Posts

Greece
The past decade has not been kind to Greece. The global recession in 2008 ravaged its markets and cut wages, leaving millions destitute and reliant on government handouts to survive. Despite the fact that a relatively large portion of Greece’s population is educated, many still cannot find employment within national borders. An ongoing EU bailout in the magnitude of billions of dollars has not brought an end to the financial predicament of Greek citizens. Here are the top 10 facts about poverty in Greece.

10 Eye-Opening Facts About Poverty in Greece

  1. The Greek unemployment rate, though lower than it was in 2014, sits at 20 percent — a fifth of the population cannot find a source of steady income. It comes in at last of all countries in the EU.
  2. The government is still largely inefficient, and its bureaucratic functions are largely characterized by personal connections and a lack of transparency. The Tsipras administration, which came to power in 2015, has failed to affect significant change.
  3. The recent fires in Greece took 93 lives. Investigations have shown both the possibility of arson and insufficient responses from the government to have exacerbated the fires.
  4. Slightly over 34 percent of Greece’s population is deemed to be at risk of poverty — one of the most unnerving facts about poverty in Greece. However, without government handouts and pensions, this figure would leap to nearly 51 percent.
  5. The Greek brain drain remains high, though slowing down in recent years. Over 130,000 postgraduates have left Greece since 2010, a trend that bears dire consequences for the future of Greece if they do not return.
  6. Greece’s GDP has recovered somewhat since its implosion in 2008. GDP growth was estimated at -0.2 percent in 2015, 0 percent in 2016 and 1.8 percent in 2017. GDP is a measure of economic performance and individual wealth, and last year’s small surge is good news for a country whose GDP had shrunk by a quarter from 2007.
  7. The fertility rate in Greece went from a local high of 1.5 births per woman in 2009, to a low of 1.29 in 2013 and steadily climbed (though very slowly) to 1.33 in 2016. Too-low fertility rates result in an aged and reduced workforce that cannot meet the demands of the market, culminating in a lack of competition and economic decline.
  8. Facts about poverty in Greece relating to children are the worst off in the European Union. The poverty rate for minors stands at 45 percent, according to a report by UNICEF in 2017.
  9. After a decade of international economic bailouts and austerity packages valued at nearly 250 billion euros, or $288 billion, Greece is due to stop borrowing by the end of this summer. If it maintains an efficient budget and pays back its debts, Greece can finally re-enter the international market as a self-sustaining economy.
  10. In March 2018, the Bank of Greece reported a 7 percent drop in the number of nonperforming loans or unpaid loans. At about 43 percent, it still has major hurdles to overcome; the EU average is below 10 percent.

Hope on the Horizon

Despite the palpable negativity of these top 10 facts about poverty in Greece, hope is on the horizon. The economy is better off now than it was at the height of the recession; though growth is slow, consumer confidence has grown and individual spending has increased in the past year. Foreign investment is also mounting — an indication of international expectations of an economic recovery.

Greece’s government is the crucial actor. If it blunders in its management of foreign debt and continues its streak of opacity, Greece could head towards another economic recession. If it initiates sizeable social and economic reforms ahead of expectations in the international community, Greece could even reach past its previous economic heights before the recession. Time will tell.

Alex Qi
Photo: Flickr

Why Is Suriname Poor? Poor Planning and Unhealthy Dependence.
Suriname, one of the smallest countries in South America, is also one of the poorest. Nearly one out of every two people in Suriname are impoverished. Tucked between Brazil and Guyana and endowed with oil reserves, one may wonder: why is Suriname poor?

The most important answer to this question lies in Suriname’s exports. Economically, Suriname is heavily dependant on exporting commodities, namely oil and gold, for revenue. As market prices fluctuate, so too does Suriname’s economy.

Mining for said commodities is the main source of employment in the nation. Stagnant markets cause production to slow and unemployment to jump. From 2014 to 2015, Suriname’s unemployment rate climbed from 6.9 to 8.9 percent.

The country’s GDP decreased two percent in 2015 and 10 percent in 2016—more than eight full quarters of economic contraction. A country is considered to be in a recession after just two.

Oil Dependence
After the crude oil price spikes during the global recession, crude supply increased as North America, and Russia exploited domestic supplies.

The sharp increase in supply, coupled with the plateauing of China’s demand for crude, depressed the global price. This led to a decrease in Suriname’s exports and public revenues. Couple that with the announcement that Alcoa, a major U.S. aluminum company, was ending its operations in Suriname after 100 years of activity—Suriname’s economy entered free fall.

In 2016, Suriname’s GDP plummeted to 2008 levels. In the same period, the U.S. added $4 trillion to its GDP, an average increase of 1.4 percent.

Currency Issues
In response to the recession, Suriname experimented with a number of monetary and fiscal policies. The Suriname dollar was devalued by 20 percent amid the drop in oil prices, was unpegged from the U.S. dollar and, by the end of 2016, had lost more than 46 percent of its total value.

Suriname also implemented austerity policies in last two years to reign in spending and raise revenue. As a result, the Suriname dollar inflated over 50 percent in 2016.

In regards to the question “why is Suriname poor?”, there are a few big takeaways:

  • The drop in global oil prices dealt a major blow to Suriname’s export-driven economy.
  • Suriname’s economy is in a two-year-long contraction. The unemployment and poverty rates have both increased.
  • The Suriname dollar has lost a great deal of value and purchasing power, hurting the country’s less-fortunate.

The short and mid-term economic forecasts for Suriname are bleak, according to economists. Economic contractions are expected to continue throughout 2017. However, the discovery of another offshore oil deposit has given the nation hope. With foreign investment and revenues from another oil project, Suriname might stabilize its economy, which will allow it to restructure to rely less on exports.

Thomas James Anania

Photo: Flickr