7 Countries Experiencing Negative Economic Growth
While media and newspapers around the world boast about economic miracles and seemingly ubiquitous economic growth, there are countries on Earth that prosperity seems to forget, and poverty remains a constant challenge. Also, there are countries that fall from grace, stumbling into an economic recession after years of expansion. Here is the list of 7 countries that experienced negative economic growth in 2016:
The once - rising star of Latin American economy has made headlines in recent months, not for new economic accomplishments, but for turbulent political unrests, surging food shortages, soaring inflation and children dying of malnutrition. Venezuela’s economy is highly dependent on oil and related-products production and export. When oil prices skyrocketed over the period from 2006 – 2014, hitting an all-time high of over USD 140 per barrel, Venezuela’s economy bloomed, earning billions of dollars in revenue. Nonetheless, the government’s economic mismanagement and rampant corruption blew those fortunes; Venezuela’s debt to GDP ratio climbed aggressively since 2008, reaching a peak of 73.7% in 2013.
When the oil price crashed, Venezuelans immediately felt the shock. The country’s economy started contracting since 2014 at an increasingly alarming rate, and in 2016, its economic growth rate was -18.6%. With constant political crisis, threat of default, and severe sanctions imposed by Trump’s administration, the prospects for Venezuelan economy remain stark in the near future.
Children are dying in Venezuelan hospitals due to lack of nutrition and medical supplies
Also an oil-dependent economy, Brunei suffered from quite the same fate as Venezuela as oil prices collapsed in 2014. Since 2015, the country’s GDP continuously shrank, remaining at -2.5% in 2016.
However, unlike Venezuela’s cash-strapped government, Brunei benefited greatly from its cash reserves (including gold) of USD 3.5 billion and net foreign assets of USD 13.4 billion, which helped the country to live through the difficult times. Nevertheless, as its oil reserves are expected to run out in 22 years, without new oil discovery, productivity enhancing, and economic restructuring, Brunei is likely to face with economic hardship soon.
The year 2017 marked Brazil’s third year in an economic recession, which has swept through the country since 2014. The recession came amidst Brazilian political crisis when a series of investigations into accusation of corruption at Petrobras - a state-owned oil company - in 2014 revealed involvement of more than 80 high-profile politicians and business leaders. At the peak of the scandal, former President Dilma Rousseff was impeached from office after finding guilty of manipulating governmental budgets, and incumbent President Michel Temer faced allegations of using illegitimate money for his presidential campaign.
As a result, Brazil’s unemployment rate soared from 6.79% in 2014 to a double-digit rate of 12.15% in 2017. Both investors and consumers lost confidence in the economy, resulting in lower overall investment, and in 2016, the country’s GDP shrank at the rate of -3.6%.
Although President Michel Temer managed to be acquitted of all his charges and focused his attention on economic reforms and national unity, impending corruption charges against political parties and Brazil’s largest companies might resurface to undermine future development.
With a GDP per capita of around USD 2,400, ranking 200th in the world, Yemen is among the driest and poorest countries. Yemeni people depended heavily on agriculture to make their living, and about 54-60% of Yemeni population worked in this sector. Trade is another important part of the country’s economy with the value of imports and exports amounting to 60% of its GDP. Chronic hunger resulted from lack of water, land, education and basic infrastructure, religious conflict, and political instability dramatically hinder Yemen’s economic growth. The recent and ongoing conflict makes it even harder for any sustainable business activity to take place in the country, turning Yemen into the world’s largest humanitarian crisis. Although no reliable official economic statistics is available for the country, it is estimated that Yemen’s economy shrank 28.6% in 2015 and 9.6% in 2016.
In 2015, the sorrowful photo of a dead Syrian child drowning near a Turkish resort while attempting to escape from war-torn Syria to Greece shocked the whole world, unfolding the tragic plights of thousands of Syrian refugees who have been forced to flee from the violence, brutality, starvation, and death in their homeland.
The ongoing civil war, which has been waging since 2011, has claimed nearly half a million lives and devastated the country’s economy. Its economic growth rates were -9.9%, -36.5%, and -30.9% in 2015, 2014, and 2013 respectively. The conflict also wrecked havoc on Syrian public and private infrastructures including roads, housing, hospitals, schools, and other infrastructure, and paralyzed most economic activities. Oil export revenues plummeted from $4.7 billion in 2011 to just around $0.14 billion in 2015. Despite cease-fire efforts, the war in Syria remained very complicated, and peace seemed very far away. So is the country’s fragile economy’s chance to recover.
The Syrian immigration crisis explanation
Burundi is located in East Africa, surrounded by Rwanda to the north, Tanzania to the east and south, and the Democratic Republic of the Congo. It is one of the poorest countries in the world with GDP per capita of USD 800, ranking 227th in the world in 2016. Burundi suffered chronically from a decade-long civil war originating from division among its ethnicities (particularly the Hutus and Tutsis), discrimination, and disparity, and with President Pierre Nkurunziza’s contentious third-term in office, the civil conflict has been exacerbated with sinking hopes for imminent reconciliation. In terms of economic prospects, Burundi’s main economic sector is agriculture which was marred by overpopulation, deforestation, soil erosion and ongoing violence. The country’s economic growth rate was -0.6% in 2016.
After gaining independence from Italy in 1951, Libya was able to enjoy a period of relatively stable economic growth thanks to the discovery and subsequent sale revenue from significant oil reserves. The country’s GDP per capita reached its peak of USD 29,630 in 2010.
However, the country’s internal resentment and political turmoil have been brewed for decades under the authoritarian regime led by Muammar Gaddafi who brutally cracked down on dissent and supported international militant groups. In 2011, Libya was caught up in the Arab Spring movement, which after a long and bloody battle overthrew Gaddafi’s government. Nonetheless, since then, the country has been torn, and undergone another Civil War in 2014 among various rival, armed militant group, while the Western-backed government has been too weak to govern and maintain order in the country. Hence, Libya’s economic growth has taken a huge backlash, plunging to -8.1% in 2016.
Does your country experience negative economic growth in 2017?
In 2016, the world’s GDP grew 2.6%. People made numerous miraculous inventions and discoveries in all fields. Yet, it is such a pity that violence, hunger, and poverty still exist, and that millions of people are in daily risk of starvation and related illness. The countries haunted by poverty and economic stagnation share some common traits including high dependence on a single natural resource/ economic sector, corrupted and authoritarian government, and constant political or religious conflict. Reducing poverty is an old-age quest which needs cooperative efforts from people and government around the world to solve.