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3 Organizations Tackling Poverty in Bosnia and Herzegovina

Poverty in Bosnia and HerzegovinaAccording to the International Fund for Agricultural Development (IFAD), over half of Bosnia and Herzegovina’s population lives in pastoral, rural areas of the former Yugoslav state. Despite being far away from urbanized areas, such as Sarajevo, inhabitants of Bosnia and Herzegovina’s countryside are not without access to services in their local area, with most being close to a doctors’ practice, primary school, grocery store and post office. However, rural income is low, unemployment is rife, and the overall rural poverty rate is far higher than that of city dwellers. A lack of governmental attention on the systemic issues of poverty has caused three aid organizations to take matters into their own hands and support the parents and children who are most affected by poverty in Bosnia and Herzegovina. 

Idyllic Surroundings, Idle Realities 

As it continues to patiently await its membership to the European Union (EU), Bosnia and Herzegovina, without the additional perks of affinity, is equally experiencing the continental rising prices of food and other household essentials, alongside the soaring fuel and electricity prices that come with having the EU as its largest trading partner.

With only 53% of rural households earning an income from employment and 50% receiving social benefits from the state, the already fragile conditions of those on or below the poverty line, most prominently in towns and villages, have worsened, leaving mothers and children, in particular, to succumb to the harsh effects of poverty in Bosnia and Herzegovina. A survey in 2013 found that the disadvantages of rural life are felt most in education and employment, with small towns and villages being most at risk of social and political exclusion by way of the absence of economic opportunities and effective welfare programs.

Obraduj Nekgoga

In 2017, the Obraduj Nekoga Foundation was created in Sarajevo to provide support across Bosnia and Herzegovina for struggling families, focusing on delivering supplies and food for the children of the families most impacted by rural poverty. From Trebević to Vlasić, many organization members venture over mountains and travel for long hours daily to provide aid and advice to families in the countryside.

Since there are very few jobs in both the private and public sectors, many parents can only find work in summer, either picking raspberries or strawberries in the fields. Only able to work for one season out of the year, families must use their savings sparingly, and children are often left short of their necessities, such as nappies and formula, as well as toys and games.

With the help of donations and volunteers, Obraduj Nekoga has helped to feed hungry families in Bosnia and Herzegovina’s towns and villages, promoted the healthy growth and steady development of children and mitigated the effects of rural poverty.

Charity Bosnian Kids

Similarly, Charity Bosnian Kids was set up in 2018 to target the food insecurity experienced by many families across Bosnia and Herzegovina, an issue highlighted by the fact that most children “consume at least half of their meals at school” and those meals “may be the only food they regularly eat.” Many of these families are located in towns and villages where access to employment and regular income is virtually impossible, so schools become the only way children can maintain a regular, healthy diet.

In the school year 2022/2023, Charity Bosnian Kids provided 445 children a daily school lunch and a total of €51,873 was donated across 2021/2022. The organization also combats poverty through its Food at Home for Bosnian Families program, where donations are used to create and send food packages to families so that they have access to necessities.

SOS Children’s Villages 

SOS Children’s Villages ensures orphaned or abandoned children are cared for. The organization primarily adopts a preventative approach by giving Bosnian families access to counseling to encourage them to stay together if it is safe to do so, thereby reducing the number of children who are abandoned by their families due to economic or social pressures that are synonymous with poverty in Bosnia and Herzegovina. 

As the level of school attendance is extremely low for rural children, many young people from Bosnia’s countryside end up lacking qualifications, which makes it more challenging to break the cycle of poverty. SOS Children’s Villages aims to intercept this cycle by strengthening families through legal and psychological support and creating sponsorships for children to complete their studies. The organization currently has 8962 beneficiaries in Bosnia and Herzegovina, all on the journey to a better and brighter future. 

Looking Ahead

Where state welfare programs are lacking, aid organizations work hard to alleviate poverty in Bosnia and Herzegovina. Obraduj Nekoga, Charity Bosnian Kids and SOS Children’s Villages have all sought to ensure that children and families are receiving the necessities that they cannot afford, alleviating the food insecurity dimension of poverty to the best of their ability. While this does not tackle the systemic roots of poverty in Bosnia and Herzegovina, these three organizations have improved the livelihoods of thousands of citizens in a short period, making a significant impact with small sums of donations, thus pointing to the level of change that can be achieved through the selflessness and determination of charities.

– Zara Brown
Photo: Unsplash

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Being Poor in Egypt: The Threat of Inflation and Currency Depreciation

Being Poor in EgyptThere had been a measured decrease in extreme poverty levels in Egypt between 2017 and 2020, from 6.2% to 4.5%. Thus, it appeared that the issue of poverty in Egypt was gradually declining. Notwithstanding, the country now finds itself in a financial crisis, which record levels of inflation and subsequent depreciation of its currency (the Egyptian Pound) further fuels. Core inflation in Egypt measured a year-on-year price level increase of 31.2% in January 2023. Moreso, the value of the Egyptian Pound capitulated against the US dollar and has subsequently lost about 50% of its value.

Poverty in Egypt: A Resurging Problem

Poverty is resurging in Egypt, with approximately one-third of the population living in impoverished conditions and millions more struggling financially. The nation’s economy continues to face significant challenges, including rising inflation that hampers citizens’ economic and social rights, as well as their access to sufficient food and essential services. In August 2022, annual inflation surged to 15.3%, compared to just over 6% in the same month the previous year.

Furthermore, the Egyptian pound recently hit a historic low against the strengthening U.S. dollar, with an exchange rate of 19.5 pounds to $1. Consequently, this depreciation has widened trade and budget deficits, as the diminishing foreign reserves have resulted in a nearly 10% decline in purchases of grain and fuel in March 2022. For impoverished Egyptians, these economic challenges make life significantly more difficult, as they struggle to meet their basic needs, particularly regarding food. Additionally, the devaluation of the Egyptian Pound in the currency market poses heightened difficulties for the country in importing goods.

Responses

The International Monetary Fund (IMF) has provided some of the much-needed financial aid in Egypt. A recent agreement for a 46-month loan program valued at $3 billion with the Egyptian government aims to attenuate at least some of the monetary issues in the country, including its outstanding debts. The theory behind this is that if Egypt staves off the fears of its defaulting on the national debt, the run on its currency will end, holding greater confidence in the Egyptian economy to stay solvent. If this can be achieved imports would become cheaper and capital will again be able to flow into the country boosting supply shortages. Simply put, this effort aims to increase the Egyptian Pounds value against hard currencies such as the US Dollar and Euro, thereby enabling local individuals and businesses to more easily buy foreign goods and capital that cannot be sourced from within Egypt.

Other nations and organizations have chipped in with a specific focus on agricultural and food issues in Egypt. Japan recently pledged $3.8 million in aid through the Food and Agricultural Organization (FAO) focused on agricultural development in Egypt. Furthermore, the World Bank approved a $500 million project in Egypt aimed at ensuring all vulnerable families in the country can afford food. This served to strengthen Egypt’s resilience to food crises and support reforms in food security policies. Additionally, the project has tasked itself with monitoring and improving nutritional outcomes in the country.

Looking Ahead

Despite the challenges Egypt faces with its financial crisis and increasing poverty rates, international support is being extended to address these issues. The IMF’s loan program aims to alleviate monetary challenges and restore confidence in the Egyptian economy. Furthermore, contributions from Japan and the World Bank specifically target agricultural development and food security, providing hope for improved resilience and access to essential resources for vulnerable populations in Egypt. These collaborative efforts hold the potential to mitigate the impact of poverty and contribute to a brighter future for the country.

– Christopher Maddocks
Photo: Flickr

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Rising Income in Japan During Hyperinflation

Rising Income in JapanWith inflation leading to soaring prices, effective government intervention is crucial to solving people’s hardships. Recent reports suggest that Japan may be able to teach the world a lesson in this regard. Japan’s economy has maintained a mild deflationary state for decades and overall prices have been relatively stable. However, this year, the island nation has rarely ushered in 2% inflation against the backdrop of rising prices around the world. While Japan’s price hikes are nothing compared to many other countries, unchanged wages are making life more stressful for consumers caught off guard by inflation. Fortunately, the Japanese government has introduced some effective measures against the wage issue, which have improved the lives of ordinary Japanese people. This article will briefly explore the topic of rising income in Japan recently.

Increasing Minimum Wages

Japan’s Central Minimum Wage Council recently issued a new policy, which is to raise the minimum wage standard across Japan by ¥30 per hour. This is the largest minimum wage increase ever issued by the Japanese government. Rising domestic prices stimulated this policy in Japan due to the sluggish yen and the Russian-Ukrainian war. The policy ensures the rights and purchasing power of ordinary Japanese workers.

Senior officials of the Japanese government have also attached great importance to basic wages and livelihood issues. In an interview with reporters, Deputy chief cabinet secretary Seiji Kihara said that raising the minimum wage is an investment in the people and he hopes that the rising trend of basic wages can keep up with the development of new capitalism.

Rising Total Income in Japan

In addition to setting requirements for basic wages, the Japanese government not long ago encouraged Japan’s major companies to raise workers’ wages on the premise of rising prices. In fact, the government wants companies to raise wages to the same extent as prices rise. This major move came with the support of Japanese Prime Minister Fumio Kishida’s economic policy. In fact, it was he who promised to bring New Capitalism to voters, which requires “a virtuous cycle of growth and redistribution driven by investment into people,” according to Japan Times.

Many Japanese companies have followed suit, including major car companies such as Toyota and Hitachi. They heeded the government’s call, even though their business was hurt by soaring oil and wheat prices as a result of the Russia-Ukraine war. In February 2022, Labor unions of major electronics and car manufacturing industries planned to raise workers’ wages by around ¥3,000.

The rising income in Japan during hyperinflation is the result of the government’s efforts to ensure a virtuous circle of the economy, as well as maintain the normal living standards and purchasing power of the people. Although the world economy in 2022 could cause difficulties for many countries, the Japanese government’s practical actions tell us that every government may have a role in caring for the needs of the people.

– Ella Li
Photo: Flickr

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Inflation in Egypt 

Inflation in EgyptIn 2022, inflation has been sweeping across the world like wildfire, and it has impacted the world’s impoverished the most severely. Here is some information about inflation in Egypt.

Inflation on the Rise

Inflation in Egypt rose to 13% in June 2022 from 11% in April 2022, after only seeing an inflation rate of 4.8% at the end of 2021. The Ukrainian war caused an increase in costs of goods which also caused the interest rates in the country to rise. These interest rates were already some of the highest in the world before the increase. These increases in the costs of imported and exported goods have made it much more challenging for the working class of the country to make a living.

There has been an increase in the prices of simple goods like bread, rice and sugar, making it hard for families to sustain themselves, and even things like nuts have moved into the category of luxury for most families. Inflation has affected individual families and Egypt’s economy as a whole as Egypt’s purchasing index contracted for the 18th consecutive month in May which is what caused the country to raise the interest rates for the first time since 2017. This has put a strain on small business owners who sell goods to survive because they no longer can afford to buy the product that they sell.

Humanitarian Impact

The U.S. has donated $30 billion in economic aid to Egypt since 1978 in order to provide stability to the region. USAID’s current plan to help the economy is to reduce the rising cost of food in Egypt. U.S. aid to Egypt reduced by 85% from 1998-2020 from $833 million to $125 million in 2020, however, the Biden Administration has requested $1.43 billion in aid for Egypt in 2022 amid the pandemic and the Ukrainian war.

The world cannot control what goes on in terms of the Russian and Ukrainian war, so the Goal of USAID is to impact the country in as many ways as possible from within. As of April 2022, the Biden Administrations’ funds are to go toward creating more and better jobs and enhancing the role of government officials to help the institutions of Egypt meet the economic needs of their people. Inflation in Egypt has been the cause of many people losing their jobs and so plans created to foster the economy are very relevant and should prove useful. Hundreds of thousands of jobs have emerged since 1978 in Egypt due to U.S. involvement, and that growth could be beneficial to combating inflation in Egypt.

Looking Ahead

The inflation crisis in Egypt is far from over, but the world is taking the proper steps in order to attempt to turn the tides. It may take months or years for one to be able to see the impact of the funds that Egypt received, however, the people of Egypt know that their struggle is not going unnoticed and that can be the spark someone needs to keep pushing for a little bit longer.

– Alex Peterson
Photo: Flickr

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Curbing Inflation in Venezuela

Curbing Inflation in VenezuelaInflation is one of the most significant problems in the world right now, as the global inflation rate rises to 6.7% in 2022, almost double the average of the last decade. This is a consequence of the Russian-Ukrainian war and the effects of the ongoing COVID-19 pandemic. Venezuela, which is one of the most in-need countries in South America has finally come out of one of the longest bouts of hyperinflation in the world after 12 consecutive months of the inflation rate rising below 50%, however, three in four people in the country still lived below the poverty line in 2021. The United States and other major players can still do a lot to help the country and curbing inflation in Venezuela is one of the many solutions necessary to improve poverty and economic stability in the country.

Mounting Challenges in Venezuela

In 2016, Venezuela entered a streak of hyperinflation which is when the rate of inflation increases by more than 50% for 12 consecutive months. In 2022, Venezuela has been able to pull itself out of this downward slide pretty simply. The country ramped up printing money in 2016, which became a real issue at the end of 2017 and caused the recent inflation. This has even been a problem in the United States because innately the more currency circulating, the less each piece of currency will be worth. That, along with deficit spending created one of the worst inflation crises in the world.

The solution to this problem appeared to be just as simple as the cause because as soon as the central government of Venezuela decided to stop printing so much money, the inflation rate eased. Although inflation has been on the decline, poverty has still been on the uptick rising to 76% in 2020. Even though these two statistics would seem to be contradictory there are reasons why simply curbing the inflation in Venezuela is not the end all be all.

Solutions

Curbing inflation in Venezuela is only the first step in a long line in order to help the situation in the country. In June 2022, the U.S. announced more than $314 million in aid to help stabilize Venezuela and the rest of that South American region.

These funds will go to multiple countries and aim to improve education and provide COVID-19 relief along with aid for other basic human needs. These funds will also go toward an effort to help potential migrants leaving the country, fleeing in an attempt to find better financial stability. They will also improve access to health care, which has been a challenge for people to access in Venezuela. As many as 5.4 million people have left the country in 2022 because of the unstable economy.

These funds ensure these people can have safe and productive new lives after leaving the country. Venezuelans will receive access to life-saving humanitarian programs like emergency shelters and obtain health care which has been difficult to access because of Venezuela’s own health care system. The International Rescue Committee (IRC) provided health care to more than 100,000 Venezuelans between 2020 and 2022, and since 2017, the U.S. has donated nearly $2 billion in total to Venezuela and the surrounding region. The humanitarian aid provided to the country has already done a lot to improve the lives of those living there and those attempting to leave. Curbing inflation in Venezuela is a step in the right direction.

Looking Ahead

The inflation crisis is severely affecting the entire world including Venezuela. People are having to leave the countries they call home in search of refuge and the possibility of a better life. A person’s displacement is a life-altering event that can change how they live forever. As more and more countries join in the fight to help Venezuela, hope exists that it will have a bright future.

– Alexander Peterson
Photo: Flickr

10 Facts About the Poverty Rate in the Netherlands

Poverty Rate in the NetherlandsThe Netherlands is the sixth-largest economy in the European Union. Playing an important role in the European economy, the Netherlands has a persistently high trade surplus, stable industrial relations and a low unemployment rate. However, poverty still exists in the Netherlands. Discussed below are the leading facts on the poverty rate in the Netherlands.

 

10 Facts on the Poverty Rate in the Netherlands

 

  1. The public debt of the Netherlands is 61.8 percent of the GDP in 2016. That makes Netherlands 64th on the public debt list comparing to other countries in the world.
  2. The unemployment rate in the Netherlands in 2016 is about six percent of the population, ranking them 72nd in the world, while the United States ranks 53rd with a rate of 4.7 percent.
  3. The Netherlands’ unemployment rate dropped from 6.9 percent in 2015 to 6 percent in 2016.
  4. The Dutch government projects the unemployment rate in the nation will decrease to 4.9 percent in 2017.
  5. The poverty rate in the Netherlands is 8.8 percent, which means about 1,400,000 people still live below the poverty line.
  6. The number of children growing up in long-term poverty in the Netherlands is about seven percent, which is about 125,000 people. According to CBS, most of those children live in single-parent families or families that rely on welfare benefits.
  7. Child poverty is considered to be a big problem in the Netherlands. The government believes actions need to be taken to fight against child poverty and children should be given a greater voice and should be directly involved in policy-making. Local authorities are responsible for considering children’s opinions. However, only five percent of the local authorities actually involve children in the process.
  8. Due to the financial crisis in 2008, the Netherlands experienced a protracted recession from 2009 to 2013. The unemployment rate doubled to 7.4 percent during the period and household consumption contracted for four consecutive years.
  9. The wealthiest 10 percent of the population in the Netherlands control about 24.9 percent of the whole country’s wealth. On the other hand, the poorest 10 percent of the population only control 2.3 percent of the country’s wealth.
  10. The inflation rate is 0.3 percent in 2016, which dropped 0.3 percent from 0.6 percent in 2015. The Netherlands is ranked 44th in the world.

The Netherlands is a wealthy country in Europe, but it also faces many problems such as child poverty. The poverty rate in the Netherlands is relativity low compared to many other countries in the world, but there is always room for improvement.

– Mike Liu

Photo: Flickr

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Hunger in Venezuela: Solving the Country’s Food Crisis

Venezuela_Food crisis
Venezuela, a country on the northern coast of South America, is well known for its lush forests and beautiful coastal view. Unfortunately, the breathtaking scenery does little for combating the growing concern of hunger in Venezuela.

Since Nicolás Maduro’s assumption of the Venezuelan presidency in 2013 after Hugo Chávez’s death, polls have found that 87 percent of citizens do not have enough income to provide food for their families.

Of their measly income, 72 percent is spent on food alone. To afford enough food to feed a family, the Center for Documentation and Social Analysis estimated a family would need the equivalent of 16 minimum-wage job salaries.

Inflation has also risen to over 180 percent since December 2015. This is partly because of a drop in oil prices that reduced Venezuelan foreign earnings by two-thirds. However, it also caused in part by the formation of Local Committees of Supplies and Protection (known locally as CLAP).

CLAP regulates when people can go shopping at the supermarket and even what they are allowed to buy based on the last digit of their identity card. For instance, if the identity card ends in a zero or one, a citizen might be able to buy groceries on Monday. They receive staples such as flour, pasta, and soap at a controlled price; the government controls even hunger in Venezuela.

These regulated shopping trips are not enough for struggling Venezuelans; lately, protests have become more widespread and even physically violent. In Cumaná, protestors marched on a supermarket, defying the grocery-shopping schedule implemented by the government, to empty the entire supermarket of food.

Riots like the one in Cumaná have occurred across Venezuela, with as many as 50 riots in the span of two weeks.

In addition to growing participation in supermarket riots, citizens have been calling for President Maduro’s resignation, blaming his socialist policies and exploitation of farmers for the current food crisis. Maduro’s response has been to blame bordering countries for hoarding food and bombing Venezuelan power plants.

Keep an eye on the Borgen Project for more information on hunger in Venezuela and developments in the Venezuelan food crisis.

– Bayley McComb

Photo: Flickr

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Inflation in Brazil Hits New High

Brazilian Inflation Hits New High- BORGEN
As the 2016 Rio De Janeiro Olympics loom, Brazil finds itself in the midst of an inflation crisis. At a staggering rate of 9.56 percent, inflation in the South American nation is higher than it has been in 12 years. Brazil has not seen such a level since November 2003. This stark increase highlights one of the main problems facing Latin America’s largest economy.

Although the rising cost of electricity has likely played a role in the increasing inflation rate, the main reason behind the economic slump is a lessening demand for Brazilian products. China plays a major role as one of the nation’s consumers, but the Asian giant is suffering an economic slowdown as well. Dwindling demand for commodities from the Chinese is a central cause of Brazil’s economic woes.

Extremely fast price increases and the depreciation of the Brazilian real versus the U.S. dollar have opened the door for the country’s central bank to raise interest rates substantially. To combat rising prices, the central bank has raised interest rates to 14.25 percent. This number is among the highest of major world economies. Officials at the bank hope that this raise will help the country reach a target inflation rate of 4.5 percent.

However, the outlook is bleak. Brazil’s economy is projected to shrink 1.5 percent, according to the International Monetary Fund. Current statistics show the Brazilian economy ranked seventh in the world.

Dilma Rousseff, the president of Brazil, is actively trying to cut the country’s deficit. Rousseff supports several measures to both cut spending and raise taxes in hopes to get the country back on its feet. Facing fiscal setbacks and possible impeachment, however, Rousseff’s political influence is at a low point and her actions may be in vain.

Although high inflation in Brazil affects poor and rich alike, those living below the poverty line are being hit particularly hard. Long known as a nation with a shocking income gap, there is little sign that this discrepancy will improve in the near future. The poor find it difficult to strive in a prospering economy, let alone one that is dramatically faltering.

– Katie Pickle

Sources: BBC, Wall Street Journal
Photo: Flickr

 

 

Argentina Transit Strike Signals Frustration over Economy

Argentina_Transit_Strike_Signals_Frustration_over_Economy
On Mar. 31, a transit strike shut down Buenos Aires as transit workers voiced their frustration with the government of Christina Fernandez de Kirchner over the economy. The transit workers complain that their pay is not keeping up with inflation. While the government did offer them a raise, the workers claim the raise has put them into a higher tax bracket and therefore continues to reduce their income.

This is just one of many signs of Argentina’s worsening economic troubles. The government is accused of falsifying economic indicators and few economists trust the official statistics. While the Argentine government claims the economy grew by .5 percent in 2014, most economists believe it contracted by two to 2.6 percent. Economists expect it to contract by around .5 percent this year.

The government’s figures claim the inflation rate is about 25 percent, but economists are also skeptical of this number. Most think the real inflation rate is around 40 percent, which is worse than both Greece and Ukraine. The peso is overvalued and while the official exchange rate is 8.4 to a dollar, the black market exchange rate is almost 15 to a dollar.

A combination of lower commodity prices, worsening economies in Brazil and Venezuela and an ongoing debt dispute with U.S. hedge funds are the primary causes of the economic downturn. Argentina is no stranger to economic downturns and has been on what many call an “economic roller coaster” for almost a century. In 2001 it defaulted on $100 billion worth of debt, the largest default on record.

So despite the frustration, Argentinians are familiar with this type of situation. Many people keep money under mattresses and elsewhere around the house as the banking system has been viewed as unstable ever since the 2001 crisis. Many others put their money in overseas bank accounts. Since 2011 the country’s bank reserves have fallen from $52 billion to $28 billion.

Commodity prices are rising rapidly. The prices of many essential goods have nearly doubled in the past year and supply has become intermittent. Many landlords have started adjusting the cost of rent every couple of months in an effort to keep up with inflation.

There has also been an increased exodus as more Argentinians leave the country for Europe and North America. This has been another common trend as waves of Argentinians have left the country to escape economic instability. Elections are due this fall and President Kirchner is stepping down. The future of Argentina’s economy will be up to the next government.

– Matt Lesso

Sources: Bloomberg, Financial Times, The New York Times, USA Today, The Wall Street Journal 1, The Wall Street Journal 2
Photo: Flickr

Venezuela One of World’s Most Distressed Economies

Venezuela PovertyMany oil producers have been hard hit by the fall in oil prices, but perhaps none more so than Venezuela. Oil is Venezuela’s primary source of revenue and the economy is incredibly dependent on oil exports. In fact, oil revenue is thought to account for at least 95 percent of its foreign currency earnings. Within the past six months world oil prices have fallen by over 50 percent, hitting the already faltering economy very hard.

Critics say the crisis is the government’s own making, pointing to a failure to diversify the economy and a series of failed government policies. For over a decade, under Hugo Chavez and Nicolas Maduro, Venezuela developed a generous welfare system financed by oil sales. While cash transfer programs, subsidies and price controls were successful at reducing poverty, they had disastrous effects on the economy.

Manufacturers complain that the price controls have made it very difficult to make a living and have forced them to cut back on production. The number of Venezuelan manufacturers fell by more than a third during the first eight years of Chavez’s presidency. This helped to create an unhealthy economic climate well before the fall in oil prices.

Over the past few months things have gone from bad to worse. Any successes at reducing poverty are about to unravel as Venezuela’s economy deteriorates. Inflation in Venezuela is currently the highest in the world, estimated at close to 80 percent. That is more than four times higher than the inflation rate in Ukraine, another economy facing a major crisis. Its currency is severely overvalued. Government currency controls have kept the official exchange rate at 6.3 bolivars for one U.S. dollar, but the black market rate is more than 200 bolivars for one U.S. dollar and rising.

Venezuela has had to reduce imports by nearly half and the country is now facing widespread food and commodity shortages. Many foods and goods are no longer available in supermarkets. In fact, the Venezuelan government has asked for assistance from neighboring countries to resupply it.

The few goods that are available have become outrageously expensive and shoppers face extremely long lines. A pack of contraceptives costs nearly 800 dollars. This is bad news for a country that has one of the highest rates of HIV/AIDS and teen pregnancy in South America.

The inflated prices have caused the real value of the minimum wage to plummet from 360 dollars a month to 20 dollars a month. This puts it on par with the poorest countries in sub-Saharan Africa and means many Venezuelans are now living below the extreme poverty threshold of one dollar a day.

The economy is expected to contract by at least three percent, but many think this estimate is optimistic, especially since more trouble is on the horizon. The government has failed to explain how it plans to fulfill its debt obligations for 2015 and few expect it will be able to. Economists think it is probable that Venezuela will default on more than 10 billion dollars worth of debt next fall, which will inevitably make the situation worse.

Maduro’s popularity has plummeted; his approval rating is now lower than 25 percent. The government points fingers at the U.S. and opposition parties. The government has also cracked down on businesses and opposition lawmakers. Last month the mayor of Caracas was arrested on allegations of plotting a coup and a major supermarket chain was nationalized. Its CEO was arrested and is being accused of hording goods.

Elections are planned for later this year. Venezuela was once considered one of the most prosperous countries in Latin America, but now it is one of the poorest. While markets may be watching the Eurozone more closely because of its larger size, the worst economic crisis of the year is unfolding in Venezuela.

– Matt Lesso

Sources: BBC 1, BBC 2, CNN, Financial Post 1, Financial Post 2, Forbes 1, Forbes 2, NPR

Photo: Flickr