The War against poverty is far from over. We must rethink the way we look at it to find ways to fight back.
For decades international organizations and countries have tried to look for ways to eradicate poverty. They have tried by implementing multiple programs that promote growth and development among the people that live in difficult economic conditions. But we can surely say, that even if some of these programs have work, a vast majority has not.
Since the 1960`s when one of the most ambitious programs to fight poverty and inequality first raised in the US -The war on poverty program- many others try to emulate and started replicating similar initiatives, but 50 plus years later, poverty and inequality still exist in many places. Efforts of governments, individuals, and the world community, in general, seem to not be working, but what is merely the problem why these programs and efforts are failing to eliminate poverty? is it that we haven’t understood correctly what poverty is? What are its causes? Or is it that poverty is something intrinsic in the capitalist and liberalist economic system that because of its nature it won’t be eradicated?
In April 2013, the World Bank set a new goal to end extreme poverty. The idea behind it was to have less than 3 percent of all the global population living under $1.90 a day. Nowadays fewer people are living in poverty than at any given time in history. In the last three decades billions of people have escape extreme poverty and according to the World Bank in 1990, 36% of the global population lived with less than $1.90, but in 2015 the amount got reduce to only 10%. But this rapid reduction in poverty rates is declining, especially in low-income countries where poverty rates remain fairly high.
Sub-Saharan Africa has become the main focus in fighting poverty, more than half of the world´s extreme poor live in African countries. 10 countries maintain over 70% of the poor in the region — Ethiopia, Congo, Nigeria, Tanzania, Kenya, Mozambique, Uganda, and Malawi and by 2030, nearly 9 in 10 of the extremely poor will be living in Sub-Saharan Africa by 2030.
“The current forecast presents a very grim yet realistic picture of the probability of ending extreme poverty by 2030. That means, we need to renew our focus on Africa, and business, as usual, will not be enough to get us through to our goal. We need to invest in people and ensure growth is inclusive, with a stronger focus on raising the productive capacity of the poor.” ( Carolina Sánchez-Páramo, Senior Director, Poverty & Equity Global Practice of the World Bank)
But even though if global efforts make it possible for us to achieve our common goal, measuring poverty by income is still narrow and in recent years a lot has been brought into the field and our way of thinking of poverty have changed for the better (which make the goal outdated). Earnings cannot determine the well-being of a person and don’t help to give a broad picture of their living standard.
Multidimensional Poverty and how understanding it better can be an advantage to fight back.
The most important way of attacking poverty is by looking into what it is, to understand it better, and to look for what is its primary causes, those things that lead to it, and that impede that someone can get out of it.
“poverty is not just a lack of money; it is not having the capability to realize one’s full potential as a human being.”(Abhijit Banerjee y Esther Duflo, Poor economics).
There is no way that if we had understood and dissected poverty into its most basic components, all the programs, and efforts that have been applied since the problem raises global awareness would not have failed.
In all these years, governments and institutions have tried to eliminate poverty almost exclusively by one means, economic growth. Many of the programs implemented are focus on increasing productivity in developing countries, with the idea that this increase in production will help in more economic flow and better gains. The problem from this approach is that in many cases, the poor will not get the benefits of the increase in the GNP and so, for this to work, it has to be applied in concordance with other policies that help the poor be benefit from the gains.
Institutions, governments, and corporations have opted for a multidimensional measurement of poverty. What this new approach does is that it captures more of the deprivations that people can experiment in their daily lives and it not only takes into account what is called “monetary deprivation”. In some cases, people that can be considered income poor may not be multidimensionally poor, and besides, people may experience poorness in different ways, for example, Lack of education, not having access to clean water and sanitation, poor health, and bad health care system, violence, etc. This is because poor people experience poverty in a broad sense and as a constant ill-being. In this sense the Multidimensional poverty analysis gives us a far richer picture than the $1.90 a day poverty rate.
The traditional way of looking at poverty is outdated, poor people from the same country and region can have a different experience with it and even perceive it differently, meaning that labeling someone as poor or not poor is an oversimplification. Inequality and differences in poorness level can be even at a household level.
Multidimensional Poverty furthermore adds concepts like incidence and intensity. Incidence helps us determine the number of people in a certain region than suffers from multidimensional poverty, and intensity helps us find out the number of indicators that someone is deprived of. Countries and regions can have similar incidences but high variations in their intensities, being the children the more affected, making age a risk factor for suffering from more depravations.
According to the MPI children under the age of 18 bears the greatest burden of multidimensional poverty being half of all multidimensionally poor just children. Of the 1.3 billion people who are considered multidimensionally poor, 663 million are children and 428 million are under the age of 10, making them our greatest concern. In the South Asian case, poverty between children has shown high variation, revealing that there is a strong intrahousehold difference in poverty.
“Intrahousehold disparities in deprivation in nutrition among children under age 5 in the region are stark. Some 22.7 percent of children under age 5 live in a household in which at least one child is malnourished and at least one child is not. In Pakistan over a third of children under age 5 experience intrahousehold inequality in deprivation in nutrition.” (Illuminating Inequalities, GMPI 2019)
Social Economy, Human capital and the Poverty Traps Theory
Economists have been very concerned with the idea of human capital and social economy, ideas that go handing hand. These new theories establish that the lack of investment in human capital is what drives poverty, because poor people do not have the opportunity to develop the most basic abilities that will provide them with skills to improve their living standards and increase their income.
The social economy focuses primarily on the people and the welfare of the group or individual over the economic gains of the institution that is providing a service or developing a project. Many businesses, governments, and organizations have adopted this new “Social economy” trend. These institutions can be run as any regular business would, but with the premise that profit maximization is not the final goal but the improvement of a specific social group.
“Social Economy initiatives are based on principles which are concerned primarily with people’s needs. Success is judged on the benefits the projects have for the wider community in terms of the number of jobs created; the number of people involved in a voluntary or learning capacity; the benefits to producers and users and in a project’s ability to generate income for and within a community.” (Placing the social economy, University of London)
As mentioned before, the idea of human capital has gained a lot of interest in the economic field. Many of these organizations try to enter the social economy by developing programs that focus specifically on reinforcing and teaching basic skills to the poor so they can use and gain some benefit. Many of this focus on education (in the vast majority of topics) and other things like providing health and nutrition, but not only on providing it but in raising awareness in poor communities that those things are also important for the whole development of the community.
Another theory that has gained many followers, that diverges from the traditional idea of “growth to fight poverty” is the poverty traps theory. This one discusses that people are poor because a big mechanism that inhibits them to escape from it. The way I like to describe it is by using the analogy of a vicious circle, people need resources and skills to generate capital, but to obtain them they need capital so because they lack sufficient income they cannot generate their means to escape poverty.
Some of the main aspects of the poverty traps are:
• No Access to health care
• No access to good quality education
• Hunger and malnutrition
• Absence of infrastructure
• Limited access to credit and financial markets
• Absence of productive industry
The main reason behind this theory is not only to try to search for a program that will lead people to get out of poverty, but to try to understand what is poverty and what is generating it, and to get to that, the poverty traps theory formulate the question: “Who is going to remain poor in the future?” And that is the backbone of this because if you understand why someone will not get the benefits to get out of poverty and obtain the gains of such help programs, you can formulate new ways of attacking it and prevent the failure.
So, as the authors of the book “Poor economics” say, to eliminate poverty we must first attack the core causes of it, the things that inhibit people to obtain a higher state of living, such basic things like health care, nutrition, and education.
“A poor girl from Africa will probably go to school for at most a few years even if she is brilliant, and most likely won’t get the nutrition to be the world-class athlete she might have been or the funds to start a business if she has a great idea.” (Abhijit Banerjee y Esther Duflo, Poor economics).
So, with these new data and information, and with the changes in the way we think about poverty, we must begin to ask ourselves if our achievements in poverty reduction can be considered as such, or if we must start again.
References
Abhijit, B. Esther, D.. (2011). Poor Economic: A radical rethinking of the way to fight global poverty. EUA: PublicAffairs.
Simeg Zhen, Ani Silwal, David Locke Newhouse. (2019). Here are the top 10 Sub-Saharan African countries that have reduced poverty the most. May 10 2019, de The World Bank Sitio web: https://blogs.worldbank.org/opendata/here-are-top-10-sub-saharan-african-countries-have-reduced-poverty-most
Anonymous . (2018). Going Above And Beyond To End Poverty: New Ways Of Measuring Poverty Shed New Light On The Challenges Ahead. May 10 2020, de The World Bank Sitio web: https://www.worldbank.org/en/news/immersive-story/2018/10/17/going-above-and-beyond-to-end-poverty-new-ways-of-measuring-poverty-shed-new-light-on-the-challenges-ahead
Anonymous . (2018). Decline of Global Extreme Poverty Continues but Has Slowed: World Bank. May 10 2020, de The World Bank Sitio web: https://www.worldbank.org/en/news/press-release/2018/09/19/decline-of-global-extreme-poverty-continues-but-has-slowed-world-bank
