Tag Archive for: Economics

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Low Levels of Hunger in Belarus Thanks to Government Intervention


Belarus is an Eastern European country that was previously one of the founding republics of the defunct Soviet Union. Like many former Soviet states, Belarus struggles from residual problems left behind by the USSR’s past influence, such as a poor human rights record and institutionalized authoritarianism. Despite the country’s rooted issues, it displays encouraging signs of development in food security. Unlike many other troubled countries, there are very low levels of hunger in Belarus.

Since 1997, Belarus has boasted an impressive Global Hunger Index score of less than five, indicating that the country as a whole does not suffer from prolonged food shortages and famine. Additionally, Belarus enjoys falling mortality rates as well as a marked decline in stunting and wasting in children younger than five years of age.

Overall, hunger and related issues are not widespread in Belarus, even though it remains a developing country. Much of the success in ending hunger in Belarus is attributable to the government’s prioritization of food security. The 1998 National Food Security Program developed standards for food security as well as measures to achieve hunger-prevention goals.

While Belarus benefits from commendably low hunger statistics, the country’s continued growth is limited by persisting Soviet-era practices in numerous economic sectors, especially agriculture. Foreign aid and development institutions such as the United Staties Agency for International Development have provided and continue to provide assistance towards privatization and free-market reforms intended to stimulate growth throughout the Belarusian economy.

Although Belarus does not struggle from significant food shortages, the country continues to face the consequences of the infamous 1986 Chernobyl nuclear reactor meltdown, in which nearly 70 percent of the radioactive fallout from the compromised plant landed in Belarus. Radiation contaminates about one-fifth of the nation’s farmland, and many Belarusians in the surrounding areas eat food that comes from these contaminated areas. Many Belarusians suffer from health issues caused by or related to exposure to radioactive fallout or contaminated food.

Fortunately, many organizations work to improve conditions for Belarus and its people by continuing to provide aid. One nonprofit, Overflowing Hands, brings Belarusian youth to the U.S. for six weeks every summer to provide access to clean food and a healthy environment, counteracting the detrimental effects of radiation exposure. According to Overflowing Hands, health care professionals estimate that for every six weeks they are kept away from radiation exposure, children and teens gain two years back to their lifespans. Overflowing Hands even teaches the Belarusian youth compassion by getting them involved in food aid and community service programs.

Hopefully, organizations such as Overflowing Hands will be successful in providing meaningful support by minimizing the already low levels of hunger in Belarus and finding solutions for Belarusians exposed to radioactivity. Similarly to Overflowing Hands’ youth summer program, perhaps these organizations will even succeed in empowering vulnerable Belarusians to help others.

– Isidro Rafael Santa Maria

Photo: Flickr

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Exploring How Foreign Aid Builds Alliances


Over the past 20 years, terrorist attacks have become more common, and groups such as the Islamic State and al Qaeda have become global enemies. These occurrences raise the question: What is the best way to fight? Exploring how foreign aid builds alliances with a look at recent history may have the answer.

Less than 80 years ago, Germany, Italy and Japan declared war on the U.S. as a part of WWII. In response, the U.S.temporarily ended diplomatic relations with these nations. When the war ended, much of Europe was destroyed, and the continent faced wide-spread famine. In these conditions, the U.S. gave extensive foreign aid to these and other nations, helping to rebuild their communities, economies and daily  lives. Today, these three countries are some of our closest allies, giving evidence that foreign aid helps forge alliances.

The U.S. government feared that the Soviet Union could take advantage of Europe’s frailty and institute communism throughout the continent. In response, the new secretary of state, George Marshall, constructed the European Recovery Program, commonly called the Marshall Plan.

The Marshall plan appropriated $13 billion to 16 European nations. This was aimed at providing food to prevent famine as well as sending other basic necessities and supplies to begin rebuilding. These shipments allowed Europe to reestablish its economy and fueled the coal and steel industries that are so important today. This investment also made a path for the eventual creation of the North Atlantic Trade Organization (NATO).

Below are three examples of benefits when foreign aid builds alliances.

1. Germany is one of our leading trade partners

As of today, Germany no longer receives U.S. foreign aid and has the largest European economy. Not only do both the U.S. and Germany remain in NATO, but the countries work together to expand global trade. Germany is also a large supplier of goods for the U.S. They exported $125 billion worth of goods, while the U.S. exported $50 billion to Germany.

Beyond economic ties, Germany also works with the U.S. at the U.N. Germany has been integral to fighting the Islamic State and al Qaeda and to maintaining peace in Africa and the Balkans.

2. Italy helps the U.S. agenda on human rights, democracy and disease control

Italy is now a prosperous nation that no longer requires foreign aid.

Italy is a member of the U.N., the Organization for Security and Cooperation in Europe, G8, G20 and many other international organizations. In these roles, Italy works with the U.S. to cultivate democracy throughout the world and reduce conflict and terrorism. Italy also helps the U.S. in human rights, drug trafficking, human trafficking and fighting epidemics such as ebola. Rebuilding Italy after WWII helped create this strong alliance and gave the U.S. a powerful partner when negotiating complex international issues.

3. Japan partners with the U.S. to research innovative technology

The U.S. occupied Japan as a part of the treaty of surrender following WWII. This involved restructuring Japan’s political, social and economic systems. The country was demilitarized as the U.S. promised to protect it from any future conflict.

The beginning of the occupation focused on political and social reforms. Meanwhile, the Japanese economy began to collapse. At this point, the U.S. focused on rebuilding the economy through taxes restructured to reduce inflation. The Korean War soon began, and at the suggestion of occupying forces, the U.N. used Japan as its primary supplier during the war. As a result, Japan’s economy developed back into a healthy, sustainable one.

Japan remains a successful democracy and still has a robust economy. Japan no longer receives foreign aid and now offers aid to other developing nations. Moreover, they echo the voice of the U.S. agenda in East Asia. Japan supports political and military efforts of the U.S. in North Korea.

Japan also works with the U.S. in researching medicine and space travel. Together the two countries form the U.S.-Japan Science and Technology Agreement. For 25 years they have worked on advancing computer and energy technologies.

Less than 80 years ago these three countries were so devastated that their civilizations could have collapsed entirely. They are now world leaders along with the U.S. When foreign aid builds alliances, it creates strong countries and resilient partnerships. Foreign aid is able to turn our most sincere enemies into our friends.

– Mary Katherine Crowley

Photo: Flickr

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International Monetary Fund: Lending to Developing Nations


According to The Organization for Economic Co-operation and Development (OECD), in 2015, Japan spent 0.22 percent of its budget, about $9 billion, on development assistance. While developed countries spend an average of less than one percent of their budget on foreign aid, Japan’s generosity made it the fourth most generous nation of 2015.

A 2010 agreement with the International Monetary Fund (IMF), a Trustee of the Poverty Reduction and Growth Trust (PRGT), assures that Japan will lend $2.7 billion to secure a total of $8 billion gathered from other nations in new loan resources for low-income countries. The loan agreement was effective in April of 2017. This will allow the IMF to increase aid to low-income countries hit particularly hard in the current global economic crisis by providing more loans for recently reformed concessional lending facilities.

The PRGT has three facilities that work on the concessional financing framework. There are the Extended Credit Facility to provide flexible longer term support; the Standby Credit Facility to address short-term needs; and the Rapid Credit Facility to provide immediate emergency support. These facilities are in place to help countries with governments with low financial stability and a “protracted balance of payment problems.”

Additionally, a 2017 IMF press release reveals that Japan “agrees to provide additional $2.5 billion to International Monetary Fund’s Trust benefitting low-income member countries, bringing [its] total contribution to $5.2 billion.” This would be Japan’s fourth contribution to the PRGT. This makes Japan one of the first 10 countries to respond with an additional loan under the current campaign.

The money that countries like Japan lend ensures that receiving countries can be financed to fix struggling institutions. The loans enable rebuilding international reserves, stabilizing currency, paying for imports and overall economic growth. What makes the IMF different from other international lending or donating organizations is the fact that it does not lend money for specific projects.

Since 2005, the IMF’s goal has been to re-stabilize the world’s economy, which is in a a state of crisis unseen since the Great Depression. As a result, the IMF has created a flexible credit line for countries that show potential to put their economies back on track and implement strong policies to keep it that way. Countries like Japan can see a return on their investments while developing nations can continue to develop.

– Vicente Vera

Photo: Flickr

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Poverty in Angola: Oil, Corruption and Land Grabs


Poverty in Angola runs high; roughly 40 percent of the population currently lives below the poverty line. The combination of a long, drawn-out civil war, systematic political corruption and economic crisis have prevented the country from establishing itself as a stable and prosperous state since Angola received its independence from Portugal in 1975.

While Angola does not have many lucrative exports, oil does make an important contribution to the country’s economy. Between 2006 and 2016, it accounted for as much as 97 percent of exports on average each year and, while there has been some reinvestment into national infrastructure, the president, José Eduardo dos Santos, has received criticism for not redistributing the profits fairly and using the financial boost from oil exports to reduce poverty in Angola as much as he could have.

Beyond its meddling in the oil industry, other forms of government corruption and nepotism are also rife in Angola. One particularly prominent example is the appointment of the president’s daughter, Isabel dos Santos, to the position of chief executive of the state-run oil firm in 2016. Forbes ranks her the richest woman in Africa, and she has an estimated net worth of more than $3 billion. Meanwhile, there is extreme poverty in much of Angola and subsistence farming is the main source of income for the majority of her countrymen and women.

This over-reliance on oil causes another problem: Angola is especially vulnerable to the fluctuations in the global oil market. Just last year, a global drop in oil prices resulted in an economic catastrophe for Angola. This triggered a rise in prices on everything from food and fuel to healthcare, putting an even greater strain on the country’s poorest inhabitants. The situation was exacerbated when the government imposed tough austerity measures, a move the U.N. Committee on Economic, Social and Cultural Rights deemed regressive and concerning.

Meanwhile, in a bid to diversify the economy with additional sources of revenue, huge land grabs have taken place at the hands of government officials and private businesses. In many cases, citizens have been forcibly evicted without adequate housing alternatives and proper compensation. Instead, they have been resettled in makeshift housing with little access to amenities such as healthcare, education, water and electricity.

Even before this move, access to healthcare and education has been severely limited, helping to reinforce a cycle of poverty. So while progress – although slow – has been made in both areas since peace was established in 2002, there is still much progress to be made. More investment is needed in the country’s public services to alleviate levels of poverty in Angola.

– Rosie McCall

Photo: Flickr

World Economic Forum on Africa 2017


In early May, South Africa hosted the 27th World Economic Forum on Africa, which promised, “achieving inclusive growth through responsive and responsible leadership.”

Various business and government leaders gathered in Durban, South Africa to discuss some of the economic challenges that Africa is facing, as well as Africa’s stance on the global economy and the fourth industrial revolution.

It is estimated that over 40 percent of people on the continent of Africa are living in poverty. The World Bank states that even the most optimistic calculations show about 330 million poor Africans in recent years. Additionally, the host nation, South Africa, has experienced sluggish economic growth recently. With all of the progress to be made in Africa, “inclusive growth” being the staple of this forum is vital, as sub-Saharan growth is at the lowest levels seen in 20 years.

This year, South African President Jacob Zuma urged the youth in Africa to aid in the realization of the Africa Union’s Agenda 2063, as it has been a focal point that the younger generation holds the key to the future of Africa.

Another key point made from this World Economic Forum on Africa was from South African’s Finance Minister, Malusi Gigabi. Gigabi warned that the Brexit and an increase in protectionism could reduce growth in Africa by reducing international trade.

One of the highest profile speakers was actor and UNESCO Special Envoy, Forrest Whittaker, whose message was regarding the young people who save lives in war-ridden communities in South Sudan.

Benedict Oramah, President of the African Export-Import Bank, pushed for an increase in intra-regional trade, as only 15 percent of African trade is region-to-region. He went on to say, “we are poor because we are not trading amongst ourselves.”

Overall, the acknowledgment of the current economic problems and the multiple plans on trade and increasing jobs for African youth are good for the reduction of poverty long term. It is necessary that these plans are held up, as some of the countries in Africa have seen the least rates of growth and poverty reduction over the past 30 years in comparison with the rest of the world.

– Dustin Jayroe

Photo: Flickr

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Child Labor in Pakistan

Child Labor in Pakistan
Child labor in Pakistan? For many years, Pakistan’s reputation has been notorious as one of the worst child labor offenders. In recent years, child labor prevention efforts have been heightened. Beginning in 2017, a province in Pakistan passed a new law banning child labor. Could this province be a guide for the rest of the nation? Here are the three things you need to know about child labor in Pakistan and how lawmakers are putting an end to this problem.

More than 12.5 million children are involved in child labor in Pakistan. According to Reuters, “Pakistan’s Labour Force Survey, 2014-15 showed that of those children aged between 10 and 14 years active in child labor, 61 percent were boys and 88 percent came from rural areas.”

In Pakistan, 38.8 percent of the population is living in poverty, with one in four individuals living in acute poverty. For many citizens in Pakistan, it is hard to find a job or to secure one paying enough to provide for a family. Students from impoverished backgrounds who are unable to enter school are most likely to become affected by child labor in Pakistan.

Many child workers are often abused where they work, suffering beatings or torture. Many children are sent to live with middle class and elite class families to perform as domestic servants. Jobs like these become particularly dangerous for children, as they are at the risk of physical and sexual abuse without real supervision.

There are a few programs funded by the government to tackle child labor in Pakistan. For instance, the Children Support Program gives parents money so that they can send their children to school instead of encouraging them to join the work force. This program is available to parents of children ages five to 16. So far, the government has distributed $3 million to families.

In 2016, Pakistan was criticized for not conducting any surveys focusing on the child labor of the past 20 years. This allowed for about 25 million children, who are not attending school, slip under the radar.

On Jan. 26, 2017, the province of Sindh made child labor illegal under The Sindh Prohibition of Employment of Children Bill, banning children under the age of 14 from working. The law also prohibits adolescents from working between the hours of 7 p.m. to 8 a.m. and for those adolescents who are working, they cannot work more than three hours a day.

Sindh is known as the most impoverished province in Pakistan. As reported by tribune.com, “In Sindh, 43.1 percent [of the] population is extremely poor due to lack of education, health facilities and poor living standards.” The new law states that offenders of the child labor law will be imprisoned for six months and fined 50,000 rupees. Meanwhile, offenders who are found with child workers in dangerous workplaces (such as stone crushing and carpet weaving) will be sentenced to three years of imprisonment with an increased fine of 100,000 rupees.

Since the province of Sindh is beginning to tackle the issue of child labor in Pakistan, in the future, the rest of the Pakistani work force could follow its example and eliminate all labor misconducts.

– Maria Rodriguez

Photo: Flickr

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Combating Poverty in Lebanon

Poverty in Lebanon
Poverty in Lebanon is caused by various factors. Since the start of the Syrian crisis in 2011, Lebanon has seen an influx of refugees, resulting in an increase in poverty, something that has been an issue for quite some time. According to the Nations Encyclopedia, the income gap between social classes has increased over the last 10 years. Both the upper and middle class have seen an increase in their income since 1991, but the rest of the country is not earning much money at all as the income of many has dropped below the poverty line.

OXFAM International, a nonprofit that fights poverty, addresses how the issue of poverty is multidimensional. OXFAM International works to address both the cause and impact of poverty in Lebanon, as well as in over 90 other countries. According to its website, the number of people living under the poverty line in Lebanon has increased by 66 percent since 2011. The World Bank discusses goals for economic improvement in Lebanon, including the creation of new jobs and the installment of an improved education system in order to spark an interest in business related jobs in the country’s youth.

Despite Lebanon’s continued economic struggles and the governmental issues behind them, there is still hope for improving poverty in Lebanon. According to data from the World Bank,  between 1992 and 2014 Lebanon’s GDP grew by an average of 4.4 percent, varying from year to year. The data also addressed the creation of new jobs between 2004 and 2009, when varying amounts of growth was seen, particularly in the trade, service and construction industry. According to the World Bank, 15 percent of the population emigrated from Lebanon in 2010, which is a factor in the economic improvement that the country has seen. This emigration increased employment opportunities and therefore sparked economic growth in the country as a whole.

– Helen Barker

Photo: Flickr

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Poverty in Israel Economy

Poverty in Israel
Poverty in Israel is widespread despite the nation’s booming economy. Approximately 22 percent of the population, or one in five Israelis, live in poverty according to a report by the National Insurance Institute in 2015. Among developed nations, Israel has the highest poverty rate, according to the Organisation for Economic Co-operation and Development.

The statistics on poverty differ depending on family structure. As the report establishes, families with children are more likely to be in poverty, with the rate holding at about 23 percent. Such is especially true for single-parent families or families with only one working parent. The rates also differ based on population group, with ultra-Orthodox families seeing a poverty rate of about 49 percent and Arab families about 53 percent.

Furthermore, a discrepancy exists due to age, with approximately 30 percent of children and 22 percent of the elderly living in poverty. Leket Israel food bank CEO Gidi Kroch said, “Israel is the poorest of the Western countries, with the widest gaps between the rich and the poor — a situation where the weakest populations, the elderly and children are suffering the most.”

Although the causes of such poverty are mixed, it can be attributed in part to low wages and employment rates, which may stem from poor education. In response to this impoverishment, the Israeli government has introduced a number of measures. Child benefits and the minimum wage have both been increased, leading to an advance in familial income. As for the elderly, welfare and disability allowances have also increased.

However, Israel’s welfare minister Haim Katz contends that welfare and tax benefit increases are not drastic enough. Average salary, as Katz points out, does not determine welfare benefits. He plans on changing this, declaring: “If we linked income support to average salaries we would immediately remove 187,000 from poverty.”

In addition to adapting the welfare system, the Israeli government should pursue a better standard of education. Regardless of which measures the government pursues, it is evident that poverty in Israel must be addressed immediately. “If things continue as they are,” Israeli economist Dan Ben-David reports, “we are heading to a third-world economy.”

– Gigi DeLorenzo

Photo: Flickr

Poverty in Paraguay

Poverty in Paraguay
Paraguay is a lower-middle class country with a population of 6.6 million people. The population is mostly concentrated in the eastern region. In 2009, a third of the population was living below the poverty line and about 20 percent of the population was living in extreme poverty. Even though poverty in Paraguay has decreased in urban areas, rural poverty is still prevalent.

Over the years, the agriculture sector, which is where the country’s economic potential comes from, has been rapidly expanding. This is due to high international commodity prices and the demands of agricultural and livestock products.

The agricultural sector has increasingly been on the lands of large-scale commercial farming operations. However, about ninety percent of all holdings are still in the hands of small-scale family farmers. There are high levels of inequality in the country. This inequality is the main reason for the devastating poverty in Paraguay.

In the late ’90s, less than 10 percent of the population owned and controlled 75 percent of the land. This left most of the rural population without land and living in extreme poverty. Furthermore, 46.6 percent of all income went to the top 10 percent of the population.

To this day, poverty in rural areas is still at an all-time high. About half of the rural population is living in poverty, and women and indigenous people are affected the most. Some of the main causes of the prevalent poverty in Paraguay are the following:

• Piteous access to land, markets and financial services
• Deterioration of natural resources and loss of soil fertility
• Limited access to appropriate technologies and quality technical assistance
• Insufficient productive assets at the farm level
• Absence of essential public goods and services
• High levels of dependency on commercial agriculture and agribusiness

In 2013, Paraguay grew economically by 13 percent, however, most of the country did not experience the recorded growth. About thirty percent of the population was still living in poverty. In fact, Paraguay was at the bottom among the South American countries in decreasing poverty over the last decade.

However, advancements have been made as Paraguay is getting the help it needs to improve its poverty condition. The World Bank has approved a $100 million loan to help improve Paraguay’s social welfare programs and help the poor.

– Solansh Moya

Photo: Flickr

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Global Benefits of the Trade Facilitation Agreement

Global Benefits of the Trade Facilitation Agreement
The Trade Facilitation Agreement (TFA) came into effect on Feb. 22, 2017, after ratification by the World Trade Organization (WTO). According to the WTO, the TFA contains provisions allowing for “expediting the movement, release and clearance of goods, including goods in transit.” The agreement was created to benefit both wealthy, developing and underdeveloped countries that wish to engage in trade and commerce.

According to an article in The Economist, the TFA is designed to cut trading costs in developing countries by implementing more efficient processes and eliminating unnecessary obstacles prior to export clearance.

For example, individuals in sub-Saharan Africa must go through an excessive amount of barriers to get an item exported, including going through up to 200 hours of regulations and inspections. In comparison, wealthier countries may face up to only 15 hours of regulations and inspections.

According to the WTO, full implementation of the TFA “could reduce trade costs by an average of 14.3 percent and boost global trade by up to $1 trillion per year, with the biggest gains in the poorest countries.”

The TFA is divided into different sections and categories, each made up of substantive provisions. For example, section one of the agreement contains provisions necessary for expediting the movement and clearance of goods. Section two, however, consists of special provisions that would allow for developing and underdeveloped countries to benefit from trade facilitation upon receiving special assistance from member organizations that are involved in its implementation.

The member organizations that are involved in assisting developing and underdeveloped countries include the WTO, World Customs Organization and the United Nations Conference on Trade and Development.

The TFA will result in a heightened level of exports taking place out of developing and underdeveloped countries. Furthermore, a rise in trading expenditures will have a positive global effect on countries such as the U.S.

– Lael Pierce

Photo: Flickr

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