33. Poverty

1. What is Poverty?

Poverty is a socio-economic condition marked by the lack of resources and services necessary for a basic standard of living. It includes severe deprivation of basic human needs such as:

• Food
• Clean drinking water
• Sanitation facilities
• Shelter
• Healthcare
• Education
• Access to information and social services

Poverty is not solely about low income. It involves inadequate access to services that support human well-being and dignity. It is often associated with vulnerability, exclusion, and powerlessness.

2. Absolute vs Relative Poverty

Absolute Poverty:

• Defined as a condition where an individual lacks the income necessary to meet the basic necessities of life—like food, clothing, and shelter—over an extended period.
• Thresholds are usually constant and globally recognized (e.g., the World Bank’s international poverty line, currently set at $2.15 per day).
• It is more common in developing countries where the struggle is with survival itself.
• Example: A person unable to afford a single meal a day or access clean drinking water.

Relative Poverty:

• Occurs when individuals have significantly less income or resources than the average in the society they live in.
• It reflects inequality within a country or community.
• This type of poverty is more commonly used in developed countries where the focus is on the ability to participate in society and afford a standard lifestyle.
• Example: Someone may have a home and food but cannot afford transport, education, or cultural participation, making them relatively poor.

3. Causes of Poverty

There are multiple and interconnected causes of poverty, including:

• Inadequate access to clean water and nutritious food: Leads to poor health and limits productivity.
• Limited job opportunities or livelihoods: Without employment, individuals lack a sustainable source of income.
• Conflict: Wars and violence displace populations and destroy economies.
• Inequality: Gender, caste, ethnicity, and regional disparities contribute to uneven distribution of resources.
• Poor education: Lack of quality education reduces opportunities for better-paying jobs and limits awareness about rights and services.
• Climate change: Natural disasters, floods, and droughts affect agriculture and livelihoods, pushing people into poverty.
• Lack of infrastructure: Roads, electricity, and transportation are essential for economic development. Poor infrastructure hinders access to jobs, markets, and services.
• Weak governance: Limited administrative capacity leads to inefficient service delivery and corruption.
• Illness: Health shocks or chronic diseases push families into poverty due to expensive treatments and loss of income.
• Low wages and job insecurity: Many work full-time jobs but earn below the poverty line due to inadequate labor protections.

4. Vicious Cycle of Poverty

The vicious cycle of poverty is a self-perpetuating system where the effects of poverty feed into its causes, locking individuals and societies into persistent deprivation.

Cycle stages:

• A poor family cannot afford nutritious food → leads to poor health
• Poor health affects children’s ability to attend school or learn effectively
• Poor education reduces employment opportunities
• Low income limits access to better healthcare, nutrition, or housing
• The next generation grows up under the same conditions, continuing the cycle

This circular relationship means that one disadvantage causes another, making it extremely difficult for poor individuals or communities to break out without external intervention.

5. Global Multidimensional Poverty Index (MPI)

The Multidimensional Poverty Index (MPI) is a modern approach to measuring poverty that goes beyond income.

• Developed in 2010 by the Oxford Poverty & Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP).
• Recognizes that income alone is not enough to understand poverty.
• Uses three main dimensions and 10 indicators:

Dimensions and Indicators:

1. Health

• • Nutrition
  • Child mortality

2. Education

• • • Years of schooling
    • School attendance

3. Living Standards

• • • • Cooking fuel
      • Sanitation
      • Safe drinking water
      • Electricity
      • Flooring (dirt or cement floor)
      • Ownership of assets (TV, radio, bicycle, etc.)

An individual is considered “multidimensionally poor” if they are deprived in one-third or more of the weighted indicators.

6. Measuring Poverty

There are various methods used to assess the extent and nature of poverty:

• National Poverty Lines: Defined by governments according to local conditions.
• International Poverty Line: Set by the World Bank ($2.15/day as of 2022).
• Multidimensional indices: Consider health, education, and living standards (e.g., MPI).
• Relative Income Thresholds: Often defined as below 50–60% of the median income in developed nations.
• Consumption vs Income Approaches: Measuring actual consumption may offer a clearer picture in some economies.

7. Policies and Strategies to Reduce Poverty

Governments, international organizations, and civil society must work together to reduce poverty. Some effective policies include:

1. Improving Quantity and Quality of Education

• Better schools, trained teachers, free or subsidized access to education.
• Educated individuals are more likely to find better-paying and stable jobs.

2. Promoting Economic Growth

• Support local industries, invest in infrastructure, encourage entrepreneurship.
• A growing economy generally creates more employment opportunities.

3. Introducing Minimum Wage

• Ensures that even the lowest earners can meet basic living standards.
• Reduces exploitation of labor.

4. Encouraging Foreign Direct Investment (FDI)

• Brings capital, technology, and employment opportunities.
• Helps develop industries and infrastructure.

5. Expanding State Benefits (Means-Tested Benefits)

• Financial support targeted to the poorest groups.
• Includes cash transfers, food assistance, housing support, etc.

6. Land Reform

• Redistribute land to landless farmers.
• Secure land ownership boosts agricultural productivity and household income.

7. Benefits in Kind

• Instead of cash, provide free/subsidized goods/services like school meals, public transport, and healthcare.

8. Universal Basic Income (UBI)

• Regular, unconditional payments to every citizen.
• Aims to ensure a basic standard of living for all.

9. Improving Healthcare Access

• Affordable, universal health coverage prevents health shocks from leading to poverty.
• Promotes long-term productivity.

10. Improving Work Conditions

• Ensures safe, fair, and secure work environments.
• Reduces exploitation, increases worker morale and stability.

Conclusion:

Poverty is a multifaceted problem that extends beyond low income. It affects individuals’ ability to live with dignity, access opportunities, and contribute to society. Understanding its causes, implications, and possible solutions is essential for shaping a more equitable world. Reducing poverty requires coordinated efforts across economic, social, and political dimensions through education, health, inclusive growth, and social protection.