Fifth week Topic: Poverty, inequality and

development Date: September 01 2010 Tutor: Manzoor Ali Isran

Factsheet about poverty:◦ 1.2 billion people lived in poverty in these seven major

areas

◦ They are: Latin America and the Caribbean; the Middle East and North Africa; Africa—Sub-Sahara; Europe, and Central Asia; East Asia and the Pacific; South Asia; and North America.

◦ Nearly 1 billion people in the world are illiterate.

◦ Approximately 1.3 billion people lack safe water.

◦ Over one-half of the developing world's population (2.6 billion people) is without access to adequate sanitation.

More than a billion people still live on less than $1 a day (World Bank 2001).

The majority of the world's poor people are women and children.

Most of these reside in rural areas.

More than 110 million children of school age do not attend school.

Easily preventable diseases (pneumonia, diarrhea, malaria, and measles) account for the deaths of nearly eleven million children under the age of five each year.

Between 600 million and 700 million children, representing about 40 percent of all those in the developing world, are poor.

Introduction

What is poverty? How is it measured? Who are the poor? Poverty is generally categorized as material deprivation

Generally, poverty is defined as the state of being poor or deficient in money or means of subsistence (Barker 1995).

Or it is a state of living below the line defined by the government or International institutions like world Bank.

Amartya Sen defined poverty as a lack of ability to live or survive

According to him, there is no single definition of poverty, it is multifaceted. It has social, economic and biological reasons.

1. Resource Poverty2. Capacity Poverty.

Measuring Poverty. Human Poverty Index , according to which human poverty is measured in terms of three key deprivations (Survival, knowledge, economic provisions):

1. Life (30% of people in the developing countries are unlikely to live beyond 40 years of age)

2. Basic Education: ( measured by the percentage of adult who illiterate, with an emphasis on educational deprivations for girls)

3. Health (measured by the percentage of people with out access to health services and safer water plus the percentage of children who are underweight)

Low HPI indicates small percentage of population is in the state of deprivation

Higher HPI is reflective of greater deprivation.

Magnitude of poverty results from the combination of low per capita income highly unequal distribution of resources.

Higher per capita income, the low number of the people in absolute poverty.

Absolute poverty

Absolute poverty measures the number of people living below a certain income threshold or the number of households unable to afford certain basic goods and services. For example $1 dollar a day fixed by World Bank

Relative poverty Poverty defined by reference to the overall standard of

living in any given society.

The deprivation of some people in relation to those who have more

Identification of poverty groups

◦ Rural Poverty. this kind of poverty is prevalent in the men, women and children of minority ethnic groups and indigenous population.

◦ Data across the third countries show that two-third of the very poor scratch out their livelihood from subsistence agriculture either as small farmers or as low paid farm workers.

◦ some of the remaining one-third are also located in the rural areas but engaged in petty services and other are located on the fringes and in marginal areas of urban centres where they engage in various forms of self-employment such street-hawking, trading, petty services and small scale commerce.

◦ In Asia and Africa 80% of poor are living in rural areas and about 50% in Latin America.

women◦ Because of uneven distribution of resources and unequal

entitlement to resources, they are more likely to be poor and malnourished and less likely to receive medical services, clean water, sanitation and other benefits.

◦ Female headed households are worst hit in terms of poverty.

◦ Because of lower earning capacity of women and their limited control over their spouses’ income all contribute to disturbing phenomenon.

◦ Other factor, women have less access to productive assets – education, employment, social security, and government employment programmes.

◦ Generally it has been observed that women in female-headed house holds have less education, lower incomes and higher fertility.

◦ Discrimination in the job market. Jobs wages In urban areas women are restricted to low productivity jobs. Discrimination in the financial market.

Most of the poor female-household are located in the far-flung areas of the country, which have little or no access to government sponsored households such as piped water, sanitation and health care.

some studies focusing on the intra-household resource allocation clearly indicate that in many regions of the world, there exists a strong bias against females in areas such as nutrition, medical care, education and inheritance.

for example, it is estimated that in India girls are four times as likely to suffer from acute malnutrition and boys are 40 times more liberl to be taken to hospital.

◦ More over, empirical research shows that these gender biases in household resource allocation significantly reduce he rate of survival among female infants.

◦ As a result,, recorded female-male ratio in courtiers like china are so much below their expected values that 200 million girls are said to be missing

◦ The favour shown towards boys reflects that fact that men have greater potential for contributing financially to family survival.

◦ These biases are fuelled and reinforced by the economic status of women.

◦ Studies also indicate that where women contribution in the family income is high, there is less discrimination against girls and women are better able to meet their won needs as well as those of their children.

Women’s control over household income and resources is limited for number of reasons

Women work in the household is unremunerated

Women, especially, from poor household are not paid for the work they perform in family agriculture and business. For example in Mexico 22.5% of women in the agricultural sector and 7.63% of women in the non-agricultural work full time without pay.

In most of the cases male members of the family control the funds from cash crops or the family business, even though a significant portion of the labour input is provided by his spouse.

the reason for such low status of women is the result of the gender or male biased state or government policies which are more male dominated.

so welfare of women and children are influenced by the design of the development policies and how much emphasis it puts on the integration women into development programmes.

◦ Need to adopt gender aware policies on the part of state.◦

Ethnic Minorities, Indigenous Population and Poverty.

◦ facing serious economic, political and social discrimination

◦ In recent years , civil wars have arisen out of ethnic groups perceptions that they are losing out in the competitions for limited resources and dwindling job opportunities

◦ the poverty problems is even more serious for indigenous peoples.

◦ their plight was highlighted when UN declared 1993 the year of Indigenous People.◦ ◦ According to research most indigenous groups in Latif America live in extreme

poverty and that being indigenous greatly increases the chances that individual will be malnourished, illiterate, in poor health and unemployed.

◦ For example, research shows over 80% indigenous population is poor in Mexico,

◦ Apart from that Kurds in Iraq, Tamils in Srilanka, Karens in Burma, Muslims in India, Tibetan in China and Baloch in Pakistan.

Need to reorient development policies, with the objective to minimize initially the poverty, following measures should be taken

Invest more in agriculture. Invest more in industry. invest more health ad education Improve governance. justice system Political participation and empowerment leads to economic

empowerment Economic justice. Socio-economic empowerment of people at grass roots

level Sens five freedoms

Player to play role in the eradication of poverty – ◦ state,◦ market and ◦ NGO.

Poverty and social development.

As a matter of fact that earlier development models paid little attention towards the social equality.

They did not regard inequality as being outcome patterns of economic growth and transformation.

Nor did they regard the social implications of the growth processes as central issue.

Low degree of social inequality was most conducive to rapid and sustained economic growth.

The main argument for high degree of high degree of inequality was that high income groups had the highest propensity to save and therefore were the most important source of capital formation.

People could not contribute in this respect, not even with increasing incomes because most of the increase would be spent food and other basic necessaries of life.

Opposing this contention, researcher propagated that most essential barrier to growth not lack of capital, but insufficient domestic demand.

Therefore priority should be given to increasing this demand through income increase also for the poor as well as high income groups.

Their argument was based on the premise that poor, especially in

agriculture, are more productive than the rich and poor people in general would demand goods that are domestically produced while the rich would to higher degree demand imported products.

On the other hand capitalist development models argued that initially they generate inequality but later on there would be trickle down of the growth result to the poor in a society.

It was the second view that appeared the most convincing and dominant.

The data revealed that aggregate growth in most developing countries had predominantly been associated with income increases for the already affluent social groups, typically 10-40 percent of the population with the highest incomes.

Knowledge about these tendencies promoted many development agencies to pay more attention to inequality issues and to the problems of poverty in the developing countries.

It was in this context that ILO and World Bank incorporated poverty assessment in their analyses and poverty alleviation in their development strategies.

Poor were regarded as passive agents to be assisted by international donor agencies through state but it found they are independent actors, who possessed tremendous potential for helping both themselves and the societies in which they lived.

Hence they become visible in the development agendas.

Finally, in the third stage they appeared as visible and as living, active human beings who mostly took care of themselves with international support.

Poverty and basic needs approach. ◦ Formulated by ILO in the mid 1979’s

Main thrust of this approach was:◦ Continued commitment to growth in industry and

other modern sectors, but combined with special measures aimed at assisting the 40% poor in each of the developing country.

◦ According to studies commissioned by ILO in the country like Kenya that growth apparently did not lead to substantial expansion of employment opportunities and increased incomes for the poor.

In nutshell the BASIC NEEDS APPROACH focused on the following factors.1. Food, shelter , clothes and other necessities of

daily life

2. Access to public services such as drinking water, sanitation, health and education

3. Access to participate in and exert influence on the decision making both in the local community and in national politics.

Basic Needs approach viewed development as ◦ Genuine economic development implies not only

growth but also persistent and measurable progress and social improvement for the poor and resource-weak groups in a society.

◦ Poor are those who are under- and malnourished, they live in miserable housing and have bad sanitation and hygienic conditions, etc.

◦ All these conditions make the poor very susceptible to disease.

In 1980’s UNICEF commissioned another study in the light more hue and cry raised by the developing countries that the western models of development were not reducing poverty, rather then exacerbating it, especially SAPs.

◦ According to the study of Cornia, Jolly and Stewart, the SAPs had tremendously impacted he poor and resource- poor sections of the society in most of the developing countries.

◦ In the light of this study, World Bank came up with new package of recommendations that there is a need for addressing poverty in a direct manner, rather than through macro-economic measure as envisioned in SAPs.

Bank recommendation contained three elements. Productive use of the poor’s most abundant asset,

that is labour, through the introduction more labour-intensive technologies and other strategies for creating better opportunities for employment.

improved access to basic social services, including primary health care, family planning, nutrition and primary education

direct assistance to those worst off, who can not be reached with the other programme elements (World Bank Report 1990)

In the light of such recommendation of the world Bank in 1995 World Summit for Social Development held in Copenhagen.

The summit stressed on the following points.1. eradication poverty requires universal access to

economic opportunities which will promote sustainable livelihood and basic social services

2. People living in poverty must be empowered through organisation and participation in all aspects of political, economic and social life – especially in the implementation of policies that affect them.

Apart from that several studies by the time came up new proposal with reference to the eradication of poverty. In this connection, the study of Michael Lipton and Simon Maxwell is noteworthy. It recommended following measures

1. Commitment to labour intensive production aimed at increasing the assets, employment and incomes of the poor

2. providing access to basic social services for as many poor people as possible as a necessary precondition for releasing their potential

3. creation of a safety nets for the poor, including food security and social security in general, as a guard against setback and to give these people the security which is yet an other precondition for releasing their creative protection

Conception of Sustainable Human Development.

The Millennium Development Goals

Goal 1: Eradicate extreme poverty and hunger Goal 2: Achieve universal primary education Goal 3: Promote gender equality and empower women Goal 4: Reduce child mortality Goal 5: Improve maternal health Goal 6: Combat HIV/AIDS, malaria and other diseases Goal 7: Ensure environmental sustainability Goal 8: Develop a Global Partnership for Development