World’s Poorest Countries: India by Population, Sub-Saharan Africans’ by GNI

By: Azhar Azam

Average gross national income (GNI) per capita of about 3 billion people from as much as 50 countries around the world was $1,051 – just above the World Bank’s new country classification of low-income economies $995 for 2018-2019.

The poorest-50 slot is ominously crammed by nations from Sub-Saharan Africa – all poorest-10 with a population of 219.6 million people and average GNI per capita of $397 subsist from this region as well as 18 of them in the poorest-20.

A total of 674.3 million people from 28 countries are living below the World Bank’s minimum GNI benchmark of $995. In terms of population, Ethiopia, DR Congo, and Tanzania are the most effected economies in Sub-Saharan Africa.

Even though the number of people living under extreme poverty ($1.90/day as defined by the World Bank) has declined from 1.9 billion in 1990 to 736 million in 2015 – the proportion of the people in Sub-Saharan Africa is on the rise.

Nigeria is the largest economy in Sub-Saharan Africa. Its economy relies heavily on oil, the main source of government revenues and foreign exchange earnings. But yet the three-fifth of the country’s population lives in extreme poverty.

Oxfam study discovered that in the last year, the wealth of the world’s richest increased by $900 billion at a time when 3.4 billion people – mostly in Africa – have barely escaped the extreme poverty and are living on $5.5/day.

Amazon’s founder Jeff Bezos – the Forbes richest man in world – had fortune of $112 billion in 2018. With this abundance, Bezos can alone sponsor the annual health budget of 110 million people in Ethiopia for 100 years.

In India where people lack basic health needs, Mukesh Ambani – Forbes 19th richest in the world – is the wealthiest Indian who dwells in a 570 feet building. His $1 billion luxurious residence is the most expensive private house in the world.

Not much has been changed in Sub-Saharan Africa over the last 40 years as only 12% of the adults born in Sub-Saharan Africa during 1980s are more educated than their parents, while 65% of the population still has no access to electricity and 37% lacks improved water source.

And the life of the people in the region is bound to deteriorate further. According to IMF, most of the 23 countries that are either in debt distress or at the high risk of suffering a debt crisis are located in Sub-Saharan Africa.

South Asia is the other shook region, despite much improved GNI per capita. The average GNI per capita of more than 1.7 billion people in three most populated South-Asian countries – Bangladesh, Pakistan, and India – is only $1,623. All three are ranked 38th, 41st, and 44th respectively in the poorest economies of the world.

In Bangladesh, many young women in garment factories suffer from repeated urinary tract infections because they are not allowed to go to toilet during working hours. Even in the much-enlightened country like the United States, Oxfam study found that poultry workers were wearing nappies as they were not getting permission for going to the toilet.

Women in Bangladesh are paid much lower wages as well. On average, the lifetime wages of an ordinary Bangladeshi woman is equated with just over 4 day’s earnings of a CEO from one of the top-5 companies the garment sector.

Calling public-private partnership (PPP) in Pakistan ‘a dangerous diversion’, the poverty alleviation group criticized Punjab province government for stop building new public schools in a country where 24 million children are out of school.

In Pakistan PPP schools, 9 out of 10 teachers are females. The mean wage of female teachers, in PPP education sector, was one-fifth of a public school – $52 – which is even less than half the minimum wage in Pakistan.

Deliberated as the largest growing economy in the world, India witnessed a rise of 39% in the wealth of top 1% of its population, which now holds 51% of the country’s total wealth – according to Oxfam’s ‘Public Good or Private Wealth?’.

Billionaires in India rose by 18, to take the billionaires’ tally to 119 in 2018 – ascending their collective wealth from $325.5 billion in 2017 to $440.1 billion in 2018. India is estimated to add 70 new millionaires every day.

Highlighting social inequalities in India, Oxfam said that the low-caste women have much lower life expectancy – almost 15 years – less than the upper-caste women. Those from upper-caste upbringings detest using the same eating utensils as those from low-caste backgrounds.

The levels of public spending on health in the world’s largest democracy are some of the lowest in the world as well. Indeed, the poorest Indian states have higher infant mortality rates than those in Sub-Saharan Africa – despite the fact that the country is one of the top destinations for medical tourism.

Oxfam noted that investing 2% GDP in health and care services could generate 1–3% growth in employment opportunities. By doing so, China created 24 million jobs – 13% more than it would have generated through investments in construction industry.

In its last year’s report, the confederation of 20 independent charitable organizations supposed that over the next 20 years, 500 of the world’s richest people will inherit $2.4 trillion to their heirs – a value that exceeds India’s GDP.

Hong Kong: Key to China’s Grand Economic Plans

By: Azhar Azam

Beijing has ostensibly Okayed the blueprint to create the much-awaited IT-driven economic powerhouse – Greater Bay Area (GBA) – in southern China, which would rival San Francisco’s Silicon Valley and the bay areas of New York and Tokyo.

Guangdong-Hong Kong-Macao GBA is Xi’s another grand plan to link Hong Kong and Macao – the two Special Administrative Regions of China – with nine cities of Guangdong province, establishing a mega science and technology hub by 2035.

The stupendous zone covers 56,500 square kilometers and has a combined population of about 67.6 million people. The total GDP of GBA was estimated at $1.8 trillion in 2017. China is expected to release the documents on February 21.

In October 2017, President Xi inaugurated the world’s longest cross-sea bridge that connects Hong Kong and Macao with Guangdong. The 55-km bridge took at-least 15 years in makings and was completed at the cost of $18.3 billion.

Being the world’s No. 1 cargo center with a global share of 40%, the role Hong Kong will be crucial in the success of China’s economic plans – as it is the most open and international territory in the region.

Once the 99-year lease of the New Territories expired – Britain handed over Hong Kong to China in July 1997 after 150 years of colonial rule, making Hong Kong a Special Administrative Region (SAR) of People’s Republic of China (PRC).

Hong Kong is governed under the principle ‘Once Country, Two Systems’, under which China provides Hong Kong a greater degree of autonomy in all matters except for defense and foreign issues for 50 years from the date of the handover.

The economy of Hong Kong is externally oriented and is highly dependent on the rest of the world. Hong Kong is largely a service-oriented economy, with services sector accounting for more than 90% of the GDP.

With a tiny population of around 7.5 million people – its GDP was $341.2 billion in 2017, more than Pakistan that houses more than 200 million people. Hong Kong’s exports in the first eleven months of 2018 totaled $489.6 billion.

Ranked #1 for the 24th consecutive year by The Heritage Foundation’s 2018 Index of Economic Freedom, Hong Kong is the world’s freest economy. The little tolerance for corruption and transparency has boosted the government integrity in the country.

Due to its strategic location, well-developed infrastructure, and effective international communication network – Hong Kong plays a key role in the trade between Mainland China and the rest of the world.

According to the China Customs, it was also the second-largest exports destination for China in 2018 – accounting for more than 12% or about $302.1 billion of total Chinese exports, behind the haughty Sino economic rival, the United States ($478.4bn).

Most of the Chinese goods exported to Hong Kong are re-exported to other countries. In 2017, the value of goods exported through Hong Kong from and to China was valued at $435.9 billion – nearly 89% of its total re-exports.

Hong Kong does not subsidize its exports. There is no tariff on the goods entering the partially-autonomous country. In 2017, only 1.2% of all the imports (four groups of commodities) were subject to excise duties.

Since the reforms and opening-up of the Mainland (China) – its share of Hong Kong’s global trade has soared significantly from 9.3% in 1978 to 50.2% ($530.7bn) in 2017. China has been Hong Kong’s largest trading partner since 1985.

UNCTAD’s World Investment Report 2018 said that FDI inflows in Hong Kong totaled $104 billion in 2017, second-largest in Asia and third-largest in the world. The United States ($457bn) and China ($136bn) charmed FDI the most.

Hong Kong is the largest source of China’s realized foreign direct investment, with 53.1% of the national total or $1.1 trillion as of 2017. Hong Kong’s major investments are directed towards Guangdong, with estimated cumulative value of $255.9 billion.

As of June 2017, a total 154 Chinese companies had their regional headquarters in Hong Kong in addition to another 196 companies which also had set-up their regional headquarters in Hong Kong to oversee business activities in the region.

As of December 2017, Hong Kong’s stock market was ranked third (3rd) in Asia and sixth (6th) globally in terms of market capitalization – estimated at $4.35 trillion with 2,118 companies listed on Hong Kong Stock Exchange (HKEx).

Hong Kong also jumped two placed to become world # 3 global banking and financial center – five points behind the top New York and just three points behind London, according to GFCI 24 ranking and ratings released in September 2018. Some 22 out of 155 licensed banks in Hong Kong are from Mainland China.

The country’s Hong Kong International Airport is the world’s busiest airport for international cargoes since 2011. As of 2017, it also had the world’s fifth-busiest container port, in terms of container throughput.

Hong Kong, however, is being caught in the fraught Beijing-Washington relations as the 90-day truce from December 1 is yet to result in any kind of settlement between the two countries. And the situation is likely to worsen in the backdrop that the United States sees it as China’s plan to catch-up America.

GCC Countries Power Global Remittances despite Headwinds

By: Azhar Azam

Migrants’ remittances hold key to many developing economies of the world. The expatriates send money back home to provide financial support to their families that also help their native countries to check their balance of payments.

World Bank’s Migration and Development Brief estimates that the global remittances by overseas workers are expected to grow by 10.3% to $689 billion in 2018 – including $528 billion of officially recorded remittances to the developing countries.

TOP REMITTANCE RECIPIENTS

India ($78.5bn) – on the back of its large population, runt employment opportunities, and 16.1 million migrants in the international souk – will continue to remain the largest remittance recipient country in the world for 2018 too.

China ($67.4bn); Philippines ($33.7bn); Mexico ($33.7bn); Egypt ($25.7bn); Nigeria ($25.1bn); and Pakistan ($20.9bn) are the other developing countries receiving largest remittances, the Brief that tracks global migration and remittances flows, said.

In terms of growth, Indonesia was the star performer that flashed a stunning 24% growth in foreign remittances for 2018, after a lackluster and flat 2017 year. Expats’ remittances to Indonesia totaled $11.2 billion in 2018.

GCC COUNTRIES LEAD THE LARGEST REMITTANCE-SOURCE COUNTRIES DESPITE HEADWINDS

Even though the United States was the leading remittances source country with nearly $68bn in expats’ remittances yet the bulk of the foreign remittances ($119bn) in 2017 came from six GCC countries, according to WB Data on Remittance Outflows.

Founded in 1981, GCC – an acronym of Gulf Cooperation Council – is a political and economic bloc of six states in Arabian Peninsula – UAE, Saudi Arabia, Kuwait, Qatar, Oman, and Bahrain who all together controls almost half of the world’s oil reserves.

With $44bn in foreign remittances, United Arab Emirates (UAE) alone was the second-largest remittances provider to the world in 2018. It is mostly a home of international migrants from Bangladesh, India, and Pakistan.

India is the major remittance recipient from the UAE, which alone accounts for about two-fifth of all the foreign remittances. Pakistan and Philippines are the next major remittance receivers from UAE with transfers of below 10% each.

According to UN 2013 estimate, the UAE population was about 9.2 million – attracting 7.8 million of both low and high-skilled international workers. It also has the highest proportion (85%) and fifth-largest stock of international emigrants in the world.

Saudi Arabia ($36.1bn) was the third-largest remittance provider in the world. It is the second-largest Arab state behind Algeria with an estimated population of over 33.4 million inhabitants – including more than 12 million non-Saudis.

Nonetheless, since the introduction of expat levy, the number of foreign workers in Saudi Arabia has constantly been declining. Slapped in July 2017, the tariff is forcing the international migrants to leave the Kingdom.

Moreover, feeling the heat of plummeting oil prices in the international market, remittances by expats in Saudi Arabia fell by 17.6% year-over-year in November while the new Saudi policies compelled to flee another 234,000 workers to leave the country in the Q2-2018.

Kuwait, Qatar, Oman, and Bahrain are the other four GCC countries that are supplying the largest workers’ remittances. As stated by GLMM, the ratio of foreign nationals in these GCC countries is 70%, 89%, 43%, and 53% respectively.

It is this incredible GCC’s ability to absorb expatriates, coupled with oil-enriched landscape and massive consumer spending that has obliged other countries to keep vying intensely for better ties with these Middle-Eastern member states.

However, Knomad – a World Bank initiative on migration & development – notes that employment opportunities in GCC countries have declined in 2017 and 2018; especially in Saudi Arabia due to Kingdom’s nationalization policies.

At the same time, the deployment of South Asian workers in GCC countries, with largest per capita share of foreign workers, is contracting as well. The trend has hit Bangladesh, India, Pakistan, and Nepal the most in the region.

Due to lower demand of foreign workers in GCC countries, the registration of Indian, Pakistani, Bangladeshi, and Nepali labors for overseas employment dropped substantially by 12%, 41%, 25%, and 5% respectively.

Nevertheless, Knomad paper believes that overall outflows from GCC countries are expected to remain buoyant since the United Arab Emirates – the regional largest remittance source – reported 13% growth in the first half of 2018.

GLOBAL REMITTANCES FORECAST

The 30th edition of the international monetary regulator said that due to continued recovery in Russian economy, the Europe and Central Asia region is forecasted to increase by 20% in 2018. The growth in India, Bangladesh, Mexico, and Egypt are likely to have given the impetus to the remittances.

US strong growth aided Mexico to remain the largest recipient of remittances (about 40% of the Latin American and Caribbean region’s total). China, India, Philippines, and Vietnam were the other leading recipients from the US.

RETURN MIGRATION AND REFUGEES

In European Union, there was a surge in the number of refugees, asylum seekers, and undocumented migrants – resulting in increase of stock of detected potential returnees from 1.4 million in 2011 to around 5.5 million in 2018.

The number of undocumented migrants and detected deportees also proliferated from 1.5 million in 2011 to 3.2 million in 2017 in the United States and from nearly 3.9 million between March 2011 and August 2018 in Saudi Arabia.

Low and middle income countries (LMICs) are hosting about nine out of ten refugees. Since August 2017, around one million Rohingya refugees have fled Myanmar to Bangladesh. Large movement of Venezuelan refugees was also witnessed to some countries in South America.

As of 2017, Turkey (3.5 million), Pakistan (1.4 million), Uganda (1.4 million), Lebanon (1.0 million), and Iran (1.0 million) were hosting the largest number of refugees from Syria (6.3 million), Afghanistan (2.6 million), South Sudan (2.4 million),and Sudan (0.7 million), according to UNCHR.

UNDESA estimates that there were about 258 million international migrants (including refugees) worldwide as of 2017 and expected to reach as high as 266 million in 2018. By 2017, the number of worldwide refugees (excluding Palestinians) totaled 19.9 million.