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How Mobile Banking is Changing Africa

More often than not, adopting a pre-existing idea is easier than creating a brand new one. The mobile phone is an example of this. In recent years, there has been an explosion in the adoption of mobile phones among people living throughout Africa. The impact of mobile phones includes paving a more secure form of mobile banking, and ultimately creating a shift in African culture.

Over the past decade, the use of mobile phones has increased in both developed and developing countries. According to the World Bank, mobile subscriptions have been increasing around the world every year – and African countries have made the biggest gains. In 2009, the US had 89 cellphones per 100 people, and 96 in 2013. Nigeria had 48 per 100 people in 2009, with 73 in 2013. South Africa had 91 cellphones per 100 people in 2009, and 147 in 2013. The greatest strides were made by African states.

According to The Economist, three phones exist for every four people, which describes the accessibility of these products. While mobile devices were initially created to function as telephones, Africans do not use them solely for communication. Just like people with iPhone’s in developed nation, Africans have access to a whole range of activities via their phones, including secure banking and e-payments.

According to Paul Edwards, the CEO of Emerging Markets Payments (EMP), only 15 to 20 percent of Africans have bank accounts. This number contrasts sharply with developed countries, where almost everyone has or is expected to manage a bank account as an adult.

Mobile banking has created a shift. Africa has a different banking culture than that of developed nations.

Furthermore, making e-payments and using mobile banking allows for less corruption. As all money transfers are electrically handled, transactions are instant and, therefore, significantly reduce the number of delays in payments.

Many Africans have used cash to fuel their informal sector jobs, but using less cash and more e-payments allows governments to track tax-able profits. Ultimately this creates a more regulated, tax-paying economy that will generate revenues for the state and further establish self-sufficiency.

The growing popularity of mobile phones displays a tangible shift in Africa’s culture. A public relations company named Portland conducted a survey of Twitter in Africa. They used devices that allowed for geo-location; by examining the hashtags in Tweets, they were able to look into the interests of Africans. Subjects ranged from Nelson Mandela’s death to football to public dissatisfaction with the government.

As Africans continue to use mobile phones for various purposes, the rest of the world will watch to see what this will mean for the development of Africa.

– Christina Cho

Sources: Foreign Policy, The Economist 1, The Economist 2, World Bank, Foreign Policy 2
Photo: CNN

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What is a Food Riot?

Throughout history, food shortages have led to civil unrest. Most notably in recent history, the Global Food Crisis of 2008 spurred an outbreak of food riots around the world. Now, with food prices increasing at the highest rate since 2008, political leaders are concerned that a similar outbreak of food riots may be on its way.

In the beginning of 2014, international food prices rose 4 percent. In the time between January and April, food prices spiked to a level just short of their all-time high in August 2012. The rapid increase is similar to the surge in food prices in 2007 and 2008 that led to so many food riots.

If history repeats itself, the recent food price hikes give government officials adequate reason to worry.

The difficulty with monitoring food riots is that the term is loosely defined. In broad terms, a food riot is some sort of public disturbance raised in response to food’s availability. Interpretations of this definition, however, are as varied as the riots themselves, leading to a great deal of confusion surrounding the topic of food riots.

How severe must the disturbance be to earn the title of a riot? A food riot is generally a violent protest. Participants have been known to harm other citizens or police forces. In return, police forces respond with brutality to control the situation. Some news articles will only cite occasions that have resulted in casualties as food riots.

Other news sources believe that any public response to food-related issues falls in this category. They report even the most peaceful demonstrations as food riots.

Where is the proper balance? How can the media successfully educate the public on these world events without an accepted definition of a riot?

In the wake of recent food pricing inclines, The World Bank has developed a widely accepted definition to guide examinations of these conflicts. Their 2014 Food Price Watch defines a food riot as “a violent, collective unrest leading to a loss of control, bodily harm or damage to property.”

The definition has helped The World Bank determine which episodes in the recent past were actually food riots. A database of food riots between 2007 and 2014 has since been collected, revealing that 51 riots have taken place in 37 countries.

The cause of food riots also prompts confusion. Increasing food prices are not the only cause of riots. In Vietnam, decreasing prices of coffee have resulted in violent outbreaks in the past. A decline in value of major exports can have just as strong of an impact on a nation as unavailability of food and other resources.

The World Bank has also established guidelines for the causes of food riots, saying that they are “motivated by a lack of food availability, accessibility or affordability,” whether directed at the government or other groups.

There are two types of food riots. In a Type 1 incident, the riots are directed at the government. Distress takes its form in public protests outside of government buildings, often in response to rising food prices. It is the most common form of food riot reported in the media because their causes often have international implications.

In a Type 2 episode, rioters demonstrate near food suppliers because they are not politically driven. They attack supply trucks, stores or refugee camps. These riots are more locally focused and occur during times of drastic food shortages.

Defining food riots helps aid organizations determine how to best help areas experiencing food shortages to prevent violent outbreaks. Government officials know how to respond to rising food prices by studying food riots of the past. By alleviating causes of global hunger, aid organizations and government officials can increase peace in underprivileged nations.

– Emily Walthouse

Sources: Food Price Watch, Global Issues, Slate, The World Bank
Photo: NPR

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Africa Faces Climate Adaptation Costs

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14 of the 20 most at risk nations of climate change distresses are African countries. These countries are considered as so susceptible due to the vulnerability of the population as well as the continent’s liability to extreme climate events.

Specifically, these African nations tend to experience extreme losses due to droughts, floods, fires, storms and landslides. Additionally, weak economies, governance, education and healthcare systems make it difficult to tackle or adapt to these problems.

Over 200 governments agree that global warming will exceed 2 degrees Celsius, causing much devastation and hardship, especially in Africa.

For instance, sea-level rise along Africa’s coastline is expected to be 10 percent higher than in the rest of the world, and in Guinea-Bissau, Mozambique and Gambia, up to 10 percent of the population would be at risk of floods each year by 2100.

The cost involved to address this looming danger amounts to billions.

According to the United Nations, adaptation costs faced by Africa range from $7 billion to $15 billion annually by 2020. Moreover, that amount could increase to $350 billion annually by 2070.

Some of the adaptation projects include developing drought-resistant crops, building early warning systems, investing in renewable energy sources, producing better drainage, building sea walls and prioritizing reforestation and desalinization.

According to the World Bank, there is a 40 percent chance of temperatures rising by 3.5 to 4 degrees Celsius if these types of climate change mitigation efforts are not stepped up.

Adaptation measures could, in fact, decrease the impacts of climate change in Africa.

Currently, projections for Africa are grim, even without the 2 degrees Celsius warming. Undernourished Africans are likely to increase by 25 percent to 90 percent, crop production will be reduced as arid areas are expected to increase by four percent, protein needs for over 60 percent of the communities would be jeopardized as fish will decline in African freshwater lakes and the necessary infrastructure for African communities to cope with climate impacts is inadequate. These effects will result in an increase of premature deaths, a rise in healthcare concerns and a decrease in food production.

The adaptation costs required to address the global temperature rise could reach four percent of Africa’s GDP by 2100. Therefore, additional funding is imperative if Africa is to move towards a climate-resilient life saving path. To meet this need, annual funds would need to grow at an average rate of 10 percent to 20 percent per year from 2011 to the 2020’s.

– Caressa Kruth

Sources: Thomson Reuters Foundation, The World Bank, CNN

Poverty and Economic Report: Brazil

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Brazil is Latin America’s strongest economy, but the country’s rate of poverty remains high.

Poverty disproportionately affects the young, which can be seen by the number of children who participate in Brazil’s labor force being at least twice as high as in any other country in Latin America. Furthermore, about a quarter of children under the age of five suffer from chronic malnutrition.

As a whole, about 35 percent of the population live in poverty, on less than two dollars a day, though rural poverty lies at about 51 percent. The International Fund for Agricultural Development (IFAD) stated Brazil has about 18 million poor rural citizens, the largest number in the Western Hemisphere.

Poor communities in Brazil have no readily available access to education and health facilities. Water supply and sewage systems are, furthermore, generally inadequate, explained the IFAD.

According to the World Bank, more than half of poor Brazilians live in the Northeastern part of the country, but rural and urban areas both contribute to the national poverty level.

Moreover, the IFAD states in the Northeastern part of the country, 58 percent of the total population and 67 percent of the rural population live in poverty.

Households that are headed by women make up 27 percent of the rural poor, meaning that women and the youth are the most vulnerable groups in Brazil.

According to the CIA World Factbook, the global financial crisis hit Brazil hard in 2008 when it experienced two quarters of a recession. Global demand for Brazil’s exports had lowered and “external credit dried up.”

On the other hand, in 2010, Brazil was one of the first countries to begin a recovery. According to the World Bank, the strategy to end poverty in Brazil would include “targeting interventions to the Northeast and expanding child care and preschool facilities in poor neighborhoods.” Expanding childcare would further help women participate in the labor force.

If children in Brazil stayed in school longer, their chances of being poor vastly decreased, the World Bank said.

As for increasing minimum wage and unemployment insurance, the World Banks explained these would probably not be effective tools because few of the urban poor have labor cards.

All in all, rural development policies have improved in Brazil, but “they are not as pro-poor as they could be because the rural poor are still at a disadvantage in land markets.”

– Alycia Rock

Sources: The World Bank, Rural Poverty Portal, The Huffington Post
Photo: PBS

 

Poverty Reduction Efforts Must Address Climate Change

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The World Bank has recently warned that global poverty could worsen due to climate change, if left unchecked. Climate change is responsible for a number of negative effects that can exacerbate poverty, including stronger storms and increased global temperatures.

Stronger storms can lead to poverty by causing destruction to homes, businesses, and crops. Likewise, increased temperatures can negatively affect crop yields by worsening droughts.

Overall, the World Bank has predicted a “two degree rise in average global temperatures” and sea levels rising to the point that “portions of Asia will be permanently underwater.” If not mitigated, these effects of climate change could decrease crop yields and displace millions of people, increasing poverty throughout the globe.

Already, 300,000 people die each year from the negative effects of climate change. Those most vulnerable to the impacts of climate change are those who live in extreme poverty and in countries that lack the resources necessary to respond to food shortages and natural disasters. One of the most concerning aspects of a changing global ecosystem is that “climate change threatens to undermine, and even reverse, the progress we’ve made to reduce poverty and promote development” due to increased droughts and destructive storm systems.

In order to prevent an increase in poverty in the future, policies must be developed to reduce the negative effects of climate change now. Technologies are available in both developed and developing countries that produce energy without generating greenhouse gasses. While the green technologies may be more expensive than fossil fuels, their use will help reduce the amount of carbon released into the atmosphere. A reduction of greenhouse gasses in the atmosphere will help reduce climate extremes and the poverty that it could potentially create.

– Jordan Kline

Sources: Mother Nature Network, The Journal, WWF

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Poverty in the Democratic Republic of the Congo

Poverty in the Democratic Republic of the Congo
A country two thirds the size of Europe, and rich in mineral and agricultural resources, the Democratic Republic of the Congo  is also the site of the “deadliest conflict since World War II,” which has killed more than 5.4 million people. The country is recovering from this civil war, but its infrastructure has been nearly destroyed. As a result, poverty in the Democratic Republic of the Congo is widespread and severe, and it requires urgent attention.

 

Breakdown of Poverty in the Democratic Republic of the Congo

 

Effects of the War
Today, the effects of the conflict in the DRC are extremely apparent. Life expectancy is 49 years compared to the global average of 70 years, and 168 children born out of every 1,000 die before reaching the age of five. In 2011, more than a quarter of the population was sickened by malaria. More than 2.3 million citizens remain displaced from their homes within the country, and thousands more have fled to neighboring countries for refuge from the ongoing violence.

Present Challenges
Though these statistics have improved slightly since the peak of the civil war in the mid-1990s, 71 percent of the DRC’s population continues to live below the poverty line. Experts say that the country’s scale is a primary factor causing many to die from “easily preventable conditions” such as malnutrition, malaria, and pneumonia. Humanitarian and aid organizations struggle to serve the DRC’s large population as “renewed rebel activities” in eastern provinces continue to displace large segments of the population.

Addressing Poverty
The World Bank reopened in the DRC in 2001 after operations were suspended for almost ten years because of political instability and corruption in the country. The Bank has committed $3.1 billion to the DRC, aiming to rebuild the country’s infrastructure, decrease corruption in public and private sectors, and rehabilitate the country’s health and education systems.

The United Nations has also been instrumental in the DRC’s recovery. The Security Council established MONUSCO in 1999, supplying peacekeeping troops to the region. In addition to the UN’s peacekeeping efforts, USAID provides emergency assistance to the displaced and has established long-term programs to address food security, democracy, education, the environment, and global health in the DRC.

Results
Since late 2010, USAID has given a comprehensive malaria prevention package in 70 health zones in the DRC, greatly reducing the incidence of malaria in the country. USAID also provides health services to pregnant women with HIV/AIDs, preventing them from passing the virus on to their children. The DRC happens to be one of the five countries in the world that accounts for half of all child deaths, but USAID recently provided health services to more than 12 million people who previously lacked access to healthcare.

The situation in the DRC remains one of the most urgent humanitarian crises in the world, but efforts to relieve the widespread poverty are proving successful. In order to maintain this trajectory, though, continued funding for USAID will be critical.

– Katie Bandera

Sources: BBC, Global Issues, USAID, WHO
Photo: BBC

3 Places Where Climate Change Threatens to Push People into Poverty

3 Places Where Climate Change Threatens to Push People into Poverty
According to The World Bank, climate change threatens to push people into poverty, rolling back “decades of progress” in developing countries and even developed countries. The effects of this would be catastrophic, especially in the world’s poor, particularly in the following areas of the world.

3 Places Where Climate Change Threatens to Push People into Poverty

  1. Sub-Saharan Africa: In less than twenty years, 40% of the land used to grow maize in sub-Saharan African will be unable to grow crops because of lack of water and extreme heat. In addition, the current minimal amount of crops in Southern Africa is likely to affect the production and cultivation of other natural resources. Being one of China’s largest contributors of natural resources, a decrease in the amount of natural resources would mean an increase in the price of goods produced from natural resources.
  2. India: It’s likely that with increasing temperatures India’s monsoon season could be affected. A rise in temperature would increase floods pushing rural populations into overpopulated cities where poverty is already high. Tensions between Pakistan and India are already high and a natural disaster, which creates a high level of displaced citizens, is likely to increase that tension.
  3. Thailand: Another impact of the sea-level rise would be the flooding of important capital cities such as Bangkok. By 2030, if the Earth continues to warm at its current pace, The World Bank projects that increased cyclones and rises in sea levels could completely inundate Bangkok. Destroying homes, commerce and pushing people into rural areas without compensation for the loss of their homes or businesses.

To help aid countries that are threatened by the ill effects of climate change, The World Bank has pledged to increase funding for the prevention of these dangers by $100 billion. However, many criticize this increase as being insufficient citing that New York alone has committed $20 billion to just one city after Hurricane Sandy.

– Pete Grapentien

Sources: Counter Currents, Huffington Post
Photo: Oxfam

Is Urbanization the Answer to Poverty Reduction?

Is Urbanization the Answer to Poverty Reduction?
Is urbanization the answer to poverty reduction? According to a new report released by The World Bank this week, it very well could be.

The World Bank has released the Global Monitoring Report: Rural-Urban Dynamics and the Millennium Development Goals.  The report has found that global poverty rates are lower in cities than in rural areas. Urban centers have a global rate of 11.6 percent whereas the rate is 29.4 percent in rural areas. Additionally, 76 percent of the developing world’s poor live in rural areas. This is a huge discrepancy.

Poverty was not the only rural-urban discrepancy the report found. In South Asia, the report states that in rural areas 28 percent of people have access to sanitation facilities compared to 60 percent in urban areas. Additionally, in the Middle East, North Africa, South Asia, and Sub-Saharan Africa, infant mortality rates are 10 to 16 percent higher in rural areas than in urban areas, and 21 percent higher in East Asia.

The report is summarizing an important conclusion: urbanization is actually helping people escape the cycle of poverty, and helping countries advance towards completion of the Millennium Development Goals. However, urbanization does come with a caveat. If it is not properly managed, it can lead to the proliferation of slums, pollution and crime. These facts have led the report to call for an integrated strategy to better manage the planning-connecting-financing nexus of urbanization. The lowering of poverty in urban areas could be explained in part by the vast majority of goods and services being produced in cities.

The report found that the smaller the town or settlement, the higher the incidence of poverty as well as less access to MGD resources. This is poignant, as the MGD’s will expire in less than 1,000 days.

There is still a great deal of progress to be made on reducing maternal and child mortality, achieving universal primary education and providing access to basic sanitation facilities. Poverty is a huge problem; it is possible that urbanization and globalization could have a positive impact on reducing it as long as it is carefully managed.  This report could provide the final push to motivate countries in the countdown to the expiration of the MGDs.

– Caitlin Zusy
Source: The World Bank
Photo: Tree Hugger