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Human Capital: Ending Poverty in Trinidad and Tobago

Poverty in Trinidad and Tobago
Since 2014, Trinidad and Tobago has taken a special interest in improving human capital through the On-the-Job Training Global Initiative (OJT).

Human capital consists of the skills, knowledge, values and health of a population. An investment in human capital would, for example, come in the form of education benefits, medical care, job training or other ways that add value to a person. On a small scale, these intangible assets are everyday factors to singular individuals. On a large scale, the amount and quality of human capital can make dramatic changes to a country’s economic status for generations. This is especially seen in the increase of entrepreneurs.

The OJT Global Initiative, a partnership between the U.N. Development Programme (UNDP) and Trinidad and Tobago’s Ministry of Tertiary Education and Skills Training (MTEST), initially resulted in 21 individuals being selected to take part in the U.N.’s competitive internship. The program teaches a specially designed curriculum with the goal of creating global citizens.

Richard Blewitt, U.N. Resident Coordinator and UNDP Resident Representative for Trinidad and Tobago, described the importance of the program in an official statement released with its induction. He said, “As you are aware, today’s youth and adolescents are faced with many new and emerging challenges. To effectively respond to and address those challenges, the U.N. seeks to ensure our programming work encompasses; promotes and facilitates opportunities for employment, and entrepreneurship, political inclusion, citizenship, protection of rights, education and reproductive health, and advocacy, to name a few.”

The OJT Global Initiative was first announced in January of 2014 as a two-year initiative. However, since then, the MTEST has maintained the program by pairing up citizen trainees between the ages of 16-35 and employers in a variety of careers — including culinary, agriculture, environmental, finance, engineering and other industries. In addition to gaining valuable experience in their chosen fields, trainees also receive competitive stipends and opportunities to work with new technology and network with industry peers. The program benefits local businesses as well by offering them reimbursement of stipend rates, access to suitable candidates and the chance to practice corporate social responsibility.


The World Economic Forum publishes annual reports of the Human Capital Index (HCI) by country. From 2013 to 2016, Trinidad and Tobago went from ranking 76th in the world to 67th. Programs like the OJT Global Initiative and the MTEST’s strong focus on training, education and entrepreneurship could be a heavy contributor to this rise in HCI over just three years.

The most recent numbers, published by the UNDP in 2007, show that the rate of poverty in Trinidad and Tobago is 16.7% for a population of 1.3 million citizens. This published rate is above the 34% given in 1992. However, The Guardian attributes this reduction to the fact that squatters, students, taxi drivers and the homeless are not accounted for in the labor force. Another major contributing factor to this is expressed in the large wage gap between men and women — with women having an average income of TT$9,000 to a male’s average of TT$18,000. This is attributed to women holding a substantially higher portion of low-wage jobs. The hope of programs like the OJT Global Initiative is to facilitate opportunities for better employment and entrepreneurship, thus reducing problems like the gender wage gap.

Fighting poverty around the globe is a combination of factors. By developing and sustaining programs such as the OJT Global Initiative, countries strive to provide higher levels of education, training and experience for their citizens. Like this program, investments in human capital have the ability to provide a country with economic benefits for generations.

– Tammy Hineline

Photo: Flickr

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Democracy Leads to Growth

Democracy_Leads_to_Growth
A recent study published by the National Bureau of Economic Research found that countries that become more democratic achieve about 20 percent higher gross domestic product (GDP) per capita in the long run. Evidence showed that democracies were better at implementing economic reforms, investing more in public goods like education and reducing social unrest, all of which, to some degree, are tied to increasing GDP.

The researchers, Daron Acemoglu, Suresh Naidu, Pascual Restrepo and James A. Robinson, studied 175 countries between 1960 and 2010. Their study tackled the difficult task of comparing apples and oranges. There are countries that recently transitioned into a more democratic state, while others have had a long history of an established democracy. There are countries that hold elections, but practice only single party rule. There are countries that have been in and out of conflict. And there are countries with political institutions and economies that ebb and flow with a change in leadership. Nonetheless, Acemoglu, Naidu and Restrepo took on the challenge of creating a baseline for comparing different countries by developing an improved version of a democracy index.

Another challenge the researchers took on was to address the question, “does democracy need development first?” Some critics suggest that democracy would be economically costly when certain preconditions are not satisfied. For example, it is suggested that a benevolent dictatorship may be preferred when it comes to simple economies and poverty ridden-countries (or what some economist may label as those with “low human capital.”) Others argue that democracy promotes redistribution of resources that would discourage economic growth, or interest groups may end up dominating economic policies at the cost of the majority and hence increase inequality. The example of communist China and its economic powerhouse is often used to support the argument that political rights are not essential for economic growth.

However, Acemoglu, Naidu and Restrepo demonstrated that democracy does not have a negative effect for countries with low levels of economic development. Evidence showing increases in GDP were associated with democracy, no matter the stage of the country’s development. The researchers did note on the side that a population’s level of education did matter, but not in contradiction to their finding. Democracy had a stronger effect for economies with a greater fraction of the population with secondary schooling.

In sum, Acemoglu, Naidu and Restrepo found that there is a statistically significant positive correlation between democracy and future GDP per capita and this was especially so when examining countries that have switched from non-democracy to democracy into their next 30 years.

– Maria Caluag

Sources: NBER, The Regional Economist

Photo: TCF

USAID Working to Prevent Illiterate Generation

Illiterate_Generation
As recently indicated by a global monitoring report on education, there are 250 million illiterate children in the world, 130 million of them at the primary school level. The United States Agency for International Development (USAID) has identified the development impacts on the illiterate generation and has made plans to lead efforts in contributing to universal education.

Human capital is at the foundation of improving the third world. However, providing access to the resources necessary for improving it is a difficult task for nations with weak economies to address.

In addition to the generation of millions of illiterate children, there are also 57 million primary school-aged children that do not have the opportunity to receive an education. Moreover, the areas that contain rampant illiteracy and a lack of educational resources will continue to face problems in the future, thus perpetuating their process of development.

In conjunction with achieving United Nations Millennium Development Goals of alleviating the international issues along the likes of climate change, hunger, poverty and illiteracy, the U.S. has joined the U.N. Global Education First Initiative. The USAID has already targeted Malawi, Zambia, Kenya and the Philippines for areas to implement programs that would supplement access to quality education.

The USAID has sponsored initiatives to improve literacy rates by establishing reading programs and introducing training programs for teachers as well. Additionally, the USAID has made efforts to improve educational infrastructure in multiple areas. For instance, it has done so by strengthening communication and feedback between teachers and the Department of Education administrators.

Assuming the role of an international leader, the U.S. is mobilizing resources through USAID to promote education as an investment. Its goals are well aligned with the U.N. Millennium Development goals to improve the third world; investment in human capital is a practice that results in a win for everyone.

– Jugal Patel

Sources: DIPNOTE, DIPNOTE U.S. Department of the State Official Blog
Photo: RT

Poverty in Djibouti

Poverty in Djibouti
Djibouti is a small country in the Horn of Africa. Surrounded by Ethiopia and Somalia, the country has a strategic location and fruitful fishing waters. However, regional instability has put pressure on Djibouti’s economy and resources, heightening poverty levels. Djibouti has taken on many refugees and immigrants from Ethiopia and Somalia, burdening its already weak economy.

The average unemployment rate in the country is around 45% and over half of the very poor in Djibouti have no employed members of their family. Poverty in Djibouti is also affected largely by poor education, health, and nutrition. Djibouti has a literacy rate of 57%, life expectancy at birth is 49 years, and 26% of children under five years old are chronically malnourished.

This data underscores the need to invest in human capital to alleviate poverty in Djibouti. Pro-poor education strategies need to be adopted with a particular focus on education for women and girls, who have a much higher illiteracy rate than men. Preventive health programs should also be enacted to develop human capital. Women often have too many children at too young of an age, and education could increase the ability of couples to space their children properly and promote family planning methods.

USAID has enacted several programs to address poverty in Djibouti. USAID works with Djibouti’s Ministry of Education to develop a teacher training plan and has trained over 1,200 teachers in the country. USAID has also, according to its website, supported parent-teacher associations, linked secondary schools with university mentors, and developed strategies to improve access to education for girls. USAID has also contributed to programs combating polio and tuberculosis, in addition to aiding food distribution to combat malnutrition. The U.S. is currently the largest contributor of humanitarian assistance to the Horn of Africa, where Djibouti is located.

The effort to combat poverty in Djibouti suffered hardship in 2011 when the eastern Horn of Africa was hit with its most severe drought in 60 years. The drought-affected more than 10 million people, inducing high child mortality rates and sharply increasing food prices in the region. Djibouti is still in the process of recovering from the crisis.

USAID’s website describes Djibouti as a “unique and strategic partner for the United States.” The U.S. maintains the military base Camp Lemonnier in the country which serves as a staging ground for U.S. counter-terrorism efforts in the Horn of Africa and the Arabian Peninsula.

Djibouti’s government is committed to peace and holds moderate views compared to some others in the region which includes the conflict-prone countries of Yemen, Somalia, Eritrea, and Ethiopia. Combating poverty in Djibouti is crucial to the stability of the region, and could lead to more prosperous economies on the Horn of Africa that contribute to the global economy.

– Martin Drake
Source: World Bank, Reuters, Washington Post
Photo: The Guardian