Poverty and poverty alleviation policies
Authors: Peter Futo, Marton Gosztonyi, Mehdi Hasan
What is poverty. Poverty of individuals, families and wider collectives means not only the lack of financial resources, but also the lack of choices and opportunities, a violation of human dignity. Absolute poverty refers to the lack of means necessary to meet basic needs such as food, clothing and shelter. Relative poverty takes into consideration individual social and economic status compared to the rest of society. Poverty frequently implies insecurity, powerlessness and exclusion of individuals, households and communities, and the susceptibility to violence. Poverty often implies living in marginal or fragile environments, without access to clean water or sanitation.
Factors of poverty. The effects of poverty - e.g. malnourishment , diseases, and analfabetism - may also become causes of poverty, thus creating a "poverty cycle". Globally, people of color, women and children, are over-represented among the poor and among the very poor. Poor people spend a greater portion of their budgets on food than richer people. As a result, poor households and those near the poverty threshold can be particularly vulnerable to increases in food prices. Research has found that there is a high risk of educational underachievement among children of low-income families living in urban slums and in other locations with a concentration of poor people. Poverty also increases the risk of homelessness.
How many people are poor. The World Bank estimated that in 2015 approximately 700 million people were living in extreme poverty, which is half of the respective number 25 years earlier. About half of these people lived in Sub-Saharan Africa, and about one-third of poor people live in South Asia. There are over 100 million street children worldwide.
Informal economy. Due to limited employment opportunities in the rural and urban areas of the Developing World, millions of the poor must make their living through self-employment in the informal economy. The informal sector, also called informal economy, or gray economy is that part of an economy that is neither taxed, nor monitored by any form of government. Unlike the formal economy, activities of the informal economy are not exactly included in the economic development statistics of a country. The financing of informal businesses relies in most cases on loans from friends, family members and on credits of moneylenders with high interest rate. Over the last decades, it has been recognized that the informal economy has a significant job and income generation potential. Therefore, Governments should not unilaterally focus on fighting tax evasion, but Governments should also reveal why small firms remain informal, i.e. why they hide production and service activities. The most frequent causes of informality, such as extreme bureaucracy and corruption in the public sector, should be reduced and eliminated. At the same time appropriate policies must be developed to facilitate job creation and economic growth in the informal sector.
Corruption. Government intermediaries and dishonest individuals often use aid and natural resources for their own purposes. In many countries development funds can be diverted away from basic services and ad hoc aid programmes by corruption. In countries with high corruption civil services are predominantly staffed by loyal supporters of the ruling party. In such cases civil services are interested in increasing bureaucracy: e.g. they establish complicated administrative procedures to start a business, to get a building permit, or to implement a food safety inspection in a pub. In such a business environment small businessmen must bribe officials and would-be entrepreneurs are driven into the informal sector.
Poverty reduction or poverty alleviation is a major goal and issue for many international organizations such as the United Nations and the World Bank.
Examples for poverty alleviation measures. Poverty and underdevelopment in developing countries call for various initiatives to improve the situation and quality of life of poor people. Examples of poverty alleviation measures include subsidies for fertilizer usage paid to farmers, or the provision of emergency food aid in case of famines. Strategies to provide education for poor population of developing countries include constructing schools, training and paying teachers, and also deworming children, in order to increase their school attendance. Education and health measures are interrelated, because poor health of mothers damages the level of intelligence of their children. There is a form of aid known as conditional cash transfer, which makes financial resources available for the family if and only if their children are enrolling in school or receive vaccinations.
Microcredit as an instrument of poverty alleviation. The Governments of numerous developing countries endorse microcredit as a potentially valuable development tool. In some cases Governments are attempting to integrate microcredit into their development planning. Some developed countries are even using microcredit to foster economic activities among certain disadvantaged or vulnerable geographic and socio-economic groups. However, permanent poverty reduction requires addressing the multiple dimensions of poverty and to recognize that microcredit is only one of the important strategic tools.
Development programmes with top-down or bottom-up approach. Development policies can be divided into top-down or bottom-up approaches. Top-down programmes are centrally developed and implemented, such as the building of a dam or a railway line, or the implementation of a uniform nation-wide subsidy programme on behalf of a poor. Bottom-up programmes are also called grass roots, or homegrown programmes. Such projects are planned and implemented locally, by the beneficiary community. Microcredit programmes implemented by national governments follow a top-down logic, while those implemented by local non-governmental organizations that take into consideration local needs and feasibility constraints, follow a bottom-up logic. Non-Governmental organisations (NGOs) have emerged as key players in the field of microcredit. They have played the role of intermediary between refinancing organisations and beneficiaries. During the last three decades the bottom-up initiatives of microcredit schemes have been increasingly applied and gained popularity.
A szegénység és a szegénység enyhítésére irányuló politika (HUN)
Africa directo - Los nadies (ESP)