The Face of Poverty

Definition of Poverty
According to the United Nations: Poverty is more than the lack of income and resources to ensure a sustainable livelihood. Its manifestations include hunger and malnutrition, limited access to education and other basic services, social discrimination and exclusion as well as the lack of participation in decision-making. Economic growth must be inclusive to provide sustainable jobs and promote equality.[1]

Definition of poverty according to the poor
An exploration into the various perspectives of  poverty, learn why poverty is multi-dimensional social phenomenon. Read this article to know more about how poor people perceive poverty from their own experience.

What is extreme poverty
The definition of ‘extreme poverty’ varies over time due to changing prices of goods and services. For example, in 2011 extreme poverty is people living a 1.25 budget per day to survive (which is actually based on 2005 prices). In 2015 World Bank announced that the extreme poverty threshold is $1.90 a day.[2]   

Extreme poverty or absolute poverty, was originally defined by the United Nations in 1995 as "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information.[3]

The Causes of Inequality according to Oxfam[4]

Corporations, working for those at the top, in pursuit of delivering high returns to those at the top, corporations are driven to squeeze their workers and producers ever harder – and to avoid paying taxes which would benefit everyone, and the poorest people in particular.

Squeezing workers and producers, while many chief executives, who are often paid in shares, have seen their incomes skyrocket, wages for ordinary workers and producers have barely increased, and in some cases have got worse. Across the world, corporations are relentlessly squeezing down the costs of labor – and ensuring that workers and producers in their supply chains get less and less of the economic pie. This increases inequality and suppresses demand.

Dodging tax, Corporations maximize profit in part by paying as little tax as possible. They do this by using tax havens or by making countries compete to provide tax breaks, exemptions and lower rates. Corporate tax rates are falling all over the world, and this – together with widespread tax dodging – ensures that many corporations are paying minimal tax.

Super-charged shareholder capitalism, in many parts of the world, corporations are increasingly driven by a single goal: to maximize returns to their shareholders. This means not only maximizing short-term profits, but paying out an ever-greater share of these profits to the people who own them. Every dollar of profit given to the shareholders of corporations is a dollar that could have been spent paying producers or workers more, paying more tax, or investing in infrastructure or innovation.

Crony capitalism; by any measure, we are living in the age of the super-rich, a second gilded age in which a glittering surface masks social problems and corruption. The huge fortunes we see at the very top of the wealth and income spectrum are clear evidence of the inequality crisis and are hindering the fight to end extreme poverty. But the super-rich are not just benign recipients of the increasing concentration of wealth.

Avoiding tax, buying politics, paying as little tax as possible is a key strategy for many of the super-rich. Many of the super-rich also use their power, influence and connections to capture politics and ensure that the rules are written for them.


The Causes of Poverty according to World Bank[5]

  • Lack of income and assets to attain basic necessities— food, shelter, clothing, and acceptable levels of health and education.
  • Sense of voicelessness and powerlessness in the institutions of state and society.
  • Vulnerability to adverse shocks, linked to an inability to cope with them. To understand the determinants of poverty in all its dimensions, it helps to think in terms of people’s assets, the returns to (or productivity of) these assets, and the volatility of returns. These assets are of several kinds:
  • Human assets, such as the capacity for basic labor, skills, and good health.
  • Natural assets, such as land.
  • Physical assets, such as access to infrastructure.
  • Financial assets, such as savings and access to credit.
  • Social assets, such as networks of contacts and reciprocal obligations that can be called on in time of need, and political influence over resources.


Fast facts on poverty:[6]

  • 836 million people still live in extreme poverty
  • About one in five persons in developing regions lives on less than $1.25 per day
  • One in four children under age five in the world has inadequate height for his or her age
  • Every day in 2014, 42,000 people had to abandon their homes to seek protection due to conflict
  • Oxfam estimates that it would take $60 billion annually to end extreme global poverty--that's less than 1/4 the income of the top 100 richest billionaires.[7]


Which part of the planet with the highest incidence of poverty (high poverty rate)?[8]

  • The overwhelming majority of people living on less than $1.25 a day belong to two regions: Southern Asia and sub-Saharan Africa.
  • High poverty rates are often found in small, fragile and conflict-affected countries.


25 poorest countries according to Global Finance Magazine (2017 report)[9]

  1. Central African Republic
  2. Democratic Republic of the Congo
  3. Burundi
  4. Liberia
  5. Niger
  6. Malawi
  7. Mozambique
  8. Guinea
  9. Eritrea
  10. Madagascar
  11. Comoros
  12. Togo
  13. Guinea-Bissau
  14. Sierra Leone
  15. The Gambia
  16. South Sudan
  17. Haiti
  18. Burkina Faso
  19. Kiribati
  20. Rwanda
  21. Ethiopia
  22. Zimbabwe
  23. Afghanistan
  24. Solomon Islands
  25. Uganda


Our response to poverty:  10 Principles of Fair Trade

  1. Creating Opportunities for Economically Disadvantaged Producers
  2. Transparency and Accountability
  3. Fair Trading Practices
  4. Payment of a Fair Price
  5. Ensuring no Child Labor and Forced Labor
  6. Commitment to Non Discrimination, Gender Equity and Women’s Economic Empowerment, and Freedom of Association
  7. Ensuring Good Working Conditions
  8. Providing Capacity Building
  9. Promoting Fair Trade
  10. Respect for the Environment

 

 

 

 

 


[1] Poverty defined according to the United Nations http://www.un.org/sustainabledevelopment/poverty/

[2] The definition of extreme poverty has just changed – here’s what you need to know https://www.odi.org/comment/9934-definition-extreme-poverty-has-just-changed-here-s-what-you-need-know

[7] Oxfam Media Briefing ‘The cost of inequality: how wealth and income extremes hurt us all”   https://www.oxfam.org/sites/www.oxfam.org/files/cost-of-inequality-oxfam-mb180113.pdf

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Live fair, beat poverty! Fair consumers are key to poverty eradication. They support the work of producers, workers and fair trading enterprises in seeking trade justice and a sustainable trading system.