Higher GDP, Higher Unemployment: The Gabon Poverty Rate

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GABON — A central African nation located between Equatorial Guinea and the Republic of Congo, Gabon is a tropical nation of a mere 1.7 million. The country’s main sources of income include agricultural products, such as cocoa, coffee, sugar and palm oil, as well as industrial activity such as petroleum extraction and refinement, manganese and gold.

As a result, Gabon’s average GDP per capita allows its economic status to be considered an upper-middle-income country, the same category as Mexico, Brazil and Russia.

However, with these economic sectors vulnerable to market shocks and low global prices, as well as a dangerously high unemployment rate (particularly among youth populations), the Gabon poverty rate is, therefore, rather high.

An estimated 40 percent of Gabon’s population of 1.7 million is unemployed, with approximately 65 percent of the population living below the poverty line, and earning less than $1 per day. Analysts have urged Gabon to diversify the economy, so as to leave it less vulnerable to price shocks of oil, gold and other minerals, particularly since oil production in Gabon decreases over time.

Eric Etoung, a hairdresser in Libreville, the nation’s capital, says, “Informal jobs are not valued, when they provide a living for so many young people who have no other options. There are many young people who lose interest once they find out that informal jobs are not taken seriously.”

Another reason for which Gabon must diversify its economy to expand beyond oil extraction and refinement is because, all too frequently, young populations are not achieving the skills required to work in the highly competitive Gabonese oil industry. According to the World Bank, the country’s education system is not funded enough to provide the nation’s youth population jobs which would allow them to gradually move away from an agriculture and labour-based economy.

The final main contributor to the particularly high Gabon poverty rate is corruption. According to Transparency International, an organization which seeks to eradicate global corruption, Gabon ranks 101 out of 176 countries studied, with a score of 35 on a scale of 0 (highly corrupt) to 100 (very clean).

By investing in sectors that benefit private rather than public good, political leaders can distort markets, fail to improve valuable infrastructure and neglect to win the trust and respect of their populations, particularly in fledgling democracies.

So, what is the solution to the staggeringly high Gabon poverty rate?

As mentioned previously, Gabon’s education system is not equipped to train young workers to enter a sector of the economy that produces approximately half of the national income: oil. By subsidizing school tuition fees and improving the quality of education itself, the Gabonese government can equip the nation’s unemployed youth with the skills to find a source of personal income.

The second solution to lowering the poverty rate is to diversify the economy beyond oil, gold, manganese and agricultural exports. By expanding the economy to include sectors more focused on services, and less focused on labor, Gabon’s economy will not be as negatively affected by shocks and fluctuations to price changes in the global markets.

Brad Tait
Photo: Flickr

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About Author

Bradley writes for The Borgen Project from Washington, DC. His academic interests include world politics and global development. Bradley was born in British Hong Kong, a political entity which no longer exists!

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