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What is poverty?

What does it mean to be poor? How is poverty measured? Third World countries are often described as “developing” while the First World, industrialized nations are often “developed”. What does it mean to describe a nation as “developing”? A lack of material wealth does not necessarily mean that one is deprived. A strong economy in a developed nation doesn’t mean much when a significant percentage (even a majority) of the population is struggling to survive.

Successful development can imply many things, such as (though not limited to):

• An improvement in living standards and access to all basic needs such that a person has enough food, water, shelter, clothing, health, education, etc;

• A stable political, social and economic environment, with associated political, social and economic freedoms, such as (though not limited to) equitable ownership of land and property;

• The ability to make free and informed choices that are not coerced;

• Be able to participate in a democratic environment with the ability to have a say in one’s own future;

What is poverty? Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom. Poverty is a call to action - for the poor and the wealthy alike - a call to change the world so that many more may have enough to eat, adequate shelter, access to education and health, protection from violence, and a voice in what happens in their communities. Poverty is the state of being without, often associated with need, hardship and lack of resources across a wide range of circumstances.

Why is this? Is it enough to blame poor people for their own predicament? Have they been lazy, made poor decisions, and been solely responsible for their plight? What about their government? Have they pursued policies that actually harm successful development? Such causes of poverty and inequality are no doubt real. But often less discussed are deeper and more global causes of poverty.

Behind the increasing interconnectedness promised by globalization, are global decisions, policies, and practices. These are typically influenced, driven, or formulated by the rich and powerful. These can be leaders of rich countries or other global actors such as multinational corporations, institutions, and influential people.

In the face of such enormous external influence, the governments of poor nations and their people are often powerless. As a result, in the global context, a few get wealthy while the majority struggle.

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Millennium Development Goals

The uneven progress of development is worrying. The flows of trade and capital that integrate the global economy may bring benefits to millions, but poverty and suffering persist. Responding to such concerns, governments and international development agencies have begun to reexamine the way they operate. In September 2000, 189 countries signed the Millennium Declaration, which led to the adoption of the Millennium Development Goals (MDGs).

The MDGs are a set of eight goals for which 18 numerical targets have been set and over 40 quantifiable indicators have been identified. The goals are:

• Eradicate extreme poverty and hunger
• Achieve universal primary education 
• Promote gender equality and empower women
• Reduce child mortality
• Improve maternal health
• Combat HIV/AIDS, malaria, and other diseases
• Ensure environmental sustainability
• Develop a global partnership for development.

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Measuring Poverty

Measuring poverty at the country level
A common method used to measure poverty is based on incomes or consumption levels. A person is considered poor if his or her consumption or income level falls below some minimum level necessary to meet basic needs. This minimum level is usually called the "poverty line". What is necessary to satisfy basic needs varies across time and societies. Therefore, poverty lines vary in time and place, and each country uses lines which are appropriate to its level of development, societal norms and values.

Information on consumption and income is obtained through sample surveys, with which households are asked to answer detailed questions on their spending habits and sources of income. Such surveys are conducted more or less regularly in most countries. These sample survey data collection methods are increasingly being complemented by participatory methods, where people are asked what their basic needs are and what poverty means for them. Interestingly, new research shows a high degree of concordance between poverty lines based on objective and subjective assessments of needs.

Measuring poverty at the global level
When estimating poverty worldwide, the same reference poverty line has to be used, and expressed in a common unit across countries. Therefore, for the purpose of global aggregation and comparison, the World Bank uses reference lines set at $1 and $2 per day (more precisely $1.08 and $2.15 in 1993 Purchasing Power Parity terms). It has been estimated that in 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less than $2 a day. These figures are lower than earlier estimates, indicating that some progress has taken place, but they still remain too high in terms of human suffering, and much more remains to be done.

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Responding to Poverty

Achievement of the Millennium Development Goals (a .pdf Document; 3.12 MB) requires rising above current trends and substantially accelerating progress toward these goals. There is an urgent need for all parties — developing and developed countries, as well as multilateral agencies — to scale up action.

The Global Monitoring Report 2004 (3.12 Mb PDF) suggests areas for particular attention for the three main groups of actors involved.
 

Priorities for developing countries:

• improving the enabling climate for private sector activity
• strengthening capacity in the public sector and improving the quality of governance 
• scaling up investment in infrastructure and ensuring its effectiveness
• enhancing the effectiveness of service delivery in human development

Priorities for developed countries:

• sustaining stable and strong growth in the global economy
• ensuring a successful, pro-development and timely outcome of the Doha Round
• providing more and better aid
• improving policy coherence for development

Priorities for international financial institutions:

• refining and strengthening institutional roles in low-income countries
• furthering progress on the results agenda
• improving selectivity and coordination of agency programs

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Sources:
http://www.globalissues.org/TradeRelated/Poverty.asp
http://en.wikipedia.org/wiki/Poverty 
http://www.worldbank.org/poverty/

More about poverty

Recent Facts of Poverty Half the world — nearly three billion people — live on less than two dollars a day. Read More

Reasons Why does poverty appear? Why so many people live in poverty? Find out here. Read More

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