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Poverty in Russia
Almost 145 million people live in Russia. Despite placing emphasis on unity, some enjoy a much higher quality of living than others. This is evident in the country’s large income discrepancy, and the accompanying poverty in Russia. Below are 10 facts about poverty in Russia:

1. Poverty is on the Rise in Russia

In the early 2000s, income levels increased in Russia and drove down the poverty rate from 29 percent in 2000 to 10.7 percent in 2012. Unfortunately, the income levels didn’t remain and the poverty rate has grown slowly back to 13.5 percent in 2016.

2. Oil is Partly to Blame

One of the greatest threats to the Russian economy has been decreasing oil prices. In a country that greatly depends on oil, a shift in prices can be catastrophic. Given the falling oil prices over the past few years, from more than $100 per barrel to less than $30, Russia’s economy is vulnerable. Although there has been modest improvement as barrel prices are now at $60.

3. Agriculture is Also at Fault

As a country with vast amounts of tundra, agriculture is not a prime industry in Russia. Soil that lacks productive capabilities places a limit on economic expansion. Although Russia plays to its strength with oil, decreasing its dependency is a must. Diverse industries create jobs – something that could help alleviate poverty in Russia.

4. Wealth Inequality is Common

Wealth inequality exists in both developing and developed countries; including the U.S. Russia is no exception. The richest 10 percent of Russia’s population control three-fourths of wealth. This raises flags for a country with a rising poverty rate. With a dwindling middle class, Russia faces a problem on the horizon. Improving wealth distribution will take a creative solution.

5. President Putin has Vowed to Help

Acknowledging the issues that many Russians face, Vladimir Putin committed to improving conditions. He mentioned nearly 20 million Russians are living below the poverty line and promised to cut the number in half by 2024. Some had concerns that the plan lacked specific methods of action. Regardless, starting a conversation on poverty in Russia is a step in the right direction.

6. Rural Areas can Offer Relief

Russian citizens in rural areas often enjoy a better quality of life. Due in part to the wealth inequality that plagues the country, city living can be expensive. For this reason, those living in rural parts of Russia often experience less poverty than in the city. Rural living is beneficial in Russia; despite the country’s lack of agricultural capabilities.

7. The Future Remains Unclear

As a whole, the economic future of Russia is hard to predict. Poverty can be a direct result of economic conditions. In a country like Russia, this principle holds true. Growth in key industries is slow. With bankruptcy being commonplace in many regions of Russia, the time for the country to act is now.

8. Slow Economic Conditions Inspire Change

One positive of a struggling economy is the Russian government’s shift toward improvement. Adopting a pro-growth policy, the Russian government has launched infrastructure improvements. When paired with methods to fight poverty, this could lead to success for Russia.

9. Russia Needs Political Advocacy

As one of the most powerful methods of change a country has, utilizing politics can help Russia. An absence of a cohesive strategy to combat poverty is a key reason for Russia’s struggle. Developing and executing a policy on a national level has achieved success elsewhere. Local, regional and national policies could provide a piece to Russia’s poverty puzzle.

10. The Road to Poverty Reduction Could be Long

Russia’s economic woes might not see a quick resolution. The country’s economy is slow to change with the rest of the world. And with oil prices still below what they were during prosperity, Russia needs to adapt. Until it does, poverty in Russia will continue to be a problem.

– Robert Stephen

Photo: Google

How Economic Inequalities Harm Societies
The idea that economic inequalities are socially corrosive has been around for decades. But there now exists statistical evidence substantially supporting the notion.

Since Richard Wilkinson’s enlightening TED talk presented the impact of income gaps and unequal societies on the wellbeing of both the rich and the poor, the issue has received unprecedented attention. A professor emeritus of social epidemiology, Wilkinson based his results upon statistical data, presenting conclusive, irrefutable evidence to prove how economic inequalities harm societies.

He chose widely accepted parameters of quality of life to draw the comparison between societies. These parameters include:

  1. Life expectancy
  2. Infant mortality
  3. Teenage births
  4. Imprisonment
  5. Obesity
  6. Mental illness
  7. Social mobility
  8. Homicide
  9. Math and literacy

However, the 15-minute presentation focused on developed countries only. Other studies in the recent past have revealed a similar pattern in developing and impoverished economies. In nations like India and China, where glaring income gaps continue to exist despite steadily increasing rates of economic growth, data illustrating how economic inequalities harm societies has been found. A United Nations Development Programme (UNDP) report published in November 2013 gives a lucid explanation of what inequality is and how economic inequalities harm societies.

According to the report, inequality within a society takes two main forms: inequality of outcomes and inequality of opportunity. Inequality of outcomes includes income inequality resulting in inequalities in nutrition, education, etc. On the other hand, inequality of opportunity refers to unequal access to education and basic resources, among other things. As the report notes, both types are “opposite sides of the same coin” and cannot be viewed as independent.

More importantly, to answer the key question of how economic inequalities harm societies, it is important to note the relationship between factors that were earlier assumed to be independent. For example, poor countries with unequal distribution of income face greater political instability, lower investment in human development, higher taxation, less secure property rights and negative impacts on growth. Moreover, surveys conducted by UNDP found that citizens in such countries showed little or no trust in government policies formed to bridge income gaps.

Both Richard Wilkinson’s research and the UNDP report found that even the rich in unequal societies suffer from lack of trust, harsher sentencing (partially because of stricter laws), greater incidence of physical and mental illness (due to the pressure to “watch your back”) and higher taxation, among several other crucial indicators of quality of life. Undoubtedly, an equal society is in the best interest of all people.

– Himja Sethi

Photo: Flickr

Income_Africa
The idea that guaranteed basic income can solve poverty was first proposed by lawyer Thomas More in the 16th century. Guaranteed basic income, also known as universal basic income is an unconditional periodic money transfer to ensure that a citizen can pay for his or her basic necessities no matter what. The idea that everybody will be paid money every month, whether or not they have a job, is undeniably radical.

Guaranteed Basic Income Has Supporters and Detractors

Economists are divided into two groups over the idea: one in favor of guaranteed basic income and the other against it. Those opposing the idea believe that it will undermine the incentive to do a job, that more people would end up in low-wage jobs or that a “handout” is by no means a tool to “turn things around”. Some of them also argue that even if guaranteed basic income can solve poverty, a program like this can be very expensive and hence negatively affect a nation’s economic growth.

On the other hand, the idea has found acceptance among several intellectuals, politicians, historians, economists and entrepreneurs alike. One of them is Facebook CEO Mark Zuckerburg, who has called for others to embrace the idea, in case people start losing their jobs to automation and artificial intelligence.

Current Studies Testing the Efficacy of Basic Income

To see how guaranteed basic income can solve poverty, many experiments are underway around the world. A nonprofit organization in Kenya called GiveDirectly has launched one of the most comprehensive economic and social experiments in human history. They will be selecting groups of people who will receive $22 per month for a period of two to 12 years, no strings attached.

To date, the organization has distributed more than $70 million among 80,000 households in Kenya, Rwanda and Uganda. “What’s interesting about basic income is that, coincidentally, it’s a conversation people are having all the way from Silicon Valley, where they are worried about job loss to robots, to some of the poorest countries in the world,” said Paul Niehaus, professor of economics at the University of California San Diego, co-founder of GiveDirectly and a firm believer that guaranteed basic income can solve poverty.

In Finland, the government randomly selected 2,000 unemployed citizens for a one of a kind experiment started at the beginning of 2017. To study how guaranteed basic income can solve poverty, these people will receive €560 every month for two years, tax-free. A key goal of the Finland experiment is to give unemployed people incentive to work by providing them with financial assistance even after they become employed again. Researchers chose the €560 monthly amount because it roughly equals the current level of unemployment benefits.

In a recent interview given to NPR, Stockton, California mayor Michael Tubbs said,” In fact, I think [it] will make people work better and smarter and harder and be able to do things like spending time with their families [be]cause we’re not robots.” Stockton will start a similar experiment by the end of this year.

What Basic Income Can Do for Impoverished People

The proponents of guaranteed basic income caution that the amount paid must be sufficient to be of assistance when misfortune strikes but not large enough to satisfy all of a person’s wants. They also argue that the freedom to start a new business or to say yes to a job that pays little but yields joy, or to say no to a job that pays too little or is demeaning, should not be reserved only for the wealthy.

Historian Rutger Bregman highlights an experiment conducted in India by American psychologists involving Indian sugarcane farmers. These farmers get around 60 percent of their income all at once. Hence, they are relatively rich during one part of the year but poor the rest of the year. The farmers were subjected to an IQ test before and after the harvest. The results showed that farmers gained nine IQ points after the harvest, as the extra money freed up mental resources that were previously concerned with making ends meet.

A similar study conducted between 1974 and 1979 in Dauphin, Canada proved that a guaranteed basic income can solve poverty by making the recipients smarter, healthier and richer. Further studies can bolster the effectiveness of basic income worldwide and could lead to it becoming an important tool in ending global poverty.

– Himja Sethi

Photo: Flickr

Causes of Poverty in St. Vincent and the GrenadinesSaint Vincent and the Grenadines is a small island nation in the Caribbean that has faced a number of challenges in the past decade. The nation has a negative population growth rate of 0.4% and approximately 20% of the total population was unemployed in 2021. There are several causes of poverty in Saint Vincent and the Grenadines. However, most of these problems are related to the country’s failing economy and poor education system.

The Failure of the Banana Industry

The failure of the banana industry around 2008 pushed much of the population into unemployment or poverty and the sudden rise of the construction industry has created an income gap. Very low wages across the country and few job opportunities led to a poverty rate of 30% in 2016.

In 2021, the United Nations Children’s Fund (UNICEF) reported that Saint Vincent and the Grenadines’ poverty rate is higher than the average rate (23%) for the Eastern Caribbean. The nation needs to focus on better integration into the global economy and on creating a more competitive national economy.

Low Education Level

Low education levels have also been one of the larger causes of poverty in Saint Vincent and the Grenadines. While programs exist, such as the School Meals and Textbooks program, to help low-income families educate their children, many poor children still need to attend school every day. The literacy rate was 96% in 2022, but younger generations had higher levels than older generations.

Gender Inequality

Gender inequality in relation to access to education is another of the causes of poverty in Saint Vincent and the Grenadines. In 2017, it was reported that more than 52% of women had their first pregnancy between the ages of 15 and 19. Additionally, women occupied only 18.2% of seats in parliaments.

It was also noted that the labor market was inherently biased and women needed much higher levels of education to be able to compete with men. Households with a female head tended to be much poorer and there was no formal legislation to deal with gender discrimination in the workplace.

Efforts From the Government

Strides have been made, however, toward reducing poverty in Saint Vincent and the Grenadines. In terms of the economy, tourism has become a larger sector and has created more jobs. With increased tourism has come increased construction, which has also created the need for more labor.

In terms of education, in 2014, the government developed an Education Sector Development Plan, which aims to create a set of objectives to improve education in the country. These goals focused on providing good quality and compulsory primary education to all children, particularly girls and ethnic minorities and improving literacy rates and access to higher education for both boys and girls.

While there is only a little recent data about poverty in the nation, these goals are quite progressive and have shown solid attempts to reduce the causes of poverty in Saint Vincent and the Grenadines. With continued effort from the government, the small island nation should be able to develop further and improve the quality of life for its citizens.

Liyanga De Silva

Photo: Flickr
Updated: May 29, 2024

Why is Papua New Guinea Poor?
Papua New Guinea, the name given to a group of islands situated in the southwest Pacific ocean, has experienced tremendous economic growth since its days of being an Australian colony, and has gone on to hold elections involving the indigenous population. Despite this, however, many people on the island still experience extremes of poverty. 80 percent of Papua New Guinea’s people live in rural communities with little to no modern conveniences, and 39.9 percent of the population lives below the poverty line. So, why is Papua New Guinea poor, despite economic growth? Here’s a brief look at some of the reasons behind this.

 

Why is Papua New Guinea Poor? 3 Simple Reasons

 

Income inequality
In 1996, the Gini index rated Papua New Guinea’s income inequality as 55.43 on its scale from 0-1, with 0 being perfectly equal (for comparison, the U.S. was rated around 45 on the scale in 2007). The evidence would seem to suggest that this inequality is due to the failure of economic growth to keep up with population growth, but could also have been caused by structural adjustment policies that came about along with rapid economic growth. Whatever the reason, it is clear that income equality has led to much greater poverty within Papua New Guinea. The good news is that this inequality has gone down significantly since the 1990s: In 2009, Papua New Guinea scored a 43.88 on the Gini scale.

Lack of long-term planning
Many citizens are critical of the fact that the government of Papua New Guinea has had little to no plan in place to modernize the country, which would include steps like building permanent houses, supplying water and sanitation and building infrastructure. The government, instead, acts reactively, creating short-term solutions only when it is absolutely necessary. For example, in 2002, Papua New Guinea faced an incredibly violent and chaotic election, but it was not until 2004 that police were deployed to fight this rampant violence. This lack of planning makes it difficult for real progress to be made in terms of poverty.

Corruption
Why is Papua New Guinea poor? Perhaps the biggest contributor to Papua New Guinea’s continuing poverty problem is the fact that so many government officials, in charge of funds that could help, have historically chosen to pocket the money instead. Michael Somare, prime minister of Papua New Guinea from 1975 to 2011, faced charges of political misconduct and misappropriation of funds spanning over 20 years, while in 2014, Paul Tiensten, former senior minister and later MP, was sentenced to nine years imprisonment for misappropriating over $1 million. Somare’s replacement as prime minister, Peter O’Neill, has also been accused of political misconduct involving a loan of $1.3 billion.

So, why is Papua New Guinea poor? In short, because of income inequality, aggravated by years of poor planning and corruption by the government. To correct this problem, new measures will need to be taken to outline and enforce government oversight and the proper use of government funds. Thankfully, awareness has risen about these issues over the past few years. During the last election, many people in Papua New Guinea protested and called for Peter O’Neill to resign after more corruption allegations were brought to light. And while O’Neill still won re-election, the fact that these protests exist shows that the citizens of Papua New Guinea are beginning to demand more from their politicians, hopefully a first step in strengthening the government and using it to enact real change.

Audrey Palzkill

Photo: Flickr

How to Help People in Denmark

In the 2016 U.S. presidential election, Denmark and other Scandinavian countries gained attention for their extraordinarily equitable economies. Candidate Bernie Sanders often pointed to the Danish education and healthcare systems as models to be followed by the U.S.

Rather than asking how to help people in Denmark, Sanders and other social democrats focused on how the rest of the world could benefit from understanding the ways in which the Danish government already helps its own people.

In addition to free education and healthcare, the Danish government provides all citizens with a minimum income guarantee of about $100 per day. As a result, Denmark has achieved the fourth lowest inequality rate in the world.

Such a world-class safety net is supported by one of the world’s highest tax rates. All sales in Denmark include a 25 percent tax and the highest income earners give upwards of 60 percent of their income to the state.

The high tax rate has motivated some economists like Rasmus Landerso and James Heckman to frame the Danish economy as equitable only insofar as it compresses the range between high and low incomes, not because it has a high index of social mobility.

Indeed, their recent study found that intergenerational social mobility in Denmark mirrors that in the U.S. A child from a lower-class background, for example, whose parents did not finish college in Denmark is just as unlikely to attend college and become middle-class as his or her American counterpart, despite the fact that Danish higher education is free.

The difference, then, between the two countries is that the Danish government compensates for low social mobility by providing significant welfare benefits to the poor.

In the end, while there may still remain a question about how to help people in Denmark ascend out of their generational social classes, it is clear that the Danish people already receive sufficient amounts of help from their own government.

Nathaniel Sher

Photo: Flickr

Help People in BrazilThough Brazil boasts a strong economy, income disparity between the rich and poor is vast, and 3.7 percent of the total population lives in poverty. Much of the poverty in Brazil is concentrated in northern rural areas, where young people in particular feel the effects of poverty. In Northern Brazil, about 25 percent of all children under the age of five suffer from chronic malnutrition. This income disparity is partially due to unevenly distributed land, and high land prices make it difficult for small-scale farmers to compete in the market. In recent years, the government has undergone measures to correct this imbalance, including reducing taxation on farming, which has already begun to improve the welfare of rural poor.

Brazil has been very successful in alleviating much of its own poverty, in particular through a government program known as Bolsa Familia. Through Bolsa Familia, parents receive a monthly stipend in exchange for sending their children to school and to health checkups. Still, there is much to be done to ensure that the rural poor continue to thrive.

Here are just three ways to help people in Brazil:

  1. Sponsor a child. With young people in Brazil most harshly affected by income inequality, this may be one of the most effective ways to disrupt the cycle of poverty and help people in Brazil. For example, Child Fund International offers programs to sponsor individual children. This money goes toward supplying a child with food, clean water and education.
  2. Volunteer. There are many ways to volunteer time toward bettering conditions for people in Brazil. Project Favela, based out of Rio de Janeiro, is a volunteer-run organization which offers both schooling and after school care for poor children (and many adults as well) completely for free. Volunteers help teach English, science, math, reading, art, theatre and even coding.
  3. Encourage vocational training. CARE, a nonprofit organization based out of the UK, has had tremendous success addressing the structural causes of poverty in Brazil and encouraging rural schools to provide vocational training to its students. In addition, CARE has helped poor communities in Brazil develop sustainable business practices and has provided access to microfinance.

Though Brazil still struggles with inequality and poverty, it’s clear that, on its own, the country has made tremendous strides toward fixing its problems. With a bit of help, it can continue to bring down the poverty rate and build a better future for all its citizens.

Audrey Palzkill

Photo: Flickr

Tackling Brazil's Income Inequality
Almost 10 percent of Brazilians live under the extreme poverty line. This is coupled with extreme inequality of income distribution. Recently however, Brazil showed a tremendous progress towards redistribution of wealth. Even though there isn’t any considerable average increase in gross domestic product (GDP), efforts to reduce poverty exist along with overcoming Brazil’s income inequality. This counts as an important step toward achieving the millennial development goals.

This change in Brazil’s income inequality resulted from improvements in education. The government tried to reduce the gap between skilled and unskilled labor. Thus, the supply of skilled labor increased. This helped more families get out of poverty by earning higher wages. Another factor was using social policies that provided small transfers to low-income families.

Brazil is apparently following the trend in Latin America as the whole continent is fighting poverty. Latin American society is becoming more aware of the harmful effect of inequality on the whole global economic growth. However, Brazil’s progress is unique. Their inequality is far higher than many advanced countries and can do more to improve its situation.

One positive aspect is that Brazil‘s economy is very inclusive. With new policies bringing more labor to the market, Brazil’s economy will strengthen. However, the business environment is not very encouraging. Many people view entrepreneurial failure as an embarrassment and not necessarily a learning experience.

The World Economic Forum during a 2015 report explained that education must be reformed as well and more students from low socioeconomic background should be included.

Brazil’s income inequality gap is narrowing. Media focused recently on the events of a World cup and the Olympic Games but on the other side, Brazil socioeconomic conditions were becoming better. This is remarkable as Brazil was on the brink of collapse due to the global economic financial crisis. The model of socio-economic development that Brazil used can be applied in other countries such as Zambia or Nigeria.

Noman Ahmed

Photo: Flickr

Hunger in Hong Kong
Hong Kong’s growth in the global financial economy has made the country a beacon of rapid development and opulence. Behind the image of luxurious expansion lurks a harsh reality of inequality and growing rates of hunger. A Hong Kong nonprofit aims to help the city’s bounty feed all.

As a major port city and a booming hub of global trade, Hong Kong’s GDP continues to grow. Trading Economics’ data indicates that Hong Kong’s GDP growth in 2016 has nearly doubled since its GDP growth in 2015. This wealth, however, is distributed disproportionately.

The CIA World Factbook designates Hong Kong’s level of income inequality as the tenth worst in the world, and the U.N. Development Program claims Hong Kong has the highest level of income inequality among highly developed nations.

Data on poverty and hunger illuminate these inequities. According to Trading Economics, the poverty line in Hong Kong is HK$ 3,275 per month (about $422) with an hourly minimum wage of HK$ 32 (roughly $4). Twenty percent of Hong Kong’s population currently lives below this threshold, leaving many citizens food insecure.

In light of these concerns, the South China Morning Post reported that the U.N. considered opening a World Food Program (WFP) office in Hong Kong in 2013, citing the region as an appropriate candidate for further attention.

However, the U.N. never established an office, leaving Hong Kong without a concrete inter-governmental organization to deal with the growing issue of food insecurity. Gabrielle Kirstein, co-founder and executive director of Feeding Hong Kong, aimed to address hunger in Hong Kong by creating a nonprofit that would divert food waste to feed those in need.

Feeding Hong Kong (FHK) is a self-proclaimed “Hong Kong food bank with a difference.” By accepting usable food donations from corporate partners, restaurants, grocery stores and delis, FHK creates a supply chain that directs surplus food into the hands of over 25 charities and community organizations that address poverty and hunger. It is the only nonprofit of its kind in Hong Kong.

To ensure the continued effectiveness of the program, FHK thoughtfully distributes the food it collects to its constituent organizations. For example, FHK deliberately addresses the needs of children’s welfare programs differently than those of adults. FHK aims to address hunger in Hong Kong by supporting these already established organizations in their endeavors to provide essential services.

FHK functions in a dense urban environment by harnessing the resources around it. For FHK’s annual event, “Chefs in the Community,” culinary professionals volunteer with local charities to improve their food services. The Feeding Hong Kong Cookbook Collection is sold to generate funds for the nonprofit, while spreading awareness of how to reduce food waste, even in a personal kitchen setting.

Despite growing rates of hunger in Hong Kong, FHK has established a network to solve several issues associated with rapid urban development. By creating an organization that supports those around it, FHK aims to spread the wealth of the nation by eradicating hunger, one meal at a time.

Laurel Klafehn

Photo: Flickr

Overcoming income disparity

Equitable growth is seldom easy to achieve. Despite rising levels of GDP, the proliferating rates of income disparity in many countries may impediment the fight against global poverty. The “Trickle Down Effect” is often the culmination of an economic boom, where regardless of rising incomes and prices, the gap between the rich and the poor does not waver. Thus, the disparity increases the Gini Coefficient which is a vital economic indicator that countries use.

A recent analysis conducted by the Overseas Development Institute explains how poverty, growth and disparity are co-mingling factors. Countries like Slovenia and Denmark have a coefficient of under 25, while large economies such as China have Gini values of 46.9.

Moreover, the poverty rates in countries with lower disparities such as Denmark stand at only 3.4 percent living under less than 50 percent median income. In contrast, India with a disparity value of 33.6 has a concurrent poverty rate of 23.6 percent according to the World Bank.

The striking variation between these countries can be attributed to the distinct fiscal and monetary policies that are followed by governments.

Overcoming income disparity is critical when it comes to to the world’s poor, especially during rapid periods of growth. With rising prices and limited credit amounts, many cannot afford necessities to help support their families. Bangladesh, Cote d’Ivorie and many parts of Sub Saharan Arica have suffered as a result. Social and labor immobility becomes prevalent.

Additionally, the different levels of education have aggravated this issue along with the division between the rural and urban sectors. The poor find it difficult to seek jobs owing to the fact that they only have a basic education. Therefore the rich find it easier to seek jobs and are paid more as they possess more skills. The labor market unfortunately runs on this principle.

While coping with income disparity and economic uncertainty, China had introduced the 12th Five- year Plan for Poverty Reduction Village by Village in rural areas along with various supply side policies. The provision of 21 billion yuan was successful. Per-capita net income of rural residents rose to 9.2 percent. Equal rights to employment was seen when 13.12 million urban jobs were created to overcome the critical situation.

Additionally, the Council for Advancement of People’s Action and Rural Technology (CAPART) in India has tried to maintain the urban-rural gap. Per-capita income has increased and is said to have overtaken Pakistan, based on a recent report by the World Bank.

Overcoming income disparity is critical to combatting global poverty. The introduction of progressive taxation would slacken the burden on lower income groups.

Bridging the gap by investing more in education is imperative so that all socioeconomic groups benefit and are equally equipped while seeking jobs.

Entrepreneurship should be encouraged to make the poor more economically self-sufficient. The World Toilet Organization has spearheaded the creation of Sanishops to train local entrepreneurs in parts of Africa. Providing subsides and capital ventures to start-ups will also increase incentives to work, amid the droughts, disparities and skirmishes in South Africa.

Over the years, a number of grassroots organizations such as Other 98 percent, US UNCUT and Mind the Gap have drawn national and international focus towards the issue of overcoming income disparity. Despite being part of thriving economies, many undermine the presence of poverty that continues to exist.

Shivani Ekkanath

Photo: Flickr