GLOBAL POVERTY
Never accept statistics about global poverty at face value and always remember that each household behind the figures has its own human story to tell. Whatever the difference of opinion on the extent of global poverty, one thing is certain: a significant proportion of the worlds population is excluded from our prevailing economic system of wealth creation. The symptoms of its inherent instability recession, volatile food and fuel prices, and climate change - impact disproportionately on the poor.
Managing very small amounts of money through an unpredictable annual cycle of household fortunes requires exhaustive ingenuity. Family loyalties survive the desperate search for livelihoods, displaying stoicism in the face of exclusion, dignity amongst deprivation.
Evidence of this defiance lies in the controversial images of poverty used by development agencies to raise awareness of their work. We are torn between horror at the inhuman environment and awe at the beauty of the protagonists, especially children.The label of poverty pornsometimes pinned to this otherwise altruistic material provides early warning that poverty is a sensitive subject to be approached with caution.
Extreme poverty strikes when household resources prove insufficient to secure the essentials of dignified living. The consequences of persistent poverty include insufficient food, children out of school, diminution of household back-up resources and exclusion from valuable social networks.
Facts and Trends
Based onWorld Bank figureswhich are used for official global poverty statistics, the number of people living below the international poverty line of $1.25 per day fell from 1.82 billion to 1.37 billion between 1990 and 2005.
Chinese poverty
Chinas economic boom has succeeded in expanding the upper and middle classes but has also left many citizens behind.
The gap between Chinas wealthiest and poorest is constantly increasing; at present the top fifth of wage earners are receiving fifty-percent of the income while the bottom fifth receives less than five-percent. Thirty million Chinese live in absolute poverty while another 60 million live on less than 865 Yuan ($109) per year, which is well below the dollar-a-day standard for poverty established by the World Bank.
The disparity between Chinas rich and poor is particularly severe when the thriving urban centers are compared with the poorer rural areas but is increasingly evident within the cities themselves. It is a common site in Chinese cities, both large and small, to see the disabled begging for change, young children reduced to working as street performers to help support their families and the elderly scouring trash bins for plastic bottles to recycle.
though China accounted for 475 million of the reduction, implying thatpoverty has increasedelsewhere-overthis period.
In India and sub-Saharan Africa, the increase was 21 million and 91 million people respectively. One third of global poverty is located in India and just over a quarter in sub-Saharan Africa.
Expressing poverty as a percentage yields more favourable results due to rising population.
For example, extreme poverty in sub-Saharan Africa fell slightly from 58% to 51% between 1990 and 2005
The wealth of our new millennium has tended to increase inequality rather than reduce poverty. UNDP has reported that, in 2005, the richest 500 people in the world earned more than the poorest 416 million.
The trend of migration from poor farming regions has raised the incidence of urban poverty, especially in the slum zones of the worlds major cities. Nevertheless, poverty remains inextricably linked with the disappointing progress in agriculture in developing countries.
Rural poverty rates are more than double those in cities, often embracing a substantial proportion of the rural population. The most persistent poverty is found amongst ethnic minorities experiencing discrimination, tribal and indigenous people, and nomadic pastoralists on marginal land.
Economic Shocks
These 2005 figures are based on the latest available data and take no account of the economic turbulence of recent years. 2007/08 saw an uncontrolled rollercoaster of food and energy prices as a prelude to the banking collapse and global recession.
The latter half of 2010 has seen a further spike in world food prices.
All key revenue sectors for developing country economies proved vulnerable to the impact of these shocks. Foreign direct investment and exports collapsed, overseas remittances were squeezed and foreign aid budgets have come under pressure.
How these setbacks will impact global poverty figuresremains uncertain. The World BanksGlobal Economic Prospects 2010estimated that the poverty count for 2010 would be 64 million higher than if there had been no financial crisis. Poor households spending a large proportion of their incomes on food and fuel are invariably the most severely affected.
Meanwhile, the richer countries have indulged in an orgy of spending on bank rescues and economic recovery. By contrast, the World Bank has observed that 43 of the 48 poorest countries lacked the financial status necessary to raise funds to execute a fiscal stimulus.
The G20 crisis meeting in April 2009 made a gesture to global poverty by increasing the financial resources of the IMF. Annual concessional lending to low income countries was scheduled to rise to $4 billion in 2010, about the same amount as US subsidies for scrapping old cars.
Meanwhile, the richer countries have indulged in an orgy of spending on bank rescues and economic recovery. By contrast, the World Bank has observed that 43 of the 48 poorest countries lacked the financial status necessary to raise funds to execute a fiscal stimulus.
Causes of Global Poverty
International Governance
A vantage point of history observes that most poor countries were vassals of the great colonial powers of the 19th and 20th centuries. The exit strategies pursued in granting independence cemented geographical boundaries that were inspired more by the politics of empire than the creation of new nation states.
A vantage point of history observes that most poor countries were vassals of the great colonial powers of the 19th and 20th centuries. The exit strategies pursued in granting independence cemented geographical boundaries that were inspired more by the politics of empire than the creation of new nation states.
Too many countries found themselves lacking a critical mass of natural resources or population, landlocked, or seething with irreconcilable ethnic division. A significant proportion of todays global poverty exists in war-torn and post-conflict countries.
The newly independent countries were also denied fair representation in international negotiations, either by exclusion or by lack of capacity. Globalisation has generated great wealth in recent decades but itsgovernance is driven by economic powerrather than democratic principles.
This has been most apparent in global trade rules which have obstructed developing countries from reproducing proven models of industrialisation. Agriculture has been impeded by massive subsidies available to US and European farmers.
National control of domestic development strategies has also been hampered byconditions attached to concessionary loans and grants. Ideological rules imposed for macroeconomic rectitude, such as privatization of urban utilities, have been imposed with insufficient regard for the poor.
National Governance
It has to be said that many developing countries have been the architects of their own misfortunes. Self-perpetuating kleptomaniac governance has drained economic growth through corruption and clientele politics.
Weak democracy further perverts the allocation of resources. Relatively robust economic growth enjoyed by developing countries for much of the 1990-2005 period has not delivered commensurate poverty reduction.
Government spending priorities have been poorly targeted; for example African governments have failed to honour their own commitment to investment in agriculture, the core need of the vast majority of their populations. As long asthe poor are denied a political voice, chronic vulnerabilities such as insecure land rights will remain.
Population growth also places great demands on poverty reduction programmes but is not an underlying cause of poverty. Rich countries have themselves emerged successfully from periods of high population growth that coincided with industrial development.
This has been most apparent in global trade rules which have obstructed developing countries from reproducing proven models of industrialisation. Agriculture has been impeded by massive subsidies available to US and European farmers.
National Governance
It has to be said that many developing countries have been the architects of their own misfortunes. Self-perpetuating kleptomaniac governance has drained economic growth through corruption and clientele politics.
Weak democracy further perverts the allocation of resources. Relatively robust economic growth enjoyed by developing countries for much of the 1990-2005 period has not delivered commensurate poverty reduction.
Population growth also places great demands on poverty reduction programmes but is not an underlying cause of poverty. Rich countries have themselves emerged successfully from periods of high population growth that coincided with industrial development.
Why Should We Care?
There are two philosophical platforms which justify our concern about global poverty. First is theabhorrence of extreme poverty on ethical groundswhich for many springs from religious teaching.
There are two philosophical platforms which justify our concern about global poverty. First is theabhorrence of extreme poverty on ethical groundswhich for many springs from religious teaching.
This finds secular expression in the 1948 Universal Declaration of Human Rights which asserts that everyone has the right to a standard of living adequate for the health and well-being of himself and of his family. The pursuit of poverty reduction as an obligation under human rights law is reflected in the mission statements of many UN agencies.
The second reason why we should care lies in self-interest. In a globalised world,countries large and small are interdependent.
Extreme poverty is the engine of international labour migration which the richer countries are notoriously reluctant to accommodate.
The spread of disease is difficult to control if weak countries lack capacity to participate in an international response. Whilst the risk of terrorism is often complex in origin, extreme poverty is the ideal recruiting ground for its foot soldiers.
From a more positive perspective, neo-liberal capitalism thirsts for a larger world economy. A prosperous Africa would increase the slice of the cake for others. If India could eradicate its mass rural and urban poverty, the country would achieve the economic superpower status it craves.
From a more positive perspective, neo-liberal capitalism thirsts for a larger world economy. A prosperous Africa would increase the slice of the cake for others. If India could eradicate its mass rural and urban poverty, the country would achieve the economic superpower status it craves.
Solutions to Global Poverty
Foreign Aid
Rich country governments are also under pressure to honour their promises to increase aid budgets to 0.7% of national income. As the average for 2009 was only 0.31%, there is considerable scope for improving on the current level of foreign aid, around $120 billion per annum.
Whilst aid fulfils a valuable role in lifting people out of poverty, in building government institutions and in pioneering new ideas for development, it is only a small part of the solution to global poverty.
Tax Recovery:
Multinational corporations active in developing countries are notoriously adept at manipulating their complex inter-company structures to minimise tax burdens.
Foreign Aid
Rich country governments are also under pressure to honour their promises to increase aid budgets to 0.7% of national income. As the average for 2009 was only 0.31%, there is considerable scope for improving on the current level of foreign aid, around $120 billion per annum.
Tax Recovery:
Multinational corporations active in developing countries are notoriously adept at manipulating their complex inter-company structures to minimise tax burdens.
Wealthy elites, too, are quick to transfer assets to secretive tax havens. It has been estimated that poor countries are denied tax revenues from each of these sources exceeding in aggregate the current level of foreign aid.
National Priorities
It is generally accepted that investment in the rural economy is the most cost effective means of reducing poverty. Many governments in Africa have renewed their commitments to raise spending on agriculture.
National Priorities
It is generally accepted that investment in the rural economy is the most cost effective means of reducing poverty. Many governments in Africa have renewed their commitments to raise spending on agriculture.
The broader challenge for budget spending in developing countries is to facilitate an equitable distribution of the rewards of economic growth. The concept of cash transfers as safety net payments for the poor, often conditional on childrens attendance at school and for immunisation, is increasingly favoured. Brazils economic transformation is attributed in part to the success of its family-based income-support programme, known as Bolsa Famlia.
Of equal importance to local communities and individual households is greater powers to control their own affairs. An infusion ofaccountability through democracy and individual rightscreates the environment in which governments come under pressure to end wasteful practices and corruption.
International Priorities
The removal of agricultural subsidies that protect American and European farmers is an important goal for global development campaigners. The issue is however only one aspect of a call for fundamental reform of global governance.
International Priorities
The removal of agricultural subsidies that protect American and European farmers is an important goal for global development campaigners. The issue is however only one aspect of a call for fundamental reform of global governance.
If theinternational rules for conduct of a globalised economyare created by the dominant participants, they are likely to prejudice those yet to gain a foothold. Trade, investment, intellectual property rights, climate change and energy are just some of the sectors where developing countries struggle for just treatment.
Apart from Brazil, the two countries with the greatest success in poverty reduction are China and Vietnam. Their governments have overcome the structural barriers to development by methods considerably at odds with the western model.
They have retained strong state control over key sectors of their economies, permitting only gradual liberalisation. Furthermore, they show little inclination to relax tough restrictions on human rights and democratic freedom. Government ofIndia alsolaunchedpoverty alleviationself - employmentprogramme w.e.f. 1-4-2002
This is a Centrally Sponsored Programme, which aims at generating wage employmentopportunities and food security to the rural poor.The scheme is funded by the Centre and Statein the ratio of 75 : 25.
Further supply of food grains at subsidized prices to the Public under Public DistributionSystem is also a part of poverty alleviation scheme.
Thanks & Regards, Raj. Kumar(courtesy to Peter Armstrong-One world & several other websites)
www.keralites.net |
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