The Issue of Poverty in Equatorial Guinea - Case Study Example

Student’s Name Course Tutor Date Poverty in Equatorial Guinea Introduction Equatorial Guinea is considered to be one of the wealthier countries in the world for it has a per capita gross domestic product (GDP) which is greater than some of the developed economies such as South Korea and Italy. Yet it is amazing to find that most of the citizens of the country live in abject poverty, with over half of the population lives below a dollar. Despite having abundant natural resources, most notably gas and oil and considering the amount of money such resources bring in, Equatorial Guinea is characterized by chronic hunger, disease, poor sanitation, and crumbling education standards among other problems (Sundiata 12-17).This irony between the country’s poverty and wealth of its people therefore raises a fundamental basic question regarding the money emanating from the sale of the country’s natural resources really benefits the citizens Economic situation of Equatorial Guinea The economy of Equatorial Guinea experienced little growth of about 1.2% of GDP in 2010. This was due to the fall of oil output as well as the main oil-producing fields achieving their maturity. It should however be noted that the economy has been dwindling since 2004, when it recorded a real GDP growth of a record high at about 38%. The year 2010 therefore experienced one of the worst growth rates since the beginning of oil exploitation in the mid-1990s. The recovery is expected to record a growth rate of about 5.0% to 8% in 2011 through 2012. Growth is expected to be sustained from the oil industry due to increasing global demand for hydrocarbons and major infrastructure projects being undertaken (Wood 103,413). Human Development indicators still remain poor with a very low life expectancy pegged at 50 years, which is way less than the average of 54 years for the regional; infant mortality is very high as about 40 percent of children are faced with nutritional problems. Barely a half of the population, estimated to be 44 percent have access to clean potable water. There is widespread disparity in regard to income. Poverty is therefore widespread in the country and according to a poverty profile survey conducted in 2006; about 77 percent of the citizens were living in poverty. Education indicators have also not recorded any impressive figures, which is worse than African averages. It is shown that only about 32 percent enroll in secondary school as opposed to the continental level of about 45 percent (Holmes, Rebecca, 2009),The girl-child enrolment in secondary school is very low at about 23 percent compared to the continental enrolment average rate of about 42 percent. In Africa, the average rates for the proportion of GDP used on health and education is 4.7 and 2.4 percent respectively compared to the country’s levels of only 0.6 and 1.2 percent. The global recovery of oil prices has impacted positively on the country’s budget with the deficit reaching about 2.6% of GDP in the year 2010, up from a record high deficit of about 9.6% of the country’s GDP in 2009. Due to the falling imports, the budgetary account knocked a surplus of 2.7% of GDP in 2010, compared to a 7.6% deficit in 2009; it is projected to remain in surplus of about 2.9% in 2011 and is projected to rise further to about 3.8% next year. The country’s inflation rate was about 4.7% for 2010. Owing to continued increasing capital expenditure levels, inflation will not go soon and is expected to hover around 6.3% in 2011. The country faces no challenges of debts as it has external reserves and a budget surplus. At the end of 2010, the country’s external debt was close to about 5% of GDP (Equatorial Guinea, 2011). Predisposing factors of poverty It is sad to note that government, legal system, economy, and other structures of the country are principally controlled by the de facto President, Teodoro Obiang Nguema Mbasogo as well as small number of family members and friends. The president and his inner circle, most of whom are from the Esangui clan have over the time perfected the art of diverting public resources amassed from natural resources that includes hydrocarbon and land resources. This gross looting of the country’s resources has gone unquestioned for over twenty years, unethically enriching close allies of Nguema, thus making the nation a perfect kleptocracy. In order to manage and benefit from the nation’s resource wealth, Nguema and his associates have established an efficient corruption system. According to Bayart, Ellis and Hibou (24-31), instead of providing and ensuring protection of needed services to the citizens, the corrupt Equatorial Guinea government has put state machinery at the disposal of the ruling class to protect, implement and ratify illegal diversion of state wealth. The Equatorial Guinea government also single-handedly controls the otherwise rich economy by ensuring that the well connected few have limitless access to lucrative business opportunities and contracts. The country lost its candidate status of Extractive Industries Transparency Initiative (EITI) in 2010. Due to that drastic measure, the Nguema government voiced its intention of improving the management of the lucrative oil sector and then apply for readmission (Jedrzej George Frynas, 414), Basically, there is lack of conducive environment for growth of private-sector activities, thus it is one of the worst in World Bank’s ranking in relation to ease of doing business, the Doing Business Index. It therefore slipped some three places in 2011 ranking to position 164 from 161 the previous year. The main constraints to business encompass import licences, construction permits, the perceived rampant corruption, shaky judicial environment, and elaborate procedures. Since over 70% of the Equatorial Guinea population is below the recommended poverty line, questions are therefore raised in relation to the extent to which the nation’s oil revenue has economically aided the citizens. Measuring with precision progress towards attainment of Millennium Development Goals (MDGs) is a very difficult task as a result of deficit in data and the controversy about the population census. The political front has not made matters good for the economic recovery of the nation. The government of Nguema has been in office since 1979 with no fresh ideas as there have been limited signs of political change or opening. Tensions have marred the country scaring away potential investors since an attack was wedged on the presidential palace in 2009. The sentencing to death of some top military commander and state officials for having played a role in the attack has raised questions about dispensation of justice. Currently, the government has embarked on a plan to embrace an open-door policy to attract investments by hosting the African Union summit of 2011 and 2012 Africa Cup of Nations. The plans for a scientific achievement award initiated by Obiang Nguema Mbasogo for the UNESCO have been shelved for the time being following intense criticism by some of the world democracies. This has been attributed to lack of democratic governance as the eldest son of the president who is the serving Agriculture minister, Teodoro Nguema Obiang Mangue, has continued to ascend to power after securing military promotion to the rank of Lieutenant Colonel as well as being the ruling party’s vice-president. According to Jedrzej (413), the country’s oil wealth has been the centre of attention and attraction from the emerging world economies in the recent times. However, the country has no opened up to the lucrative business opportunities. The main emerging trading partner of Equatorial Guinea is China which has started providing credit avenues even though the hydrocarbon industry of the country is still a preserve of the Americans. There is also a paltry presence of Russia, Brazil, Argentina and others. The country also lacks sound administrative structures and capacity to strategically engage with the emerging trading partners on business associations. Social context and development of human resources In regards to (Bayart, Francois, Stephen Ellis and Beatrice Hibou, 1999), despite the country having a sustained growth as well as good influx of revenues, the social situation, which is a main determinant of economic development, is still behind the expectations in Equatorial Guinea. Based on the rankings by human development indicators (HDIs), the country was ranked 127th out of a total of 177 nations surveyed in the 2007 to 2008 Human Development Report released by the United Nations Development Programme (UNDP). This was a slip seven places below the ranking it achieved in 2006. The ranking that places the country amongst nations with average human development was specifically reached due to increase in its per capita GDP as opposed improvements in the usual social indicators such as access to healthcare (The republic of Equatorial Guinea, 2011). According to Leoncio (1-6), out of the country’s total population, about 68 percent were living in abject poverty between 1994 and 2001. In rural areas, the shown to higher than 70 percent compared with about 60 percent recorded in urban centers. According to a report released in relation to a household survey for evaluation of poverty carried out by the government in 2006, it emerged that about 77 percent of the entire population is poor, which essentially translates into a poverty ratio of about 66 percent. This is in fact a pathetic ratio for a nation where GDP was very impressive. The analysis therefore indicates that poverty ravages more women compared to men, and is rampant in rural settings than urban areas. The health care system in the country is in a sorry state. For example, there is high rate of infant mortality even though life expectancy at birth has tremendously increased to about 50 years. The infant mortality is pegged at about 123 deaths per 1 000 live births, and consequently the mortality rate of mothers is approximated to be 680 per 100 000 live births (Holmes 1-8). Malaria still remains the principal cause of death as it claims about 50 percent of children below the age of five linked to this disease. Statistical data has revealed low vaccination coverage against diseases. Only about 32 percent of children have been vaccinated against measles through the vaccination program, about 32 percent tetanus, diphtheria and whooping cough, and about 34 percent against tuberculosis (Wood, Geoffrey,2004),The prevalence rate of HIV and AIDS has reached a record high, thus about 7percent of the citizens between the ages of 15 to 49. The government, with external assistance has embarked a number of initiatives to control the pandemic, thus strengthening programs of health for children and mothers, creation of capacity building forum, and creation of a national AIDS council (Social Security Programs throughout the World: Africa, 2009). Conclusion In conclusion despite the grim situation on the ground, the country can be said to be on a good track of achieving the MDGs of reducing child mortality, universal primary education, improving maternal health, and combating malaria, HIV/AIDS and other diseases. However, it is short of being on the good track of achieving MDGs of empowering women, promotion of gender equality as well as ensuring environmental sustainability. Works Cited Equatorial Guinea. Retrieved on 22October 2011 http://www.oecd.org/dataoecd/12/56/40577917.pdf 1-16 Bayart, Francois, Stephen Ellis and Beatrice Hibou, The Criminalization of the State in Africa, Indiana University Press, 1999. Holmes, Rebecca. Social Protection to Tackle Child Poverty in Equatorial Guinea. (2009, September). Retrieved on 22 October 2011 from Overseas Development Institute: http://www.odi.org.uk/resources/details.asp?id=3794&title=desarrollo-inclusivo-guinea- ecuatorial Social Security Programs throughout the World: Africa 2009. (August, 2010). Retrieved on 22 November 2011 from United States Government, Social Security Administration: http://www.socialsecurity.gov/policy/docs/progdesc/ssptw/2008-2009/africa/index.html Sundiata, K.Ibrahim., Equatorial Guinea: Colonialism, State Terror, and the Search for Stability, Boulder: Westview Press, 1990. The republic of Equatorial Guinea. Retrieved on 22 October 2011from Read More