Matija Šerić
Poverty is a big problem that has always faced humanity. It can be said that poverty is a global disease that is almost impossible to cure at least as long as the current political and economic trends continue. There is no single definition of poverty, but it is a very accurate definition by Investopedia, which claims that poverty is a state “in which a person or community lacks financial resources or necessities for a minimum standard of living”. The Scottish Poverty Information Unit designates people as poor if “they do not have sufficient resources for their material needs and if conditions exclude them from active participation in activities that are considered normal in society…”Individuals and families affected by poverty may be left without adequate housing, clean water, healthy food and medical care. Poverty is a socioeconomic condition that is the result of multiple factors (not just income) such as ethnicity, race, age, gender or access to education. At the same time, poverty is an individual but also a broader social problem. At the individual or household level, the inability to make ends meet can lead to a number of psychophysical problems. At the social level, high poverty rates are an obstacle to achieving economic growth and can cause problems such as unemployment, crime, urban and rural decay, and a general threat to the health of a nation.
Multiple forms of poverty
Extreme poverty is not only poverty characterized by low incomes, but it is characterized by a state in which people cannot afford the most basic necessities of life. It is divided into absolute and relative poverty. Absolute poverty is a condition when a person cannot afford the minimum food, clothing or home. Relative poverty is a condition where the household income is below a certain percentage, usually 50% or 60% of the median income of that country.
Multidimensional poverty (introduced by the UN in its Development Program in 2010) is a type of poverty that shows that poverty is not always solely about income. Sometimes a person’s income may be above the poverty line, but his family does not have access to electricity, does not have a proper toilet, does not have clean drinking water, and no one in the family has completed elementary school. There are 10 key indicators of multidimensional poverty: nutrition, child mortality, years of education, school attendance, sanitary conditions, drinking water, electricity. energy, housing, property and cooking oil. If a guy experiences deprivation in three or more of these standards, he is multidimensionally poor.
Poverty is measured by the government of each country, which collects data through household surveys of its own population. The poverty line (threshold) is the limit below which it is difficult, if not impossible, to afford the basic necessities of life. Poverty lines are not the same in all countries. In countries with a higher income, the cost of living is higher, so the poverty line is also higher. In 33 low-income states, the poverty line is $1.90 per person. In 32 lower-middle-income countries, such as India and the Philippines, the limit is $3.20 per person. In 32 upper-middle-income countries, such as Brazil and South Africa, the limit is $5.50 per person. In 29 high-income states, the limit is $21.70 per person. The international poverty line is currently set at $1.90 a day and constitutes the universal standard for measuring poverty in the world.
Poverty in the world in numbers
When you look at the actual figures, the data on poverty in the world are striking and cannot leave anyone with the slightest sensitivity indifferent. A little over 21,000 people die every day as a result of poverty! 689 million people live in extreme poverty, surviving on less than $1.90 a day. In the United States, 10.5% of the population, or 34 million people, live in poverty. The poverty line for an individual American is $12,880 per year, which is $35.28 per day.
Children and young people make up two thirds of the world’s poor, and women lead the way in most regions of the world. Extreme poverty is increasingly concentrated in sub-Saharan Africa. About 40% of the inhabitants of that region live on less than $1.90 a day. Extreme poverty rates almost doubled in the Middle East and North Africa between 2015 and 2018, from 3.8% to 7.2%, mainly due to the crises in Syria and Yemen. Although countries affected by instability, crises and violence account for approximately 10% of the world’s population, they generate more than 40% of people living in extreme poverty.
It is estimated that by 2030, 67% of the world’s poor will live in vulnerable conditions. About 70% of people over the age of 15 who live in extreme poverty have no school or only basic education. Also, according to UN data, 1.3 billion people in 107 developing countries, which make up 22% of the world’s population, live in multidimensional poverty. About 84.3% of the multidimensionally poor live in sub-Saharan Africa and South Asia. As many as 644 million children live in multidimensional poverty.
However, one should not be pessimistic because as the decades pass, the level of human progress increases exponentially, and poverty experiences a decline. Since 1990, more than 1.2 billion people have emerged from extreme poverty. Currently, 9.2% of the world’s population survives on less than $1.90 a day, compared to nearly 36% in 1990. However, the coronavirus pandemic threatens to reverse years of progress in the fight against global poverty and income inequality, and threatens new generations. According to World Bank estimates, the Covid crisis has driven an additional 97 million people into a state of extreme poverty in 2020. When families are lifted out of poverty, the health and well-being of children improves.
The top 10 countries with the highest poverty rate in the world are: South Sudan (82.30%), Equatorial Guinea (76.80%), Madagascar (70.70%), Guinea-Bissau (69.30%), Eritrea (69% ), Saint Thomas and Princip (66.70%), Burundi (64.90%), Democratic Republic of Congo (63.90%), Central African Republic (62%) and Guatemala (59.30%).
Current and future trends
As part of the UN’s sustainable development policy, global leaders aim to eliminate extreme poverty in the world by 2030. Or at least they officially aim to do so, how much they really want to achieve is a debatable question. What is certainly true is the fact that the greatest successes in eliminating extreme poverty have been achieved in China and India. In December 2020, China declared that it had completely eliminated extreme poverty. In the case of India, strong economic growth reduced extreme poverty rates to 77 million, or 6% of the population in 2019. India, however, experienced a short-term spike in poverty due to the coronavirus. Estimates say that by 2030, India is likely to eliminate extreme poverty to less than 5 million people living below the $1.90 a day mark. By 2030, the only Asian countries unlikely to meet the goal of eliminating extreme poverty are Afghanistan, Papua New Guinea and North Korea.
In other parts of the world, poverty trends are disappointing. In Latin America, poverty fell sharply at the beginning of the 21st century, but has been increasing since 2015, with no significant reduction expected until the end of this decade. In Africa, poverty is on the rise, thanks to rapid population growth and stagnant economic growth. The pandemic has caused an 11% increase in poverty, and African poverty shows little sign of declining by 2030. Trends point to the emergence of a very different form of poverty. While in 1990 poverty was concentrated in low-income Asian countries, current and future poverty is mostly found in sub-Saharan Africa in unstable states affected by political conflict.
By 2030, sub-Saharan African countries will account for 9 of the 10 countries with the highest number of poor. 60% of the global poor will live in fragile and conflict-affected countries. The countries with the largest number of poor in the next decade will become Nigeria, the Democratic Republic of Congo, Mozambique and Somalia. Global efforts to achieve the Sustainable Development Goals by 2030, including the elimination of extreme poverty, will be complicated by the concentration of poverty in these hard-to-reach regions. By 2030, poverty will not only be linked to specific countries, but also to specific places within those countries. Middle-income countries will be home to nearly half of the global poor, a dramatic shift from just 40 years earlier.
Causes of poverty
The most common causes of poverty include: political conflicts, social inequality, lack of (highly paid) jobs, poor education system, climate change, lack of reserves, underdeveloped infrastructure, absence of state social welfare programs, global health crisis, etc.
Political factors
Political conflicts (riots, terrorism, wars) can cause poverty in several ways. The long-term, large-scale violence we see in countries like Syria, Iraq, Libya or Yemen can bring society to a standstill, destroy infrastructure and force people to flee, forcing families to sell or leave all their possessions. In Syria, about 70% of the entire population now lives below the poverty line. This is a country where extreme poverty was once very rare. Even a relatively low level of violence can have a huge impact on communities. For example if farmers are worried that their crops will be burned or looted, they will not invest in planting agricultural crops. Women are also particularly vulnerable in all conflicts because they often become targets of sexual violence while working or being at home.
When considering political factors as the cause of poverty, they should by no means be reduced to the national borders of individual states, because large states can cause poverty in other small states with their policies. A good example is the colonial exploitation of African, Asian and American countries by European colonizers. The age of colonies is over, but superpowers like the USA (but also regional powers like Saudi Arabia, Turkey) can lead other small states into chaos with their decisions, which is a fertile ground for the growth of poverty. What happened after the American interventions in Iraq, Afghanistan or Libya does not need much explaining.
Social inequality
Social inequality is a concept that, along with politics, is the most common generator of poverty. When one group has fewer rights and resources based on its identity compared to other members of the community, it is a social inequality. Social marginalization can be based on nationality, race, age, health, social status, gender, etc. However, the way in which inequality functions as a cause of poverty is multiple. When people are given fewer rights based on their ethnicity, for example, it means that they have fewer opportunities to advance in life. We often see this in cases where women have less rights in terms of financial power than men.
Lack of sources of income and poor education
Being without a job and without the possibility to earn money is a condition that makes people face poverty. It can be assumed that if someone wants to work, he can have a job. This is simply not true, especially in rural parts of the world and in developing countries. Access to productive land is decreasing (often due to conflict, overcrowding or climate change), while the overexploitation of natural resources such as forests, water and minerals is putting increasing pressure on many traditional livelihoods.
For example in the Democratic Republic of the Congo, the majority of the population lives in rural communities where natural resources have been plundered during centuries of colonialism – while conflict over land disputes has forced people to leave the land they rely on for food and sales. Currently, more than half of Congolese live in extreme poverty. While inconsistent work and low-paying jobs can drive a family into poverty, absolutely no work means a family cannot survive without welfare.
A poor education system is a powerful driver of poverty. Not every person without education lives in poverty, but most of the poor do not have education. The question is why? There are many obstacles that prevent children from going to school. Many families cannot afford to send their children to school because they need them to work on the family farms. Many families still do not see the benefit in educating girls. Education is often labeled as a means of escaping poverty because it can open the door to acquiring knowledge and skills to get well-paid jobs. UNESCO estimates that 171 million people could be lifted out of extreme poverty if they adopted basic reading skills. And with even more education, world poverty could be cut in half.
Climate change and lack of reserves
Climate change has the potential to push more than 100 million people into poverty this decade. Climate disasters such as droughts, floods and severe storms have a devastating impact on communities already living in poverty, as many of the world’s poorest populations rely on agriculture, hunting and gathering to eat and make a living. They often have just enough food and property to get them through the coming season, and they don’t have enough reserves to fall back on in the event of a bad harvest. When natural disasters leave millions of people without food, it pushes them further into poverty, and recovery can be even more difficult.
People living in poverty do not have enough reserves to survive the crisis. Natural disasters, wars, diseases represent a disaster for the poor. For example In Ethiopia, cycles of drought have caused harvest after harvest to fail, causing a widespread famine crisis. In order to cope, families will pull their children out of school and sell off everything they have to eat. This can help a family survive one bad season, but not another. For communities that repeatedly face extreme climates or protracted conflicts, repeated shocks can send a family into extreme poverty and prevent it from ever recovering.
Lack of infrastructure and social programs
Lack of infrastructure (roads, bridges, railways, electricity, water and sewage systems, poor internet access) can isolate communities living in rural areas. Such communities do not have the opportunity to go to school, work or the market to buy and sell goods. Traveling long distances for basic services not only takes time but also wastes money, keeping families in poverty. Infrastructural isolation limits opportunities, and without opportunity it is difficult, if not impossible, for many to escape poverty. Some countries have social assistance programs that help the socially disadvantaged in the form of financial assistance, food and health care. Social programs provide support that people can rely on if they lose their jobs. However, not every government can provide this type of assistance to its citizens. Without social programs, there is nothing to prevent vulnerable families from falling into extreme poverty.
Health crises
How diseases, especially pandemics, affect society was clearly seen during the last three years during the corona crisis. However, Covid-19 is not the first health crisis that has put the wind behind poverty. Local epidemics such as Ebola in Africa, cholera in Haiti and Congo or malaria in Sierra Leone have shown how local authorities and national governments can neglect other things while working to stop the spread of disease and provide resources for the work of medical personnel. Everything has its price. In Guinea, Liberia and Sierra Leone, the countries hardest hit by the 2014-2016 West African Ebola epidemic, USD 2.2 billion was lost as a direct result of the outbreak. This includes losses in the real sector, agricultural production and international trade.
A potential solution
In order to eliminate poverty, it is necessary to improve infrastructure facilities and public services such as schools, hospitals, facilitate access to clean water and toilets, electricity, and the internet. People need to be provided with resources to increase their income.
Whatever it is, the solution to reduce global poverty must be sustainable – loyal communities must be involved in every step from planning to its implementation. In order to successfully end extreme poverty in the world, it is necessary to invest a certain amount of money. The UN estimates that the total annual cost of eliminating extreme poverty would amount to about 175 billion dollars, which is less than 1% of the total income of the world’s richest countries. This data shows that the elimination of (extreme) poverty requires only political will, which does not exist, and it seems that it will not exist for a long time.
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