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Czechia Poverty Rate Remains Low

Czechia Poverty RateThe Czechia poverty rate continues to rank among the lowest in the EU. At 5.9 percent, the eastern European nation, which shed its English moniker of “Czech Republic” early in 2017, beat out such neighbors as Poland, Portugal, Hungary, Italy and Spain, all of whom have rates exceeding 10 percent.

In the OECD, Czechia ranks behind only Denmark in terms of poverty rate, which measures the amount of families living below a country’s poverty line. In Czechia, that number is 10,220 crowns (about $431 USD) per individual and 21,461 crowns (about $906 USD) for families with children.

Based on population-weighted estimates drawn from household surveys, the poverty rate is not necessarily a perfect benchmark for comparison between nations. Indicators are specific to each country’s economic and social circumstances, and a variety of factors influence perception of poverty.

However, other metrics tell the same story of a robust quality of life within Czechia. Not only is the Czechia poverty rate one of the lowest, the nation’s wealth inequality outperforms other high-performing countries. Only 22 percent of Czech income is held by the wealthiest 10 percent, lower than the U.S., China, Indonesia and Chile, who have rates of 30.2, 31.4, 31.9 and 41.5 percent respectively. The Gini coefficient, which measures income inequality, is a relatively low .26 for Czechia, and unemployment lingers at an impressive 3 percent as of 2017.

Explanations for the country’s favorable economic indicators are many. Czechia has an excellent education track record, with enrollment standing at 99.75 percent. Government funds have been redirected to education over the past decade, while decreasing in other sectors such as infrastructure. Public reform following the 2008 global economic crisis saw a VAT hike and reduction of social welfare benefits, but included significant tax discounts in other sectors of the economy and pensions that nearly doubled.

Though these factors have aided in suppressing the Czechia poverty rate, conditions for the majority of employees are not necessarily as complimentary. As average Czech wages increase, they still remain substantially lower than the EU median. An average wage across industry of $23,003 USD reflects Czechia’s tough minimum wage, which remains one of the lowest among OECD nations. The country’s main source of income comes from engineering and machine-building industries, which accounts for 37.5 percent of the economy. With a popular tourist destination for a capital, services bring in around 60 percent of Czechia’s wealth.

Forecasts predict a sustained pace of economic growth but slowing rates of employment. Inflation, which jumped from 2016 to 2017, is expected to decline as debt continues to diminish post-recession. It remains to be seen whether or not the trend in Czechia’s low poverty rate will continue.

– Mikaela Krim

Photo: Google

Causes of Poverty in Malaysia

Causes of Poverty in Malaysia
Malaysia is a nation in southeast Asia with a rich history and a population of over 30 million. The nation has been one historically plagued with deep poverty; however, in recent decades, the conditions for a large swathe of its people have greatly improved. The government has undertaken a monumental effort to attempt to eradicate the causes of poverty in Malaysia and has been largely successful. Nevertheless, the country still suffers from the ills of impoverishment and plenty of work still needs to be done.

Since the Millennium Development Goals were introduced in 1990, the Malaysian government has done a lot to reduce poverty in the nation. The percentage of households living on less than $8.50 per day (the national poverty line) fell from over 50 percent in the 1960s to 1 percent currently. The Asian Development Bank claimed this to be the largest reduction among all Asian countries. Another government goal was to halve the number of people living on $1 a day by 2015, which they also successfully achieved.

The task of solving the root causes of poverty in Malaysia, however, is still far from over. Over 60 percent of the country still lives on less than $1,600 a month, and in rural areas, that number can climb up to 85 percent. Furthermore, although only about 1 percent of people currently live under the extreme poverty line, that still accounts for 300,000 people, a significant number.

The government recognizes that it still has not fully addressed the causes of poverty in Malaysia, and has laid out a road map of its future plan of action. This plan of action revolves around four main focal points.

 

Addressing the Causes of Poverty in Malaysia

 

  1. Increase the level of education among the poor. Through education, children in poor communities will have a better chance to get a high-paying job or start a business.
  2. Strengthen social safety nets, enhance collaboration with NGOs and corporations and provide empowerment programs.
  3. Ensure income is redistributed to uplift those in poverty for the bottom 40 percent.
  4. Institutionalize appropriate policies which promote economic development.

If the Malaysian government continues on the path they have been on so far and successfully addresses these goals in their plan of action, poverty and the ills it brings could be effectively eradicated in the nation once and for all.

– Alan Garcia-Ramos

Photo: Flickr

Why Is Mongolia Poor?

Why Is Mongolia Poor
Between one third and one half of Mongolia’s population currently lives in poverty. Since the nation ended their Soviet-style communist regime in 1990, many impoverished Mongolians have been wondering why the advantages of capitalism have not yet reached them. After nearly three decades of reform, why is Mongolia poor?

Since the turn of the 21st century, Mongolia has fostered great development. Income and school enrollment have risen, while sanitary concerns and maternal and child mortality have declined. However, the nation’s success has not been equal in all areas and has not had the desired impact on alleviating poverty.

 

Why is Mongolia Poor? Investments and Inequality

 

While economic growth is necessary for human development, human development is not necessary for economic growth. Between 2009 and 2013, Mongolia’s GDP rapidly increased by $8 billion – primarily a result of foreign investment in the country’s natural resources. Despite this flow of capital, there has not been a satisfactory increase in more and better job opportunities; thus, impoverished families are not able to lift themselves out of poverty and share in the new wealth.

Not only are not enough jobs being created, but most lower-class Mongolians are unqualified or under-educated for the advantageous jobs that are present. Furthermore, adequate job opportunities are not present where poor Mongolians live, so they must resort to low-productivity work that only provides enough income to sustain their livelihoods rather than improve them. In turn, the nation’s wealthy get richer while the impoverished remain poor.

Since 2013, Mongolia’s economic growth has slowed, with its GDP dropping over $1 billion in three years. The economic slowdown, while not drastic, raises concern for the country’s most vulnerable and how the downturn will affect them, considering the previous upturn was not doing much to help them.

To answer and address the question of why Mongolia is poor, the nation must focus on equal and quality access to jobs and education. Fortunately, Mongolia has the tools to succeed and is currently implementing strategies such as the National Plan of Action for Decent Work and the National Employment Promotion Programme. Investing in education will also be crucial for increasing the population’s employability and potential for the generations to come.

Mongolia’s rapid development is worth celebrating, but to ensure the nation’s long term success the country must work toward closing the gap between the rich and the poor and evenly dispersing their development. Only when the entire population has the capability to succeed will Mongolia reach its full economic potential.

– Catherine Fredette

Photo: Flickr

Why is Kyrgyzstan Poor?

Kyrgyzstan is a lower-middle-income country in Central Asia, surrounded by Kazakhstan, China, Tajikistan and Uzbekistan. It is known for its stunning natural beauty and nomadic traditions. After being controlled by a rotating series of tribes and clans, the country finally gained sovereignty in 1991 after the dissolution of the Soviet Union. Since its inception, the nation-state of Kyrgyzstan has made economic progress. However, there have been serious obstacles during the transition. So, why is Kyrgyzstan poor?

Poverty in Kyrgyzstan

According to the World Factbook, it is home to approximately 6.2 million people, with only three million or nearly half, in the labor force. Additionally, 33.3% of the total population lived below the national poverty line in 2021, making Kyrgyzstan the second poorest nation in Central Asia after Tajikistan. There is also a significant wealth disparity between the urban and rural populations, with 70% of the country’s poor living in rural areas.

Causes of Poverty in Kyrgyzstan

Kyrgyzstan’s economy heavily depends on farming, which accounts for 20% of the country’s gross domestic product (GDP). Furthermore, 40% of the workforce is employed in agriculture and more than 50% of the farming output comes from household plots where many individuals participate in subsistence farming. However, due to the slow modernization of its agricultural sector, food insecurity persists in rural Kyrgyzstan.

According to research, 16% of the “poorest quintile of households in Kyrgyzstan” do not have enough food. This inadequate food intake can lead to acute energy deficiency (AED) and reduced physical activity. As a result, the most impoverished people in Kyrgyzstan lack the energy to work and earn income, making it challenging for them to break the cycle of poverty.

Secondly, Kyrgyzstan is only able to export cotton and tobacco as it has few natural resources that the rest of the world wants. While the country has untapped coal deposits and a major gold mine, little has been done to take advantage of these resources. Another factor that causes poverty in Kyrgyzstan is its severe lack of access to proper banking and financial services. There has been little competition between large commercial banks and the country has continued to rely on imperfect Soviet methods for accounting and banking.

Furthermore, the Kyrgyz Revolution of 2010 led to the discovery of high-level corruption in the banking sector. In fact, more than $170 million or 10% of the country’s assets, was stolen by the former president’s son. Due to these serious issues with the banking infrastructure, many people, particularly those in rural Kyrgyzstan, do not have access to banking services, preventing investment and economic growth. There is also a lack of services crucial to aiding entrepreneurs, such as credit risk assessments and bank loans.

USAID in Kyrgyzstan

To address food insecurity, the United States Agency for International Development (USAID) implemented the Farmer-to-Farmer initiative in 2018. The initiative aims to boost Kyrgyzstan’s economy by providing technical assistance to its agriculture sector. The program brought 79 agricultural specialists from the United States (U.S.) to assist the country’s “farmers, agribusinesses, agricultural education and advisory services” improve their services and make more profit, thereby breaking free from the cycle of poverty. The program, which ran until September 2023, reached 4,320 people, including both men and women, with 85% of them being trained.

Final Remark

Like several other landlocked developing nations, Kyrgyzstan faces challenges, such as a high poverty rate and food insecurity. Organizations like USAID, which are working to eliminate food insecurity in the country, can improve the lives of Kyrgyzstan’s most vulnerable citizens.

– Akhil Reddy

Photo: Flickr
Updated: June 01, 2024

Why Is Djibouti Poor?

Why Is Djibouti Poor

Djibouti is a small nation located in the Horn of Africa between Ethiopia, Somalia and Eritrea. The country faces a major poverty problem. About 41 percent of the population live in poverty and 23 percent live in extreme poverty. So why is Djibouti poor?

At the heart of Djibouti’s poverty is a lack of resources. The arid land makes Djibouti a poor place for farming. In fact, just 0.04 percent of land in Djibouti is arable; this is largely due to the harsh, dry climate. Drought is common and a huge threat to Djibouti’s rural population, which consists of nomadic farmers. The most recent drought saw malnutrition rates rise to 18 percent and in some areas, chronic malnutrition was as high as 30 percent.

These conditions have caused people to flee to urban areas like Djibouti’s capital city, which is home to over 75 percent of the population. Due to the unprofitable nature of farming in Djibouti, the country has to rely on foreign imported food to feed its people.

In addition to a poor agricultural sector, Djibouti also suffers from the stresses of war. In the 1990s, Djibouti experienced a civil war after President Hassan Gouled Aptidon transformed the government into a single party state and began granting privileges to the Issa clan. The Afar clan rebelled, which led to a three year civil war. By the time peace was finally attained, the war had caused significant damage to rural livestock production and infrastructure. Djibouti has spent a decade recovering from these damages.

Despite these great challenges, Djibouti’s future is looking brighter. The nation is gaining significant investment, primarily from China, in the hopes of making Djibouti a free trade zone. These investments have caused Djibouti’s GDP to grow and the country is expected to have its GDP growth rate continue to rise in the next two years. Consistent foreign investment in infrastructure and Djibouti government reforms to make the area more business friendly could be a significant boon to ending poverty in Djibouti. Hopefully with continued progress, we will no longer have to ask “Why is Djibouti poor?”

– Carson Hughes

Photo: Flickr

10 Facts About the Poverty Rate in Senegal

Senegal Poverty Rate
Senegal, the westernmost country in Africa, has a population of about 13 million people. Nearly half of the Senegalese population—46.7 percent, to be exact—are living in poverty. The following 10 facts explain and give context for the poverty rate in Senegal:

  1. The poverty rate in Senegal is determined in terms of consumption. Estimates of consumption per household are divided by the number of adults in the household. This number excludes children, who are assumed to consume less than adults. From here, a minimum acceptable standard of consumption is calculated and individuals below this level of consumption are considered poor.
  2. Geographic disparities exist between rural areas and Dakar, the capital city and the largest city in Senegal. In rural areas, 66 percent of residents are considered poor, compared to 25 percent of residents in Dakar. Additionally, the general poverty line in Dakar is almost two times higher than it is in rural areas.
  3. As of 2011, 38 percent of Senegal’s population was living on $1.90 or less per day.
  4. As of 2016, Senegal’s GNI per capita was $950.
  5. Senegal’s economy relies on industries such as mining, construction, agriculture, fishing and tourism, but it also heavily relies on foreign aid and remittances. Nearly 75 percent of the population works in the agriculture sector, which is regularly threatened by inclement weather such as drought and climate change.
  6. Senegal has a poor economy and, as a result, many Senegalese people emigrate to other countries. An economic crisis in 1970 ignited migration, which had accelerated by 1990. Many migrants left for Libya and Mauritania for opportunities in their thriving oil industries. Others left for more developed countries such as France, Italy and Spain for other economic opportunities.
  7. Senegal’s GDP rose at an average of 4.5 percent each year from 1995 to 2005. After 2005, however, while the rest of Africa enjoyed economic growth, Senegal’s economy started to decline. From 2005 to 2011, Senegal’s economy rose at an average rate of 3.3 percent. Decline in economic growth, especially during this period, can be attributed to drought, floods, rising fuel prices and the global financial crisis.
  8. The World Bank reported that GDP growth is too low for significant poverty reduction in Senegal.
  9. The fertility rate in Senegal is almost 4.5 children per woman. Young people comprise a large portion of the population at 60 percent of the Senegalese population. Additionally, Senegal has an illiteracy rate of 40 percent and a high unemployment rate of 12.7 percent, both of which provide dim outlooks for Senegalese youth. According to the Hunger Project, 22 percent of children ages five to 14 are working and not attending school.
  10. Unlike many countries facing extreme poverty, Senegal has one of the most stable governments in Africa and is considered a model for democracy in Africa. Since its independence from France in 1960, Senegal has elected four presidents and has witnessed three peaceful political transitions.

Despite the fact that the poverty rate in Senegal is high, many projects have been implemented to reduce the poverty rate. President Macky Sall unveiled the Emerging Senegal Plan (ESP), which strives to prioritize economic reforms and growth. The International Monetary Fund is providing assistance for the ESP from 2015 to 2017.

In an attempt to take a fresh look at poverty, Senegal’s national statistics office distributed the second Senegal Poverty Monitoring Survey. The World Bank, the Canadian government and the World Food Programme provided financial support. The survey, however, has room for error, because it is heavily dependent on the time of year that residents fill it out, as consumption levels vary based on the harvest.

Furthermore, microfinance has begun to play a key role in reducing poverty in very poor countries, such as Senegal. This program has allowed very poor individuals who are excluded from traditional banking to obtain microloans. The Hunger Project introduced the Microfinance Program (MFP) in Senegal, which strives to incorporate female farmers and entrepreneurs to give them a larger voice in the community. Three of the MFPs in Senegal have been approved by the government to operate as rural banks. MFPs provide credit and savings programs and have allowed many farmers to move beyond exclusively subsistence farming.

Economic growth will be the key component in reducing poverty in Senegal. These projects from the Senegalese government and various organizations hope to spark economic growth and help reduce the poverty rate in Senegal.

– Christiana Lano

Photo: Google

Decreasing the Cyprus Poverty Rate Among the Elderly

Cyprus Poverty Rate
The European Social Watch Report 2010 identified the elderly as the generation most at-risk to be affected by poverty. However, within the past few years, the over-65 poverty rate has decreased dramatically, dropping from 45 percent in 2008 to 17.3 percent in 2015. Two key factors played a major role in this improvement.

 

Causes of Poverty in Cyprus

 

Pension Maturation: Everyone who is gainfully employed in Cyprus (including self-employed individuals) is eligible to receive compulsory social insurance. This insurance also includes an old age pension, which is the primary source of income for Cypriots over age 65.

The current Cypriot social insurance scheme was last reformed in 1980, affecting pension levels in two important ways. First, the system changed from a flat-rate to an earnings-related structure. This means that the level of pension available is based on the level of insurable earnings. Second, pension levels are based on the length of the contribution period. As the current system has “matured,” or gotten older, retiring Cypriots have had more time to contribute to their pensions. This has allowed for an increase in income from old-age pension, directly correlating to the decrease in the over-65 poverty rate.

Overall Wage Decline: In the wake of the 2008 global financial crisis, unemployment rose and wages fell in Cyprus. The European Social Policy Network (ESPN) cited both a 7.6 percent drop in mean monthly earnings for full-time workers between 2010 and 2014 and a rise in non-standard employment as repercussions of the crisis. However, income for Cypriots over 65 remained relatively stable due to the old age pension.

It is important to note that the dramatic decline in the over-65 poverty rate in Cyprus is not necessarily secure. The ESPN predicts that pension growth will level off as the system fully matures, the poverty line will rise as the economy grows and pension levels will be lower in the future as workers in non-standard positions retire. Maintaining the current Cyprus poverty rate for Cypriots over age 65 will require focusing on income levels for retirees. In the current system, that means safeguarding the ability for workers to obtain an adequate pension.

– Erik Beck

Photo: Flickr

Causes of Poverty in Tunisia

Causes of Poverty in Tunisia

The pressing issue of poverty in the North African country of Tunisia needs to be addressed. While attempting to understand the causes of poverty in Tunisia, patterns of unemployment, food insecurity and civil unrest have become most apparent.

In 2021, Tunisia’s poverty rate rose to 16.6% from 15.2% in 2015 and it has been projected to increase further to 17.1% in 2024. Furthermore, although the nation has experienced some economic growth in the tourism sector (+17% year-on-year) and transportation (+5%), over the years, the wealth achieved so far is unevenly distributed, with those living in the coastal regions benefiting more than those in the inland areas. The COVID-19 pandemic has also caused a rise in unemployment, which has worsened the situation.

Poverty, in particular, affects those in central Tunisia at a higher rate than those on the outskirts of the country’s borders.

3 Leading Causes of Poverty in Tunisia

Hunger is a pressing issue within Tunisia that contributes to poor living conditions for many. According to the Food and Agriculture Organization of the United Nations (FAO), 12.6% or more than 1.5 million of Tunisia’s population experienced severe or moderate food insecurity in 2022. One of the primary causes of food insecurity in Tunisia is the country’s dependence on agricultural imports, with Russia’s invasion of Ukraine exacerbating the situation. Many problems are associated with malnutrition on such a large scale, including limits to economic productivity and increased health costs for many.

Tunisia also has a remarkably high unemployment rate, which affects, in particular, the youths. The country’s unemployment rate reached approximately 16% in the first quarter of 2023, one of the highest among countries in the Middle East and Central Asia. The high unemployment rate among youth is due to various structural and policy factors, including the fact that the demand for skilled labor is primarily concentrated in the public administration sector, which faces constraints due to budgetary limitations and the trends of privatization and deregulation.

The civil unrest that has plagued Tunisia since 2011 is another one of the significant causes of poverty in Tunisia. The political instability resulting from the Ben Ali regime stems from dissatisfaction with poverty and unemployment that plague many Tunisians. This unrest has since driven away tourists and business investors alike, which has further increased unemployment for Tunisians, as not enough jobs are being created to meet the demands of the growing workforce.

Organizations Tackling Poverty in Tunisia

There are several nongovernmental organizations (NGOs) working to combat hunger, unemployment and poverty in Tunisia. Among them is Islamic Relief, which has been operational in the country since 2011. Since its establishment, the nonprofit has been running a program that ensures more than 270 school children receive daily meals.

Moreover, the organization is dedicated to enhancing the lives of Tunisians by collaborating with farmers and offering vocational training to the youth. This initiative aims to equip them with the skills needed for self-employment, ultimately breaking the cycle of unemployment and poverty.

Another notable nonprofit in Tunisia is the Tunisian Youth Alternative Network (RAJ TUNISIE), founded in 2013 in response to the civil unrest that began in 2011. Serving as a mediator between various stakeholders, the organization focuses on youth issues, encouraging greater participation among young Tunisians in building the “new democratic and pluralist Tunisia.”

Final Remark

Like every other country, Tunisia is facing some challenges like high youth unemployment rates, civil unrest and poverty. However, several NGOs, such as the Islamic Relief, are actively at the forefront in the fight against poverty in Tunisia.

– Jennifer Faulkner

Photo: Flickr
Updated: May 27, 2024

Causes of Poverty in Botswana

Causes of Poverty in Botswana

The discovery of diamonds in 1967 helped Botswana to move from one of the poorest countries in Africa to a middle income country. Ironically, that same discovery contributed to vast levels of income inequality and poverty in the nation. Though Botswana is not technically a poor nation, substantial clusters of poverty remain in its rural areas. In some rural areas, the poverty rate is as high as 46 percent and unemployment for the country is at 20 percent. Here are some of the main causes of poverty in Botswana.

  1. Education
    The skills taught in the education sector often do not match the skills needed to execute jobs available in the job market. This has led to a mass influx of certain skills in the job market, resulting in high unemployment for graduates. Several youths between the ages of 15 and 24 are unemployed in Botswana due to being poorly prepared for potential careers. This age group makes up 51 percent of the unemployed population in Botswana.
  2. Gender
    Unemployment rates are higher among women than men. Botswana men are generally better educated than women so their employment rates tend to be higher. Women also have trouble entering the labor force because of social standards and barriers. Because of these barriers, women make up a mere 36 percent of formal sector employees but make up 75 percent of informal sector employees.
  3. Inequality in Cattle Distribution
    Lack of ownership of livestock is a significant cause of poverty in Botswana. About 47 percent of farmers do not own cattle and those who do own cattle only own small herds. Thus, the poorest 71 percent of traditional farmers own only about 8 percent of total traditional herds, while the richest 2.5 percent own about 40 percent. About 10 percent of farming households own 60 percent of the 2.3 million cattle in the country. This system makes it so that wealth in the country continues to be dispersed unequally. The rich remain rich and the poor remain poor.

While there are several causes of poverty in Botswana, the future of Botswana’s economy looks optimistic. The Botswana government has recently released Vision 2036, a framework designed to reduce the poverty rate and secure prosperity for all. The plan is ambitious and is backed by the United Nations Development Programme (UNDP). Prior to creating the plan, the president engaged in a countrywide dialogue with citizens of Botswana to understand their goals and needs, ensuring that Vision 2036 captures their perspectives. If the plan is effective, by 2036 Botswana will be a high-income country with virtually no one living under the poverty line.

– Jeanine Thomas

Photo: Flickr

Central African Republic’s Poverty Rate

Central African Republic Poverty RateThe Central African Republic is among the poorest countries in the world. In 2017, the country had the lowest reported GDP per capita, at $656, and the average person lives on less than $1.80 per day. The Central African Republic’s poverty rate is among the highest in the world, with 62 percent of citizens living on less than $1.90 per day when the data was last taken.

The incredible poverty rate is due to a variety of factors, perhaps none more important than the Central African Republic’s history as part of the French Empire. As a country rich in natural resources that have been in demand throughout history, the Central African Republic has been exploited by western nations from the beginning of the Age of Imperialism to the modern day.

Internal conflict has worsened the problems originally begun by western imperialism. Since the Central African Republic gained independence in 1960, the major Christian and Muslim factions in the country have rarely ceased in-fighting. Alongside religious rivalries, multiple ethnic groups and political ideologies have contributed to widespread violence and instability throughout the country.

Longstanding political instability has led to a severe lack of development, one of the greatest reasons behind the abysmal Central African Republic’s poverty rate. Widespread poverty has allowed the country to wallow in incredibly low rates of development for years, ranking 179th out of 187 countries.

In a population of just over four million people, nearly 370,000 children will grow up without one or both of their parents, and more than 50 percent of the population can neither read nor write. Almost five percent of the population carries HIV/AIDS, one of the highest rates in the world.

Numerous groups worldwide are providing necessary aid to the Central African Republic, but many focus on providing emergency relief. While any and all aid is needed throughout the country, short-term solutions do little to assuage the Central African Republic’s poverty rate. In order to provide a long-term solution to poverty, the International Rescue Committee is, alongside emergency aid and health services, creating programs that help both men and women receive education and set up businesses. This program will allow Central Africans take the first steps out of poverty themselves.

– Connor S. Keowen

Photo: Flickr