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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

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

 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
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 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

new_currency
In 2008, inflation in Zimbabwe soared to nearly 80 percent, prompting the African country to opt out of the Zimbabwean currency and switch to the U.S. dollar. However, many Zimbabweans are finding themselves literally waiting for change—pocket change, that is.

There is little to no access to American coins, forcing shopkeepers and others sellers to give pens, sweets or chewing gum as change for American dollars. Zimbabwe now faces the opposite problem it had before: instead of money being worth too little, it is now worth too much.

To the average Zimbabwean, an American dollar is a lot of money. However, coins are more expensive to ship than dollars, and therefore it has proved a difficult task to get American coins to Zimbabwe. Last month, the national bank began issuing “bond coins,” denominated in American cents, to be used only in Zimbabwe.

Besides Zimbabwe, four other countries have adopted the use of the U.S. dollar, but also hang on to a national currency, even if it is not in circulation. Countries that use the dollar get around the “coin problem” by minting local coins. But that requires confidence in the local government, something that is in even shorter supply in Zimbabwe than coins. Zimbabweans say they want “no legal tender issued by their government.”

There have been many improvements provided by the currency change. Zimbabwe’s economy has been rocky; between 1990 and 2003, the poverty rate rose from 25 percent to 63 percent due to the political and economic crisis. By wiping out inflation, the U.S. dollar saved Zimbabwe from a potential economic collapse that would have plummeted the country even deeper into poverty. After inflation stopped and normal commerce resumed, importers experienced reduced transaction costs.

The economy may be growing, but it rests on a rocky foundation. The government has remained under the same leaders since the 1980s, and Zimbabweans receive very little from it. Even as education expands, employers receive improper training, funds and wages. Mining used to carry Zimbabwe, but now the government has adopted an indigenization policy, and deposits of gems and minerals are nearly exhausted. Commodity prices are falling and fewer investors are getting involved in Zimbabwe’s unstable economy.

If Zimbabwe sees no improvement in the economy, poverty will continue to rise throughout the country. Zimbabwean officials claim that the economic growth of the country fell in 2014 from six percent to three percent. However, as the country learns more about the U.S. monetary system, expands education and revises the government, Zimbabwe is on the track toward a brighter future, with enough change to go around.

– Alaina Grote

Sources: Economist,  NY Times,  Rural Poverty Portal
Photo: Go To Think Tank

venezuela_slashing_prices_inflation
The inflation in Venezuela has caused significant social turmoil. In September, after the toilet paper shortage, which was preceded by food shortages and electricity blackouts, an occupation of the Paper Manufacturing Company took place.

Troops were sent to monitor “fair” distribution of available stock. Earlier in November, President Nicolas Maduro jailed electronic vendors whom he accused of price-gouging, stating that this was only the beginning of what he was willing to do to protect his people. He has expanded this occupation to a variety of goods stores.

The inflation also led to the handing out of Christmas bonuses in November. While many saw this as political theater meant to sway people’s votes just prior to the December elections, it was thought necessary by some in a country with a 54% inflation rate. It is this climate that necessitates paychecks being distributed prior to prices having time to rise.

Like Chavez, Maduro has blamed speculators and the “parasitic bourgeoisie” however, his accusations will not be able to stop the collapse of the economy especially given the continued monetary expansion and debilitating price controls. Furthermore, his emergency measures might be too late given that Venezuela has been in steady economic decline since Hugo Chavez instituted his trademark socialism in Venezuela.
The nation has a massive social spending program, and when one combines this with costly prices and labor controls along with an ambitious foreign aid strategy, the oil revenues that have been keeping Venezuela afloat no longer seem to be enough.
Mari Sahakyan

Sources: Wall Street Journal, Market Place, National Post, Market Oracle, Trading Economics

Venezuela_Food_Shortages
For residents of Venezuela, food and grocery shortages have become a part of daily life. Outside of many government-subsidized grocery stores, people line up before dawn hoping to purchase what they can before supplies run out. Items such as milk, meat and toilet paper are bought up quickly. The shortages have lasted for more than a year, prompting calls for President Madura to reevaluate the economic policies of his predecessor, Hugo Chavez.

Though Venezuela is one of the most oil rich nations in the world, it is struggling to mitigate inflation and keep subsidized grocers stocked with products. Many experts say that strict price controls are to blame for the country’s economic problems, while President Maduro insists that it is all part of an effort by the opposition and CIA to destabilize the government and sabotage Venezuela’s oil industry.

Asdrubal Oliveros, an economist at one of Venezuela’s leading consulting firms, told the Guardian that the current crisis is the result of several factors, which include the country’s overreliance on imports and the government price controls. Another factor is the decrease in agricultural production due to the government’s recent land expropriations. “It’s cheaper to import than it is to produce,” Oliveros said. “That’s a perverse model that kills off any productivity.”

Many economists echo Oliveros analysis, saying that the Venezuelan government is not helping the problem by fixing prices so low. When prices are set low, companies and producers are not able to make a profit—this, in turn, leads to a cessation of farming, manufacturing, and production. Originally designed to help Venezuela’s poor and working classes afford food and staples, the price-fixing program has instead led to empty shelves and long queues.

After becoming President of Venezuela, Hugo Chavez and his ministers sought to reduce the growing wealth disparity in their country. To achieve this, they implemented price controls on certain goods so as to make them cheaper for individuals and families with lower incomes. This step and increased spending on social programs, however, may be contributing to the country’s current economic crisis.

Aggravating the problem is the fact that inflation is increasing at an alarming speed. In August, 12-month interest rates rose to 45.4 percent. This is the highest since Venezuela’s hyperinflation crisis in the mid-1990s. Officials in Maduro’s government have said that they will be considering changes in the country’s economic policies in an effort to combat the rising prices and food shortages in Venezuela.

– Daniel Bonasso

Sources: The Guardian, New York Times, Wall Street Journal

Raise the Minimum Wage, Inflation is Real!In his State of the Union address, President Obama has called for a national increase in the minimum wage standard of the country. The President has proposed to raise the minimum wage to $9 from its current $7.25. The newly proposed amount would also have safeguards to account for inflation, which the current standard does not.

This demand comes at a time when the National Center for Law and Economic Justice supports that one in seven Americans lives in poverty, with one in sixteen Americans living in deep poverty. Poverty, of course, exacerbates tension and has been linked to decreased social mobility, increased rates of violence, and increased likelihood of being a young parent.

Addressing poverty, both at home and abroad, is a key, central way to better the standard of living for millions as the better able families are to support themselves, the more efficient the employee, the better the consumer, and the more stable the economy.

CNNMoney, however, has debunked the myth that raising the minimum wage in America is the only element necessary to raise a family out of poverty. For a family of four making at least $9/hr, and while taking advantage of several key tax breaks, Tami Luhby of CNNMoney writes that the new rate would be barely enough to lift the family above the poverty line, and hardly enough to raise their standard of living by much in light of the U.S.’s dependence on a tax code that has been decried as “broken” by many.

While raising the minimum wage would be a step in the right direction towards addressing poverty in the United States, advocates for economic justice argue that helping people find higher-paying jobs is another, more effective, means of fighting poverty.

– Nina Narang

Sources: NCLEJ, CNNMoney
Photo: Occupy