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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

BURO BangladeshBasic Unit for Resources and Opportunities of Bangladesh (BURO Bangladesh) is an organization that teaches poor Bangladeshis microfinance techniques that help them manage their money, operate businesses and obtain social services.

BURO Bangladesh currently serves 1.3 million impoverished people, many of whom are women, operates 644 branch offices in Bangladesh and employs more than 6,000 staff.

Established in 1990, the organization is one of the first microfinance institutions in the country to dedicate 100 percent of its operations to achieving financial sustainability for women and their families through commercial capital.

BURO Bangladesh offers two main programs, a microfinance program and a remittance program. The main goal of the microfinance program is to reduce poverty among the disadvantaged and the poor living in Bangladesh. Some of the features of the program include open withdrawal savings accounts, optional loans and operational and financial self-sufficiency resources.

The remittance program is designed specifically for expatriates who work abroad in order to provide for their families back in their home country. BURO Bangladesh has established partnerships with multiple banks and money transfer services across Bangladesh and Asia, such as Western Union, Xpress Money and Merchantrade products, to provide their clients with products.

Besides focusing on microfinancing to assist with poverty alleviation, they have also implemented other projects to address common issues in Bangladesh. These projects concern issues such as supplying clean water, both for consumption and hygiene purposes; human resource development within companies; and improving health, hygiene, nutrition and sanitation throughout the country.

According to their 2014-2015 report, BURO Bangladesh has successfully helped over one million people. In a country where approximately 36 percent of the population lives below the national poverty line of $2 per day, the organization plans to continue assisting impoverished people, particularly women, throughout Bangladesh until poverty is reduced significantly.

Julia Hettiger

Sources: BURO Bangladesh, Mix Market, Nation Multimedia
Photo: Flickr

Poverty in Belarus
Though poverty in Belarus has declined over time, the reduction in poverty is superficial – destitution still permeates throughout the nation. A significant contributor to this unyielding poverty is government-mandated wages that have outpaced productivity, a policy under which economic stability is nearly impossible.

Situated in lowlands speckled with forests, rivers and lakes, Belarus is landlocked Eastern European country bordered by both Russia and Ukraine. Formerly known as “White Russia,” Belarus has suffered and continues to suffer from economic hardships.

 

Poverty in Belarus: Implications and Solutions

 

Lonely Planet refers to Belarus as the “outcast” of Eastern Europe because rather than integrating with the rest of the continent, the nation is staunch in its effort to remain physically and politically isolated. For instance, rather than converting to a capitalist system, the tiny nation remains entrenched in a historical dictatorship, earning Belarus the title “the last dictatorship in Europe.”

However, Belarus’ economic model has fallen short of meeting the needs of its people. Although the rate of poverty in Belarus in one of the lowest in Europe, residents still grapple with squalor. For example, approximately 27.1% of Belarus residents have a per capita gross domestic product that falls below the poverty threshold. Additionally, 17.8% of these individuals also live below the minimum level required to sustain themselves.

In order to reduce income inequality within the population, Belarus has embarked on a set of reformative initiatives. For example, reforms in education, health and social benefits have taken place. However, these initiatives must be strengthened in order to truly sustain the needs of the nation.

Furthermore, the United Nations Development Programme (UNDP) has undertaken a poverty reduction agenda in Belarus that consists of initiatives to bolster small businesses, thereby stimulating economic growth and expansion. Specifically, the UNDP endeavors to strengthen agricultural businesses in order to revitalize rural Belarus, an area of the nation that has been hit particularly hard by poverty.

These business initiatives are critical in not just Belarus, but in also other former Soviet territories that have not adapted well to the transition from collective farming to privatized farming. For instance, as part of its agenda, the UNDP has established the Rural Business Development Center outside the Minsk, the capital of Belarus. The Development Center is the official location for the redevelopment of collective farms into competitive enterprises.

With the aid of the UNDP and the deepening of Belarus’ already-present reformative initiatives, the “outcast of Eastern Europe” holds the potential to reform itself into a more vibrant and economically-prosperous nation.

Phoebe Pradhan

Sources: Info Please, Lonely Planet, Borgen Project
Photo: IFRC

Sanders
Bernie Sanders, one of the leading democratic candidates in the 2016 Democratic Party primary race, has been praised for his stance on promoting equality. Over the course of his congressional career, he has been an ally for the millions of impoverished around the globe.

In speeches, Sanders has claimed that investing in global poverty has several positive outcomes, such as lessening the instances of terrorism abroad. He has claimed that with a sound foreign aid policy, living conditions abroad are less likely to produce conflict.

Sanders has an impressive track record on global poverty to back up these claims. In 2000, he voted in the Senate to allocate $156 million from the military’s large budget to the International Monetary Fund. This was in support of the Millennium Development Goals.

In 2008, he also supported funding to combat AIDS, malaria and tuberculosis. The bill he supported authorized $48 billion to various countries to combat the further spreading of these diseases.

Sanders has also demonstrated his support for combating global poverty in his statements about global warming. He has described how international conflict is produced when populations become desperate as a result of climate-related hazards, including lack of access to water and food.

Sanders has been vocal about eliminating income inequality and domestic poverty. He has shared his aspirations for putting an end to systemic forces diminishing the middle class, claiming that a more equitable economy can be created through fair taxing of corporations and banks. “America now has more wealth and income inequality than any major developed country on earth,” he said.

The presidential hopeful is devoted to redistributing America’s wealth and alleviating the 22 percent of American children living in poverty. His focus on domestic poverty and inequality is a promising indication of his future foreign aid and global poverty commitments.

Mayra Vega

Sources: Global Citizen, Votesmart, Feel the Bern, Newyorker, U.N.
Photo: Vox

Income_Inequality
While world leaders have agreed to end global poverty by 2030, more than 200 million people worldwide will be trapped unnecessarily by income inequality unless governments find solutions.

Oxfam, an international organization that works to find solutions for poverty have reported that income inequality will continue to increase with the addition of the newly approved Sustainable Development Goals.

Research conducted by the Overseas Development Institute found that 79 percent of people in developing countries live in a nation where the incomes of the bottom 40 percent grew slower than the average during the period of the Millennial Development Goals.

The slow growth of income is due to the richest one percent’s fast earning potential. If trends continue, the richest one percent will own more wealth than the rest of the world’s population combined.

“Wealth does not automatically trickle down to those who need it most. It’s up to politicians to ensure everyone gets a fair share of the benefits of growth,” said Winnie Byanyima, Executive Director of Oxfam International.

While the past 15 years have seen the fastest reduction of poverty in human history, world leaders must act.

Some solutions to income inequality include:

  • Fair Taxes: Rules must be enacted to ensure everyone, including rich and multi-billion dollar corporations, pay their fair share.
  • Invest: Money used in unfair and broken tax systems should be invested towards health care, schools and public transportation to significantly change the lives of the world’s poor.
  • Fair Pay: People who work hard should have fair pay no matter what gender. This could give people a chance for the world’s poor to escape poverty when on the same playing field.
  • Financial Resources: People have the right to understand how to save and invest money wisely. Through financial mentors, the world’s poor can learn how to eventually become part of the world’s middle class.

Through government actions and the eradication of income inequality, the Sustainable Development Goals have a better shot of completion by 2030.

Alexandra Korman

Sources: InfoZine, OxFam, Voice of America
Photo: Wikemedia

As China Solves Its Urban Poverty Crisis, Inequality Still Prevails
With the recent explosion in Tianjin and stock market failings grabbing headlines, it’s hard to believe that any good news can come out of China. New data, however, proves otherwise.

The most recent survey in the China Household Income Project (CHIP) provides some promising statistics concerning China’s urban poverty dilemma. According to the survey, the number of people living below the poverty line in China’s cities was just 1.6 percent.

Although the data won’t be formally released until next year, it falls in line with China’s growing reputation as a country that has truly helped lift its citizens out of poverty. Per capita income across the country saw a fivefold increase between 2000 and 2010, mirroring an almost identical increase the previous decade.

Inequality across China is still a prevailing issue even in the face of such positive data. Gender and regional equality are still large problems and China’s Gini Coefficient for income equality was 0.473 in 2013, a high number on the scale where 0 is a perfectly equal society.

Income inequality in today’s China is among the highest in the world, especially in comparison to countries with comparable or higher standards of living,” University of Michigan sociologist Yu Xie told Bloomberg Business in 2014.

According to the United Nations, a number higher than .4 is likely to cause “social unrest,” and if current events in China are any indication, that assumption is correct. While China is making significant strides in eliminating national poverty, there’s still a tremendous amount of work to be done.

Alexander Jones

Sources: Bloomberg Business, The Guardian 1, The Guardian 2
Photo: Flickr

World_Bank

The World Bank has released a report showing improving economic conditions for the world’s poor. Income inequality, however, continues to be a threat to progress.

The most recent report on gross national income (GNI) per capita shows the number of countries considered to be “low-income” have been halved over the last 20 years. In 1994, there were 64 low-income nations, whereas today there are 31.

Most of today’s low-income countries can be found in Sub-Saharan Africa. Among the poorest are Central African Republic, the Democratic Republic of the Congo and Malawi. Some countries, including Somalia and Syria, are not included because data is incomplete.

To be considered low-income, a country must have a GNI of $1,045 or less. In the last 20 years, several countries graduated into the $1,046 to $12,736 range of “middle-income.”

At the other end of the spectrum were high-income countries: small, wealthy countries like Qatar, Singapore and Norway.

Gross national income is a common way of measuring the prosperity of a nation. When divided by a country’s population, it yields GNI per capita. The data is based on purchasing power parity and is adjusted for inflation.

The report demonstrates rising economic tides for the world’s poorest countries, largely driven by rapid growth in the last two decades. However, with growth often comes rising inequality.That’s why the World Bank says it will take more than growth to end world poverty.

In a paper released in 2014, the World Bank noted the importance of monitoring income inequality; “In countries with rising income inequality, the effect of growth on poverty has been dampened or even reversed,” the paper reported.

To address this concern, the World Bank recommended social protection programs that protect those left behind by growing economies.

“We need a laser-like focus on making growth more inclusive and targeting more programs to assist the poor directly if we’re going to end extreme poverty,” explained World Bank Group President Jim Yong Kim in a press release.

This echoes a concern held by many development agencies. Jobs alone are not enough to end extreme poverty and economic growth is often unequally distributed, leaving millions behind.

While the results of the latest GNI index are promising, there are still 31 low-income nations remaining. As more countries enter middle-income territory, the needs of those left behind by growth will need to be addressed.

Kevin McLaughlin

Sources: World Bank GNI Index, World Bank Press Release, The Guardian
Photo: The Guardian

American_PovertyWith the 2016 Presidential election approaching rapidly, candidates are beginning to differentiate themselves from the competition by advocating for unique platforms. While some candidates have built a large portion of their campaign around illegal immigration, one candidate has made it clear that he will focus on an issue here at home. Bernie Sanders has emerged as the champion for reducing poverty here in the United States.

Sanders uses the increasing disparity between the wealth classes in America to illustrate his point on the problem of American poverty. Continuing to hammer his point home, Sanders then puts the blame on Wall Street’s influence over economic poverty, unfairly favoring those with more income. Sanders is directly quoted as saying, “There are a lot of great public servants out there, great economists who for years have been standing up for the middle class and the working families of this country, who know that it is an international embarrassment that we have the highest rate of childhood poverty of any major country on Earth.” Sanders makes a bold claim with this statement, but one that is shockingly valid.

Sanders’ campaign website lists some alarming figures about overall U.S. poverty as well as child poverty on an international scale. According to the site, 46.5 million Americans live below the poverty line making that figure the largest in U.S. history. In addition to this number, Sanders’ website cites a 21.8 percent child poverty rate, the “highest of any major country on earth.” It is important to distinguish here that by “major country,” he is referring to all countries part of the Organization for Economic Co-operation and Development (OCED).

In March of 2014 Sanders organized a subcommittee to examine in depth the differences in life expectancy across the United Sates as a direct result of varying poverty levels. Some of the findings reported that almost as many people die from poverty as from lung cancer. Life expectancy was also shown to have decreased over the past 20 years in 313 U.S. counties, and the United States has 6 million more people in poverty today than it did in 2004.

Poverty is as crucial an issue as any from presidential hopefuls this elections. Senator Bernie Sanders has made it one of his top campaign priorities to reduce this number drastically if elected, by working vigorously to improve the system of the American economy and reduce the vast gap between wealth classes in America.

Diego Catala

Sources: PolitiFact, Senate
Photo: Bernie Sanders