Causes of Poverty
In our short analysis of the many causes of poverty, we shall explore three sections- economic, political, external.
Overpopulation is defined as the situation of having large numbers of people with too few resources and too little space. Overpopulation can result from either a high population density (the ratio of people to land area) or from low amounts of resources, or from both.
A high population density pressures the available resources in the country, as the resources can only support a certain number of people.
Poverty can also depend on the country's mix of population density and agriculture productivity. For example, Bangladesh has one of the world's highest population density with 1,147 persons per sq km (2,970 persons per sq mi). A large majority of the people of Bangladesh engage in low-productivity manual farming, which contributes to the countryís extremely high level of poverty. However, this only applies to third-world countries who do not have advanced technologies.
High birth rates contribute to overpopulation in many developing countries. Children, especially boys, are assets to many poor families because they provide labor, usually for farming. Cultural norms in traditionally rural societies commonly sanction the value of large families. Also, the governments of developing countries often provide little or no support, financial or political, for family planning (see Birth Control) Families may also not know about family planning due to the lack of education. Hence, most developing countries have high rates of population growth.
A country’s level of poverty can depend greatly on its mix of population density and agricultural productivity. Bangladesh, for example, has one of the world’s highest population densities, with 1,078 persons per sq km (2,791 persons per sq mi). A large majority of the people of Bangladesh engage in low-productivity manual farming, which contributes to the country’s extremely high level of poverty.
Some of the smaller countries in western Europe, such as The Netherlands and Belgium, have high population densities as well. These countries practice mechanized farming and are involved in high-tech industries.
On the other hand, many countries in sub-Saharan Africa have population densities of less than 30 persons per sq km (80 persons per sq mi). Many people in these countries practice manual subsistence farming. These countries have infertile land and lack the economic resources and technology to boost productivity. As a consequence, these nations are very poor.
High birth rates contribute to overpopulation in many developing countries. Children are assets to many poor families because they provide labor, usually for farming.
Cultural norms in traditionally rural societies commonly sanction the value of large families. Also, the governments of developing countries often provide little or no support, financial or political, for family planning and birth control.
Distribution of resources:
In many developing countries, the problems of poverty are massive and pervasive. In recent decades most of these countries have tried to develop their economies with industry and technology with varying levels of success. Many developing countries, however, lack essential raw materials and the knowledge and skills gained through formal education and training. Because these things are necessary for the development of industry, developing countries generally must rely on trade with developed countries for manufactured goods, but they cannot afford much.
Because people in developed nations may have more wealth and resources than those in developing countries, their standard of living is also generally higher. Thus, people who have what would be considered adequate wealth and resources in developing countries may be considered poor in developed countries.
In contrast, people in developing countries may consider themselves to be doing well if they have productive gardens, some livestock, and a house of thatch or mud-brick. In rural areas, people may be accustomed to not having plumbing, electricity, or formal health care. By the standards of developed countries, such living conditions are considered hallmarks of poverty.
According to reports, people’s incomes are not enough to cover the cost of their basic necessities and provide them basic services such as water, electricity, transportation and communication. It pointed out that recent surveys confirm that 80 percent of citizen’s expenses go for to food, most notably among vulnerable groups that are deprived of basic services and luxury means.
Lack of education:
Illiteracy and lack of education are common in poor countries. Governments of developing countries often cannot afford to provide for good public schools, especially in rural areas. Whereas virtually all children in industrialized countries have access to an education, only about 60 percent of children in sub-Saharan Africa even attend elementary school. Poor people also often forego schooling in order to concentrate on making a minimal living. In addition,developing countries tend to have few employment opportunities, especially for women. As a result, people may see little reason to go to school.
Reports have also argued that 41 percent of Yemen’s rural population lives on less than two dollars per day, and 85 percent of Yemen’s poor population live in rural areas. It clarified that 47 percent of Yemen’s population are illiterate, which is another reason for poverty and unemployment.
In countries with high populations, unemployment levels of only a few percentage points mean that millions of working-age people cannot find work and earn an adequate income. Because unemployment figures indicate only the number of people eligible to work who have no job but are seeking employment, such figures are not necessarily an accurate indicator of the number of people living in poverty. Other people may not be able to find enough work or may earn wages too low to support themselves.
Environmental degradation is the deterioration of the natural environment, including the atmosphere, bodies of water, soil, and forests — is an important cause of poverty. Environmental problems have led to shortages of food, clean water, materials for shelter, and other essential resources. As forests, land, air, and water are degraded, people who live directly off these natural resources suffer most from the effects. People in developed countries, on the other hand, have technologies and conveniences such as air and water filters, refined fuels, and industrially produced and stored foods to buffer themselves from the effects of environmental degradation.
In developing countries, deforestation has had particularly devastating environmental effects. Many rural people, particularly in tropical regions, depend on forests as a source of food and other resources, and deforestation damages or eliminates these supplies. Forests also absorb many pollutants and water from extended rains; without forests, pollution increases and massive flooding further decreases the usability of the deforested areas.
Poverty in many developed countries can be linked to economic trends.
Changes in labor markets in developed countries have also contributed to increased poverty levels. For instance, the number of relatively high-paying manufacturing jobs has declined, while the demand for workers in service- and technology-related industries has increased. Historically, people have learned the skills required for jobs that involve manual labor, such as those in manufacturing, either on the job or through easily accessible school vocational programs. As these jobs are replaced by service- and technology-related jobs—jobs that usually require skills taught at the college level—people who cannot afford a college education find it increasingly difficult to obtain well-paying work.
In many developed nations the number of people living in poverty has increased due to rising disparities in the distribution of resources within these countries.
Since the 1970s, for instance, the poorest 20 percent of all U.S. households have earned an increasingly smaller percentage of the total national income (generally less than 5 percent) while the wealthiest 5 percent of households have earned an increasingly greater percentage (about 45 percent of the total).
Some researchers also cite demographic shifts as contributing to increases in overall poverty. In particular, demographic shifts have led to increases in poverty among children.
In the United States, for instance, typical family structures have changed significantly, leading to an increase in single-parent families, which tend to be poorer.
There are differing beliefs about individual responsibility for poverty. Some people believe that poverty is a symptom of societal structure and that some proportion of any society inevitably will be poor. Others feel that poverty results from a failure of social institutions, such as the labor market and schools.
In addition, many people in developed countries blame cycles of poverty, or the tendency for the poor to remain poor, on overly generous welfare programs. Supporters of this position, including some politicians, argue against government spending and initiatives to help the poor.
In the United States, the belief that cash welfare assistance actually encouraged personal decisions leading to poverty dominated policy discussions of the 1990s. In response, in 1996 the U.S. Congress created a new welfare program called Temporary Assistance to Needy Families (TANF). This program ended the guarantee of cash benefits for poor families with children, shifted more control to the states, and established stricter work requirements for recipients. The numbers of poor families with children receiving cash welfare fell dramatically, from 4.6 million in 1996 to 2.1 million at the end of 2001.
Reports have noted that poverty is also symptomatic a symptom of poor basic services, scarce financial resources and low returns from natural wealth such as oil, gas, minerals and fisheries while revenues from public investments and taxes are exposed to corruption and embezzlement.
- High rate of unemployment
- Unemployment is rampant now that the global financial crisis has ravaged the world's economy. With a higher number of unemployed people, crime rates in these cities will increase as people grow desperate to survive. It is also believed, however, that some governments of the world intentionally keep a "sufficient" number of people out of work as a replacement batch when the need arrives.
- Unfair trade
High subsidies and protective tariffs for agriculture in the developed world drains the taxed money and increases prices for consumers in the developed world, decreasing competition and efficiency and preventing exports by more competitive agricultural and other sectors in the developed world due to retaliatory trade barriers and undermining the very type of industry in which developing countires do.
Corruption often accompanies centralization of power, when leaders are not accountable to those they serve. More directly, corruption inhibits development when leaders help themselves to money that would otherwise be used for development projects.
Corruption, both in government and business, places heavy cost on society. Businesses should enact, publicize and follow codes of conduct banning corruption on the part of their staff and directors.
Citizens must demand greater transparency on the part of both government and the corporate sector and create reform movements where needed.
Corruption is both a major cause and a result of poverty around the world. It occurs at all levels of society, from local and national governments, civil society, judiciary functions, large and small businesses, military and other services and so on. Corruption affects the poorest the most, whether in rich or poor nations.
The issue of corruption is very much inter-related with other issues. At a global level, the economic system that has shaped the current form of globalization in the past decades requires further scrutiny for it has also created conditions whereby corruption can flourish and exacerbate the conditions of people around the world who already have little say about their own destiny.
A difficult thing to measure or compare, however, is the impact of corruption on poverty against the effects of inequalities that are structured into law, such as unequal trade agreements, structural adjustment policies,” free” trade agreements and so on.
It is easier to see corruption. It is harder to see these other more formal, even legal forms of “corruption.” It is easy to assume that these are not even issues because they are part of the laws and institutions that govern national and international communities and many of us will be accustomed to it—it is how it works, so to speak.
This is not to belittle the issue of corruption, however, for its impacts are enormous evidently.
A broader way to try and tackle corruption can be made by attempting to provide a more just, democratic and transparent process in terms of relations between donor nations and their creditors:
An independent process would have five goals:
To restore some justice to a system in which international creditors play the role of plaintiff, judge and jury, in their own court of international finance.
To introduce discipline into sovereign lending and borrowing arrangements—and thereby prevent future crises.
To counter corruption in borrowing and lending, by introducing accountability through a free press and greater transparency to civil society in both the creditor and debtor nations.
To strengthen local democratic institutions, by empowering them to challenge and influence elites.
To encourage greater understanding and economic literacy among citizens, and thereby empower them to question, challenge and hold their elites to account.
Governance is defined as the manner in which power is exercised in the management of a country's social and economic resources for development.
Good governance implies a capacity to turn public income into human development outcomes. Good governance is an essential pre-condition for pro-poor growth as it establishes the enabling regulatory and legal framework essential for the sound functioning of land, labor, capital and other factor markets.
Corruption and political instability resulted in weakening of business confidence, deteriorating economic growth, declining public expenditure on basic entitlements, low efficiency in delivery of public services as discussed in the earlier section on human development, and a serious undermining of state institutions and the rule of law.
Prejudice and inequality
Social inequality that stems from cultural ideas about the relative worth of different genders, races, ethnic groups, and social classes. Ascribed inequality works by placing individuals in different social categories at birth, often based on religious, ethnic, or 'racial' characteristics. In certain countries in the world, governments tend to favour a specific creed or race or people. This is evident in South Africa. In South African history, apartheid laws defined a binary caste system that assigned different rights and social spaces to different races, using skin colour to automatically determine the opportunities available to individuals in each group. These people enjoy educational, social and welfare benefits. For example, the children of these people are able to enjoy education with subsidised school fees; adults are able to obtain high-paying jobs easily etc. Instead of channelling resources to help those at need, the governments of these countries choose to treat different races and creeds with prejudice and will treat others with less favouritism. Hence, this leads to poverty.
Corruption is a rampant problem in the world today, especially in third-world countries. It undermines democracy and good governance by flouting formal processes. Corruption often occurs when leaders are not accountable to those they serve. Corruption usually inhibits development when leaders help themselves to money that would otherwise be used for development projects. Corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Also, it generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. In Nigeria for example, more than 400 Billion dollars was stolen from the National Treasury by Nigeria's leaders from 1960 to 1999. Forms of such corruption include embezzlement, bribery, cronyism, nepotism, graft etc. Hence, this leads to poverty as leaders should have used the money they usurped to help the poor, which results in a lack of funds.
Centralization of Power
In many developing countries, political power is disproportionately centralized. Instead of having a network of political representatives distributed equally throughout society, in centralized systems of governance one major party, politician, or region is responsible for decision-making throughout the country，causing development problems. For example, politicians make decisions about places that they are unfamiliar with, lacking sufficient knowledge about the context to design effective and appropriate policies and programs.
External & Other Causes
Nations experiencing civil war will experience stunted economic growth rate. For example, from 1990 to 1993, the period encompassing Desert Storm, per capita GDP in Iraq fell from $3500 to $761.
This is significant as it shows the drop in the well being of all citizens in the affected country. It however, fails to capture the broader affects of damages to the infrastructure and social services, such as health care and access to clean water, which are not captured. The loss of infrastructure and breakdown of society will inevitably lead to the nation having to spend a hefty sum to rebuild and prepare itself for the economy.
Furthermore, civil war diverts scarce resources from fighting poverty to maintaining a military. This is evident in the cases of Ethiopia and Eritrea. The most recent conflict over borders between the two countries erupted into war during 1999 and 2000, a period when both countries faced food shortages due to droughts.
There is a lack of uniform, basic infrastructure, such as roads and means of communication and hence, development can hardly occur in poor countries. Some scholars have asserted that colonial history was an important factor and reason to the current situation.
In most countries with a history of colonization, colonialists used the colonies to provide raw materials and other resources for their own economic growth and development. M. E. Chamberlain once said that the "Industrial revolution depended on raw materials like iron and coal. Africa was likely to be more significant as a supplier than as a market." Moreover, David Thompson also asserted that “the special attractions of Africa and Asia were, indeed, that they offered many of the raw materials needed by the multiplying factories of Europe: including cotton, silk, rubber, vegetable oils, and the rarer minerals.” This is significant as the colonialists colonised these countries due to the fact that the colonies would provide natural resources and markets for economic and industrial growth, thus solving their economic woes.
Furthermore, H.R. Cowie has also pointed out that "New systems of agricultural production imposed upon colonial communities transformed land owners into wage earners susceptible to the threat of unemployment." This is evident in Senegal and Nigeria in which the groundnut-oil mill was restricted. It was also known that the state agricultural export monopolies in Burma and in East and West Africa have withheld from the producers a very large production of the sales proceeds. This is significant as colonialism brought along poverty indirectly as they prevented the colonies from developing. This is again propounded by J.A Hobson, H.N Bralisford, Leonard Woolf and Lenin, who said that colonialism brought about exploitation of economies and resource primarily through conquest of markets for capital and commodities. Professor Gunnar Myrdal also said that colonialism brought about the retardation of economy by depriving the colonies of the economic benefits of a sovereign state. He elaborated that the inability of locals to pursue active economic development policies, especially in undertaking comprehensive central planning via state control, leading to the retardation of the economy. Hence, countries that were ex-colonies (such as Ex-colonies Somalia and Uganda) face corruption and poverty.
Natural disasters such as hurricanes and earthquakes have caused millions of dollars worth of infrastructure and the loss of lives. Developing countries often suffer much more extensive and acute crises at the hands of natural disasters, because limited resources become obstacles for the construction of adequate housing, infrastructure, and mechanisms for responding to crises. Natural disasters, being uncontrollable by man, affect annual agricultural output, such as floods destroying the fertility of soils by washing away mineral-rich topsoil, and take away natural decomposing agents, rendering the soil infertile. Droughts cause the land to become barren and unsuitable for cultivation. The states of the U.S.A situated in Tornado Alley face constant fears of poor harvests in the face of frequent tornado occurrences. In the case of the Sichuan Earthquake in 2008 and The 2004 Tsunami catastrophe not only resulted in the loss of agriculture, but the destruction of millions of dollars worth of infrastructure as well.
Uneven distribution of resources/lack of adequate resources in the world economy
For example, it is known that many countries are facing poverty due to the lack of resources in the country.
Why is this the case? One reason is due to the legacy of colonisation. It was known that many years ago, many countries were colonised, which led to the transportation of many goods to the country which colonised it. Hence, the colonised country does not have enough food/resources for its people. Moreover, when these once colonised countries start development towards modernisation, they lack raw infrastructure, such as transportation systems and power-generating facilities. These countries also lack raw materials and knowledge skills. As a result of this, the countries must rely on trade with developed countries for manufactured goods, instead of themselves, which burdens them even more. The lack of materials also leads to lesser jobs for the population, in which will increase the rate of poverty, since most people in that countries will be unemployed, and are unable to earn themselves a living. As this goes on and on, the rate poverty will increase drastically.
Some social scientists argue that neocolonisation, a type of colonisation, is also practised in many wealthy countries. The affluence of these countries is based to a large extent on favourable trade with the developing world. Developed countries have been able to get inexpensive natural resources from poorer countries in Asia, Africa, and Latin America, including oil for power, ores and minerals for manufacturing durable goods, and manufactured goods made by low-wage workers in factories operated by multinational corporations. This practice contributes to the dependency of poorer countries while not raising their standards of living.
There are things that some people until now can't apprehend. Aside from the everyday expenditure, many people have vices such as cigarettes and alcohols which we weren't able to include in our daily expenses. When people begin to get wages or salaries, they immediately spend the money for worthless and nonsense things instead of saving it. Some of them, if it is not for their vices, they spend their money in stakes, testing their luck and expecting to be rich immediately.
As we all know, poverty is a curse. It was written in the Bible that God has curse man, "In toil you will eat of it all the days of your life." This only means that man can't eat without working hard. God will only provide for those who are persistent. There's no place in this world for lazy people.