Why are there still so many very poor people in the world and who are they?(i.e: what are their main socio-economic characteristics)?

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Introduction:

‘The elimination of the poor is a key concern of all those interested in the development of poor countries, and this is the bases of main justification for promoting economic growth and development.’ (Stewart et al, 2007) This quote reflects the importance of the poor to the development paradigm as their numbers provide a benchmark for development. Therefore to be able to evaluate who they are impacts policy making and outcomes greatly. It also provides a more accurate picture of the problem of poverty itself and one can perhaps begin to understand the complex question of why there are still so many poor people in the world.

The poverty discourse has changed over time, to illustrate the relative way in which poverty as a concept is understood in development. This inherent subjectivity at the core of the approach highlights its many limitations or constraints in not only trying to understand and measure poverty but also create effective policy for poverty reduction. Consequently, how one understands poverty is fundamental in engaging the question of who the poor are and why there are still so many of them in this world because ultimately that view of poverty as( Shiller,1989) notes, ‘will have a direct bearing on the public policies we pursue’  for eliminating poverty and whether the objective is successful or not.

Mainstream neoclassical economics assumes a positive relationship between economic growth (income) and poverty reduction (Thirlwall, 2003: pg 33). Although this assumption is contested by Marxian economists for example, who noted the insufficiencies of economic growth alone in alleviating poverty, this residual view of understanding poverty is currently dominating methodology and policy space within the poverty debate (Davis & Martinez, 2014). One could arguably say this assumption to an extent;  that influences all aspects of the approach is a contributing factor to why there are still so many poor people in the world as its monetary lens proves to be too narrow in trying to not only identify who the poor are but also create effective policies for poverty reduction.

Nonetheless, whether residual or relational they all face constraints in trying to find effective methods to identify and measure the poor for policy purposes in the form of data collection and the arbitrary context in which they all work. Equally as a more or less universally accepted multidimensional concept, there are key issues within the poverty debate that demonstrate a more complex problem; such as its interrelationship to other structural and relational factors in the form of gender, climate change, employment and labor for example, that act as threat multipliers for the poor attempting to escape poverty.

In this essay we will begin by exploring the four rival approaches to defining and measuring poverty in order to identify the poor. This identification will then be used as a foundation to explore the causes of poverty; its symptoms, who it affects, the reasons why people stay poor and the effectiveness of poverty reduction strategies over the years; It is my hope that this will offer an insight into why there are still so many poor people in the world.

Definition and measurement of poverty:

As noted above the definition of poverty is contested and can therefore be defined in many ways. How we also define and measure poverty is very important as it has serious policy implications for the development agenda. (Laderchi et al,UNDP, pg 10)

‘Poverty is now thought of as a kind of generalized lacking, or a state of being without some essential goods and services’ (Toye,2007). Other sources like the World Bank also echo this definition as poverty is pronounced as ‘deprivation in well-being’. Both are ambiguous; however it reflects its multidimensional nature and creates a broader space for not only how poverty is thought about but also how it should be measured. I will briefly outline each approach to show their different methodologies before i move on to demonstrate the problems they face in trying to measure poverty and therefore identify the poor.

The four approaches within the poverty debate that attempt to measure poverty are;

  • The monetary approach
  • The capability approach
  • The participatory approach &
  • Social exclusion.

The monetary approach measures poverty by using a ‘shortfall’ in consumption or income to create an arbitrary ‘poverty line’ that is used to identify the poor (sender 2003). Its conceptual idea of poverty and empirical methodology is greatly influenced by the classic poverty studies undertaken by Booth and Rowntree in the late 19th century and early 20th century. As pioneers in measuring poverty, a distinction between primary and secondary poverty was determined with the former being recognised as extreme (absolute) poverty and the latter as relative poverty (Riddell, 2004). In practice, the monetary approach recognizes poverty in absolute terms. To illustrate, using basic needs as a threshold, the World Bank estimates global poverty through the usage of an international poverty line. Currently,

Despite acknowledgement of multidimensional nature of poverty, the dominant monetary approach is used in identifying the poor which demonstrates a deficit between the accepted definition of poverty and the methodology used. (Fukuda-Parr, UNDP, pg 7)

Causes of Poverty:

Majoriy of the poor countries of the world have a history of  capital and slaves being mined for the betterment of the then developing countires. This lead the countries under exploitation to develop poor economic conditions and ultimately, to poverty (Davis, 2011). However, there are a few major reasons that lead to conditions of poverty and they are as under:

  • War and political instability
  • National debts
  • Discrimination and social inequality
  • Vulnerability to natural disasters.

Regardless of these factors, it can be said that conditions of poverty are not restricted to a single causal factor, there can be a combination of the aforementioned and several other internal and external factors that makes a country poor (Xue, Wang and Xue, 2013).

Poverty reduction agenda

Decreasing poverty, in all its systems, is the supreme encounter for the global community. Out Of 6.0 billion people in the world, 1.2 billion are amongst..