Bjarne Tellmann is senior vice president and general counsel at GSK Consumer Healthcare, a joint venture that combines the consumer brands of GSK and Pfizer. He speaks to Global Finance about the intersectionality of his work.
Household saving is defined as the difference between a household’s disposable income and its expenditures on goods and services. During the pandemic it rose to historical highs everywhere.
On October 27, Global Finance conducted a Sub-custody Roundtable, moderated by publisher and editorial director Joseph Giarraputo. The Roundtable agenda covered crucial topics in the sub-custody sector including: the global and regional impact on the COVID-19 pandemic on sub-custodians; the effect ...
All these extremely fragile and underdeveloped economies have either recently been through a civil war or are suffering from ongoing sectarian or ethnic conflicts.
Peruvian children climb a hill in Puente Piedra shantytown to gain cellphone reception to continue their schooling amid the COVID-19 pandemic.
The world has enough wealth and resources to ensure that the entire human race enjoys a basic standard of living. Yet people in countries like Burundi, the Central African Republic or the Democratic Republic of the Congo—the three poorest in the world—continue to live in desperate poverty.
How do we measure how poor or wealthy a given nation is compared to another? While GDP per capita is often considered the standard metric, by compensating for differences in living costs and rates of inflation the purchasing power parity (PPP) can better assess an individual’s buying power in a particular country.
Poverty, mathematician Eli Khamarov said, is like punishment for a crime you didn't commit. Dictatorial and corrupt governments can make what could be a very rich nation into a poor one. And so does a history of exploitative colonization, weak rule of law, war and social unrest, severe climate conditions or hostile, aggressive neighbors. It is often hard to pinpoint a single cause of long-term poverty, hence why economists often refer to “cycles” of poverty. For example, a country in debt will not be able to afford good schools, and a poorly educated workforce will be less capable of fixing problems and creating conditions that will attract foreign investment.
The worst social and economic consequences of the coronavirus pandemic, it is clear, will be particularly felt in underprivileged households worldwide. Global inequality, the IMF has warned in its June 2020' World Economic Outlook update, could significantly worsen: “The fraction of the world’s population living in extreme poverty—that is, on less than $1.90 a day—had fallen below 10 percent in recent years (from more than 35 percent in 1990). This progress is imperiled by the COVID-19 crisis, with more than 90 percent of emerging market and developing economies projected to register negative per capita income growth in 2020”. In countries with high shares of informal employment, the IMF adds, lockdowns have led to joblessness and abrupt income losses for many of those workers. Furthermore, widespread school closures will have disproportionately negative effects on earnings prospects for children in low-income nations.
That is particularly true for the world's 10 poorest. All of them are found in Africa, where per-capita purchasing power is on average $1,181. By contrast, in the top 10 richest nations this figure reaches over $90,000. Two of them are within the Sahel region, where persistent and widespread droughts cause food shortages and associated medical and social problems. Four of them are landlocked, putting them at a considerable disadvantage relative to those with access to maritime trade. The decline in commodity prices in recent years has torpedoed their better chances for progress. All have experienced political instability, disputed elections, and ethnic or religious strife. And while all these countries have so far recorded fewer cases of coronavirus than most nations around the world, the spread of the infection is picking up pace rapidly. A large number of cases and deaths, sadly, will go unreported.
Values are expressed in current international dollars, reflecting a single year's currency exchange rates and PPP adjustments. Data source: International Monetary Fund, World Economic Outlook Database, October 2019.
Two are the facts that most people know about Sierra Leone: that it is extremely rich in diamonds, and yet very poor. The main culprit is the brutal civil war that—stemming from the desperate social and economic conditions of the population, the youngest in particular—erupted in 1991 and lasted until 2002. The trade of illicit gems—or “blood diamonds”, as they are often referred to—played a crucial role in perpetuating the conflict. At the same time, given the informal nature of the industry and the high degree of corruption at all levels, local communities had been historically excluded from any economic benefit.
Almost two decades after the end of the war, this nation of less than 8 million is still struggling. Its democratically-elected—although highly contested—governments have failed to meaningfully modernize the economy, which remains reliant on subsistence and small-scale agriculture providing support or employment to about 75% of the rapidly growing population. Poor infrastructure, lack of education and gender inequality contribute to the dire situation.
South Sudan is the newest nation in the world. It was born on July 9, 2011, six years after the agreement that ended the conflict with Sudan, Africa's longest-running civil war. However, violence has continued to ravage this land-locked state of 11.2 million. Formed by the 10 southern-most territories of Sudan and home to around 60 indigenous ethnic groups, a new conflict broke out in 2013 when president Salva Kiir accused his former deputy, rebel leader Riek Machar, of staging a coup. As a result, it is estimated that as many 400,000 people were killed in clashes and nearly 4 million have been internally displaced or fled to neighboring countries.
South Sudan could be a very rich nation, but with oil accounting for almost all of its exports, falling commodity prices and rising security-related costs hammered the country's economy. Outside the oil sector, the majority of the population is employed in traditional agriculture, although violence often prevents farmers from planting or harvesting crops.
Still, people of South Sudan may finally have a shot at living more prosperous lives. After signing a ceasefire and a power-sharing agreement two years ago, last February government and opposition parties formed a unity cabinet led by president Kiir and Machar as first vice president. So far, they have been successful in reducing politically motivated conflicts. Inter-ethnic hostilities, however, have continued in some parts of the country, threatening the fragile agreement.
Africa’s oldest republic has also ranked amongst the poorest nations for the longest time. While the country has enjoyed peace and stability since the ending of the civil war in 2003, its governments failed to adequately address serious systemic problems and structural challenges. To add to the difficulties, this country of just 4.9 million struggled to recover from the decline in commodity prices and the major Ebola epidemic that hit West Africa in 2014.
Yet, Liberians are still holding hope that George Weah—at one time named the world's best footballer—can change things around. Elected as president in 2017 with a program that focused on job creation, economic diversification and investment in critical infrastructure projects, his electoral promises were undermined by the decline in mining exports and rising inflation accompanied by the depreciation of the Liberian dollar. The country—along with Sierra Leone, Niger and two dozen others worldwide—is also on a list of nations on the frontline of impending Covid-19-driven food crises compiled by the Food and Agriculture Organization (FAO) and the World Food Programme (WFP). A vicious cycle of declining production, increasing food prices and reduced farming labor opportunities—the document states—could trigger the worst hunger crisis in generations.
The former Portuguese colony has plenty of arable land and water, and ample energy and mineral resources. Mozambique is also strategically located, as four of the six countries it borders are landlocked and depend on it as a conduit to global trade, and over the past 10 years has often posted average GDP growth rates of more than 5%. Yet, it remains among the top 10 poorest countries in the world, with large sectors of the population continuing to live well below the poverty line. While a 15-year long civil war ended in 1992, severe climate conditions, corruption and political instability never went away. To make things worse, attacks carried out by Islamic insurgent groups in the northern part of the country since 2017 have recently escalated, bringing the total toll to more than 1,000 people killed and another 200,000 displaced. The violence has not stopped French company Total S.A. from securing $15.8 billion in funding for its liquified natural gas project in the region—the biggest foreign direct investment in Africa to date and, hopefully, the start of a new beginning.
One of Africa’s smallest nations, in recent years Malawi has made strides in improving economic growth and implementing crucial structural reforms. Its per capita GDP, which went from about $975 in 2010 to over $1,200 last year, is now projected to surpass $1,500 by 2023. This improved outlook has been overseen by a stable and democratic government that has received considerable financial support from both the IMF and the World Bank. Nevertheless, poverty is still widespread, and the nation’s economy— largely dependent upon rain-fed crops—remains vulnerable to weather-related shocks. As a result, while living standards in urban areas are broadly improving, food insecurity in rural areas is extremely high.
Malawi is a generally peaceful country that has had stable governments since gaining independence from Britain in 1964. However, disputed poll results are far from being an anomaly. Last February, the country's constitutional court annulled former president Peter Mutharika's poll win in May 2019's general elections citing vote tampering. Theologian and politician Lazarus Chakwera, who was sworn in in his place in June, declared that he wants to provide leadership "that makes everybody prosper". The rapid surge in Covid-19 infections recorded recently could put that plan on hold.
With 80% of its this landlocked territory covered by the Sahara desert and a rapidly growing population largely dependent upon small-scale agriculture, Niger is under threat from desertification and climate change. Food insecurity is high, as are disease and mortality rates, and the army’s recurrent clashes with jihadist group and Islamic State (ISIS) affiliate Boko Haram have displaced thousands of people. One of the main drivers of the economy—the extraction of valuable natural resources such as gold and uranium—has also suffered from volatility and low commodity prices.
Nevertheless, the largest nation in West Africa seems to have finally entered a new political and economic transition phase. Wracked by military coups since its independence from France in 1960, in 2011 Niger declared veteran opposition leader Mahamadou Issoufou winner of the presidential polls. Since then, the adoption of a new investment code, improved access to credit and somewhat faster access to water have contributed to a sharp increase in foreign direct investment. Yet, while the country has so far reported a relatively low number of cases, the pandemic has exacerbated pre-existing economic vulnerabilities, prompting the government to review down its growth projections for the year from 6.9% to 1%.
This small East African nation of just 3.5 million is one world’s least developed. With about 65% of its people living in rural areas and 80% of them relying on subsistence agriculture for their livelihoods, Eritrea was ranked 47th among 47 nations in the Sub-Saharan Africa region in the 2020 Index of Economic Freedom of the Heritage Foundation.
In 1962, Ethiopia’s annexation of the country sparked a 30-year conflict for independence that ended in 1991 when Eritrean rebels defeated government forces. The repressive regime of Isaias Afewerki, who is the leader of the sole political party and has governed since the country was formally established in 1993, has instituted a rigidly militarized society where defense spending drains resources for sorely needed public infrastructure. In the meantime, while all land is considered state-owned and property rights are nearly nonexistent, the main drivers of the economy—mining and agriculture—are highly vulnerable to commodity price fluctuations and climatic hazards. Hardly the conditions for economic prosperity.
Since gaining independence from Belgium in 1960, the Congo has suffered decades of rapacious dictatorship, political instability and constant violence. Now the country is ready to turn a page: on 24 January 2019, Félix Antoine Tshisekedi Tshilombo—the son of legendary opposition leader Etienne Tshisekedi—was elected as the new president.
He has his work cut out for him. His controversial predecessor Joseph Kabila—who had governed since succeeding his assassinated father in 2001—is credited for bringing an end to what is commonly referred to as the “Great African War,” a conflict that claimed up to 6 million lives, either as a direct result of fighting or because of disease and malnutrition. However, he did little to improve the lives of people who survived the war: over 60% of the country’s 89 million population still live on less than two dollars a day. With 80 million hectares of arable land, over a thousand minerals and valuable metals under its surface and a citizen median age of just 17, the Democratic Republic of the Congo—the World Bank says—has the potential to become one of the richest African nations and a driver of growth for the entire continent. Political instability, endemic corruption and now the coronavirus pandemic continue to frustrate that potential.
Rich in gold, oil, uranium and diamonds, the Central African Republic is a very wealthy country inhabited by very poor people. However, after claiming the title of the poorest in the world for the best part of the decade, this nation of just 4.9 million is showing some signs of progress.
For the first time since its independence from France in 1960, in 2016 the Central African Republic has democratically elected a president: former mathematics professor and prime minister Faustin Archange Touadéra, who campaigned as a peacemaker who could bridge the divide between the Muslim minority and the Christian majority. While his successful election has been seen as an important step towards national reconstruction, with about 75% of the population living below the poverty line and large swaths of the country still controlled by anti-government rebels and militia groups the path to recovery is still very long.
Growth, however, has somewhat already picked up, driven by the timber industry and a revival of both agricultural and mining sectors. The economy is also benefitting from the partially resumed sale of diamonds, which were found to be funding inter-religious armed groups and placed under international embargo in 2013. Yet, the government has struggled to restore sales and has seen only a fraction of the revenues it once did.
The small landlocked country of Burundi, scarred by Hutu-Tutsi ethnic conflict and civil war, has the rather unenviable distinction of topping the world's poverty ranking. With about 90% of its nearly 12 million citizens relying on subsistence agriculture (and the overwhelming majority of them living on $1.25 a day or less) food scarcity is a major concern: the level of food insecurity, in fact, is almost twice as high as the average for sub-Saharan African countries. Furthermore, the World Bank notes, access to water and sanitation remains very low, and less than 5% of the population has electricity.
How have things come to this, despite the civil war formally ending 15 years ago? Lack of infrastructure, endemic corruption, security concerns: the ingredients leading to extreme poverty are often the usual suspects. Pierre Nkurunziza, the charismatic former Hutu rebel turned president in 2005, had initially managed to unite the country behind him and to start rebuilding the economy. In 2015, however, the announcement that he would run for a third term—which according to the opposition was in violation of the constitution—reignited old disputes. A failed coup attempt followed, hundreds of people died in clashes and tens of thousands were displaced internally or abroad.
Just 55, Nkurunziza died last June after suffering a cardiac arrest. Evariste Ndayishimiye, an ex-general who was handpicked by Nkurunziza to succeed him at the end of his mandate, was sworn in ten days later. Will he bring change or just more of the same?
Gross domestic product (GDP) based on purchasing-power-parity (PPP) per capita.
Values are expressed in current international dollars, to the nearest whole dollar, reflecting a single year's currency exchange rates and PPP adjustments.
Rank
Country
GDP-PPP ($)
1
Burundi
727
2
Central African Republic
823
3
Democratic Republic of the Congo
849
4
Eritrea
1,060
5
Niger
1,106
6
Malawi
1,240
7
Mozambique
1,303
8
Liberia
1,414
9
South Sudan
1,602
10
Sierra Leon
1,690
11
Madagascar
1,699
12
Togo
1,826
13
Haiti
1,878
14
Guinea-Bissau
2,019
15
Burkina Faso
2,077
16
Afghanistan
2,095
17
Kiribati
2,138
18
Yemen
2,280
19
Solomon Islands
2,303
20
Guinea
2,441
21
Rwanda
2,452
22
Mali
2,471
23
Chad
2,480
24
Ethiopia
2,511
25
Uganda
2,631
26
Zimbabwe
2,702
27
The Gambia
2,746
28
Comoros
2,799
29
Vanuata
2,957
30
Nepal
3,318
31
Sao Tomè and Prìncipe
3,387
32
Tanzania
3,402
33
Benin
3,446
34
Micronesia
3,562
35
Tajikistan
3,589
36
Lesotho
3,614
37
Senegal
3,853
38
Marshall Islands
3,868
39
Kenya
3,875
40
Cameroon
3,955
41
Papua New Guinea
3,983
42
Kyrgyz Republic
4,056
43
Sudan
4,072
44
Zambia
4,148
45
Tuvalu
4,277
46
Còte d'Ivoire
4,457
47
Cambodia
4,664
48
Mauritania
4,881
49
Bangladesh
5,028
50
Timor-Leste
5,254
51
Nicaragua
5,290
52
Honduras
5,395
53
Djibouti
5,568
54
Pakistan
5,872
55
Nigeria
6,054
56
Samoa
6,152
57
Tonga
6,486
58
Myanmar
6,707
59
Angola
6,752
60
Ghana
6,956
61
Republic of Congo
7,174
62
Moldova
7,703
63
Cabo Verde
7,729
64
Vietnam
8,066
65
Lao P.D.R.
8,110
66
Bolivia
8,172
67
El Salvador
8,313
68
India
8,378
69
Belize
8,664
70
Guatemala
8,705
71
Nauru
8,999
72
Uzbekistan
9,000
73
Guyana
9,094
74
Morocco
9,235
75
Libya
9,358
76
Philippines
9,471
77
Jordan
9,649
78
Jamaica
9,692
79
Ukraine
9,774
80
Bhutan
9,876
81
Armenia
10,866
82
Eswatini
11,160
83
Namibia
11,266
84
Ecuador
11,742
85
Dominica
12,008
86
Fiji
12,147
87
Georgia
12,227
88
Kosovo
12,322
89
St. Vincent and the Grenadines
12,454
90
Tunisia
12,661
91
Paraguay
13,584
92
South Africa
13,754
93
Sri Lanka
13,897
94
Albania
13,991
95
Indonesia
13,998
96
Egypt
14,023
97
Bosnia and Herzegovina
14,220
98
Mongolia
14,309
99
St. Lucia
14,492
100
Peru
14,719
101
Lebanon
15,049
102
Suriname
15,532
103
Colombia
15,541
104
Algeria
15,696
105
Palau
16,234
106
Brazil
16,462
107
North Macedonia
16,486
108
Grenada
16,717
109
Iran
17,662
110
Iraq
18,025
111
Costa Rica
18,037
112
Botswana
18,558
113
Serbia
18,564
114
Azerbaijan
18,616
115
Barbados
18,921
116
Gabon
19,057
117
Dominican Republic
19,411
118
China
19,504
119
Argentina
20,055
120
Montenegro
20,084
121
Thailand
20,365
122
Turkmenistan
20,411
123
Belarus
20,644
124
Mexico
20,868
125
Equatorial Guinea
21,300
126
Maldives
23,312
127
Uruguay
23,581
128
Bulgaria
24,595
129
Mauritius
24,996
130
Chile
26,317
131
Panama
26,822
132
Croatia
27,729
133
Romania
27,887
134
Turkey
28,264
135
Kazakhstan
28,849
136
Antigua and Barbuda
29,346
137
Russia
29,642
138
Greece
30,252
139
St. Kitts and Nevis
30,578
140
Latvia
31,402
141
Seychelles
31,693
142
Trinidad and Tobago
32,881
143
Malaysia
33,333
144
The Bahamas
33,665
145
Portugal
33,665
145
Poland
33,665
147
Hungary
34,046
148
Estonia
35,852
149
Slovak Republic
36,640
150
Lithuania
36,701
151
Slovenia
38,462
152
Czech Republic
38,834
153
Israel
39,121
154
Puerto Rico
40,067
155
Aruba
39,121
156
Italy
40,470
157
New Zealand
40,943
158
Cyprus
41,407
159
Spain
41,592
160
South Korea
44,704
161
Japan
45,546
162
United Kingdom
46,828
163
France
47,223
164
Oman
47,366
165
Malta
47,405
166
Finland
47,975
167
Belgium
49,529
168
Canada
48,246
169
Bahrain
49,529
170
Australia
50,725
171
Austria
50,931
172
Germany
53,558
173
Denmark
53,882
174
Sweden
54,628
175
Taiwan Province of China
55,078
176
Saudi Arabia
55,704
177
Iceland
56,066
178
Netherlands
58,341
179
San Marino
61,575
180
Hong Kong SAR
64,928
181
United States
65,112
182
Switzerland
66,196
183
Kuwait
66,387
184
United Arab Emirates
69,435
185
Norway
76,684
186
Brunei Darussalam
80,384
187
Ireland
83,399
188
Singapore
103,181
189
Luxembourg
108,951
190
Macao SAR
114,363
191
Qatar
132,886
Source: International Monetary Fund, World Economic Outlook October 2019.