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Prosper Africa Helps Address Global Poverty

Prosper Africa helpsTwo direct consequences of the alleviation of poverty in a region are economic growth and bolstered purchasing power. For countries that invest in the development of a region, there is the potential that a two-way economic relationship begins once that region’s population gains the necessary financial strength to buy more expensive consumer goods. The relationship between the United States and Africa reflects this trend, especially with the start of the Prosper Africa initiative. Prosper Africa helps end global poverty, starting with Africa.

Africa’s Economic Potential

Despite having struggled with chronic poverty issues, Africa is home to six of the 10 fastest growing economies in the world. With one billion potential consumers, Africa has the potential to become an economic powerhouse that can provide any international trading partner with a valuable destination for exports and a significant source of imports.

Seeing this opportunity, in 2018, the United States federal government launched the Prosper Africa initiative, which developed out of increasing requests by U.S. companies to have easier access to African markets.

With the oversight of the U.S. State Department and International Trade Administration, Prosper Africa offers U.S. and African businesses a wide-ranging set of economic tools such as access to financing, loan guarantees, insurance and business strategy advising. The program facilitates deals between U.S. and African businesses to foster a stronger two-way economic relationship between the United States and Africa.

Prosper Africa Shows Promising Signs of Success

According to a 2019 analysis by the Congressional Research Service, Prosper Africa has been implemented across the continent. Each U.S. embassy in Africa has created a team designated to fostering ties between U.S. and African businesses. Furthermore, the U.S. Development Finance Corporation has also launched an online point of access to the array of business tools that the initiative offers.

These efforts have had noticeable results across the continent. Since June 2019, Prosper Africa has facilitated more than 280 deals valued at roughly $22 billion in more 30 African countries, including Cameroon, Namibia, Sudan and Madagascar. These deals have been struck in sectors as diverse as healthcare, aerospace and financial services.

Prosper Africa helps countries in that it has also led to government reforms aimed at fostering a more transparent and efficient business environments in 10 African countries. These reforms ensure that small and medium-sized African businesses can access financial services and that governments can effectively implement necessary regulatory frameworks to govern business environments.

Ending Global Poverty is Beneficial for All

Prosper Africa helps Africa and the entire world because the fight against global poverty does not solely consist of one-way foreign aid investments. These investments have the potential to be the beginning of a healthy economic relationship between a developed nation and emerging economies. Once the United States takes the lead on an issue, the rest of the world follows. From addressing drug trafficking to addressing terrorism, the United States has shaped the focus of the international community on countless issues. Through Prosper Africa, the United States has the potential to lead the way once more and uplift the lives of billions in Africa.

– John Andrikos
Photo: Flickr

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Improving Conditions in India: Emerging Economies

Improving Conditions in India: Emerging Economies
Currently, India is a low middle-income country and is set to become an upper middle-income country within the next decade. The improving conditions in India have been shown in many different sectors throughout the country. It is abundantly clear in sectors like the travel sector, health sector, telecommunications, and the space program.

Improving Conditions in India: Travel

The prime minister of India passed the national civil aviation policy which has had a positive impact on the travel and economy in India. It was passed in an effort to make flying more affordable for India’s growing middle class. The national civil aviation policy states that domestic carriers no longer have to operate for five years before they can fly abroad. This change immediately affected Vistara and AirAsia India. The number of passengers on domestic flights increased by 21 percent to over 80 million passengers and this number is estimated to reach 300 million by 2022.

The government has also lowered prices of domestic travel, only on the less popular routes, to be capped at $37 each hour of air travel. This has increased travel within India and has helped airports and airlines welcome more business which has had a large effect on the improving conditions in India. The effect has been shown through increased jobs in the travel industry and stimulating the economy in other parts of the country with new travelers that will purchase things in new cities like hotel rooms, food or even souvenirs.    

Improving Health

The life expectancy in India has doubled in just approximately 70 years. It has gone from 35 years in 1950 to almost 70 years today. This has come from various changes throughout India. One of the biggest changes is the access to toilets in the country. As a result of the efforts of Swachh Bharat Abhiyan. Swachh Bharat Abhiyan is a movement in India that aims to clean up the city, infrastructure and rural areas of the country. From the efforts of this program, millions of more people have access to toilets in India which has greatly helped improve conditions.  

Improving Telecommunication

The government of India has recently wanted to improve telecommunication in the north-eastern states of the country. To do this the government has invested around $1.7 billion to fund projects that will help the telecommunication throughout the country. These improvements are set to be completed by December of this year. There has been a deal signed between Bharat Sanchar Nigam Limited (BSNL) and Universal Service Obligation Fund (USO) to set up almost 7,000 mobile towers in over 8,000 cities and along the highway in Northeast India. This deal hopes to help people in rural areas of India have the same access to ICT services at affordable prices as people in the bigger cities have. Phase one of this deal was completed in December 2017 which laid a great amount optical fiber cable covering 109,926 GPs (Gram Panchayats) and over 100,00 of them are ready for service. This means that more people throughout rural areas of India have access to high-speed internet at an affordable price which is only helping the country become an upper-middle income country even faster.  

The Space Program

Just over a year ago the Indian Space Research Organization launched multiple record-breaking satellites into space showing the world that India has a strong space program. It launched 104 nano-satellites and a larger satellite for Earth observation. Then even before that, in 2014, it launched the Mars Orbiter Mission. India was the only country to do that on the first attempt and with a budget of only $73 million. The Space Foundation estimates that these smaller inexpensive satellites that India has been building will be of great demand in the next few years. These innovative and cheap satellites and a boost in the Indian Space Research Organization has brought and will continue to bring money into the economy of India. It will create jobs and stimulate the economy.  

Each of these sectors has greatly improved in India in the past several years and will continue to help India to become a less impoverished country and move forward to become an upper-middle-class income country in the next few years.

– Ronni Winter

Photo: Flickr

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Tax Haven Investment Outpaces Emerging Economies

Tax_haven
Despite having a population under 30,000, the British Virgin Islands (BVI) attracted more foreign investment in 2013 than the world’s two largest emerging economies—Brazil and India—according to a UN survey.

The islands house some of the better-known corporate tax shelters where transnational corporations secret their profits in order to avoid steeper taxes in the nations where they operate. The ethics of such tax loopholes aside, the archipelago benefitted from $92 billion in outside money last year. To put that number in perspective, the U.S. (as the world’s largest economy) received $159 billion in foreign investment.

However, it is somewhat deceptive to suggest that these investments are 100% comparable. Ultimately, the money that moves through the BVI isn’t going there for development or industry, but simply for the purposes of treasury.

An organization known as Tax Justice USA reports $150 billion in tax revenue is lost each year in the U.S. as a result of international corporations using tax havens like the BVI. However, money is not just leaving the developed world. Tax Justice cites a report that shows from 2000-2008, $810 billion of what it calls “illicit money” left the developing world on an annual basis.

The designation as “illicit” refers to money that leaves its country of origin without record and through legally questionable means. These funds are then funneled into tax havens, creating a leaching effect on development and aid resources.

As it pertains to the U.S., the loss in revenue is not on any parties’ political agenda despite the fact that nearly every major American corporation makes use of states like the BVI including the tech giants Apple and Microsoft.

In the U.S. Senator Bernie Sanders (I-VT) is essentially the lone voice in the fight for fairness in corporate taxation. In February of 2013 he introduced a bill to the Senate called the “Corporate Tax Dodging Prevention Act” that would prohibit the use of offshore tax havens.

According to Sanders, “You can’t be an American company only when you want a massive bailout from the American people. You have also got to be an American company, and pay your fair share of taxes, as we struggle with the deficit and adequate funding for the needs of the American people.”

As of early 2014 the bill is still in committee.

Although lost tax revenue is a frustrating loss for the developed world, the consequences in the developing world are much more dramatic. It’s hard not to imagine, for instance, the positive impact $92 billion dollars (the amount received by the BVI) would have in real terms on poverty in the developing world.

In Brazil, nearly 9% of the population lives on less $1.30 per day. In India, 33% of the population lives below the poverty line. In these the largest of the emerging economies this sort of outside investment could potentially lift millions out of poverty if the funds were applied to improving healthcare and education.

Without any comprehensive change on the horizon, there still remains some hope that tax reform may be on the way. The UN report has raised a few eyebrows in developed nations (like those Senator Bernie Sanders), and the increased awareness along with the UN’s recommendations might lead to an international agreement on this issue.

– Chase Colton

Sources: UNICEF, Huffington Post, The Rio Times, Business Insider, Global Financial Integrity , Tax Justice USA, Reuters
Photo: Top-10-List

Defining an Emerging Market

Defining an Emerging Market
The term “emerging markets” was coined in 1981 at the International Finance Corporation when promoting the first mutual funding investments in developing countries. While the term is sometimes considered unhelpful, it is important to identify and define these markets. Emerging markets are a hot topic as they are predicted to surpass the US, German, and UK economies in the future.

There are three factors that distinguish an emerging market from a developed market. Firstly, rapid economic growth defines emerging markets. Great examples of emerging markets are Brazil, Russia, India, China, and South Africa (BRICS). In recent decades, these developing countries have boosted their large economies based on global capital, technology, and talent. The GDP growth rates of these countries have outpaced those of more developed economies, lifting millions out of poverty and creating new middle classes and large new markets for consumer products and services. The large labor pools of these countries give their economies a huge advantage over more developed economies.

The second factor that defines the emergence of a developing economy is how much competition it offers in comparison to developed markets. Along with the rapid pace of development, these countries pose serious competition to current dominant economies in developed countries such as the United States, the United Kingdom, Germany, France, and Italy.

Lastly, emerging markets are often defined in terms of their financial situation and infrastructure. While their rapid growth and competitiveness are positive growth indicators, the amount of red-tape and inconsistencies involved in dealing with these markets marks them as emerging. Unfortunately, some argue that the corruption in these markets will halt them all together despite other growth factors.

While the economies of Brazil, Russia, India, and China are well on their way to surpassing “emergence”, the predicted emerging economies of the future are Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa (CIVETs). According to John Bowler, director of Country Risk Service at the Economist Intelligence Unit, the sizeable populations of some of these countries and the wealth of natural resources in others, just might make them the economic boomers of the next decade.

– Kira Maixner

Source CNN , Forbes
Photo ACF

Positive Attitudes About Emerging Economies

emerging-economies
Most major news venues are preaching about the crash of the global economy, however, there are certain attitudes that have been left untold. In a study done by the Pew Research Center from March 2 to May 1 of this year, attitudes reflect that things are not as bad as they seem, especially from the viewpoints of citizens of emerging economies worldwide.

Citizens of both advanced and developing economies declared that their personal finances were in a positive state despite the unequal and jobless market the recession brought. Citizens of emerging economies were particularly optimistic, 48% expecting their national economies to improve in the next 12 months. 53% of people surveyed in emerging economies said that they thought their economy was doing well. Furthermore, these positive attitudes have changed very little and have even improved from 2007 to 2013.

In contrast, 25% of people living in advanced economies said they thought their economy was failing and as many as 32% said their economy would get worse. The survey revealed that negative attitudes about national economies are more typical of European Countries and advanced economies such as France, Spain, Italy and Greece.

The survey proved that even in the face of a negative reality, emerging economies come out on top. 80% of Chinese citizens and 85% of Malayasian citizens that took part in the survey agreed that their emerging economy was doing well, while 24% of those surveyed in advanced economies thought the opposite about their own national economy. One factor that all participants surveyed could agree on was that the gap between the rich and the poor was definitely increasing, most distressfully in developing countries.

– Kira Maixner

Source: Hindustan Times
Photo: The Guardian