rate may appear to have decreased, but as the population increases the number of poverty living in poverty is actually on the rise. For example, between 2010 and 2012 the poverty rate in Mexico dropped 0.6 percent, but half a million more people were living below the poverty line.

Mexico’s president, Enrique Pena Nieto, faces challenging circumstances for lowering the poverty rate. The government priority is on expanding Mexico’s economy rather than creating programs to help people come out of poverty, so a heavier focus on this important issue is necessary for improvement.

– Sarah Denning

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What Do Most Developing Countries Have in Common?

What do most developing countries have in common that most developed countries do not? Global poverty is a complex issue that involves many historical, regional and social factors. One important factor that most developing countries have in common is a history of agricultural dependence.

Some regions, like Latin America, are in prime geographical positions for growing important foods such as produce, sugar and cacao. Countries in these farming-friendly areas have historically been colonized and exploited by industrialized nations who are unable to grow these crops in their own countries. As a result of this historical process, many agricultural countries have been devastated by foreign influences in their countries and overzealous farming practices on their lands.

Agricultural countries are also challenged by their dependence on many factors beyond their control. Uncontrollable issues such as the environment disproportionately affect those whose livelihoods come from the natural world. The emphasis on producing certain crops for the rest of the world also limits these countries’ agency in the global market. When the international demand for a product such as sugar decreases, countries that focus on sugar production are helpless to find other sources to bolster their economies.

A focus on farming can also limit these nations’ abilities to develop infrastructure and diversify their economies. Agricultural work requires a lot of manpower but little education. In agricultural countries, the educational levels and human capital are not always sufficient to advance beyond the production of a few crops.

Understanding the answer to the question of what do most developing countries have in common can help these countries escape global poverty. Industrialized nations can help their agricultural counterparts through strategy and technology. For example, researchers in the United States can help farmers in Bangladesh by equipping them with the best irrigation practices, most cost-effective tools and highest yield crops.

Climate change is another important area that those in developed countries should focus on in order to help their developing counterparts. Addressing the impact of climate change is a priority for all, but farmers in poor countries feel its effects most strongly.

Foreign aid from wealthy nations is also an important way for developing countries to diversify beyond agriculture. With start-up funding from rich countries, more agricultural nations can follow in the footsteps of rapidly developing countries such as India and China.

Agricultural countries feed the world, yet many of them cannot meet their own people’s needs. Understanding the link between agriculture and poverty is important for dispelling myths about why certain countries prosper while others struggle. Realizing what most developing countries have in common is crucial to truly helping these populations emerge beyond the developing world.

– Bret Anne Serbin

Photo: Flickr

Mineral Wealth in the Democratic Republic of Congo: Blessing or Curse?

Democratic Republic of Congo
The Democratic Republic of Congo (DRC), located in Central Africa, is a resource-rich nation that has been plagued by conflict for decades. It has been the site of ongoing violence and civil war in what is known as the deadliest crisis since World War II. The country possesses vast amounts of natural wealth but mineral wealth in the Democratic Republic of Congo is even more famous, including gold, diamonds and coltan (a mineral essential to manufacturing cell phones). It is currently sitting on approximately $24 trillion worth of raw minerals; however, it suffers from perpetual strife and endemic poverty.

How is it possible that such a resource-rich nation is so engulfed in crisis? What role has natural wealth played in destabilizing the DRC?

Oftentimes, in states with vast natural resources, greed abounds and corruption permeates the fabric of society. This relationship has its roots in colonialism in the case of the DRC. The DRC was once a colony of Belgium’s King Leopold II, who exploited the colony’s abundant resources. In 1960, the Belgian government abruptly awarded the colony its independence, resulting in a nation without the experience to govern itself efficiently. In its infancy, the nation suffered from civil war and dictatorship, both of which drained natural resources.

The bloody conflicts that have stained the DRC’s postcolonial history have been funded largely by mineral wealth. In the eastern part of the DRC, illegal trade of minerals, especially coltan and gold, helps finance rebel groups. The combination of ineffective governance and abundant mining opportunities have made it relatively easy to fund insurgency, especially in this region. The International Peace Information Services estimates that 57 percent of Congolese gold miners work with an armed group present. International corporations have often bought minerals obtained from unregulated mining from rebel groups. An estimated $1 billion in resource revenue has been lost due to these types of foreign companies. The majority of profits made from mining in the DRC is used to perpetuate armed conflicts or to line the pockets of CEOs in foreign countries. Most citizens, 63 percent of whom live below the poverty line, are harmed by the effects of the wealth that should benefit them.

Undoubtedly, the extensive mineral wealth in the Democratic Republic of Congo has been a curse. But how can this legacy of exploitation be reversed? How can the resources that have financed war be used to improve the lives of the Congolese?

There is still hope that the Democratic Republic of Congo will be able to reform itself. Between 1990 and 2015 the country’s Human Development Index increased 22 percent, proving that progress is not just possible; it is plausible. Through the cooperation of the DRC’s government, the international community, as well as the efforts of non-governmental organizations, the Democratic Republic of Congo makes strides toward achieving stability.

– Emma Bentley

Photo: Flickr

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Three Interesting Causes of Poverty in Bulgaria

Poverty in BulgariaBulgaria is situated on the Black Sea, to the north of Turkey and Greece and to the south of Romania and Serbia. This country’s location on the Black Sea and on the Danube River provides a beautiful, picturesque landscape. Not as beautiful is the fact that Bulgaria has been named the most unhappy country in the EU.

It is no coincidence, then, that Bulgaria has some of the highest poverty rates in the EU. The most recent data from Eurostat reports that in 2015, about 41.3 percent of Bulgaria’s 7.4 million citizens were at risk of poverty or social exclusion – the highest percentage in the EU. Bulgaria also reported the highest rate of material deprivation in the EU, with 34.2 percent of the population being materially deprived. The elderly and children bear the highest risk for social exclusion and poverty in Bulgaria, at rates of 51.8 percent and 43.7 percent, respectively.

What drives poverty in Bulgaria? Here are three causes that should help shed some light on Bulgaria’s poverty rate, and why it is therefore rated such an unhappy country.

Corruption

Bulgaria has been perceived as the most corrupt country in the EU. The European Commission reported that tackling high-level corruption and organized crime are the biggest challenges in Bulgaria. There is a pervasive lack of autonomy and transparency in Bulgaria’s judicial system. Several political officers have been known to take bribes, which is a driving force in Bulgaria’s government and economy.

Corruption comes at a price for Bulgaria’s international relationships. In 2008, the European Commission temporarily suspended hundreds of millions of euros in EU aid to Bulgaria, over concerns of corruption and organized crime. Additionally, corruption is a barrier to doing business in Bulgaria. This barrier is problematic, as opportunity and access to international business and trade in Bulgaria could create more jobs and open up Bulgaria to receiving foreign aid.

When Bulgaria joined the EU in 2007, many Bulgarians hoped that EU membership would ameliorate the corruption in their government. Unfortunately, these problems in Bulgaria’s government still persist.

Pension

Bulgaria has the lowest average pension in Europe, at the equivalent of €160 a month; Bulgaria’s currency is the lev, which is €0.51. Most Bulgarians, however, receive less than the equivalent €160. In 2016, the majority of pensioners in Bulgaria – 60 percent – received the equivalent of €150, forcing them to live below the poverty line. One quarter of Bulgarian pensioners receive the minimum pension of the equivalent of €80 per month – the lowest in the EU. According to the Confederation of Independent Trade Unions of Bulgaria, a Bulgarian would need to receive the equivalent of €290 per month to lead a “normal life”.

Transition out of Communism

Is it a possibility that the quality of life in Bulgaria was better during communism?

Bulgaria was not a member of the Soviet Union, but it was a satellite state under a communist regime. During the communist regime, Bulgarians received free healthcare, free higher education, maternity and disability benefits and pensions. Even the poorest Bulgarians, the Romas, had jobs, collected social security and enjoyed an acceptable standard of living.

After communism was abolished in Bulgaria, the U.S. encouraged a market economy and multi-party democracy. Since transitioning out of communism, however, Bulgaria has faced a corrupt government and stunning rates of poverty.

Despite a bleak outlook on poverty and on life in general in Bulgaria, there is hope. Bulgaria’s economy is largely dominated by the service sector, and not by the agriculture sector, as is common for countries facing high rates of poverty. Therefore, Bulgaria is already a step ahead in stabilizing its economy. Furthermore, Bulgaria’s memberships in international organizations such as the EU and Nato will help secure valuable foreign relations and trade partnerships. Ultimately, however, the key to tackling poverty in Bulgaria will lie in overcoming corruption, which requires a tremendous effort from Bulgaria.

– Christiana Lano

Photo: Pixabay

Poverty Rate in Nicaragua Declines but Rural Areas Suffer

Poverty Rate in NicaraguaWhile the poverty rate in Nicaragua has declined in recent years, approximately 30 percent of the population currently lives on less than $2 per day. Nicaragua’s poverty resides predominately in rural areas where resources and employment are limited.

One Step Forward, Two Steps Back

According to the National Survey of Measurement of Life, extreme poverty fell from 8.3 to 6.9 percent in Nicaragua, and the Gini Coefficient of Inequality improved from 0.38 to 0.33 percent.

Nicaragua’s rising economic growth, supported by agricultural and commercial activity, indicates that its policies are working to fight poverty and create jobs and incomes for families. However, Nicaragua still has the lowest level of GDP per capita in Central America.

BCN President Ovidio Reyes says: “We know that we face a great challenge and that there is still a long way to go. The country needs to improve its per capita income even more, which can be achieved through higher rates of economic growth that allow the creation of jobs and more Income for families.”

The Need for Focus on Rural Areas

To continue fighting extreme poverty, Nicaragua must focus on its rural areas, where 50 percent of households live in extreme poverty. Finding innovative methods for economic stimulation and helping the poorest families improve their livelihoods and incomes will spur increased economic growth.

In rural areas, limited access to good schools and job opportunities cause Nicaraguan families to farm for earning a living and food. Yet, the dry land is unsuitable for agriculture and worsens their struggle instead of alleviating it. The land supplies limited natural resources, including water. With 80 percent of the rural poor depending on agriculture, the environment suffers. Recent droughts also affect food security and sources of income, and the fragile ecosystem and isolated location make productivity an obstacle.

Unemployment, which averages 12 percent for the country, exceeds 20 percent among poor rural families and many migrate to urban areas or abroad for work. One in five Nicaraguan families rely on remittances as a source of income, accounting for 20 percent of GDP. The unemployment rate, along with the poverty rate in Nicaragua captures the unparalleled plight of the rural poor.

Without employment opportunities and adequate infrastructure, the poor do not improve their incomes and well being. Since the poor then face many limitations, including natural resources, isolation and low productivity of soils, they do not have the means to access markets and public services such as education, health and legal services. Ultimately, productivity is stalled.

Nicaragua’s poverty rate may be declining, but to achieve sustainable economic growth, the country must focus on rural areas where poverty is most extreme.

– Sarah Dunlap

Photo: Flickr

Why is Libya Poor?

Why is Libya Poor?Why is Libya poor? Before NATO’s intervention in 2011, it wasn’t. Per capita income stood at almost $12,000, making Libya the wealthiest country in Africa. By 2016, however, five years into its civil war, the average Libyan earned just more than $5,000 per year.

For much of its history, Libya was rich because of its abundant oil reserves. Oil production accounted for 80 percent of Libya’s GDP, providing citizens with free education, healthcare and welfare services.

After the NATO-backed ousting of Colonel Muammar al-Qaddafi, however, a civil war ensued, and rival factions began fighting for control of the government and the oil sector. Amid the chaos, oil production plummeted.

While Islamist militias took control in western Libya, members of Qaddafi’s old regime formed the Libyan National Army (LNA) and migrated to the eastern Tobruk region. In the ungoverned south, violent extremist groups like the Islamic State emerged.

At the same time as the Libyan civil war brought declines in Libyan oil production, oil prices around the globe fell by half, due to technological advances like fracking. In other words, the simple answer to the question “why is Libya poor?” is that oil production fell at the same time as global oil prices.

Beyond damaging oil production, the Libyan civil war continues to ravage Libya’s infrastructure and deter investors from providing the capital necessary for reconstruction. Even foreign assistance from the U.S. has been kept to a minimum due to the severity of the security situation.

In 2015, USAID delegated only $8.3 million for nominal help with democratic elections and good governance.

Despite the dismal outlook between 2011 and 2016, the Libyan economy is finally showing signs of strength. By capitalizing on an exemption from OPEC’s organization-wide oil production cut, Libya has been able to increase its daily production from about 300,000 barrels per day in 2016 to more than 600,000 in 2017. Still, this number represents only about half of what Libya was producing before the civil war. Most of the increase has come from the LNA’s Tobruk region.

If the trend continues, the government in Tobruk may be able to maintain security and facilitate further economic growth, ideally, decreasing the country’s reliance on oil and diversifying the economy. With a more stable government, likewise, the U.S. will be able to step up its developmental commitments. Soon, the question, “why is Libya poor?” may once again become, “why is Libya rich?”

– Nathaniel Sher

Photo: Flickr

5 Causes of Poverty in Puerto Rico

Causes of Poverty in Puerto RicoWith more than $70 billion in debt and three defaulted bond payments, Puerto Rico is in a debt crisis. Almost half of the population of Puerto Rico is in poverty, according to the U.S.Census. There are five main causes of poverty in Puerto Rico.

  1. Puerto Rico’s population has fallen by 400,000 since 2004
    When Puerto Rico’s economy initially began to decline, many islanders left for the mainland U.S. as a way to make a better life for them and their families. Employment has reached 11.8 percent, which is more than twice the unemployment rate in the U.S., so many skilled workers do not see the use of staying on the island.At least one doctor leaves the island per day. The loss of skilled workers negatively affects the economy and is one of the contributing causes of poverty in Puerto Rico.
  2. Government Overspending
    The Puerto Rican government has been continuously spending more money than it collects in taxes, in part because it is not required to create a budget like the states do since it is a territory, and also due to a translating error.The error was in the 1952 constitution with a phrase that said “recursos totales” that could be translated into total revenue or total resources, and it was interpreted as total resources. This allowed the territory to have a huge range of options when it came to issuing debt to fund activities, putting it into deeper debt. National debt has increased from $43.5 billion in 2006 to more than $70 billion presently.
  3. Congress changing laws
    Although Puerto Rico is a territory, it is still under the control of the U.S. Congress, so when the Congress changes laws it can contribute to the reasons that Puerto Rico is in poverty. At one point in time, Puerto Rico was a place where many businesses wanted to because there were huge tax breaks on the island, as Puerto Rico was not required to pay federal tax. The government started phasing out the tax breaks in the late 1990s, and by 2006 the breaks were nonexistent, causing businesses to go elsewhere.
  4. No Bankruptcy rights
    Congress also took away Puerto Rico’s bankruptcy rights in the 1980s, which means that the country is not entitled to Chapter 9 bankruptcy rights like the states are. It can only declare bankruptcy with the approval of Congress, and Congress has yet to give that approval.
  5. Credit vultures
    A vulture fund is a hedge fund that buys the debt of a struggling company, or in this case, an entire country, to make a profit. The companies buy the debt for a fraction of the cost and then make sure that they get paid back the original value of the debt plus interest. There are at least 14 hedge funds in the United States holding about $3 billion of Puerto Rico’s debt.

Puerto Rico continues to be in need of help, with unemployment and debt at an all time high. The government’s overspending and congressional unwillingness to change laws to benefit the island are the main causes of poverty in Puerto Rico.

To solve this problem, Puerto Rico filed for bankruptcy in federal court, making it the first U.S. state or territory to do so. It has also been seeking assistance from the government in front of congressional committees. Puerto Rico has a lot of unprecedented in-court fighting to do, but if it is able to get its debt cleared from the federal government, many Puerto Ricans believe that it will give the territory the fresh start that it so desperately needs.

– Téa Franco

Why is Indonesia Poor?

Why is Indonesia PoorIndonesia is the largest country in Southeast Asia, both in terms of population and economy. In the past decade, Indonesia’s economy has steadily grown, with overall poverty falling by 6 percent from 2007-2014. Despite this, however, Indonesia still has 105 million people living just above the national poverty line.

So, with a steady economic growth and a labour force of 126 million people in 2016, why is Indonesia poor?

Firstly, in terms of geography, Indonesia is vulnerable to a wide variety of natural disasters, such as volcanic eruptions, earthquakes and tsunamis. In 2004, a deadly magnitude 9.1 earthquake struck in the Indian Ocean near Indonesia, claiming 230,000 lives and displacing tens of thousands more. Communities such as Banda Aceh also suffered massive, long-term environmental and infrastructural damage, leading to a widespread emergency situation in the region. In asking the question “why is Indonesia poor?”, events like this may serve as one of the most directly contributing factors.

Additionally, when one asks “why is Indonesia poor?”, one must consider demographic shifts. Indonesia currently faces a population of nearly 50 million living without electricity, equal to approximately 20 percent of the national population. While 94 percent of the urban population has access to electricity, only 66 percent of rural populations do.

Furthermore, the employment growth has fallen behind the population growth rate, leaving many young, able-bodied workers without jobs. With approximately 1.7 million people entering the labor force each year, Indonesia’s job market must continue growing in order to meet this demand.

Finally, in Indonesia today, 33 million people lack access to safe water, and 100 million people lack access to improved sanitation. This allows for an easier dispersion of diseases such as cholera in the nation, as a result of unclean water sources.

Despite these facts regarding the recent and current trends in Indonesia’s poverty outlook, there is a high amount of optimism for the future. The country’s president, Joko Widodo, has announced a firm commitment to improving national infrastructure, and has approved $353 billion to fund infrastructure development until 2019. This plan includes the Kalimantan region, which has historically been overlooked in Indonesia’s development strategies.

Furthermore, the United Nations, World Bank, OECD, and International Monetary Fund have all forecast positive GDP growth rates in Indonesia since approximately 2014, likely as a direct result of rising fuel and mineral prices around the globe. The proper utilization of this positive forecast and optimistic outlook by the Widodo presidency, through the continued dedication to infrastructure improvement, can allow for Indonesia’s people to flourish for years to come.

– Bradley Tait

Photo: Flickr