Global Poverty: An Overview
The Extent of Global Poverty
“Money money money, must be funny. In the rich man’s world. Money money money, always sunny, in the rich man’s world. Aha-ahaa, all the things I could do- if I had a little money. It’s a rich man’s world.” (Abba)
In the United States of America and in much of the world, status is acquired with new cars, large houses and other luxuries. Those with money make large donations to political parties, thereby influencing their positions on economic policy and universal health care. Money is also passed down to children, spent on their college education, a car, or a down-payment on a house, all the while keeping the wealth in the family. Most Hollywood movies and television shows function on the premise that taxes do not exist, let alone electricity bills, child care or car payments. Money is rarely if ever a real issue, let alone an obstacle, while extreme global poverty is never mentioned in the world of coffee shops, dating crises and comedic moments. Ironically, not all in the United States have lives that even remotely look like this. In fact, most do not have the luxury of paying all of the bills with money to spare for emergencies, let alone splurges on designer clothes.
Poverty, in a relative sense, is truly global. It is not only a 'Southern' phenomenon, but, as Isbister succinctly explains, poverty is universal: "What poverty really means is the inability to make choices... the poor are the people on the bottom, the people denied the benefits of the society in which they live" (19). To further illustrate this point, when a family of four is living in the United States below the poverty line- yet not qualifying for welfare- health insurance for everyone may not be an option, and juggling acts are required every time a child gets sick or the car breaks down. Choices are limited, and all the while our cultural ideology states that anyone can achieve the American Dream if they would simply work hard and apply themselves. In The Poverty of Nations, Khusro quotes Peter Cutler (1984) as saying
"Poverty can be defined... with reference to the norms for society, and conceived as a set of "basic needs" rather than minimum needs... obviously, such material basic needs will depend upon the culture of the society in question and upon the general standard of living" (112).
In other words, while owning or at least having access to a washer and dryer may not be a ‘norm’ in underdeveloped countries, an individual lacking them in the United States would be considered impoverished, as most North Americans were not brought up washing their clothes by hand
However, when faced with the poverty of the underdeveloped or developing world, these ‘norms’ may seem like luxuries. The situation throughout the global South is unimaginable for most people living in a developed market economy
, with health centers running out of supplies, unchecked epidemics of AIDS
and other preventable diseases, widespread famine
-ridden water and unstable political systems. Isbister summarizes poverty by naming various attributes of it, such as "low life expectancy, adult illiteracy, underweight children, inadequate housing, child labor, food insecurity, and lack of access to safe water, to health services, and to sanitation"
In The Other Crisis, James Wolfenson writes that "Today, across the world, 1.3 billion people live on less than one dollar a day; 3 billion live on under two dollars a day; 1.3 billion have no access to clean water; 3 billion have no access to sanitation; 2 billion have no access to electricity." This level of existence is survived-and sometimes not- by billions of women, men, orphans, and villages.
Interestingly, this level of poverty is not concentrated in a few poor countries, but rather it can be found in various countries and on different continents. Many of the countries do have wealthy people, yet they tend to be a small minority of the population. The well-to-do are sometimes of a different skin tone, or they speak a dominant language that the ‘masses’ do not. Some are political allies of the politicians in control, while others might be the politicians or dictators. Still others are of a dominant religion, or they are foreigners taking advantage of cheap labor and little or no taxes.
In Nicaragua, for example, there are taxis and electricity in the capital city, although not all can afford the taxis or an electricity bill, and there are various shanties made from spare materials throughout. The situation in the rural villages is a different picture entirely, and it is worse in some ways, and better in others. The United Nations Development Program estimates that "most of the poor-more than three-quarters- live in rural areas" (Isbister, 17). While there appears to be less trash on roads and in the fields in rural areas, this is due in part to the fact that they tend to raise their own livestock and grow their own produce, or they might even receive food aid. However, this does not mean that there is always enough food, as land might be infertile or owned by the wealthy, or farmers may not own the tools needed to farm productively.
Then if a child living in a rural village should happen to infect an eye while playing outside, the health clinic might be hours away, with few if any cars available to drive a patient. As a consequence, a number of children and adults go blind from treatable eye infections, or a urinary tract infection that requires a 10-day dosage of antibiotics will continue to cause them pain for years. If by chance they can get to a clinic, patients will more than likely encounter a shortage in supplies. The women who make it to a family planning clinic (often after having had 8 to 10 children, although the average number of children in rural areas is 14) are also likely to find a lack of supplies. Some indigenous people living in rural villages attempt to retain a semblance of their traditional culture, yet more often than not it is in the process of being destroyed by both the exodus to urban centers and the importation of cheap goods and culture. And so the middle class lives in a sort of juxtaposition with their struggling neighbors, hiring guard dogs and constructing high fences around their barred villas, shielding themselves from the destitution around them.
On the other hand, there are some who do not have the opportunity to experience these various socio-economic tug-of-wars: prisoners. These individuals in the prison system (at least outside of the major cities) are not even in the same ballpark as their compatriots, as they are given government-provided food only once a week. If they are lucky, their family knows that they are in prison, and they live close enough to deliver food and water every two weeks or so, when they have something to spare. In addition, there are neither running water nor bathroom facilities available for the prisoners- simply a hole in the ground in a cell shared by 15 or more people. In the United States, these would be called sub-human standards of living, and advocacy groups would protest the conditions. In Nicaragua, it is accepted as the way things have to be.
The nature and causes of global poverty
So why is this kind of extreme poverty- both for criminals and for those who have committed no crime- allowed? Should the poor accept their fate, assuming that some are rich and some are poor, or that they have lost favor with God due to lack of devotion? Why does it exist and where does it come from? There are several factors that perpetuate the cycle of poverty, recessions, and despair specifically in the developing world. However, the major obstacles to eliminating widespread, extreme poverty are corruption, centrally-planned economies, and restricted trade.
Corruption is not just a third-world problem- Enron is now synonymous with corrupt CEO’s, and it was once a major player in the U.S. economy. Nevertheless, the impact of corruption in developing countries on the economy is much more devastating for several reasons. With less capital to balance the economy with (let alone to maintain economic growth), a developing country stands to lose more when an official takes money from the pot- especially if more than one politician or official is involved.
In addition, the low wages paid in these countries can make cheating even more attractive to politicians who want to live beyond their means. Finally, and perhaps most importantly, there is a tendency by developing countries to export only a few types of crops, which leads to occasional sizeable payments (and dependency on world prices for these commodities), often in hard currency, which "presents a greater opportunity for corruption than in a more diversified economy with more (smaller) deals" (Goldstein, 511).
Alongside the problem of corruption is the centrally-planned economy. A corrupt official who is planning the economic growth of a country does not exactly have the best interests of the people in mind. On the other hand, with a free-market economy, a corrupt politician would have less direct influence on the nation’s economy, so long as she maintained the free-market system. In addition, a government might decide that tea should be grown in order to export it to Great Britain. However, if there is a stronger internal market for legumes, government planning has failed the farmer of a larger profit, and the nation of an edible crop. Conversely, if the government were to allow only one farmer to grow legumes, a monopoly would be formed, with low productivity and high costs, which would harm the nation’s economy in the long run. In addition, the loss of the traditional way of life has had an impact:
"The poor laborers in the tobacco, cocoa, banana, cotton, rubber, and sugar fields are not obeying traditional cultural imperatives; they are producing export crops for sale in the prosperous markets, mostly in North America and Europe" (Isbister, 21).
In 1999 India’s chairman of the Indian finance commission wrote that "Price controls have to be replaced by free markets, and... rationing and quotas by... demand and supply. The direction of labour must be given up... and the market orientation of costs and prices must become the order of the day" (Khusro, 173). After comparing the economic growth patterns of the growing Asian economies with different Latin American countries that mixed planning with free trade, Khusro came to the conclusion that the benefits from restricted trade did not trickle down to the poor as quickly as pure market economies, although he did recommend some government-funded social welfare systems, as long as they were funded by the country’s economic growth.
The most appropriate response to global poverty
The typical response to poverty is to find a scapegoat, whether it is the government, another country, the rich or even the poor themselves. However, this is neither realistic nor productive. There are several factors that contribute to the problem of global poverty and that perpetuate its cycle in the third world, and a simplistic answer will not provide a long-term solution. For example, to helpfully suggest that an upswing in a developing countries’ economy alone is indicative of a decrease in poverty is short-sighted, as the benefits will simply go to those who are already doing well, as the poor do not tend to have enough capital left over to invest in the market.
Others focus on the domestic economy of the United States, worrying about things like outsourcing and free trade taking precious jobs away from working-class Americans. Luckily, this narrow-sighted and America-centric view is not in the best interests of the U.S. economy or most multinational corporations, so protectionist policies have not yet done away with the free trade agreements we have, such as NAFTA and the upcoming Central American Free Trade Agreement. Perhaps more importantly, to ignore the condition in which many human beings live is irresponsible, for "to whom much is given, much is expected" (Luke 12:48), and in a world where "1.2 billion people... are poor" (Isbister, 17), or in other words making one dollar a day, the excesses of the rich do not seem appropriate. And yet while living simply is perhaps the morally correct thing to do, it cannot be regulated by a democracy, and so it is not enough to turn the tide of global poverty.
Instead, a combination of international trade, cooperative micro-lending, governmental accountability, and political stability will encourage economic growth on both the national and individual level, effecting a visible change in poverty in the short- and long-term, which will also benefit other countries in the long-term as a by-product.
"International trade is increasingly seen as the leading sector that will drive economic growth… it embraces the idea that they (third-world countries) must become productive and efficient enough to compete against all challengers" (Isbister, 186). While international trade can bring in important revenues as well as prompt advances in technology and productivity, it can not stand alone. Without the other pieces of the puzzle in place, such as governmental accountability to combat corruption and micro-lending to engage more of the poor in the market system, the benefits of trade simply allow the gap between the rich and poor to grow. This has been seen in various Latin American countries, with the growing disparity in wealth leading to resentment of the elite and of the party in office, which has destabilized the political structure even further and increased social tensions.
One solution to the problem of disparity in wealth is the concept of micro-lending, which "uses small loans to poor people, especially women, to support economic self-sufficiency" (Goldstein, 509). However, in conjunction with this program, the concept of self-determination should be promoted, as seen in the Oxfam model. This British development aid organization is against the idea of simply giving hand-outs or of deciding what is best for a community. Instead, Oxfam "relies on local communities to determine the needs of their own people and to carry out development projects" (Goldstein, 528). With this and the system of micro-lending, a developing government (or an aid agency that has looser terms of conditionality than the World Bank) could easily empower their own people to pull themselves out of poverty and into the new, burgeoning market economy. This would benefit the populace economically and in terms of morale, which would decrease the chances of revolts against the government.
Yet another factor that might also deter political instability is governmental accountability, or transparency, combined with economic policies that are not relying on tariffs and trade barriers as a safety net:
"development works best when poor countries have strong policies on governance and economic reform and take responsibility for reducing poverty and spurring economic growth" (Sperling).
Transparency would reduce the instances of government-business corruption, which could look like Transparency International
, a Berlin-based NGO
that publishes surveys listing countries considered to be the most corrupt by business executives (Goldstein, 512). This would aid the judicial system (and investigative journalism) in the incredibly important system of checks and balances for the government. With the chain reaction starting here, public confidence in the government would lead to increased political stability, which would spark the confidence of foreign investors in the government. This political stability is pivotal, as a newly emerging economy that is engaged in genocidal civil wars will not function. People flee, generals often take over and assume a dictatorial position, and that is the last place where an investor wants to be.
Of course, wrapped up in the idea of holding the government economically accountable in order to gain political stability is the recognition and enforcement of universal human rights. Without something as basic as the freedom of speech, corrupt politicians could easily close down newspapers that published negative commentaries on their spending or practices (President Mugabe in Zimbabwe is a prime example), and without fair labor standards, other developed countries may use it as an excuse to not trade with them. In the long run, recognizing these rights would only win the government more international favor, though an MNC or two might have to relocate to a country where there is no minimum wage.
Can global poverty be eradicated? Perhaps. But each situation must be looked at both in the socio-historical context as well as on an individual basis, because each country has a different culture and a different point of departure. However, there are basic concepts that will aid them in the process of finding equilibrium in the world. Human rights, political stability, and micro-lending that looks more like a partnership rather than a crutch, all supported by unrestricted international trade. For some, these actions are counter-intuitive, as it means less direct control over the economy and over the people. Luckily, there are individuals who realize that things still function when they do not have a hand in it, and that some things do better when they give up control and watch from a safe distance, ready to intervene only when necessary. Otherwise, the world will end up with sheltered, dependent countries that have not learned to fly on their own.
Sperling, Gene, and Tom Hart. “A Better Way to Fight Global Poverty.”
Goldstein, Joshua. International Relations.
Isbister, John. Promises Not Kept.
Khusro, Ali Mohammed. The Poverty of Nations.
Sklar, Holly, Chuck Collins and Betsy Leonard-Wright. “The Growing Wealth Gap,” The Social Construction of Difference and Inequality. Comp. and ed. Tracy Ore.
Wolfenson, James. “The Other Crisis.” World Bank, October 1998, quoted in
The Reality of Aid 2000, Earthscan Publications, 2000.