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51. Asia’s Extreme Inequality Crisis: Building back fairer after COVID-19

Author:
Matthew Martin
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
COVID-19 has exacerbated Asia’s crisis of extreme inequality. This is undermining growth and preventing poverty eradication. Asian governments have done almost nothing to combat this rise in inequality and are constrained in their policy choices as debt burdens grow and post-COVID austerity begins. A few Asian governments have done a lot to fight inequality during COVID-19 through equitable public services, progressive taxation and enhanced labour rights, especially for women, but most have not. This paper lays out a comprehensive set of measures that Asian governments, the Asian Development Bank and the international community could use to significantly reduce inequality, eradicate poverty and accelerate growth in Asia.
Topic:
Poverty, Governance, Pandemic, COVID-19, Banking, and Equality
Political Geography:
Asia

52. Our climate future depends on conflict dynamics in Congo

Author:
Peer Schouten, Judith Verweijen, and Fergus Simpson
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
The Congo Basin rainforest – the second largest on earth – absorbs four percent of global CO2 emissions and constitutes a crucial line of defense against cataclysmic climate change. However, a complex mix of illegal resource exploitation and conflict is currently threatening the rainforest. To curb these threats and their global consequenses, we need to understand the interplay between resources, conflict and environmental protection in Congo.
Topic:
Agriculture, Climate Change, Development, Environment, Poverty, Food, Non State Actors, Armed Forces, Inequality, Fragile States, Violence, Police, and Justice
Political Geography:
Africa and Democratic Republic of the Congo

53. Characterisation of Danish agricultural investments in Tanzania and Uganda

Author:
Rikke Broegaard, Helle Monk Ravnborg, Evelyne Lazaro, Teddy Nakanwagi, and David Tumusiime
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Danish Institute for International Studies (DIIS)
Abstract:
This DIIS Working Paper presents key characteristics of each of the six cases including main crop focus, size and business model, as well as types of investors, their investment approach and the factors that motivate them. It also presents the different objectives that the investors have expressed wanting to achieve. As most of the investments involve private funds, it is reasonable to expect that one important goal is to ensure a viable economy in the investment. However, in addition to an economically sound investment, all of the investors behind these six cases have ambitions regarding ways in which they see themselves - through the investment - as contributors towards a positive societal development in the area of the investment. Thus, the paper presents the different ways the investors see their investments contributing to development in the area. The paper is based on interviews with the investors and field work in the areas of investments.
Topic:
Agriculture, Development, Environment, Poverty, Natural Resources, Food, Inequality, Investment, and Land Rights
Political Geography:
Europe, Denmark, Tanzania, and Africa

54. We Will Die In Poverty Before Dying By COVID: Young Adults and Multi-Layered Crises in Afghanistan

Author:
Orzala Nemat, Vidya Diwakar, Ihsanullah Ghafoori, and Shukria Azadmanesh
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Afghanistan Research and Evaluation Unit (AREU)
Abstract:
Afghanistan experienced an extraordinary situation in 2021 that presents a complex example of how an intensified level of conflict and the global COVID-19 pandemic of added to an increasing prevalence of drought due to climate change has been affecting people’s livelihoods from different angles. In pre-August 2021, the country experienced record-level violence across the provinces. This was followed by the gradual fall of districts, provinces and finally the capital Kabul into the hands of the current de facto authorities, the Taliban. Meanwhile, like any other part of the world, Afghanistan also experienced the impacts of the COVID-19 pandemic, which hindered people’s access to jobs, health care and different sources of revenue. Alongside this, the second-worst drought in 4 years (IFRC, 2021) has widely affected the livelihoods of the majority of people who rely on agriculture and livestock as the sole source of income. There has been limited research into how these situations have combined to affect livelihoods and wellbeing in Afghanistan. This article attempts to advance understanding of this issue and promote research that investigates overlapped crises.
Topic:
Poverty, Violence, Pandemic, and COVID-19
Political Geography:
Afghanistan and Middle East

55. Economic and Social Impacts of FDI in Central, East and Southeast Europe

Author:
Doris Hanzl-Weiss and Branimir Jovanovic
Publication Date:
11-2022
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This study assesses the economic and social impacts of foreign direct investment (FDI) in 17 economies in Central, East and Southeast Europe (CESEE). More precisely, we investigate how different FDI inflows have affected various economic and social indicators, such as GDP growth, labour market outcomes, and poverty and inequality, for the period since the fall of communism until 2020. We pay particular attention to FDI that originates from the EU, as well as FDI from Germany and Austria, in order to evaluate whether their effects are different from the effects of FDI from other places of origin. We also examine whether there are differences in the impacts of different types of FDI – equity capital, reinvested earnings and intra-company debt, as well as of FDI that goes to different sectors of the economy – the primary, secondary and tertiary sectors. We find that FDI inflows have had, in general, a positive effect on economic growth in CESEE, and that this effect has been particularly strong for German and Austrian FDI. For total FDI, higher inflows of 1 percentage point (pp) of GDP are associated with 0.19 pp higher GDP growth. For FDI from Germany and Austria, this effect is five times higher – FDI inflows of 1 pp of GDP have led to 0.9 pp higher GDP growth. The positive GDP effects have come from the higher consumption and exports that the FDI has induced. FDI inflows have also reduced unemployment and increased wages, but have had no effects on labour productivity. Total FDI has had only limited effects on inequality and poverty, but FDI from Germany and Austria has been found to reduce both inequality and poverty, likely because they have benefitted mainly lower-income persons. There are differences in the effects of the different types of FDI, with reinvested earnings and equity capital having in general more beneficial effects than intra-company loans. Also, FDI in different sectors of the economy has had different effects, with inflows to the secondary and tertiary sectors having greater effects than inflows to the primary sector. The policy implications of these results are that CESEE economies should not give up on their efforts to attract more FDI, but also that their endeavours should be more targeted, focusing on investments that have greater economic and social impacts. Moreover, foreign investment should not be criticised for the perhaps unsatisfactory economic and social performances of the economies from this region. Instead, the reasons for this should be sought in domestic factors and in the modest growth of the European Union during the past two decades.
Topic:
Development, International Trade and Finance, Poverty, Foreign Direct Investment, Inequality, Economic Growth, and Unemployment
Political Geography:
Europe, Eastern Europe, Germany, and Austria

56. Just Transitions: A Review of How to Decarbonise Energy Systems While Addressing Poverty and Inequality Reduction

Author:
Daniele Malerba
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Germany promotes “just transition” as a guiding principle for the global transition to a socially and environmentally sustainable economy that incorporates the necessary climate, environmental and energy policy measures. This includes the urgent transformation of economies to become emission neutral while ensuring a process whereby poverty and inequality are reduced, and no one is left behind. The German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), the World Bank and the German Federal Ministry for Economic Cooperation and Development (BMZ) worked together to explore ways to implement the concept of just transition in German development cooperation. The two papers that have resulted from this process outline approaches to a “just transition for all” and highlight its potential to reduce poverty and inequality (SDG 1 and SDG 10). In recent decades, the interdependencies between social and ecological development have become clear: negative effects of climate change particularly affect vulnerable and marginalised groups living in poverty. At the same time, social inequalities contribute to an exacerbation of climate change. A just transition must effectively address the consequences at the international, national, regional and local levels. Both papers provide an overview of existing approaches and challenges to foster a “just transition for all”. They offer different but complementary perspectives on an increasingly important complex of topics. This first paper, by DIE, takes a broad perspective by considering the decarbonisation of the energy sector as a whole, outlining the connections between just transition, poverty and inequality, and exploring how to ensure a just transition (for both workers and consumers) through the use of different social protection mechanisms. It argues that it is possible to make energy transitions just, but that properly designed combinations of socio-economic and climate policies are needed. A second paper, by the World Bank, zooms in on the transition away from coal. It lays out key social and community impacts resulting from the decommissioning of coal assets, based on experience gained from World Bank operations and from industrialised countries, and articulates an enhanced approach to supporting the coal transition. Both provide practical recommendations for international development cooperation in general, and for German development cooperation in particular.
Topic:
Development, Poverty, Inequality, Economy, and Decarbonization
Political Geography:
Europe and Germany

57. Declining poverty level in Ghana: Exploring the role of migrants’ remittances

Author:
Daniel Armah-Attoh
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Afrobarometer
Abstract:
Ghana has a long history of citizens migrating to other countries. Many of these migrants send remittances to relations and acquaintances back home, often to help recipients experiencing poverty and a lack of employment and economic opportunities. Empirical studies have established the poverty-alleviation impact of remittances in Africa, including Ghana. This study uses pooled Afrobarometer survey data collected between 2002 and 2017 to assess the relationship between migrants’ remittances and lived poverty in Ghana. Multiple statistical approaches suggest that remittances have a negative and statistically significant impact on lived poverty. We therefore recommend that the government institute policy measures to encourage the use of formal channels for such transfers to enable the country to harness the full development potential, including the poverty-reduction benefits, of migrants’ remittances.
Topic:
Humanitarian Aid, Poverty, Migrants, and Cost of Living
Political Geography:
Africa and Ghana

58. Profile and determinants of lived poverty in Benin

Author:
Romaric Samson and Richard Houessou
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Afrobarometer
Abstract:
The 2030 Agenda for Sustainable Development, launched in 2015, outlines global aspirations and priorities through the end of this decade. Prominently, the first two Sustainable Development Goals (SDGs) call for ending poverty “in all its forms everywhere” and for “zero hunger” (United Nations, 2021a). The proportion of the world’s population living in extreme poverty decreased from 36% in 1990 to 16% in 2010 and to 10% in 2015, but the COVID-19 pandemic is likely to have reversed this trend (Sumner, Hoy, & Ortiz-Juarez, 2020). Benin has had one of the fastest-growing economies in sub-Saharan Africa in recent years (Adegoke, 2019), with per-capita gross domestic product (GDP) growth averaging 3.6% between 2017 and 2019 (World Bank, 2020). But the most recent household survey led by the Institut National de la Statistique et de l’Analyse Economique (2018) estimated that 38.5% of citizens still live in poverty. Are GDP gains translating into better lives for ordinary Beninese? According to Afrobarometer survey findings, “lived poverty” – the experience of going without basic life necessities – has worsened significantly over the past decade in Benin. More than three out of four Beninese face moderate or high levels of lived poverty. Many of these citizens continue to have limited access to the electricity grid, water and sanitation services, and other essential development infrastructure. Most importantly, our analysis shows they often lack the education and employment needed to break the poverty cycle.
Topic:
Education, Poverty, Infrastructure, Inequality, and Job Creation
Political Geography:
Africa and Benin

59. Income and Consumption Inequality in Latin American Countries

Author:
Sungwoo Hong
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The recent large-scale protests across Latin America show the seriousness of this inequality in the region. Accumulated complaints about poverty, inequality, and the gap between the rich and the poor are the root causes of the massive protests in Chile that broke out in October 2019 and the demonstrations in Colombia that started in April 2021. This brief looks into the following questions: 1) how profound is inequality in Latin America, and has there been no notable change in its pattern over time? 2) Are the current conditions of poverty and inequality and patterns of inequality the same across Latin American countries?
Topic:
Poverty, Income Inequality, Consumption, and Income
Political Geography:
South Asia and Latin America

60. The effectiveness of social protection in five African countries through normal times and times of crisis

Author:
Katrin Gasior, Iva V. Tasseva, and Gemma Wright
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We study the effectiveness of social protection benefits in reducing income and consumption poverty in five sub-Saharan African countries—Ghana, Mozambique, Tanzania, Uganda, and Zambia—in normal times and times of widespread economic crisis. Using tax–benefit microsimulation models with representative household survey data, first we estimate the coverage of benefits and their poverty-reducing effects in each country. Second, we study the ability of benefit automatic stabilizers to reduce losses in incomes and consumption in times of crisis, by simulating hypothetical reductions to earnings and employment. Although the coverage of benefits is fairly high in Ghana and Zambia, the poverty-reducing impact of benefits in all five countries is low in normal times. The effectiveness of benefits to stabilize income and consumption in times of crisis is also limited because many benefits are linked to proxies of income, not income itself, or have tight eligibility criteria. Social assistance programmes are typically unresponsive to losses in household earnings and employment and provide limited support for unemployed people.
Topic:
Poverty, Crisis Management, Economic Crisis, and Income
Political Geography:
Uganda, Africa, Mozambique, Tanzania, Zambia, and Ghana