Causes of Poverty in IranWith a population of more than 79 million people, Iran is a large country in Western Asia, bordered by Turkmenistan, Iraq, Afghanistan, Pakistan and Armenia. Sadly, of the millions of citizens in this country, 18.7 percent live below the poverty line. There are many causes of poverty in Iran, but two major causes have caused a crisis in the country during the last several years.

Iran’s economy began to struggle in 2014 when a subsidy program adjusted the prices of fuel, the country’s largest export. In 2015, the economy somewhat improved in the first half of the calendar year and the oil and fuel sector prospered. Meanwhile, unemployment in other job sectors increased. By 2016, the unemployment rate reached a three-year high of 12.7 percent, though labor participation increased from around 35 percent to about 40 percent since 2014. An unemployment gender gap was noted in 2016 as well, as unemployment rates for men and women were 21.8 and 10.4 percent respectively.

In 2014, however, Iran saw the height of the unemployment crisis when the rate of unemployed women was estimated to be 46 percent and youth unemployment was twice that of general unemployment.

Additionally, the standard monthly income for families averaging five people per household is about $600, which is considered significantly below the poverty line. In 2014, Parliament’s Plan and Budget Committee announced that 15 million Iranians were living below the poverty line, or 20 percent of the population, and seven million of those people did not have access to any services that might offer them support or assistance.

Internal Corruption
In 2014, news broke that a merchant with close ties to the Iranian government facilitated many oil and gold transactions through the Turkish People’s Bank and embezzled a significant amount of money, putting the country into serious debt. Later, many other fraudulent investors were reported to be active in the oil industry, and though over $1 billion in debt was reported, the guilty were not punished. Between 2013 and 2014, 4,000 cases of embezzlement and theft were reported, most of them being cases of illegally importing luxury cars, hidden monopolies and smuggling, to name a few, but no names of the guilty parties were ever disclosed.

In 2014, Iranian president Hassan Rouhani took office with the determination to develop an effective strategy to reduce poverty for Iranians. Rouhani established a three-part policy to assist the most vulnerable populations and curb inflation, which ended two years of negative growth. Officials under the Rouhani administration provided food aid to about seven million citizens in poverty. Though many aid projects under the administration were criticized for potentially adding to the budget deficit, such policies and programs seek to give immediate help to those living in absolute poverty, and the administration continues to fight for the poor and make food security its number one priority.

These causes of poverty in Iran have led to justified tension and fear among the public and the government that conditions and employment rates will deteriorate further if changes to the subsidy program do not go into effect, and if eliminating government corruption is not made a higher priority. Those changes are key to improving Iranian lives.

Olivia Cyr

Photo: Flickr

Tackling Poverty Together: Canada’s Poverty Reduction StrategyThe government of Canada is showing its commitment to fighting poverty by developing and implementing Canada’s Poverty Reduction Strategy. Canada’s focus on a modern approach to the problem of poverty should be an example to many other countries.

Overview of Canada’s Poverty Reduction Strategy

Approximately five million Canadians currently live in poverty, and poverty costs Canada between $72 and $84 billion each year. Canada has an opportunity to improve the quality of life of its citizens and also stimulate its economy through the Poverty Reduction Strategy. Canada’s Poverty Reduction Strategy included three initial steps:

  1. Consulting with Canadians in every area of the country on the issue of poverty
  2. Creating a Ministerial Advisory Committee on Poverty that includes a combination of experts as well as people who have experienced poverty themselves.
  3. Conducting the Tackling Poverty Together project— a research project that will look at six different communities across Canada.

Consulting Canadians on Poverty

The first step in Canada’s Poverty Reduction Strategy was to consult people from all areas of the country and all walks of life. This phase included a combination of meetings with local governments as well as online forums and town halls so that all Canadian citizens were given an opportunity to be heard. The use of online tools to engage more people in the conversation is a great example of leveraging modern technology to help find solutions for complex problems like poverty.

Establishing an Advisory Committee

Canada’s Poverty Reduction Strategy includes an advisory board of 17 leaders from academia, business and beyond. The advisory group also includes members that have experienced poverty themselves. This is an important reminder that any decision-making body should include those who have lived experience with the topic being considered. The advisory board will discuss issues pertaining to poverty and give advice to the Canadian government.

Conducting Research

The Canadian government has also conducted a case-study in six different communities across Canada to look at what can be done to lift people out of poverty. The final report made key conclusions about what Canada’s Poverty Reduction Strategy needs to focus on moving forward. Many other countries can learn from Canada’s findings. The conclusions were as follows:

  1. There is a strong and ongoing need for federal government support to help Canadians get out of poverty.
  2. The Canada Child Benefit and Guaranteed Income Supplement are making a big difference.
  3. The federal government offers other important programs that could be helping, but very few people are aware of them.
  4. Many people cannot access the support they need because of how some programs are designed and delivered.
  5. Canadians were unanimous that there is a need for more support in different areas, and by different levels of government, to help people overcome poverty.

An Innovative Way Forward In the Fight Against Poverty

Canada’s Poverty Reduction Strategy should be an example to the world on how to create a cohesive, modern and organized strategy for fighting poverty. However, poverty is a complex issue and there is no one-size-fits-all solution.

Powerful governments like that of the United States and organizations like the United Nations have the opportunity to aid the reduction of global poverty. One way they can do this is by making sure developing countries have the resources they need to implement their own poverty reduction strategies.

– Aaron Childree

Photo: Flickr

Challenges and Solutions in Reducing the Poverty Rate in St. Kitts and NevisSt. Kitts and Nevis is not one of the poorest countries in the Caribbean. No exact statistics on the exact poverty rate in St. Kitts and Nevis exist, but it is clear that the country both has ongoing struggles and that solutions to many of its problems do exist.

One of the biggest contributing factors to the poverty rate in St. Kitts and Nevis is youth unemployment and underemployment. Some of the costs of this are hard to quantify, such as the feeling of self-esteem one gains from being employed.

Childhood education is free in St. Kitts and Nevis, but the additional costs associated with it can be prohibitive. Teachers in St. Kitts and Nevis have been known to hold antagonistic attitudes towards the poor. In many cases, impoverished parents of children have to work two or three jobs to provide for their families.

Health problems related to unhealthy lifestyles are widespread in St. Kitts and Nevis, such as obesity, hypertension and depression. This, in turn, puts a strain on the country’s healthcare system and economy.

It is not unheard of for citizens of St. Kitts and Nevis to procure healthcare and education abroad. In fact, many low-income families in the country are supported by migrants living abroad and sending money home.

Another contributor to the poverty rate in St. Kitts and Nevis is one that threatens all Caribbean nations: natural disasters, particularly hurricanes. The collapse of the sugar industry has led to soil erosion, a result of diverting runoff rainwater to sugar fields through pipes.

Alarmingly, violent crime, which can be both symptomatic of and contribute to poverty, has risen in the very recent past. There were 103 reported homicides in 2006-2010, compared to 42 from 2001-2005, a 160 percent increase.

Despite the obvious challenges that lay ahead, there are several steps being taken to reduce the poverty rate in St. Kitts and Nevis. The country is in the process of reforming the various antiquated departments that would be concerned with a rise in violent crime. Effective mobilization of resources to inform the public about bad health choices could make a huge difference. Currently, the government is investing in more training for medical professionals.

St. Kitts and Nevis face a number of very real challenges in alleviating poverty. But most of these challenges have been identified and none are insurmountable. In the coming years, with proper action, the poverty rate in St. Kitts and Nevis can be reduced.

Andrew Revord

Photo: Flickr

Innovations Against PovertyEven with active funding partners, some development agencies may fall short if lacking internal infrastructure. While funding is certainly an important aspect of achieving sustainable development goals, it may be just as important to ensure that the strategists and support for development projects are up to date and relevant. SNV: Smart Development Works is a nonprofit that works toward providing such resources through an expansive network of professionals in a variety of different sectors. SNV works with policy experts, local governments, private business and institutes of higher learning to provide lasting differences in extremely poor communities.

SNV was founded in the Netherlands in the mid-’60s and has since established itself in Asia, Africa and Latin America. Expertise in sectors relating to agriculture, energy, water, sanitation and health have helped solve problems locally and provide sustainable solutions to poverty. SNV is funded by the Swedish International Development Agency and managed in partnership with BoP Innovation Center and Inclusive Business Sweden.

SNV has several projects on the ground and one in particular worth noting. Innovations Against Poverty is working in the private sector to develop products and services that can aid in fighting global poverty. This particular mission has focused its efforts on younger demographics as well as women in order to empower groups to shift gender and age paradigms. Companies can apply for the Innovations Against Poverty program to get funding that incentivizes innovation, entrepreneurship and consumption of goods and services in their communities.

Innovations Against Poverty was created with the idea that the private sector is a powerful mechanism for creating jobs and increasing incomes while also providing necessary goods and services to a community. Low-income markets in impoverished communities contain business opportunities that can be sustainably exploited with adequate startup funds and resources. Innovations Against Poverty exists to stimulate development where it otherwise would not exist, with financial support ranging from $60,000 to $200,000. Innovations Against Poverty gains a non-reimbursable capital return and provides advisory support for its investors. This support includes training and coaching from international experts. The program also narrows its support to cases that are not seen as “risk free”, thereby investing in businesses that may not receive support in most cases.

Innovations Against Poverty has registered over 1300 companies since its inception and is expected to grow. These innovative solution investments have primarily been made in Cambodia, Ethiopia, Uganda, and Zambia, with a focus in the agriculture and energy sectors. With continued success, Innovations Against Poverty can foster development in more countries all over the world.

Casey Hess

Photo: Flickr

Sustainable Advancement in Developing CountriesMore countries are becoming developed, according to the 2016 Human Development Report done by the U.N. Development program. People are living longer, there are more social service programs and more children are enrolled in school. There is still more progress to be made in developing countries but, more than ever before, more countries are making significant advancements. While developing countries start to industrialize, it is important to keep in mind the environmental costs caused by more emissions in the air. To cut down on emission levels, it is important to invest in sustainable advancement in developing countries, so their economies can still grow but they can cut down on pollution at the same time.

According to CAIT Climate Data Explorer, there are a few developing countries – including Indonesia, India and Brazil – that are on the list of top 10 highest emitters of greenhouse gases. Additionally, CAIT’s 2017 report analysis shows that all developing countries contribute 60 percent of global emissions. This means that developing countries are growing industrially, but it also means there is a more negative impact on the environment that comes with this growth. In compliance with the Paris Agreement, developed countries are initiating programs to be more sustainable, so it is important to invest in sustainable practices in developing countries as well.

Sustainable advancement in developing countries is not hard to achieve. For example, the Deep Decarbonization Pathways Project by ClimateWorks is a global collaboration program that identifies problems of carbon emissions and finds solutions, while still sustaining economic growth. Research done by the World Resource Institute shows that 21 countries have reduced their greenhouse gas emissions by using sustainable practices, while still maintaining economic growth.

Knowing how beneficial sustainability can be for economic growth as well as for the environment, the U.N. has adopted Sustainable Development Goals in 2015. These goals are aimed at increasing human prosperity by giving access to education and equal rights, but balancing this with sustainable practices that will protect our planet. By combating these two issues at once, programs such as the Sustainable Development Goals will help developing countries prosper.

Deanna Wetmore

Photo: Flickr

Poverty Rate in Spain

Spain is best described as the land of Picasso and Gaudí by art lovers and home to Real Madrid and Barcelona by football fans across the world. Spain is a great tourist destination, thanks to its unique culture which includes the great dance form of flamenco, the celebration of the La Tomatina and the famous bullfighting.

However, Spain has always struggled economically compared to other European states. The early 2000s saw a great change, as Spain became one of the strongest economies in EU. Foreign direct investment tripled from 1990 to 2000. Unfortunately, the financial crisis of 2008 hit Spain the hardest of any country in the eurozone, as it had relied heavily on property and the construction sector. The unemployment rate increased dramatically and banks failed.

In 2012, the poverty rate in Spain was estimated at 21.1 percent. Today, Spain has recovered from the recession and is growing fast, but issues still linger. Most of the work available is of low quality, wages remain low and the unemployment rate is still at 18 percent, and almost 40 percent for youths, while strikes and job insecurity are still very common. These issues most impact families with children. According to UNICEF, 40 percent of children in Spain are living in poverty, which is the third highest in the EU.

The reduction in spending on healthcare and education as austerity measures have had a negative long-term impact. Social protection policies are not focusing on children and their sustainable future. In fact, the gap in social protections for children and people over 65 is the highest in Europe. Spain also has the biggest wealth gap in Europe, with the middle class disappearing and wealth concentrated in the hands of very few.

The good news is that the last three years have seen an impressive growth in Spain’s economy. The government has outlined several solutions to decrease poverty rate in Spain:

  1. New labor market reforms offer subsidies to firms hiring the young, women and long-term unemployed.
  2. Ensuring adequate income in old age and boosting private pension schemes that guarantee less risk of poverty among the old.
  3. Encouraging innovation and entrepreneurship through friendly policies.
  4. Investing in early childhood education and care as well as providing vocational training for youths.
  5. Overhauling the tax and transfer system.

As the country works to revive its economy, it is key to prioritize reducing the poverty rate in Spain. To make that happen, it is essential that all its policies are directed towards inclusiveness and with regard to the existing inequalities.

Tripti Sinha

Photo: Flickr

Is Malaysia Poor

Malaysia is a country located on the Malay Peninsula in southeast Asia. In 2016, it had a population of 31,187,265. In the same year, its GDP was $296.359 billion. Life expectancy went up by almost two years from 2002 to 2015, and it has a reputation for the massive strides it has made in poverty reduction due to its economic growth. The Commission on Growth and Development identified it as one of a few countries to experience more than 7 percent growth every year for more than 25 years. Its exports are varied, including electric parts, components and appliances, and palm oil and natural gas. By all accounts, Malaysia is prospering. So is Malaysia poor?

Is Malaysia Poor?

The national poverty headcount (which is the percentage of the population living below the poverty line) was 0.6 percent in 2014, down from 6 percent in 2002. However, migration from rural areas to urban areas has increased urban poverty, which has been exacerbated by crony capitalism and a rising cost of living.

Factors Causing Malaysia Poverty

Rural to Urban Migration
In recent decades, poverty was much higher in rural areas than in urban areas in Malaysia. As a result, the government’s poverty-reduction programs and policies were focused on rural poverty, neglecting urban poverty. During that same period, many people moved to cities from rural areas, including many foreign workers.

This rural to urban migration put pressure on urban infrastructure and essential services. Currently, 70 percent of Malaysians live in urban areas. Unemployment rose, and large families earning low wages now suffer from a lack of basic resources.

Profiteering, rent-seeking and crony capitalism have all widened the income gap between the rich and poor in Malaysia’s cities. Big companies hold on to more of their profits, allocating less toward wages. In more “developed” countries, 50-60 percent of GDP typically goes toward employee wages. In Malaysia, only 33 percent of GDP goes toward wages. Low wages prevent families from saving for emergencies or healthcare costs.

In May 2016, the Crony Capitalism Index, which compares the billionaires’ wealth percentages against GDP, ranked Malaysia as number two, second only to Russia.

High Cost of Living
The cost of living in urban areas is significantly higher than in rural areas. On average, as of 2015 60 percent of Malaysians lived on approximately $1,600 a month. Looking solely at rural areas, the proportion rises to 85 percent who live on less than $1,600 a month. This skews the perception of poverty in rural areas relative to urban areas. But according to one Malaysian man, “In rural areas, the cost of living is cheaper and there is no shortage of housing. Food supplies can be supplemented by farming, growing your own vegetables and rearing chickens. But you can’t do that in flats in urban areas.”

Food prices have skyrocketed in Malaysia, and 94.6 percent of Malaysian households say that they spend more on food than anything else. Despite many years of economic growth, the per capita gross national income dropped from $10,440 in 2015 to $9,850 in 2016. As a result, Malaysians can experience poverty in urban areas even if they are technically earning an income above the poverty line.

Ethnic Disparities
Malaysia defines ethnic minorities broadly as “Other Bumiputera“, which encompasses communities such as the Orang Asli and all of the indigenous peoples living in the Sabah and Sarawak states. Poverty rates among “Other Bumiputera” are consistently much higher than ethnic-majority groups. For example, the poverty headcount in the Sabah state is 4 percent, more than 6 times higher than the national poverty headcount.

The Good News
So, is Malaysia poor? Like any country, a portion of its citizens are experiencing poverty, and that must be addressed. But it has made major strides in reducing poverty since the 1980s. Today, the government provides free primary and secondary education for all Malaysians, and healthcare is free in rural areas and very low cost in urban areas. In short, there is always room for improvement, but Malaysia is on the path to eliminating poverty.

Olivia Bradley

Photo: Flickr

Causes of Poverty in SwedenSweden is a nation in northern Europe that is home to about 10 million people. One of Sweden’s defining characteristics is its neutrality. Formerly a military power, it has been more than 200 years since Sweden has gone to war. This is not the nation’s only impressive accomplishment. Sweden’s other notable claim to fame is its robust economy. Overall, the economy is very strong, and measures have been enacted to reduce and alleviate the causes of poverty in Sweden.

Some statistics about Sweden’s economy:
• In 2016, the nation’s GDP was $511 billion
• The nation’s unemployment rate is about 6 percent

One strength that enables Sweden’s economy to achieve as much as it does is how easy the nation makes doing business. In fact, Forbes rated Sweden as the best country in the world for business in 2017. By comparison, the U.S., an undeniable economic power, is ranked 23rd. Some of the factors that Forbes took into consideration were innovation, taxes, technology, levels of bureaucracy and stock market performance.

Another factor that allows for Sweden’s economic success is its interest in defending and promoting gender equality. In 2016, the World Economic Forum created its Global Gender Gap Index and showed the progress that Sweden has made in this area. According to the index, Sweden trails just three nations, Iceland, Finland and Norway, in terms of gender equality. While economic gain may not be the first thing you think of when you improved gender equality, it really is the case. The European Institute for Gender Equality (EIGE) believes in a very simple cause and effect relationship: “If the EU stepped up its efforts to improve gender equality, more jobs would be created, GDP per capita would increase and society would be able to adjust better to the challenges related to the ageing population.”

These and other actions have limited the causes of poverty in Sweden and ensure a good quality of life for its citizens.

Adam Braunstein

Photo: Pixabay

Sint Maarten Poverty RateSint Maarten is a country located in the Caribbean that shares a portion of the island it is located on with the French part of the island, known as Saint Martin. Although the island is a beautiful and popular destination spot for tourists, poverty is a problem for the citizens of Sint Maarten.

Poverty has created very dangerous problems for the small country, including issues such as crime, illiteracy and teenage pregnancy. Poverty is defined as “the total absence of opportunities, accompanied by lack of education, physical and mental ailments, social instability and unhappiness”. The Sint Maarten poverty rate has not quite reached a state of crisis, but there have been definite warning signs for the country.

The Sint Maarten poverty rate is an issue that has been present for the past few years. The Board of United Sint Maarten Party has said that “The increased crime rate wherein people are scared to carry out their daily routine, and are in constant fear of becoming victims of crime even in their very home, is evidence enough that the poverty exists on St. Maarten. Another example is when you visit certain communities and you find up to 6 persons living in a one-bedroom apartment with just the bare essentials to get by, that is poverty.”

According to Trinidad & Tobago MCO, the unemployment rate in Sint Maarten is 11 percent, the illiteracy rate is 4.1 percent, residents without a secondary school education is at 42.9 percent and 22 percent of households have no income.

Fortunately, the Sint Maarten poverty rate can be reduced. The country has been recovering from the recession of 2008-2009, and a positive economic growth is envisaged in the coming years. The economy is very open in Sint Maarten, meaning that developments in the external environment—mainly the U.S. economy— will directly affect the small island country’s economy in return. According to the Economic Outlook of Sint Maarten, the economy has a relatively good starting position for further expansion, and is also said to be able to absorb financial as well as economic setbacks better than other Caribbean countries. These factors will contribute to improving the Sint Maarten poverty rate.

Sara Venusti

Photo: Flickr

Causes of Poverty in Israel
Of the 34 member countries of the Organization for Economic Co-operation and Development (OECD), Israel ranks twenty-sixth poorest when discussing gross income, or before government intervention. However, when poverty is discussed in net terms or income after government intervention, it is ranked second-poorest. According to a report by the Taub Center for Social Policy Studies in Israel, 31 percent of the country is living below the poverty line. Why is there such a discrepancy and what are the causes of poverty in Israel? There are a number of reasons.

  1. System of allowances
    The first of the causes of poverty in Israel is its system of allowances. While Israel, compared to other countries, collects a significant amount of income from the wealthy in the form of taxes, it lacks in its system of allowances. The government’s influence in curtailing poverty is at around 30 percent. Other countries’ participation is at around 60. Of the allowance payments made by the government, most are handled efficiently. Part of the solution lies in more system of allowances by the government.
  2. Low participation in labor market
    Another one of the causes of poverty in Israel comes from low participation in the labor market, specifically with two minority groups: ultra-Orthodox Jews and Arab Israelis. As of 2011, only 48 percent of ultra-Orthodox Jewish men and 28 percent of Arab-Israeli women were employed.According to a report by the Bank of Israel in 2015, “the dilemma [of poverty] becomes greater because about half of the poor in Israel belong to the ultra-Orthodox (Haredi) community – a population sector that attributes great value to devoting time to studying the Holy Scriptures – and the traditional Muslim community, in which there are cultural restrictions on the employment of women.”For these cultural reasons, some of the ultra-religious in Israel choose not to search for jobs and therefore fall into poverty. This is also one of the reasons why the government’s influence on curtailing poverty is so low; it believes it will encourage living on allowances instead of looking for other means of income.

These main contributors work in conjunction to create a difficult environment for the government to control poverty. Between the low participation in the labor market and therefore lower system of allowances by the Israeli government, the population has suffered from impoverished conditions.

To combat these issues, the OECD has offered some recommendations that will hopefully decrease the poverty rate, the first of which includes increasing competition and efficiency in the domestic economy. An OECD survey noted that the banking industry is inefficient and concentrated.  Therefore, should allow the entry of new competitors into the market, particularly in non-banking credit entities.

Another way to improve the apparent disparity in the labor market is to boost “investment in infrastructure and promoting skills, particularly among disadvantaged groups [which] can both enhance social cohesion and raise long-term growth.” One of the last recommendations given was improving education for those disadvantaged groups like Arab women and the Haredi population so that they may increase their income levels and contribute to the economy.

Sydney Roeder

Photo: Flickr