Poverty Alleviation and Sustainable development

Poverty occurs in both developing countries and developed countries. While poverty is much more widespread in developing countries, both types of countries undertake poverty reduction measures.The World Bank defines poverty as hunger, lack of shelter, being sick and unable to see a doctor, inability to go to school, illiteracy, joblessness, fear of future, living one day at a time, lack of access to clean water, powerlessness, lack of representation and freedom. Capital, infrastructure and technology World GDP per capita (log scale) World GDP per capita Long run economic growth per person is achieved through increases in capital (factors that increase productivity), both human and physical, and technology.[4] Improving human capital, in the form of health, is needed for economic growth. Nations do not necessarily need wealth to gain health.[26] For example, Sri Lanka had a maternal mortality rate of 2% in the 1930s, higher than any nation today.[27] It reduced it to .5-.6% in the 1950s and to 0.6% today.[27] However, it was spending less each year on maternal health because it learned what worked and what did not.[27] Knowledge on the cost effectiveness of healthcare interventions can be elusive but educational measures to disseminate what works are available, such as the disease control priorities project.[1] Promoting hand washing is one of the most cost effective health intervention and can cut deaths from the major childhood diseases of diarrhea and pneumonia by half.[28] Human capital, in the form of education, is an even more important determinant of economic growth than physical capital.[4] Deworming children costs about 50 cents per child per year and reduces non-attendance from anemia, illness and malnutrition and is only a twenty-fifth as expensive to increase school attendance as by constructing schools.[29] UN economists argue that good infrastructure, such as roads and information networks, helps market reforms to work.[30] China claims it is investing in railways, roads, ports and rural telephones in African countries as part of its formula for economic development.[30] It was the technology of the steam engine that originally began the dramatic decreases in poverty levels. Cell phone technology brings the market to poor or rural sections.[31] With necessary information, remote farmers can produce specific crops to sell to the buyers that brings the best price.[32] Such technology also helps bring economic freedom by making financial services accessible to the poor. Those in poverty place overwhelming importance on having a safe place to save money, much more so than receiving loans.[9] Also, a large part of microfinance loans are spent on products that would usually be paid by a checking or savings account.[9] Mobile banking addresses the problem of the heavy regulation and costly maintenance of saving accounts.[9] Mobile financial services in the developing world, ahead of the developed world in this respect, could be worth $5 billion by 2012.[33] Safaricom’s M-Pesa launched one of the first systems where a network of agents of mostly shopkeepers, instead of bank branches, would take deposits in cash and translate these onto a virtual account on customers' phones. Cash transfers can be done between phones and issued back in cash with a small commission, making remittances safer.[10] [edit] Employment and Productivity Economic growth has the indirect potential to alleviate poverty, as a result of a simultaneous increase in employment opportunities and increase labour productivity.[34] A study by researchers at the Overseas Development Institute (ODI) of 24 countries that experienced growth found that in 18 cases, poverty was alleviated.[34] However, employment is no guarantee of escaping poverty, the International Labour Organisation (ILO) estimates that as many as 40% of workers as poor, not earning enough to keep their families above the $2 a day poverty line.[34] For instance, in India most of the chronically poor are wage earners in formal employment, because their jobs are insecure and low paid and offer no chance to accumulate wealth to avoid risks.[34] This appears to be the result of a negative relationship between employment creation and increased productivity, when a simultaneous positive increase is required to reduced poverty. According to the UNRISD, increasing labour productivity appears to have a negative impact on job creation: in the 1960s, a 1% increase in output per worker was associated with a reduction in employment growth of 0.07%, by the first decade of this century the same productivity increase implies reduced employment growth by 0.54%.[34] Increases in employment without increases in productivity leads to a rise in the number of "working poor", which is why some experts are now promoting the creation of "quality" and not "quantity" in labour market policies.[34] This approach does highlight how higher productivity has helped reduce poverty in East Asia, but the negative impact is beginning to show.[34] In Viet Nam, for example, employment growth has slowed while productivity growth has continued.[34] Furthermore, productivity increases do not always lead to increased wages, as can be seen in the US, where the gap between productivity and wages has been rising since the 1980s.[34] The ODI study showed that other sectors were just as important in reducing unemployment, as manufacturing.[34] The services sector is most effective at translating productivity growth into employment growth. Agriculture provides a safety net for jobs and economic buffer when other sectors are struggling.[34] This study suggests a more nuanced understanding of economic growth and quality of life and poverty alleviation. [edit] Helping farmers Raising farm incomes is described as the core of the antipoverty effort as three quarters of the poor today are farmers. [35] Estimates show that growth in the agricultural productivity of small farmers is, on average, at least twice as effective in benefiting the poorest half of a country’s population as growth generated in nonagricultural sectors. [36] Improving water management is an effective way to help reduce poverty among farmers. With better water management, they can improve productivity and potentially move beyond subsistence-level farming. During the Green Revolution of the 1960s and 1970s, for example, irrigation was a key factor in unlocking Asia's agricultural potential and reducing poverty. Between 1961 and 2002, the irrigated area almost doubled, as governments sought to achieve food security, improve public welfare and generate economic growth. In South Asia, cereal production rose by 137% from 1970 to 2007. This was achieved with only 3% more land.[37] The International Water Management Institute in Colombo, Sri Lanka aims to improve the management of land and water resources for food, livelihoods and the environment. One project its scientists worked on demonstrates the impact that improving water management in agriculture can have. The study, funded by the Japan Bank for International Cooperation, initially upgraded and irrigated the irrigation system on the Walawe Left Bank, Sri Lanka, in 1997. In 2005, irrigation was extended to a further area. An analysis of the whole are was carried out in 2007 and 2008. This study found that access to irrigation provided families with opportunities to diversify their livelihood activities and potentially increase their incomes. For example, people with land could reliably grow rice or vegetables instead of working as labourers or relying on rainfall to water their crops. Those without land could benefit by working within new inland fisheries. Within the project's control area, 57% of households were below the poverty line in 2002 compared with 43% in 2007.[38] [edit] Growth vs. State Intervention: Comparative Perspective in China, India, Brazil A 2011 World Bank research article, “A Comparative Perspective on Poverty Reduction in Brazil, China, and India,” looked at the three nations’ strategies and their relative challenges and successes. During their reform periods, all three have reduced their poverty rates, but through a different mix of approaches. The report used a common poverty line of $1.25 per person, per day, at purchasing parity power for consumption in 2005. Using that metric and evaluating the period between 1981 and 2005, the poverty rate in China dropped from 84% to 16%; India from 60% to 42%; and Brazil from 17% to 8%. The report sketches an overall scorecard of the countries on the two basic dimensions of pro-poor growth and pro-poor policy intervention: “China clearly scores well on the pro-poor growth side of the card, but neither Brazil nor India do; in Brazil’s case for lack of growth and in India’s case for lack of poverty-reducing growth. Brazil scores well on the social policies side, but China and India do not; in China’s case progress has been slow in implementing new social policies more relevant to the new market economy (despite historical advantages in this area, inherited from the past regime) and in India’s case the bigger problems are the extent of capture of the many existing policies by non-poor groups and the weak capabilities of the state for delivering better basic public services.”[39] [edit] Aid Main article: Aid [edit] Welfare Main article: Welfare's effect on poverty Aid in its simplest form is a basic income grant, a form of social security periodically providing citizens with money. In pilot projects in Namibia, where such a program pays just $13 a month, people were able to pay tuition fees, raising the proportion of children going to school by 92%, child malnutrition rates fell from 42% to 10% and economic activity grew 10%.[40][41] Aid could also be rewarded based on doing certain requirements. Conditional Cash Transfers, widely credited as a successful anti-poverty program, is based on actions such as enrolling children in school or receiving vaccinations.[42] In Mexico, for example, the country with the largest such program, dropout rates of 16–19 year olds in rural area dropped by 20% and children gained half an inch in height.[43] Initial fears that the program would encourage families to stay at home rather than work to collect benefits have proven to be unfounded. Instead, there is less excuse for neglectful behavior as, for example, children are prevented from begging on the streets instead of going to school because it could result in suspension from the program.[43] Welfare states have an effect on poverty reduction. Currently modern, expansive welfare states that ensure economic opportunity, independence and security in a near universal manner are still the exclusive domain of the developed nations.[44] commonly constituting at least 20% of GDP, with the largest Scandinavian welfare states constituting over 40% of GDP.[45] These modern welfare states, which largely arose in the late 19th and early 20th centuries, seeing their greatest expansion in the mid 20th century, and have proven themselves highly effective in reducing relative as well as absolute poverty in all analyzed high-income OECD countries.[46][47][48] Philosopher Thomas Pogge is a supporter of gathering funds for the poor by using a sort of Global Resources Dividend. [edit] Development aid See also: Development aid and Tied aid A major proportion of aid from donor nations is ‘tied’, mandating that a receiving nation buy products originating only from the donor country.[13] This can be harmful economically.[13] For example, Eritrea is forced to spend aid money on foreign goods and services to build a network of railways even though it is cheaper to use local expertise and resources.[13] Money from the United States to fight AIDS requires it be spent on U.S brand name drugs that can cost up to $15,000 a year compared to $350 a year for generics from other countries.[13] Only Norway, Denmark, Netherlands and Britain have stopped tying their aid.[13] Some people disagree with aid when looking at where the development aid money from NGO's and other funding is going. Funding tends to be used in a selective manner where the highest ranked health problem is the only thing treated, rather than funding basic health care development. This can occur due to the a foundation's underlaying political aspects to their development plan, where the politics outweigh the science of disease. The diseases then treated are ranked by their prevalence, morbidity, risk of mortality, and the feasibility of control. [49] Through this ranking system, the disease that cause the most mortality and are most easily treated are given the funding. The argument occurs because once these people are treated, they are sent back to the conditions that led to the disease in the first place. By doing this, money and resources from aid can be wasted when people are re-infected. This was seen in the Rockefeller Foundation's Hookworm campaign in Mexico in the 1920s, where people were treated for hookworm and then contracted the disease again once back in the conditions of which they came from. To prevent this, money could be spent on teaching citizens of the developing countries health education, basic sanitation, and providing adequate access to prevention methods and medical infrastructure. Not only would NGO money be better spent, but it would be more sustainable. These arguments suggest that the NGO development aid should be used for prevention and determining root causes rather acting upon political endeavours and treating for the sake of saying they helped. [50] Some think tanks and NGOs have argued that Western monetary aid often only serves to increase poverty and social inequality, either because it is conditioned with the implementation of harmful economic policies in the recipient countries,[51] or because it's tied with the importing of products from the donor country over cheaper alternatives.[13] Sometimes foreign aid is seen to be serving the interests of the donor more than the recipient,[52] and critics also argue that some of the foreign aid is stolen by corrupt governments and officials, and that higher aid levels erode the quality of governance. Policy becomes much more oriented toward what will get more aid money than it does towards meeting the needs of the people.[53] Problems with the aid system and not aid itself are that the aid is excessively directed towards the salaries of consultants from donor countries, the aid is not spread properly, neglecting vital, less publicized area such as agriculture, and the aid is not properly coordinated among donors, leading to a plethora of disconnected projects rather than unified strategies.[12] Supporters of aid argue that these problems may be solved with better auditing of how the aid is used.[53] Immunization campaigns for children, such as against polio, diphtheria and measles have saved millions of lives.[12] Aid from non-governmental organizations may be more effective than governmental aid; this may be because it is better at reaching the poor and better controlled at the grassroots level.[54] As a point of comparison, the annual world military spending is over $1 trillion.[55] The role of education and skillbuilding as precursors to economic development Universal public education has some role in preparing youth for basic academic skills and perhaps many trade skills, as well. Apprenticeships clearly build needed trade skills. If modest amounts of cash and land can be combined with a modicum of agricultural skills in a temperate climate, subsistence can give way toward modest societal wealth. As has been mentioned, education for women will allow for reduced family size—an important poverty reduction event in its own right. While all components mentioned above are necessary, the portion of education pertaining to the variety of skills needed to build and maintain the infrastructure of a developing (moving out of poverty) society: building trades; plumbing; electrician; well-drilling; farm and transport mechanical skills (and others) are clearly needed in large numbers of individuals, if the society is to move out of poverty or subsistence. Yet, many well-developed western economies are moving strongly away from the essential apprenticeships and skill training which affords a clear vocational path out of modern urban poverty.