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'Income Poverty' means earning less than one US dollar a day. 1.2 billion people
suffer from income poverty. This means one in every five people on the earth.
But there is also 'Non-income Poverty'. This includes:
- not having access to decent and affordable services (eg education, health,
water, sanitation)
- not having access to decent and affordable infrastructure (eg roads, transport,
electricity, telephones, radio, TV and the internet)
- being unable to release your entrepreneurial talent because you don't have
access to, or information about, technology, markets and financial services
- and, even if you had access to all of these, it would still be a kind of poverty
if you did not feel safe in your home, if you could not trust the legal and
political systems, if you felt powerless to influence what happens in your life.
There is already enough wealth in the world to solve all the poverty problems.
It would, however, be very difficult to convince the people who control most of
it to use it differently. The challenge therefore is to create new wealth and to
make sure that a reasonable amount of it is available to help people escape from
poverty.
Some people feel that the poor are poor because they are either lazy, lack
education or are spendthrifts. But it is not that simple. The rules that control
global finance, trade and development have built up so that it is very difficult
for the poor to catch up with the rich. The two main theories about how to
tackle these problems are described in the box.
Theory A was the basis of the early structural adjustments programmes (SAPs) of
the World Bank and the IMF. These were not as successful as they might have
been. In recent times there has been some movement towards Theory B.
Poverty Reduction Strategies (PRS) are based on the idea of pro-poor growth
although the methods for channelling wealth into social safety nets and social
spending are not always worked out in detail. |
There are 272 countries in the world.
In 2001 the value of all the goods and services they produced was 47
trillion US Dollars.
30 trillion was produced by only 10 countries. 10 trillion was
produced by the USA and 5.6 trillion by China.
[Source: CIA World Factbook 2002]
million 1,000,000
billion 1,000,000,000
trillion 1,000,000,000,000 |
Theory A - Free markets and trickle down wealth
Some people believe that we should give the successful
entrepreneurs of the world the maximum amount of freedom to create
businesses and become rich. This would involve selling government
industries and services to them and getting rid of regulations on
how finance, trade and development is controlled. (He governs best
who governs least!)
The theory is that this would create lots of new jobs and allow new
wealth to be created. Some of the wealth would 'trickle-down' to
poor people.
In practice, however, in most places, the rich get even richer and
the poor get even poorer.
Theory B -Regulated markets and pro-poor growth
Since the collapse of communism there are few people who believe
that government should own and be in control of everything. But
there is a middle way.
This theory still believes that growth will happen because of
entrepreneurs. The difference is that the government will set rules
about what happens to part of business profits and about how
businesses treat their employees and the environment.
In this theory the government would keep control of key services (eg
education and health) to make sure that poor people are not ignored. |
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