Posts

What Causes Poverty in San Marino?San Marino, which is said to be the world’s oldest republic, is a tiny country landlocked by Italy. At only 23.6 square miles, San Marino is the fifth smallest country in the world, only larger than Vatican City, Monaco, Nauru and Tuvalu. It is also one of the richest countries in the world, with an estimated 2016 GDP per capita of $59,500. Despite its wealthy status, the 2008 recession, from which the country is still recovering, has significantly increased poverty in San Marino.

San Marino‘s main economic activities are tourism, banking and the manufacture and export of different goods such as clothing, ceramics, fabric, wine and spirits. As it is surrounded by Italy, most of San Marino’s economic sectors are highly supported by this nation; in fact, 90 percent of San Marino’s export market is supported by Italy. As Italy also suffered from the 2008 recession, its demand for imports from San Marino has lessened, which has in turn weakened San Marino’s economy.

After the recession, San Marino’s strong economy took a downward turn. Unemployment – which had been at its lowest in 2007 at three percent – jumped to 4.5 percent by 2009 and reached its peak of 9.2 percent in 2015. While poverty is not a major issue in San Marino compared to many other countries, the recession certainly caused a notable increase.

Although San Marino’s poverty rate is low enough that it is not necessarily significant enough to be recorded, it is likely that such a rapid increase in unemployment led to hardship for a significant portion of San Marino’s population. Increases in unemployment cause greater stress for the individual and strain the government, as it puts more pressure on the government to support those who are unemployed. Additionally, it weakens the economy further, as those who are unemployed lose purchasing power. Since San Marino’s peak unemployment in 2015, unemployment has started to drop, with the unemployment rate in 2016 at 8.6 percent.

Although the recession caused an increase in poverty, the government of San Marino has been working to curb the effects of the recession by eliminating its status as a tax haven. As other countries have bounced back from the recession, demand for goods from San Marino has increased as well. Hopefully, as more countries start recovering, this will also help San Marino’s economy recover so that progress can be made regarding its poverty rate.

Mary Kate Luft

Photo: Flickr

Causes of Poverty in ArmeniaArmenia is a landlocked country in Eastern Europe that saw a steady decrease in poverty after the dissolution of the Soviet Union. However, Armenia was hit quite hard by the recession in 2008, and the economy is still trying to right itself. Many families in Armenia struggle to find work and affordable necessities. The poverty rate in Armenia is 29.8 percent. The main causes of poverty in Armenia are a lack of jobs within the country, a high unemployment rate and a weak agricultural system.

Migration of Workforce

One of the main causes of poverty in Armenia is a lack of jobs. This is demonstrated through the number of workers who emigrate. The majority of men leave the country to earn wages in Russia. Some researchers estimate that almost 14 percent of the Armenian population has emigrated to find employment elsewhere.

In order to combat this problem, Armenia needs to create more job opportunities within the country. Currently, one-fourth of jobs in Armenia are low-paying jobs; thus, Armenia needs to create more middle-income positions. Formal businesses want the government to impose more regulations so that informal employers do not have advantages. If the Armenian government intervened, these businesses could create many more jobs.

Poverty and Unemployment

Unemployment and poverty in Armenia are closely linked. In 2010, when the head of the household was unemployed there was a 50 percent chance they lived below the poverty line. The reported unemployment rate in Armenia is 16 percent. The average job search is 20 months. Unemployment benefits in Armenia are minimal, so a large percentage of the unemployed do not register. The number of unemployed people in Armenia is estimated to be closer to 30 percent.

There is low labor force participation in Armenia. Around 70 percent of women in Armenia are unemployed and only 55 percent of women who are of working age are active in the economy. One way to solve this aspect of unemployment is for the government to create incentives to encourage women to join the workforce. The Armenian government can also work to remove barriers to working such as transportation or household responsibilities.

Weak Agricultural System

The agricultural system in Armenia does not create enough jobs or affordable food. When the Soviet Union collapsed, Armenia had to replace some of its industrial economy with agriculture to feed its people. The government rapidly created small farms and sold them to citizens. Many of the newly minted farms were created in mountain regions with difficult terrain. Farmers often lack agricultural knowledge. In addition, many of the small farms do not have adequate infrastructures or access to farming technology. Government policy has not bolstered the efficiency of farms; instead, changing regulations and policies have damaged the agricultural sector. If Armenia can develop its agricultural sector through education, infrastructure and policy, the country will be able to produce more of its own food and improve the standard of living.

While over one-quarter of Armenians live in poverty today, this number can be reduced. Creating more attractive jobs within Armenia will encourage citizens to work in their country. In addition, the development of programs to help people join the workforce will help decrease the unemployment rate. Finally, as Armenia improves its agriculture system, the price of food in the country will decrease.

Sarah Denning

Education in Croatia
Thousands of Croatian protesters gathered on June 1 in the main square of the city to support the newly-formed “Croatia can do better!” movement. Over 50,000 people advocated for better education in Croatia after the country’s political institutions were thought to be robbing students of an adequate system.

Many graduates were deemed unprepared for the workforce amid a difficult economic climate leading up to the protest. Croatia has a jobless rate of almost 16% and the country has only recently begun to recover after a six-year recession ending in 2014.

According to the Open Society Foundations, a family of foundations committed to aiding expenditures for global struggle, “Graduates [of Croatia’s school systems] are desperately unprepared for the job market, and the current education system does not prepare citizens to play an active role in [their] society.”

Consequentially, the Comprehensive Curricular Reform began to push for better education in Croatia after the National Strategy on Science and Education passed in Croatian Parliament in October 2014. The early effects of the process for reform were led by the Expert Working Group (EWG). The group focused its energies on involving over 52 working groups and 500 teachers by presenting education as a public good with more significant political and individual interests.

However, these positive efforts were shut down after the election of a new government in January 2016. Newly appointed members of the Parliamentary Committee on Education added more members to the EWG — they convinced the Minister to reject the Parliamentary Education Committee advancements and give funds owed to members of different working groups to place the educational reform at a frustrating standstill.

The resultant public outcry quickly led to the “Croatia can do better!” movement. A responsive push for a stronger educational system gained the support of the Network of Educational Policy Centers (NEPC) and the campaign consequently gained rapid public support for the June 1 demonstration.

Marko Kovačić, a participant in the civil society in Croatia reported on the June 1 protest stating, “It was an incredible feeling to see so many people mobilize and overcome our differences in support of a better education system for Croatia. It felt empowering…[we were] united behind a better future for our country.”

Hailey Visscher

Economy Failing Japan
Japan is currently facing a dour economic situation comparable to  2011 when a tsunami struck Japan’s eastern coast. Following the tsunami, Japan’s economy started to shrink to 6.9 percent and is now down to its lowest rate since the environmental disaster.

Economists attribute Japan’s most recent third-quarter recession to lack of investment in housing in addition to a rise in taxes enacted as a part of a series of reforms. The value-added tax (VAT) has caused the world’s third-largest economy to shrink into recession.

The unpopular rise in taxes comes at an unfortunate time for current Prime Minister Shinzo Abe who is seeking reelection.

Another burdening issue for Japan is the vast economic debt it has garnered. The debt is due to the inequality between revenue and expenditures and Tokyo’s inability to address this serious problem.

As a major player in the world economic system, Japan’s recession is affecting U.S. markets as well. It could negatively impact the U.S. economy because Japan consumes a large number of U.S. goods as its fourth-largest trading partner. A surprising number of American-brand luxury retailers rely on Japanese consumers to buy their products.

On the bright side, however, the country is currently projected to increase the quantity of exports as demand is likely to rise. Japan is currently pursuing low interest rates offered by the central bank on long-term borrowing. This will allow Japan to rise slowly out of public debt while not incurring the backlash of high interest rates.

Prime Minister Abe outlined a three-step solution to resolve the economic crisis in 2012. First, the Bank of Japan increases inflation followed by increased government monetary spending including a hefty stimulus package. The last step of “Abenomics,” as the Prime Minister’s plan has been dubbed, is to completely restructure the system by implementing tax cuts and other long-term reforms.

Abenomics is essentially the coupling of short-term policies with long-term, structural reforms aimed at strengthening the overall economy. However, the projected benefits of “Abenomics” have yet to be seen and increased taxes have plunged the economy into recession.

Eventually, the system is meant to result in higher wages that will allow an increase in consumer spending over time.

Maxine Gordon

Sources: Yahoo Finance, The Economist, Trading Economics, CFR, Reuters
Photo: Foreign Affairs

homeless-students-us
The number of students who don’t have homes has risen dramatically since the recession. The global financial crisis critically affected a great many families in the United States and has resulted in a 70% increase in the amount of homeless youth, according to data released by the Department of Education (DOE). The amount of students that are actually homeless is quite alarming and startling.

The data from the DOE indicates that overall 1,168,354 students from preschool to the 12th grade are homeless. These numbers give credence to other data from a census showing that nearly a quarter of children under the age of 18 in the U.S. lived in poverty in 2012 due to the recession. This is quite alarming for many advocates. Cara Balardi, the senior policy director of the child policy group First Focus, stated that “it’s a sign that despite what we read in the news about the economy getting better and the recession being over, it’s clear that children and families are still suffering the effects.”

While the number of homeless students in the U.S. is indeed troubling and shocking, it a much larger indication of the very real issues that are occurring all over the world. There are crises happening all over that are affecting huge numbers of people. There is an economic crisis occurring in Europe as well that ties into the world economy. There is even more troubling news about the state of homeless youths in the United States. Experts fear that because of the lack of complete data on other student demographics, the number of homeless youth could actually be much higher.

The homeless student demographic in the U.S. is merely a figment of the much larger issue of homelessness. According to a study done by the National Alliance to End Homelessness and the Homelessness Research Institute, there were over 636,017 homeless people living in the United States in 2011–67,495 of those were veterans. The National Coalition of the Homeless estimates that 16% of the homeless population in the U.S. in 2011 had a sever or persistent from of some mental illness as well. The homelessness crisis is something that must be more efficiently addressed by the United States.

– Arthur Fuller

Sources: HuffPost, U.S. News, NationalHomeless, MSNBC, Washington Post, CNN
Photo: Huffington Post

Poverty_in_Italy
The number of people who are living in poverty in Italy has doubled since 2012. Over a million Italians are unable to afford to eat meat or pay for basic necessities such as heating for their houses. It is estimated that poverty in Italy is higher than it has ever been within the last 16 years.

Relative poverty is considered a family of two members living on a monthly salary of 991 euros or less. Approximately, 12.7 percent of families are living at relative poverty standards.

About eight percent of the Italian population is living in total poverty and unable to meet the minimum acceptable standard of living, according to the National Institute for Statistics (ISTAT).

“It is a reminder, if one were needed, of the severity and scale of Italy’s recession, the longest since the Second World War. Italy maybe the comeback kid of the global sovereign debt markets, but its economy does not look as though it will ever come back – and it was not even strong to start,” said Nicholas Spiro, head of Spiro Sovereign Strategy about ISTAT’s report.

The recession is taking a massive toll, currently plunging approximately 40 percent of Italian youth into unemployment.

Currently, Italy’s rate of unemployment and the amount of young people without education is the highest in Europe since the 1970s, totaling 23.9 percent. This means that one third of people ages 15-29 are either without education or without a job.

Only 58 percent of those who have graduated from college are able to find jobs out of school, which is below the average number of 77.2 percent in European countries.

The number of families living without adequate necessities, such as heating, has reached a staggering 8.6 million, or one family out of five. Unfortunately, it is not uncommon for those same families to not be able to afford a healthy meal consisting of meat once every 2 days, meaning 16.6 percent of families living in poverty in Italy are not receiving an appropriate amount of nutrients.

Poverty in Southern Italy has increased by a whopping 90% over the past five years, a clear indicator of the economic gap between Northern Italy and Southern.

The recession is also affecting the ability of Italian employees to take a holiday break. 50 percent of Italians are not able to enjoy a holiday week off and, in Southern Italy, approximately 69 percent of Italians are unable to enjoy a holiday off. Employee wages are being cut and full-time employment is at record lows.

– Rebecca Felcon

Sources: Reuters, UK Reuters, The Local, CNBC, Global Post
Photo: 

International-Monetary-Fund-report
While 1.2 billion people live in poverty, subsisting on less than $1.25 a day, a recent study published by the International Monetary Fund states that 900 million people are at risk of falling into poverty if another economic crisis occurs.

A significant recession such as the Great Recession that hit the global economy in 2008 could increase the number of people living in poverty by as much as 75 percent.  This would add three times the size of the U.S. population to the world’s poor, greatly increasing the strain on humanitarian and foreign aid organizations.

The IMF report does praise the work that has been done to alleviate global poverty and bolster the world economy, but it cautions against reductions in foreign aid.

While USAID creates new markets and trade partners for the United States, roughly 40 percent of the world’s population remains unemployed. The recent recession exacerbated income inequalities, making it more difficult for the employed to support their families on their existing income.

A subsequent recession could occur if the eurozone, already destabilized by the Cyprus bailout, is further disrupted, so the U.S. government would have to maintain or increase USAID in order to support expansions to its programs.

The number of people currently living in poverty already makes up about 17% of the world’s population, and 900 million more would raise this number to 30 percent.

Katie Bandera

Sources: IMF, The Guardian, The Huffington Post
Photo: Worldwide Center

Charitable_giving_statistics

While individual charitable giving in the United States rose almost 4% last year, corporate donations increase threefold, a sign that charitable giving is mirroring the slow recovery of the economy.

Charitable donations reached their peak in 2007, with $344.5 billion going towards non-profits, however since the recession, levels have fallen sharply and have yet to match 2007. In 2012, individual donations towards the arts, health, and religion, amongst other activities, totaled $228.9 billion, a 3.9% increase from $220.3 billion in 2011. For companies and their foundations, however, the increase was more substantial: 2012 saw a rise of 12.2%, from $16.2 billion to nearly $18.2 billion in 2012.

The data comes from an annual study, published by the Giving USA Foundation and the Indiana University Lilly Family School of Philanthropy. The study used U.S. tax data from the Internal Revenue Service, government economic indicators, and other research. “In 2012, Americans were feeing better – but not great,” said Gregg Carlson, chair of the Giving USA Foundation. In general, donations follow the rise and fall of the economy, and, he said, even though the increase was relatively small, it showed that the “healing continues, with the progress being good.”

Although individual giving constitutes approximately three-quarters of all giving, it is thought that it is still suffering because of widespread unemployment, underemployment, and worries about the economy. However, the upward trend is a positive sign that charitable giving will continue to rise. “One thing we’re happy with is that it’s the third straight year we’ve had an increase,” said Keith Curtis, a fundraising consultant who is vice chairman of Giving USA. Should donations continue to increase at similar rates, it will take an estimated six years to return to the 2007 pre-recession levels.

– Chloe Isacke
Source: Huffington Post, National Public Trust
Photo: Arts Journal

Escalating Tensions in South Africa
In August of last year, police killed dozens of striking workers at a South African platinum mine. Yet, now, nine months later, labor disputes continue to sweep the country.

This unrest is largely fueled by disputes and turf wars between two rival unions, the Association of Mineworkers and Construction Union (AMCU) and the National Union of Mineworkers (NUM). The competition between these two leads to ever-increasing demands as they try to attract new members. For example, NUM is seeking pay rises of up to 60% for its members. The trouble is that these figures are unattainable. South Africa’s currency has plummeted in recent weeks, meaning increased import costs and more rapid inflation.

A lot of factors play into the give and take between industry and the unions. Unemployment in South Africa sits at 25%, although if one were to factor in those unemployed who are not currently seeking jobs, the figure rises to 37%. Strict job protection rules prevent people from stepping in place of union workers. This creates a vicious cycle: jobseekers are kept out of the workforce, thus they must offer their services at higher rates, and then as a result, those privileged few with jobs wind up with higher costs and thus require higher wages. This cycle leads to an escalation in pay, without a corresponding rise in productivity, and perpetuating high unemployment rates.

South Africa’s economy is struggling. Exports to its biggest market, Europe, have slowed drastically due to the recession. Retailers are reporting disappointing figures. Mining output is down and inflation may be on the rise. In addition, industrial strikes, or just the threat of them, could potentially lead foreign investors to take their money, money that South Africa desperately needs, elsewhere.

While increased salaries and better working conditions are crucial elements of stable industry, the demand for them cannot be so high as to engender the failure of the industry as a whole, else all of South Africa may suffer.

– David Wilson

Source: The Economist,Global Post
Photo: Photo Blog

IMF Study Shows Possible Consequences of Economic RecessionThe International Monetary Fund (IMF) released the results of a new study, showing that another global economic recession could throw nearly 900 million people back into poverty.

Although global poverty within the last decade has improved, over 1.2 billion people worldwide still live on $1.25 a day, and the IMF warns that the global economy that initially brought millions out of poverty is still extremely unsteady and at risk of failing.

The report cites global unemployment numbers, which are at a 20-year high, that shows unemployment around the world is now at 40 percent. The report goes on to state that an economic event, such as the recession of 2007-2009, could have significant negative effects on the world’s poorest people. Experts are alarmed with the recent economic woes in Cyprus that caused “eurozone chaos,” and also cite that the U.S. and Europe are close to another economic downturn.

Doubts in the U.S. economy have been exacerbated by the recent sequester, in which spending cuts could lead to hundreds of thousands of job furloughs and losses.

Christina Kindlon

Source: Huffington Post