A lot has been done to try to solve the problem of world poverty but sadly these efforts have not worked.
Poverty is a scourge on humanity as almost half the world – over 3 billion people- now live on less than $2.50 a day.
Furthermore, all studies indicate that in terms of income per head, the gap between the richest and poorest countries is widening.
THE MEANING OF POVERTY AND HUMAN DEVELOPMENT
A person is considered poor if his or her consumption or income level is below the minimum level necessary to meet basic needs.
If you fall below this ‘poverty line’ you are either in absolute poverty which refers to deprivation of basic needs or in relative poverty which describes economic inequality within a particular society.
The way to lift people out of poverty is through the process of human development.
This is about creating an environment in which people can develop their full potential and lead productive, creative lives in accordance with their needs and interests.
This implies an improvement in living standards, access to all basic needs- food, water, shelter, clothing, health and education as well as a stable political, social and economic environment including the equitable ownership of land and property (Global Issues – Poverty Around The World, by Anup Shah, November 12, 2011).
THE NATURE OF THE PROBLEM
There is enough food and money to go around so the problem is not one of scarcity in the Malthusian sense. The problem is one of inequality i.e. development has occurred unevenly across the world so that some countries can afford to spend much more money on luxuries than the additional money needed by the poor ones for the basic necessities of life as illustrated by the following charts:-
1. Consider the global priorities in spending in 1998 :
Global Priority – $U.S. Billions
Cosmetics in the United States- 8
Ice cream in Europe -11
Perfumes in Europe and the United States -12
Pet foods in Europe and the United States -17
Business entertainment in Japan – 35
Cigarettes in Europe – 50
Alcoholic drinks in Europe – 105
Narcotics drugs in the world – 400
Military spending in the world – 780
2. And compare that to what was estimated as additional costs to achieve universal access to basic social services in all developing countries:
Global Priority – $U.S. Billions
Basic education for all – 6
Water and sanitation for all – 9
Reproductive health for all women – 12
Basic health and nutrition – 13
(Global Issues – Poverty, Facts and Stats, by Anup Shah, January 7, 2013).
EFFORTS TO REDUCE POVERTY
In September 2000, 189 United Nations member states pledged to halve global poverty by 2015. They set targets that are not being met.
The reason is that in societies the rich use their wealth to acquire political clout and governments do all they can to give their needs top priority while helping the poor is given little attention or none at all.
At this time there are thousands of anti-government demonstrations on the streets of Brazil protesting the high costs of hosting next month’s World Cup whereby a few will line their pockets while the needs of the vast majority are ignored.
Inequality is usually associated with poor societies but it is also occurring in the rich countries. The US, the most developed country, has the largest gap between the rich and the poor of all the developed nations; so between 1979 and 2007 the income of the top 1% grew by 275%, 7 times more than the remaining 99% hence the cries from the “Occupy Wall Street” protesters “We are the 99%” (Global Issues – Poverty, Facts and Stats etc.).
In some cases the very policies designed to fight poverty lead to a worsening of the problem. International Institutions like the IMF and the World Bank, in order to ensure debt repayment impose Structural Adjustment Policies requiring poor countries to reduce the standard of living of their people by reducing spending on social programs.
Furthermore, globalization has only benefited a small elite with the concentration of a small group of transnational corporations that make profits in the poor countries and evade local regulations by exporting them through transfer pricing back to Western capitals. Transfer pricing is the setting of prices among divisions within an enterprise.
The consequence of all this is that wealth is moving in the wrong direction from the poor to the rich instead of from the rich to the poor. In order to reverse this trend developing countries must strive to take control of their own economies and decision-making instead of having policies imposed from outside. Solutions must come from within.
THE SOLUTION IS SELF-EMPOWERMENT
Each society must put production as top priority. It must start in agriculture and any surplus generated can be used to industrialize and make products as foreign exchange earners. Domestic investment must take priority over inward foreign investment which only leaves the developing nations in a state of dependency.
In order to achieve these goals societies must:-
1. develop a skilled workforce through education and training since people are your best resource,
2. be open to new technology by sending students abroad to learn new ways or import experts to teach your own people, and
3. import foreign equipment, adapt it to local conditions and then make it yourself. This is particularly applicable in countries richly endowed with natural resources like the oil-rich Middle East who use their wealth to buy imports instead of making their own products, leading to falling incomes.
This model of development is how the advanced economies became rich as defined in this quote by a merchant banker in the Persian Gulf who said:
“Rich is education…expertise…technology. Rich is knowing. We have money, yes. But we are not rich. We are like the child who inherits money from the father he never knew. He has not been brought up to spend it. He has it in his hands; he doesn’t know how to use it. If you do not know how to spend money, you are not rich. We are not rich.
Without this knowledge, this understanding, we are nothing. We import everything. The bricks to make a house, we import. The men who build them, we import. You go to the market, what is there that is made by Arabs? Nothing. It is Chinese, French, American….it is not Arab. Is a country rich that cannot make a brick, or a motorcar or a book? It is not rich. I think” (see Jonathan Raban – Arabia: A Journey Through the Labyrinth, p.63).
Despite having their own economic problems, the rich industrialized countries are well positioned to cope with poverty because of their advancement in technology and learning. It is in their interest to help the poor to catch up or otherwise those that have been left behind will take what they can’t make and export people, not products.
Victor A. Dixon
May 20, 2014