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Trade Partnership Between The EU And India

Trade Partnership Between The EU And India
The European Union and India have recently agreed to resume trade negotiations since 2013. The European Union has acknowledged that trade leads to the reduction of national poverty, a huge benefit. The trade partnership between the E.U. and India is strategic to the E.U. in terms of India’s geographical location and natural resources.

National Poverty in India

In India, 30% of the population lives under extreme poverty, meaning that individuals earn less than $1.25 per day. India is one of the subcontinents with the highest toll of poverty in the world. The lack of resources creates a chain reaction, leading to unemployment, child labor and lack of education. Similarly, the poverty rate in India is concerning, alarming other nations to develop impactful relations with India. The economy in India bases on exporting spices, coffee, tea, tobacco, iron and steel. The current COVID-19 pandemic struck India with the lowest economic growth in years. It affected rural areas in India the most. People are reducing spending due to the crisis and financial situation. The European Union has agreed to trade with India to pursue common interests.

Trade Agreements Between the EU and India

The European Union agreed on trading with India for better development and strategic commerce. Europe and India froze their relationship in 2013. This decision strongly affected India’s financial situation. Trade partnership between both nations creates impactful relationships and empowers women. Strengthening the relationship between both countries strengthens human rights and reduces the poverty index, helping civil society. The trade deal between nations is 8.5 billion euros. The European Union and India agreed to build infrastructure projects to increase cooperation.

Both nations have compromised to reduce carbon emissions and increase renewable energy. The pledge between both will improve citizens living conditions and minimize national poverty. According to the European Commission, India is amongst one of the fastest-growing economies in the world. The trade partnership with the European Union could potentially grow India’s GDP up to 6%. The European Union will exhaust available channels to work with India to ensure a transparent market and respect multilateral obligations.

Trade Drives International Development

Open trade policies enable economic development in countries. The cooperation of international trade will benefit the importer and exporter in numerous ways. For instance, trade is critical when it comes to ending global poverty. Multilateral relationships create a win-win scenario, improving productivity and innovation. Poverty means the concentration of individuals deprived of basic needs, often disconnected from global or even regional markets. Consequently, increasing trade creates jobs and grows the exporting sector.

Improving Living Standards in India

In conclusion, emphasizing trade partnership is a national growth strategy. With the collaboration and agreement, India could increase up to 6% of its annual GDP. According to the World Bank, trade-open markets help create an inclusive and integrated environment. The European Union will help India significantly reduce national poverty levels. All sectors in India benefit from bilateral and multilateral negotiations. Above all, it is essential to have an equitable economy to ensure growth in society. The United Nations has prioritized poverty as a millennium development goal emphasizing MDG 8, which corresponds to international trade as a growth strategy to reduce poverty. Thus, the trade partnership between the E.U. and India is conducive to India’s future economic success.

– Ainara Ruano Cervan
Photo: Flickr

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Poverty in Refugee Camps in Bosnia and Herzegovina

Refugee camps in Bosnia and Herzegovina
Bosnia and Herzegovina is a southeastern European country situated in the western Balkan Peninsula of Europe. The state has borders with Croatia, Montenegro and Serbia. The migration process that peaked in 2015 had an impact on many European states. A mix of civil wars, violence and bad governance in North Africa and the Middle East pushed people outside of their motherlands. According to the statistical data of the United Nations High Commissioner for Refugees (UNHCR), more than 1,015,078 people irregularly crossed the Mediterranean Sea in 2015 and 3,771 people died or disappeared at sea during their journeys to reach Europe. These migrations have resulted in a need for refugee camps in Bosnia and Herzegovina, which has land borders with the E.U.

Refugees in Bosnia and Herzegovina

The number of asylum seekers and migrants arriving in Bosnia and Herzegovina drastically increased at the end of 2017. An average of 32 new arrivals registered per month between January-November, but in December, the number of newcomers reached 198. The tendency continued into 2018 and the number of asylum seekers and migrants increased from 237 in January to 666 in March. Since the beginning of 2018, approximately 70,000 asylum seekers and migrants arrived in Bosnia and Herzegovina via the Western Balkans migration route. Based on the United Nations (U.N.) statistics, around 8,000 asylum seekers and migrants are currently present in Bosnia and Herzegovina. In most cases, new arrivals were from Syria, Libya, Palestine, Afghanistan, Iran, Algeria and Iraq.

Due to economic and social reasons, new arrivals mostly do not have the willingness to stay in Bosnia and Herzegovina. Their main priority is to reach E.U. countries. However, strict border controls by the Croatian authorities and the slow readmission process by the E.U. have made the situation more complicated. In the last years, non-governmental organizations (NGOs) and human rights groups have documented violence against asylum seekers and migrants by Croatian border police. According to the International Organization for Migration (IOM), there are five fully operational Temporary Reception Centers in Bosnia and Herzegovina. At the same time, 5,616 asylum seekers and migrants are present at Temporary Reception Centers and 8,116 asylum seekers and migrants in Bosnia and Herzegovina.

Current Struggles in the Refugee Camps

The poverty level of the residents in refugee camps in Bosnia and Herzegovina remains very high despite the humanitarian aid of the E.U., U.N. agencies, humanitarian organizations and Bosnian and Herzegovinian authorities. Especially during the winter, all camps lack the most basic conditions for hosting people. Since the fire of the main camp in Lipa, residents of camps live in tents built by the Bosnian and Herzegovinian military. The refugee camps in Bosnia and Herzegovina provide minimum comfort from the harsh weather conditions and 13 people live in one tent on average.

Food security remains a significant problem in camps for asylum seekers and migrants. According to U.N. data, 67% of residents of camps eat one meal per day. Asylum seekers and migrants purchase second and third meals with their own money. Personal funds of people are running out and they do not have income sources. Some residents of camps beg for money or sell tissues in the streets. Also, food security can change by location. Camps in the Sarajevo area receive food on a regular basis. However, residents of camps on the east and west of the country suffer from a lack of food distribution.

At the same time, people do not have any access to education while they live in refugee camps in Bosnia and Herzegovina. By international law, asylum seekers have the right to primary and secondary education.

European Initiatives

Since early 2018, the E.U. provided €40,5 million directly to Bosnia and Herzegovina and project implementing partners. These funds help address the problems asylum seekers and migrants face in the refugee camps. Despite all of the humanitarian aid from the E.U., humanitarian organizations, non-governmental organizations and local authorities, problems remain. After visiting the notorious Lipa camp in the early months of February 2021, the European Commissioner for Home Affairs Ylva Johansson recommended a new European program for migrants and asylum seekers. However, to start a new program, consent is necessary from all E.U. members.

– Tofig Ismayilzada
Photo: Flickr

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Cleaning Up the Thai Fishing Industry

Thai Fishing Industry
In recent weeks, Thailand experienced a new wave of COVID-19 cases originating from a large seafood market near Bangkok. The Prime Minister of Thailand wasted no time in blaming the outbreak on human smuggling networks and illegal immigrants. Most of those working at this particular market are from neighboring Myanmar. This ongoing outbreak brings Thailand’s fishing industry back into focus. The industry faces international pressure to address findings of horrific working conditions, unfair wages and forced labor. This article discusses the importance of the Thai fishing industry, the human rights abuses uncovered in recent years and what some are doing to address these issues.

Thai Fishing Industry

The Thai fishing industry exports more than $6 billion worth of products annually and employs more than 800,000 people. It is the world’s third-largest seafood exporter and the world’s leading exporter of shrimp. The industry came under fire in the E.U. in 2014 due to reports uncovering widespread forced labor, worker abuses and environmental degradation in the industry.

Burmese immigrants represent a majority of those working in the Thai fishing industry, followed by a smaller percentage of Thais, Cambodians and Laotians. Workers on fishing vessels are exclusively men, while men and women each work in the seafood processing sector. There is a mixture of regular and irregular workers, which makes ascertaining the true number of immigrants in the fishing industry difficult. About 3 million labor migrants legally live in Thailand and an estimated two million more are undocumented.

Poor Working Conditions

Working conditions on Thai fishing vessels are notoriously challenging. In multiple reports, workers discuss working 18-20 hour days with inadequate food, water and medical supplies. Between 14% and 18% of migrants report being victims of forced labor. Among these victims of human trafficking, over half report seeing a coworker killed in front of them. Threats from employers and beatings are common, along with working at sea for years at a time without being allowed to leave the vessel. These conditions affect all nationalities in the Thai fishing industry, but undocumented immigrants are the most vulnerable to mistreatment.

Solutions

Although much work is necessary to address issues in the Thai fishing industry, Thailand has been largely receptive to suggestions that organizations such as the ILO and other national and international human rights NGOs have made. The government has improved legal frameworks and compliance measures for fishing companies. Additionally, wages have increased and housing conditions are improving, according to respondents in a recent ILO survey released in 2020.

Specific laws that have gone into place include the elimination of recruitment fees that workers pay, banning the practice of employers withholding identity documents from workers and banning child labor in the fishing industry. Going forward, regional compliance will be essential in enforcing these legal frameworks. Thailand is attempting to set that precedent in the ASEAN region. In response, the E.U. lifted its “yellow card” rating for the industry and continues to accept seafood imports.

The Labor Protection Network

For more than 15 years, the Labor Protection Network (LPN) has been spearheading efforts to clean up the Thai fishing industry. LPN conducts direct action raids on illegal fishing boats, provides short- and long-term shelter for victims and educates children in its centers. Additionally, LPN has brought international attention to the industry through its advocacy campaigns. A notable part of these efforts is the appearance of co-founder Patima Tungpuchayakul in the documentary “Ghost Fleet.” In 2017, Tungpuchayakul received a nomination for a Nobel Peace Prize for her efforts in human rights.

Each year, LPN also provides legal assistance to more than 3,000 migrants. It provides assistance in Thai, Burmese, Khmer or Lao, depending on migrants’ needs. Victims of human trafficking in Thailand have a right to government protection and legal assistance. LPN plays a crucial role in identifying victims of human trafficking that grants these protections, as the Thai authorities sometimes struggle to identify victims through its enforcement procedures.

Through the work of the government, LPN and other NGOs, the Thai fishing industry is improving its standards to meet international demands. With this spotlight on the human rights issues involved in the industry, funding and monitoring remain critical to building on current progress.

– Matthew Brown
Photo: Flickr

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Humanitarian Aid in Nagorno-Karabakh

Humanitarian Aid in Nagorno-KarabakhNagorno-Karabakh is a region in the country Azerbaijan and is home to an Armenian majority. While the region is within Azerbaijan’s borders, Armenia has claimed the region for itself. The first intense conflict between Armenia and Azerbaijan over the Nagorno-Karabakh region was in 1988 when the Soviet Union was nearing the end of its existence. Recently, conflict in the region began again in late September 2020 and lasted for about a  month until a ceasefire was brokered by Russia. Additional ceasefires were brought into fruition by France with the help of Russia and the United States. Despite the ceasefires, the conflict in the region is continuing. The fighting in the region has drastically impacted the civilian population of the region. This has in turn created a strong need for humanitarian aid in Nagorno-Karabakh.

The European Union Assists

The European Union (EU) is actively providing aid to the civilian populace affected by the conflict and has done so since early October 2020. The initial amount of aid provided by the EU was €900,000. Then, in November, the EU commissioned an additional €3 million to the civilians in the Nagorno-Karabakh region. According to the EU, this humanitarian aid will provide the necessary assistance that humanitarian organizations partnered with the EU need to carry out their duties. This includes providing food, winter clothing and medical assistance.

The United States’ Aid

The United States is also providing its share of financial assistance. In total, the United States has provided around $10 million in humanitarian assistance to Armenia and Azerbaijan since the 2019 fiscal year. Of the $10 million, $5 million has been allocated to the International Committee of the Red Cross and similar humanitarian organizations to help civilians caught in the crossfire of the conflict. Assistance coming from the U.S. Department of State and the U.S. Agency for International Development (USAID) will also be used for humanitarian aid in Nagorno-Karabakh. The support these two institutions will be providing will come in the form of food, shelter and medical support for the people impacted by the conflict.

People in Need

There are also NGOs that have provided humanitarian aid in Nagorno-Karabakh as well. One organization, People in Need, has done just this. People in Need is an organization dedicated to providing immediate aid to countries should a natural disaster or war take place.

People in Need has provided support, not to Nagorno-Karabakh, but to the city of Goris in Armenia. People in Need directed its humanitarian aid to this Armenian city because many of the displaced civilians in Nagorno-Karabakh have gone there for refuge. The displaced people either move on or stay in the city. People in Need have been able to provide hygienic supplies to 1,200 displaced families in Goris. Additionally, People in Need have provided 480 children, 600 women and 110 seniors with their own individual hygienic kits. People in Need have also taken into consideration the psychosocial needs of children impacted by the conflict. To help these children, People in Need opened a child-friendly space in the city library where children can engage with other children and partake in other activities.

While the conflict in Nagorno-Karabakh continues, international institutions, individual countries and humanitarian organizations are trying to provide all the support possible to help the civilians impacted by the conflict.

– Jacob E. Lee
Photo: Flickr

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How Air Pollution in Kosovo is Rooted in Poverty

Last December, children in Kosovo, a disputed territory in southeast Europe, already wore masks on their way to school. They weren’t worried about COVID-19, the deadly contagion that has since gripped the world. Instead, children wore masks to protect themselves from air pollution in Kosovo.

Power plants that run by burning coal, private residences that burn coal for heat and antiquated automobiles that run on less environmental-friendly engines contribute to air pollution in Kosovo. In particular, the Kosovo B power station, outside Pristina, Kosovo’s capital, released a massive quantity of nitrogen oxide and dust emissions until the plant’s modernization began in 2019. Modernization efforts seek to immediately improve air quality. In the long term, modernization efforts will meet the standards of the European Union’s environmental safety regulations, as well as improve Kosovo’s domestic infrastructure.

The European Union invested in two initiatives that would help Kosovo’s air pollution relief efforts. First, the European Union granted $83 million to the Kosovo B power station’s modernization. Second, the European Union invested another $7.6 million to renovate heating systems in private and public buildings throughout Kosovo, including schools and homes.

Poverty’s Impact on Methods of Heating Private Homes

Much debate surrounds the question of whether wood is an environmentally responsible source of heat energy. Many scientists fear that acknowledging wood sources as an environmentally friendly form of heat energy will give the green light to deforestation, one of the primary contributors to the environmental crisis. For many citizens of Kosovo, wood and coal are the least expensive methods to heat their homes.

Around the world, more than one and a half million people are killed each year by indoor air pollution. Indoor air pollution is caused by burning substances like coal, wood and human or animal feces in small, enclosed areas with antiquated heating systems. Along with the human toll, indoor air pollution contributes to the environmental crisis.

For example, indoor air pollution is a factor that contributes to overall air pollution in Kosovo. The bulk of the E.U.’s investment to address air pollution in Kosovo went toward modernizing the Kosovo B power station. The amount of money the E.U. invested in addressing indoor air pollution amounted to about a tenth of the money the E.U. invested in modernizing the power station. Former Environment Minister Fatmir Matoshi put the weight of the responsibility of addressing indoor air pollution on Kosovo’s citizens when he asked them to refrain from using coal and wood to heat their homes. However, low-income households would face severe challenges in obtaining an alternative heating source as stated previously, wood and coal are the least expensive methods for families to heat their homes.

Efforts to Address Poverty and Air Pollution in Kosovo

People who live in poverty have to rely on more accessible, less expensive means to heat their homes. Toxic biomass fuels, like coal and wood, are used by approximately two and a half billion people worldwide. In Kosovo, people are unable to stop using coal and wood because they lack the means to heat their homes with other, non-toxic materials.

To reduce air pollution in Kosovo, poverty must first be addressed. Fortunately, some organizations are making strides to mitigate the issue. The Ideas Partnership selects individual families from minority groups in Kosovo to support. Many such families have subsisted via “garbage picking,” the only source of income and sustenance otherwise available to them. The Ideas Partnership aims to remove families from overcrowded dwellings and provide them with food and shelter, so parents can focus on educational and well-being goals for their children.

The Kosovar Organization for Talent and Education recognizes the role education plays in preparing Kosovo’s youth for the labor force. Kosovo’s population is young; a quarter of its citizens are younger than 19 years old. In 2017, over one half of Kosovo’s youthful population was unemployed. The Kosovar Organization for Talent and Education began in 2015. Today, more than 15,000 have participated in the program as volunteers and students. Its goal is to improve the quality of education in Kosovo while preparing students to enter the workforce.

Air pollution in Kosovo is caused by a variety of factors that must be vigorously addressed. Widespread, oppressive poverty in Kosovo is at the root of this issue. Both poverty and air pollution should be addressed simultaneously to arrive at the best results for Kosovo’s future health.

—Taylor Pangman
Photo: Pixabay

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Dairy Production in Africa: EU’s Milk Substitute Hurts Farmers

Dairy Production in Africa
Dairy production in Africa plays a central role in the region’s economic and sustainable development. It contributes to food security, combats malnutrition and reduces poverty in the region. Dairy production in Africa has also created rural employment (nearly 80% of the African population resides in the countryside), and increased the economic potential of pastoral areas. Experts even expect strong production growth in the region due to an abundance of cows, goats and sheep.

Local Milk Production

Local milk production in West Africa has already risen by 50% between 2000 and 2016 to about 4 billion liters in 2019. Producing and selling milk provides an important source of income for locals. Around 48 million nomadic herders and agro-pastoralists participate in the milk sector, while others work in the trading and transportation of products. Additionally, the sector produces jobs in processing and marketing.

Despite substantial growth in recent years, the dairy sector in Africa faces major drawbacks such as high production costs and low yields. This is due to the lack of infrastructure and appropriate equipment in the production process. Another factor is the low-grade feed that affects animal health.

Local production does not yet have the capacity to meet 100% of demands in the sector. Only 50% of consumption comes from local production, and imported milk powder helps meet the remaining needs. On top of existing internal constraints, dairy production in Africa has to compete with cheap milk-based products imported from the European Union (E.U.). These foreign products continue to increase in quantity and threaten to overtake the African market.

Impact of Fat-Filled Milk Powder Imports

In 2018, the European Union exported 92,620 tons of milk powder to West Africa and 276,982 tons of fat-filled milk powder. That is an increase of 234% since 2008. Fat-filled milk mixtures comprise of milk constituents and vegetable oils, such as palm oil, enrich them. This milk derivative sells for 30% cheaper than whole milk powder in African markets, generating unfair competition for African dairy farmers.

For instance, in Burkina Faso, 1 liter of pasteurized local milk costs 91 cents in comparison to only 34 cents for milk made from E.U.-imported powder mixtures. Since competition is almost impossible, local livestock farmers suffer huge financial losses as imports increase. “I’ve tried selling my milk, but most of the time it goes to waste and ends up being poured away,” said Hamidou Bande, the president of Burkina Faso’s National Herders’ Union.

Furthermore, experts say that the milk lookalike does not contain the same nutritional value as whole milk with regards to its fatty acids, minerals and vitamin content. Locals are concerned about the health impact the milk import could have on their community. “It’s a milk that is flooding our schools and is very unhealthy for our children,” said Sommanogo Koutou, Burkina Faso’s minister of animal resources. Nevertheless, these products sell at wide availability because of their large consumer base, who have less purchasing power and thus prefer the cheaper option.

Change is Forthcoming

Members of the E.U., West African governments and private companies have all taken actions to support the local dairy market.

Vétérinaires Sans Frontières is a Belgian NGO supporting agriculture and breeding in eight African countries. It has involved itself in helping farmers improve all stages of production including livestock feed, herd health and animal hygiene, milk collection and processing as well as marketing for their products.

Fairebel, a Belgian milk brand, created the “advocacy brand” Fairefaso. It has partnered with local milk producers in Burkina Faso to support small-scale local farmers by helping them maximize sales and profits.

ECOWAS, short for the Economic Community of West African States, has launched the Regional Offensive for the Promotion of Local Milk. It aims to increase the production and collection of fresh milk.

With cooperation from European producers and institutional support, change is forthcoming for African livestock keepers and farmers. With increased funding and new import regulations, projections have determined that dairy production in Africa will continue growing to meet the needs of the local communities and beyond.

– Alice Nguyen
Photo: Flickr

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European Union’s Foreign Aid 

European Union’s Foreign Aid 
The European Union is consistently one of the largest contributors to foreign aid in the world. This organization continuously contributes more than €50 billion. Its goals are to alleviate global poverty and advance international development. Additionally, the European Union’s foreign aid works to institute global agreements that improve foreign aid and its effectiveness.

The European Union’s Foreign Aid

The European Union dedicated roughly €264.2 million to nutrition programs globally in 2018. As a result, more than 26 million people received food assistance. Also, more than 17 million women and young children received nutrition-related aid. In addition, about 6.9 million small agricultural farm owners received support. This improved the sustainability of their production and profitability.

Furthermore, roughly 77 million 1-year-olds received immunizations. Meanwhile, about 23 million students entered secondary education due to the European Union’s education efforts. The European Union also ensured that 723,000 people had access to sanitary drinking water. Moreover, more than 16 million people in developing countries received access to electricity. The European Commission planned to contribute €123 billion to foreign aid between 2021 and 2027. This is a 30% increase of its original budget toward foreign aid.

Foreign Aid During COVID-19

The European Commission suggested allocating $18.2 billion USD to the European Union’s foreign spending on COVID-19 aid packages in May 2020. This decision pleasantly surprised many NGOs and other organizations. The pandemic has caused economic stress and many believed this would result in foreign aid budget cuts. However, this was not the case in the European Union. The European Union has committed €5 billion euros to humanitarian aid and €10.5 billion to support the development of impoverished countries. Furthermore, about €1 billion has contributed to the European Union’s Sustainable Development Goals (SDGs). Its most immediate goal is to support countries recovering from the impact of the COVID-19 pandemic. As such, many NGOs have praised the European Union’s foreign aid budget plan.

COVID-19 Response Packages

About 3.8 billion COVID-19 response packages went to Africa. This decision occurred because of the documentation of 10,000 cases of COVID-19 in a particular week in April 2020 and more than 500 deaths in Africa. Countries that were more vulnerable during this crisis received foreign aid first. The European Investment Bank and the European Bank for Reconstruction and Development provide financial resources to these foreign aid COVID-19 response packages. Furthermore, the packages address a country’s most immediate needs during the pandemic and aid in reconstructing economies.

The European Union Continues to Fight

The European Union pledged more than $18.4 billion to foreign aid in response to the COVID-19 pandemic in April 2020. Additionally, the President of the European Union Commission stated in a press release that ‘the virus knows no borders. This global challenge needs strong international cooperation. The European Union is working tirelessly to fight the pandemic.”

The European Union’s foreign aid contributions are impressive and successful. Also, the European Union continues to act charitably to foreign countries even when its own economy is facing issues due to the pandemic. Furthermore, the European Union has taken leadership in responding to the global pandemic.

– Adelle Tippetts
Photo: Flickr
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How the EVFTA will Create New Opportunities for Trade

Global MarketAfter ten years of negotiation, the European Union Vietnam Free Trade Agreement (EVFTA) came into action on August 1, 2020. The deal will reduce tariffs by 99% over the next 10 years and will provide relief from the economic drops caused by COVID-19. The market contains over 500 million individuals and is valued at 18 trillion USD. The trade relationship will enable Vietnam to compete in the global market better, especially against markets like Japan and South Korea. Currently, out of all of the countries in the Association of Southeast Asian Nations (ASEAN), Vietnam is the European Union’s (EU) second-largest trade partner behind Singapore. Compared to its regional rivals of Indonesia and Thailand, Vietnam has a stronger trade relationship and involvement in the global market.

Vietnam and the EU Ties

For exports, Vietnam relies on the EU as its largest partner. Vietnam’s exports to the EU are larger than any other ASEAN country. A World Bank study found that from 2001 to 2018, Vietnam’s exports to the EU have grown annually at an average rate of 16%, gaining it a trade surplus over the EU. According to the European Commission, these exports are mostly textiles and clothing, agriculture products like coffee, rice, seafood, electronic products, telephone sets and more.

As the agreement is implemented, both countries could see a rise in GDP and new job opportunities, amongst other positive effects. More immediately, Vietnam’s GDP will increase by 2.18-3.25%, said the Ministry of Planning and Investment. Unlike most countries, Vietnam will see positive economic growth this year – estimated to be up by 4.8%, according to a study by the World Bank. In 2030, Vietnam will see a 6.8% growth in its GDP.

Both countries will have large growths in their exports. The EU could see a $16.9 billion per year increase in exports by 2025. Vietnam is expected to increase exports by 42.7% in the first five years of the deal, mostly in farm produce, manufacturing and services. Additional domestic reforms by Vietnam could raise productivity and further increase GDP by 6.8% in the next 10 years.

Vietnam’s Participation in Global Value Chains

As Vietnam increases trade with other countries through agreements, it will become more involved in the global market. Further globalization will also push Vietnam to participate more in global value chains (GVCs), shifting away from the manufacturing market from China. The bilateral treaty signed between Vietnam and the EU will also ensure that electronics and electrical equipment (a large portion of current imports) comes to Vietnam exclusively from the EU.

Due to this shift, the EU has increased its foreign direct investment in Vietnam. The EU already was the largest foreign investor in Vietnam, with a total of 6.1 billion euros endowed as of 2017, mostly into processing and manufacturing. This investment will go towards new jobs and increased productivity by reducing the number of imports to Vietnam and shifting towards in-house production for higher gains.

To be eligible to avoid tariffs, Vietnamese products must not contain imports from other countries. In addition, agriculture must meet requirements for sanitation, meaning farmers will have to refine their growth system. The deal places especially tight regulations on the quality of agricultural and manufactured products shipped by Vietnam, pushing technological developments in order to avoid drops in efficiency.

Poverty Reduction

Over the past two decades, Vietnam has made steady progress in reducing extreme poverty. From 1992 to 2018, Vietnam’s GDP per capita increased by more than four times, pulling extreme poverty rates from 52.9% down to 2% of the population. EVFTA will continue this trend. A World Bank Study found that EVFTA is expected to reduce extreme poverty (less than $1.90 per day) by 0.1-0.8 million people by 2030, 0.7% more than the poverty-reduction rate without the agreement. Overall, this will amount to an 11.9% decrease. In addition, poverty at $3.20 per day is expected to reduce from 8% to 3.5%.

Vietnam has now broadened its poverty baseline from $1.90 to $5.50. From 2016 to 2030, developments caused by EVFTA will influence this poverty rate to drop from 29% to 12.6%, allowing Vietnam to achieve upper-middle-class status. In addition, the income gap between genders will be decreased by 0.15 percent. This difference affects low-income families the most, as they are traditionally involved in manual labor jobs where this is most prevalently seen.

This agreement will open up new territories for both the EU and Vietnam to expand into. Vietnam’s primarily agricultural economy might see large shifts into one of manufacturing and processing. This agreement is a stepping stone for Vietnam’s involvement in the global market, and it might be a sign of large changes to come.

– Nitya Marimuthu
Photo: Pixabay

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Andorra Struggles With COVID-19 Response

Andorra Struggles With COVID-19 ResponseAndorra, one of Europe’s smallest and oldest countries, does not boast full European Union membership. Instead, sandwiched between Spain and France’s 11,000 foot high Pyrenees borders, Andorra relies on integrating relations with the two countries. Yet, as Andorra’s economy and demographics differ greatly from most of the European Union, Andorra has a unique agreement with the body of countries. Unfortunately, lacking full E.U. membership and the benefits this includes, Andorra has faced struggles with their COVID-19 response.

A Unique Agreement With the European Union

As evidenced by the recent Brexit controversy, E.U. membership comes with positive and negative aspects. Entry challenges proved a significant hurdle for Andorra; therefore, it initially did not join the union. Only after the 2008 recession did Andorra arrange a special agreement with the European Union, like other European micro-states.

Due to tourism, the country’s main economic draw, and Andorra’s location on a map, some economic realities have been unavoidable. After 2008, Andorra began using the Euro and entered trade agreements slashing tariffs. However, unlike the rest of Europe, Andorra continued to restrict individual taxes. This branded the small country as a hot spot for tax evasion. This caveat kept Andorra afloat but alienated the country from the rest of Europe. Due to international pressure in 2011, the country began moving towards international tax standards.

Even though it lacks full European Union membership, Andorra still retains membership in the United Nations, the Council of Europe and the Organization for Security and Cooperation in Europe.

Does Andorra qualify for European Union aid?

Full European Union member countries qualify for aid programs. The European Union, like most international institutions, provided large amounts of COVID-19 aid–37 billion Euros in the initial program to be exact. Individual countries qualify for an additional 100 billion from the E.U. for employment assistance.

However, Andorra’s partial membership benefits to the European Union are limited to:

  1. The customs union, which is a group of countries that have agreed to charge the same import duties as each other and allow free trade between themselves.
  2. Tariff exemption to void taxes imposed by a government on goods and services imported from countries outside of the European Union.
  3. Euro use for stable and standardized currency.
  4. Access to name and tax databases.

COVID-19 in Andorra

As Andorra’s place in the European Union is unclear, so is its ability to receive COVID-19 aid. It appears that Andorra cannot and has not accessed any European Union COVID-19 aid. As neighboring Spain and France have done, Andorra implemented specific travel limitations. Uniquely, its rules included odd and even-numbered homes taking turns with short exercise periods.

Poverty in Andorra

The tough situation created by COVID-19 shutdowns and the ambiguous nature of Andorra’s relationship with the European Union have left the country exposed to further poverty. Unlike countries with widespread extreme poverty, Andorra’s poverty is specific to immigrant labor unemployment during tourism lulls and the housing crisis. Both of which, when paired with COVID-19, have the potential to drastically increase Andorra’s 4% poverty rate.

As of now, Andorra continues to encounter additional struggles with their COVID-19 response. As the post-2008 trend of strengthening relationships between Andorra and the E.U. continues, more poverty prevention aid will hopefully find its way to this small, land-locked country.

– Rory Davis
Photo: Flickr

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Personal Debt in the Czech Republic

debt in the Czech RepublicThe Czech Republic is a country cradled in Central Europe and is a member of the European Union. Despite its membership in the EU, the Czech Republic opted out of adopting the Euro in favor of keeping its own currency, the Koruna (CZK). Formerly a communist country in the Soviet Bloc, the Czech Republic adopted democratic market-oriented policies following the Velvet Revolution in 1989. With this shift toward free markets and an industrial economy, the Czech Republic experienced a credit boom in the early to mid-1990s. Unfortunately for Czech households, with rising credit comes rising debt in the Czech Republic as well.

A Closer Look at Debt in the Czech Republic

After shedding the yolk of communism in 1989, the Czech Republic embraced free-market policies focused on industrialization and the growth and privatization of business. Deregulation ensued, with particular focus placed on unshackling the banking and lending industries.

Following the credit boom of the 1990s, a reform on the lending system in 2001 provided the opportunity for a slew of private bailiffs to emerge to collect debts racked up throughout the spending boom in the previous decade. These private debt collection agencies often employ aggressive strategies to enforce repayment. The private bailiffs often pursue debts regardless of the debtor’s ability to pay. They utilize brutal strategies for recollection such as freezing bank accounts and siphoning earned income. They even enter into debtors’ homes to seize property.

How Debt Destroys Opportunity

Currently, 863,000 Czechs face at least one seizure order. This means, due to the current legal framework, their income above a certain minimum amount can be forcibly redirected towards debt repayments. This represents roughly 10% of the current population of the Czech Republic.

Personal debt in the Czech Republic can become financially crippling for many people. Those with outstanding debts have their income siphoned away to pay the interest. This leads many to enter into the black market to find jobs which would not disclose their income. This expansion of the black market is exacerbating a labor shortage within the Czech economy.

People who accumulate even small debts such as those from telephone bills may face compounding debt traps. This is a result of poor financial literacy and loose regulations on lenders and financial institutions. In addition, there are laws that make bankruptcy declaration extremely convoluted and difficult. This legal and institutional framework of the Czech debt system regressively places an undue burden upon the middle and lower classes to pay debts which they cannot afford. Thus, it stifles economic mobility and magnifies the financial hardships faced by the Czech people.

Finding Ways Out of Debt in the Czech Republic

Fortunately for many within the Czech Republic, various government and non-government solutions are being implemented. Financial literacy is critical when navigating the complex landscape of personal debt, which is one of the main services that Czech nonprofit People in Need provides. People in Need offers debt advisory services to Czech citizens to help them understand financial planning, borrowing and repayment of loans. People in Need also helps debtors legally defend themselves from unjust collections strategies as well as petition for bankruptcy. This can be an important tactic for alleviating debt in the Czech Republic.

The Czech government is also aware of these systemic issues. As of 2017, Parliament has debated bills addressing these strict policies regarding seizures and bankruptcy. Since the early 2000s, the law allows companies to better collect their loans by paying collections agencies. These agencies can cause the fees owed by debtors to skyrocket, potentially over ten-fold. This is due to costly collections processes as well as fees collected by the agencies. Both the government as well as nonprofit organizations like People in Need are working on ways to lower fees. They also work to expand access to the possibility of bankruptcy and more generous debt relief.

Conclusion

The Czech Republic serves as an important case study in national debt policy. Even a relatively rich country in Europe can still place undue financial burdens on its lower classes through inadequate lending laws and aggressive privatization of the credit industry. The work being done by nonprofits and the government should act as an example in reforming household credit markets and hopefully create a more just and forgiving landscape for lenders within the Czech Republic.

– Ian Hawthorne
Photo: Flickr

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