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Poverty Stricken Australia

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For some people living inside the AU, you might be thinking, “we’re not poverty stricken”. But that’s just because you’re not poverty-stricken, or maybe even the majority isn’t. But some people out there are living in poverty conditions due to the lack of jobs available, or the money they’re receiving. The stresses this causes on families is huge, especially those with younger children.  But who’s fault is it? There are arguments to say that people get themselves into this situation. There are also arguments to say that the government have caused it. This article is going to explore a bit about the causes and effects it has on people across the AU.

Firstly, let’s look at the fact the people of Australia might be the cause. We’re at the minute, a lazy generation. It is easier for some people to sit at home and receive benefits rather than work, even though they’re perfectly capable of working. Which then takes the money away from people who genuinely can’t work due to reasons such as disability. Then there’s the big immigration problem that we’re currently dealing with. Some people are entering the country seeking urgent protection from the countries they have come from. However, they are also taking up a lot of our benefits system rather than working. Is this because it’s easier to, or is it because businesses don’t want to hire? Whichever reason it is, it’s putting a lot of strain on our benefits system. Although it is a lot harder for immigrants to enter AU than it is to other countries.

The second potential cause is the government. For every good decision they seem to make, they make two bad ones. They’re making cuts left right and centre, meaning employers and say for example the public sector is struggling to open up jobs to people. This then circles us back to the point that maybe living off benefits is easier as there are simply not enough jobs going around. But this issue is happening all over the world. Take the UK for example. They’re having massive strains put on the NHS due to funding cuts. If they privatise it, they’ll be no hope left for the people who don’t have the money.

Then there are the effects it’s actually having on the families across Australia. Divorce rates are at an all-time high, as well as domestic violence. A domestic violence lawyer will be dealing with hundreds of more cases than they would have in previous years. But it is easy to see why. When there is no money coming into a household, it’s easy for it to cause arguments that can escalate. It’s also common for people in poverty to turn to alcohol, this can increase the risk of domestic violence cases or marriage breakdowns.

On the whole, you might go through your time not even realising some people in Australia are in poverty. It’s easy for people to assume poverty only relates to people in countries such as India or countries in Africa. But the truth is, it’s happening in pretty much every country to so many families.

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Student @ Advanced Digital Sciences Center, Singapore. Travelled to 30+ countries, passion for basketball.

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India

Iran’s Chabahar Port: How India, Afghanistan, and Iran Gain From it

Manak Suri

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November 11, 2017 was a significant day diplomatically and geopolitically for Iran, India, and Afghanistan. A trilateral cooperation between the three countries saw Afghanistan receive its first shipment of wheat from India which was set in motion by India’s minister of external affairs Sushma Swaraj on October 29 along with her Afghan counterpart Salahuddin Rabbani. The shipment was the first among a series as part of India’s commitment to supply 1.1 million tons of wheat to the people of the country suffering from decades of war and instability. At the center of this achievement lies Iran’s Chabahar port and the trilateral International Transport and Transit Corridor Agreement between the three countries.

The Iranian port in Chabahar: why it is so important

The Iranian port is located in the country’s southernmost city of Chabahar, and has periodically found itself making headlines especially as the Asian powerhouses in India and China compete for influence in the seas to establish trade relationships across Asia, Europe, and Africa. As China pumps more and more investment into its mammoth Belt and Road Initiative (BRI), a modern take on the Silk Route to connect 60 countries across the three continents through land and sea routes, the port of Chabahar has over a period of time found its suitors in prime opponents of the BRI such as India and Japan with the former already investing around USD 500 million in the port. While the idea for the port’s development was first proposed in 1979, it is expected to be fully operational by the end of 2018.

It would be rather unrealistic to assume that the Chabahar port will challenge China’s BRI as a whole to a direct geopolitical contest. However, once fully operational, the port is expected to connect the Persian Gulf and the Indian Ocean with St. Petersburg in Russia and further ahead with Europe through the International North South Transport Corridor or the INSTC. India, Afghanistan, and Iran stand to gain in different ways both collectively and individually through this development in trade routes.

A win-win-win situation

The development of the Chabahar port presents the key for India to reforge an oil based relationship with Iran and to forge trade relations beyond Afghanistan with countries in Central Asia. Once the port is fully developed, it is expected to also carry a larger variety of cargo, including heavy engineering goods and electronics. With a much shorter route to Europe, the time taken to transport goods from ports in India to countries in Europe is expected to be reduced by more than half from the 45 days it currently takes for the cargo to reach its destination. It is also estimated the cost of the deliveries will be reduced by about 30-40%. Moreover, it seems extremely unlikely that India will be a part of the Chinese proposed BRI, given that an integral component of the initiative is the China Pakistan Economic Corrdior (CPEC) that runs through the Kashmir region whose ownership is hotly contested by both India and Pakistan. In that regard, the Chabahar port offers India the opportunity to challenge China at least in some capacity in their ever expanding contest for trade and influence across the globe, by connecting it to rail networks of different countries in Central Asia.

For a landlocked Afghanistan which has no direct access to the seas, the development of the Chabahar port and its agreement with India and Iran coming to fruition holds great significance. The port opens up the country to the world, and provides it with better access to trade, vastly reducing its dependency on its neighbour Pakistan and enabling it to forge even closer ties with India. Pakistan has in the past disallowed India to access the land route to Afghanistan for the provision of aid to the country. Now an alternate route through Chabahar allows for the same to reach the country first from the port to Zaranj, which is adjacent to Afghanistan’s border with Iran, and then further 218 km ahead into the country via the Zarang-Delaram highway.

For Iran, a fully functional seaport in Chabahar appears to be strategically important since it is located away from the historically contested waters of the Arabian Gulf. Recovering now from easing sanctions, Iran looks to climb the geopolitical ladder and reestablish itself in the coming decades. Amid worsening ties with the United States, it has caught the attention of China, Russia, and other countries in Europe and also looks to gain from its relation with India. The Chabahar port may just be the key to put an end to its economic isolation. Even with the United States and India recognising each other as allies, Iran has not yet found any opposition from the US against India’s cooperation with Iran on the port, and that is because the US recognises the benefit that Afghanistan is able to attain from India’s efforts through the Chabahar port.

India, Iran, and Afghanistan share historical civilisational ties and similarities and the same was referenced by Indian minister of external affairs Sushma Swaraj. “This shows the convergence between the ancient civilisations of India, Afghanistan and Iran to spur unhindered flow of commerce and trade throughout the region,” said Swaraj as she flagged off the first shipment of wheat to Afghanistan on October 29.

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In South Africa, Cherry Blossom’s detention fuels investor anxiety

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Port Elizabeth Light house

Port Elizabeth

As various countries in Africa recover from previous crises and build solid reputations as good places to do business, the champions of past times are losing their luster. That is the case for South Africa, previously seen as a reliable business partner for global trade, but which has been causing more and more concern from international investors. The unexpected intervention of Port Elizabeth in an international territorial negotiation may be the straw that breaks the camel’s back.

On the Northwest Atlantic coast, between Morocco and Mauritania, lies Western Sahara, a former Spanish colony. In 1967, Spain withdrew from the area, leaving it to its own fate. The desert strip remained inhabited by local communities, and Moroccan businesses which employ them. An armed separatist group, named the Polisario front, was created in 1973, which aimed at excluding Morocco from the land, making it a separate and sovereign nation. The United Nations classify Western Sahara as a “non-self-governing territory”, something the Polisario front would like to change.

The Saharawi people stretch across the area, all the way to the Algerian side of the border, where refugee camps are home to near 200 000 people, where NGOs decry the shortage of food, water, basic supplies and access to elementary services. Yet, there’s no lack of means, as Magnus Norell, Senior Policy Analyst at the Washington Institute for Near East Policy and the European Foundation for Democracy, points out. “The newly presented report from the EU corruption watch-dog — OLAF — about embezzlement of funds from the EU to Polisario, comes as no real surprise for those of us who have followed the confluence between organized crime and terrorism in West Africa”, he explains. According to Norell, “OLAF shows how Polisario leadership, in cahoots with Algeria, has inflated the number of refugees in the camps in Tindouf in order to increase aid-money and supplies intended for the refugees. Furthermore, good-quality foodstuff like Canadian wheat for example, intended for the refugees were switched to lower-quality provisions, selling the higher quality goods on the open market.”

“Polisario has become even more entangled in various criminal activities, like smuggling and trafficking, says Norell. Even more worrying is the fact that militant Islamists have aggressively targeted the Tindouf-camps in efforts to recruit militants.” From this point of view, life seems better in the western part of the land, where Moroccan companies have heavily invested into the local mining economy, as well as in schools and proper housing conditions for workers.  However, the Polisario front claims that Saharawi people are being robbed of their natural resources and wish to gain complete economic control of the area. UN-held negotiations have been under way for years, and were recently reset in an attempt to find a solution to the dispute. The Polisario front therefore tried to find higher grounds for the negotiation.

Aware that phosphate ore from Western Sahara was transiting through the world on their way towards clients, the Polisario Front sent requests to several courts, hoping to have cargos seized, especially in April 2017. A Panamanian court temporarily held back a Vancouver-bound ship, but released it a few days later, as the case was for the United Nations to rule upon. But a local South African courthouse, in Port Elizabeth, did not declare itself incompetent and decided to judge the case on merits, despite the ongoing UN negotiation.

As a result, the Cherry Blossom, a Danish cargo boat, transporting 55 000 tons of phosphate on its way to New Zealand, has been held captive with 30 hapless sailors on board, for two months, with no solution in sight. The Moroccan government issued a formal complaint through its spokesman, M. El Khafi, describing the self-proclaimed competence of the local South African court as “contrary to international law”.

The Polisario front, on the other hand, celebrated its temporary victory and threatened with further legal action: “The reputational risk for ship owners and charterers is that which results from knowingly participating in the export of resources from a territory widely referred to as Africa’s last colony. This entails possible rejection of trade by parties interested in an end to the occupation of Western Sahara, including commercial enterprise and governments throughout Africa and elsewhere”, as was reported by the Western Sahara Resource Watch, an international NGO favorably inclined towards the Polisario Front and opposed to Morocco.

It’s hard to say whether this initiative could have happened at a worse time. South Africa was recently set back by Standard & Poor’s into the BB+ category, known as speculative, which recommends that investors avoid dealing in the area. In fact, South Africa has been losing speed for some time, while neighboring Tanzania, Mozambique and Rwanda proudly display soaring development rates. Half a century ago, South Africa held a unique geographical position in international trade, with harbor facilities unlike any other in the area. In other words, international business which wanted to deal in the area had little choice but to plant their flag in South Africa.

But things have changed, now that the entire area is developed. In response to the Cherry Blossom caper, businesses who fear being dragged into international dispute they hold no stakes or interest in, have simply decided to stop for refuelling in other countries, in order to secure their activities.  Following the arrest of the Cherry Blossom in South Africa, New Zealand now makes sure the cargo ships refuel safely: “Since the ship was detained in South Africa, Balance Agri Nutrients and their shippers have been finding ways of evading the legal tactics used by the Saharan campaigners.  They and their shippers made sure the carrier, Common Spirit, travelled to New Zealand via Cape Horn, and so avoided South African jurisdiction”, reported Eric Frykberg for RNZ.

South Africa didn’t need this: since 1980, the unemployment rate has more than doubled, hitting nearly one in four adults in 2016. The local currency has been in constant devaluation over that same period: when a rand could buy a dollar in 1980, with change to spare, nearly 16 are necessary to buy a green bill today. According to the IMF “Slow economic growth since 2008 has further aggravated unemployment, real disposable income is stagnant, and households are heavily indebted. […] Stress tests confirm the capital resilience of banks and insurance companies to severe shocks but illustrate a vulnerability to liquidity shortfalls.”, which is exactly what South Africa will likely experience, as businesses and investors avoid the area for fear of being held hostage. This is the price to pay for ludicrous political choices.

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Economy

Africa, The New Industrial Eldorado

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Cape town

With saturated markets in Europe and North America, industrial firms are turning to other parts of the world to bring their craft and technology, and to maintain their growth. And right in the middle of their scope lies Africa. The size and magnitude of industrial and infrastructural project in Africa have been on the steady rise over the past years, enough to turn the continent into a new business hunting ground.

Both because of the cliché of African poverty and because of higher-economic profile countries such as China or Brazil, uninformed readers may believe that Africa’s growth is sluggish, or even dormant. Nothing could be further from the truth, with some African countries posting growth rates neighboring 10%, far beyond the champions of Asia or Latin America. In fact, even when factoring in the sluggish or war-ridden areas of the continent, Sub-Saharan Africa is the fastest developing area in the world. Some of this growth is due to post-conflict reconstruction, some due to renewed political governance. But with the vastest natural resources in a ever-hungrier world, the road is open for Africa to maintain its steady growth and attract increasing attention from foreign investors. Economic expert Krispinana Shirima Krispinana explains (1): “Although concerns exist regarding the negative effects of foreign capital inflows, including Foreign Direct Investment (FDI) and portfolio equity and debt flows, a variety of empirical studies have demonstrated that the inflows stimulate economic growth with the transfer of new technologies and innovations, human capital formation, and integration in global markets.”

With wanting areas of development, and stabilized conditions foreign investors will be the key to unlocking projects. The Ethiopian Herald reports the effectiveness of foreign funds investment (2): “Ethiopia has continued becoming investors’ choice. It is attracting more Foreign Direct Investment (FDI) from time to time. Particularly, textile and garment manufacturing industries, as the sectors are labour intensive, they create millions of job opportunities, and help transfer technology.” Even with the period of peace and stability, little or nothing will happen without FDIs, due to lack of available native funds from the African private sector. A playground is a necessary condition to play, but not sufficient to launch the game.

Business day highlighted this dilemma (3) in its February 2017 analysis : “Between 2010-2016, Africa recorded $22.7billion in private equity transactions, reports the Financial Times (FT), representing only about 1% of global PE investments despite a contribution of roughly 3% to global GDP. Furthermore, the majority of the transaction capital came from a few big investment firms targeting a limited number of deals.” This entails that a vast majority of investments are injected by the public sector, with often reduced efficiency, exposure to graft and dependence upon international aid.

Africa has succeeded in turning its difficulties into opportunities. With less than half the continent electrified, save Northern Africa, lack of access to reliable power has plagued economic development for years. Today, numerous projects are coming out of the ground with off-grid powering solutions. Expansion of water networks or transportation networks, which suffer years of belated maintenance, is currently picking up. “A doubling of Ethiopia’s road network in two decades, has allowed more farmers to bring their produce to market”, the Overseas development Institute published in a recent report (4), stressing the impact on the general economy of the country “On average, Ethiopia’s economy is growing at 10% a year and it is expected to double within the next seven years. This means that by 2025, it will have grown to a middle-income nation. This is as reported by World Bank.” In fact, off-grid power solutions are on the rise in Europe also, where households seek to take part in environmental progress by producing their own power; so, Africa may prove to be the test lab and launching pad of the nascent technology, which Europe will then absorb with its high purchasing power.

Moreover, an increasing number of reforming and corruption-fighting leaders are at work in Africa and getting traction, according to many experts. Patrick Couzinet, director of Veolia Water Technology for Africa, gives great importance to the link between governance and economic perspectives: “In terms of development, economics and politics are one. And we are at the beginning of a new phase of stability, development and growth, with projects ready for every industry to strive on; from communications to transport, and from energy to tourism”. Throughout African 20th century, there has been many examples of development eras snapped short by revolts and instability sparked off by one political group. And when stability was assured, it has often been the silver lining of locked political interests, with a high cost to economic development. The political layer within countries often has more nuisance power than added value: it is difficult for the political establishment to develop by itself, but it can hamper development by itself. According to Patrick Couzinet, this threat is slowly drifting away from Africa, through reforms and structuration.

If anything is to confirm that the African continent is sizzling, it is the increase in foreign investments from China and from Western countries. Several post-crisis reconstruction phases are currently in progress, which yield high growth rates, just as the post-war reconstruction efforts pushed Germany and Japan to the top of the world’s economic ranking. And because the project under way are basic infrastructural equipment, it is very likely that it will bear further economic growth. There will therefore be many business opportunities for British and European businesses, due to Africa’s need for technological transfer.

(1) http://allafrica.com/stories/201702150099.html
(2) http://allafrica.com/stories/201702180276.html
(3)https://www.businessdayonline.com/corporate-data-access-africa-sparking-private-sector-investment-greater-transparency/
(4) https://www.africanexponent.com/post/the-6-fastest-growing-economies-in-africa-36

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