POVERTY

WORLD BANK‘S DEFINITION OF POVERTY Poverty is an income level below some minimum level

necessary to meet basic needs. This minimum level is usually called the “poverty line”. What is necessary to satisfy basic needs varies across time and societies.

Therefore, poverty lines vary in time and place, and each country uses lines which are appropriate to its level of development, societal norms and values.

But the content of the needs is more or less the same everywhere. Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job, poverty is fear for the future,.

Poverty is losing a child to illness brought about by unclean water.

Poverty is powerlessness, lack of representation and freedom.

UN DEFINITION OF POVERTY

“Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity.

It means lack of basic capacity to participate effectively in society.

It means not having enough to feed and cloth a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit.

It means insecurity, powerlessness and exclusion of individuals, households and communities.

It means susceptibility to violence, and it often implies living on marginal or fragile environments, without access to clean water or sanitation”

WORLD SUMMIT ON SOCIAL DEVELOPMENT IN COPENHEGAN IN 1995

Poverty is a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information.

It depends not only on income but also on access to services. It includes a lack of income and productive resources to ensure

sustainable livelihoods; hunger and malnutrition; ill health; limited or lack of access to education and other basic services; increased morbidity and mortality from illness; homelessness and inadequate housing; unsafe environments and social discrimination and exclusion.

It is also characterized by lack of participation in decision making and in civil, social and cultural life.

It occurs in all countries: as mass poverty in many developing countries, pockets of poverty amid wealth in developed countries, loss of livelihoods as a result of economic recession, sudden poverty as a result of disaster or conflict, the poverty of low-wage workers, and the utter destitution of people who fall outside family support systems, social institutions and safety nets.

DEFINITION BY PETER TOWNSEND:

And there’s the equally interesting but completely different definition by Peter Townsend:

Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or are at least widely encouraged or approved, in the societies to which they belong.

Their resources are so seriously below those commanded by the average individual or family that they are, in effect, excluded from ordinary living patterns and activities.

DIMENSIONS OF POVERTY

Poverty can be viewed in

ABSOLUTE AND RELATIVE TERMS. OBJECTIVE AND SUBJECTIVE PERSPECTIVES PHYSIOLOGICAL AND SOCIOLOGICAL DEPRIVATIONS POVERTY AND INEQUITY POVERTY AND VULNERABILITY POVERTY AND EXCLUSION POVERTY AND UNDERDEVELOPMENT

1. ABSOLUTE AND RELATIVE POVERTY

Poverty can be viewed in absolute and relative terms.

1.Absolute poverty refers to subsistence below minimum, socially acceptable living conditions, usually established based on income and nutritional requirements and other essential goods.

ABSOLUTE POVERTY

Absolute poverty as the absence of any two of the following eight basic needs: [

1. Food: Body Mass Index must be above 16.2. Safe drinking water: Water must not come solely from rivers and ponds, and must be available nearby

(less than 15 minutes' walk each way).

3. Sanitation facilities: Toilets or latrines must be accessible in or near the home.

4. Health: Treatment must be received for serious illnesses and pregnancy.

5. Shelter: Homes must have fewer than four people living in each room. Floors must not be made of dirt, mud, or clay.

6. Education: Everyone must attend school or otherwise learn to read.

7. Information: Everyone must have access to newspapers, radios, televisions, computers, or telephones at home.

8. Access to services: This item is used to indicate the complete panoply of education, health, legal, social, and financial (credit) services.

ABSOLUTE POVERTY……………….

This concept of poverty is strongly linked to destitution and can be applied to all countries or societies.

A person who is considered poor under this criterion is classified internationally in the same way throughout the world.

The common international poverty line has in the past been roughly $1 a day. In 2008, the World Bank came out with a revised figure of $1.25  purchasing-power parity(PPP).

Purchasing power parity(PPP) is an economic theory and a technique used to determine the relative value of currencies, estimating the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to (or on par with) each currency's purchasing power.

 It asks how much money would be needed to purchase the same goods and services in two countries, and uses that to calculate an implicit foreign exchange rate. Using that PPP rate, an amount of money thus has the same purchasing power in different countries

RELATIVE POVERTY

Relative poverty compares the lowest segments of a population with upper segments.

RELATIVE POVERTY………………………………

In this system, if everyone's real income in an economy increases, but the income distribution stays the same, then the rate of relative poverty will also stay the same.

This means, by its very nature, that there will always be a family living in (relative) poverty, even if they have a very high living standard, unless everyone has almost exactly the same income.

OBJECTIVE AND SUBJECTIVE PERSPECTIVES

Poverty can be approached from objective or subjective perspectives.

The objective perspective (sometimes referred to as the welfare approach) involves normative judgments as to what constitutes poverty and what is required to move people out of their impoverished state.

The subjective approach places a premium on people’s preferences, on how much they value goods and services (hence the emphasis on individual utility).

OBJECTIVE AND SUBJECTIVE PERSPECTIVES………………………

Economists have traditionally based their work on the objective approach, mainly because of the obstacles encountered when trying to aggregate multiple individual utilities across a population.

Subjective poverty lines are based on the opinion held by individuals on themselves in relation to society as a whole.

In other words, the concept of poverty used in these lines to divide the population into poor and not poor is based on the perception of households and individuals themselves.

DIFFERENCE BETWEEN SUBJECTIVE AND OBJECTIVE POVERTY

When using subjective focus for measuring poverty, it is assumed that "each individual is the best judge of their own situation”.

Advocates of objective approach use the argument that individuals are not always the best judge of what is best for them.

For example, most poverty measurement systems focus on nutritional attainments. Although all individuals value food consumption,some may place higher value on certain food types or food quantities that are not best for their physiological well being. It is conceivable that the subjective approach could both undervalue or overvalue food consumption when compared to the welfare approach, leading to conflicting assessments as to who are the poor.

PHYSIOLOGICAL AND SOCIOLOGICAL DEPRIVATIONS

PHYSIOLOGICAL

Regarding the “physiological”, the line of thinking is as follows: people are poor because they lack income, food, clothing and shelter.

Both the income and basic needs concepts of poverty stem from physiological deprivations (although some advocates of the basic needs concept set the parameters beyond physiological needs).

Strategies to reduce poverty emerging from these approaches focus on increasing the income/consumption of the poor and their attainment of “satisfiers” of basic needs, such as health and education.

PERSPECTIVE OF SOCIOLOGICAL

The concepts of poverty emerging from the perspective of sociological deprivations are rooted in underlying structural inequities and inherent disadvantages.

It is also called as structural poverty. It can be defined as Deprivation which is reinforced by administrative, economic and social barriers preventing access to new life skills, employment opportunities, improved health care and better housing.

They are based on observations that even when resources are flowing into sectors dominated by the poor, the latter may not be able to take full advantage of them because of structural impediments.

These constraints hamper access by the poor to “external” assets, such as credit, land, infrastructure and common property (i.e., the natural environment), and “internal” assets, such as health, nutrition and education.

The fundamental causal factors lie in power structures and governance issues, as well as in the inequities imbedded in macropolicy frameworks and distributional systems.

POVERTY AND INEQUITY

Whereas poverty refers to different forms of deprivation that can be expressed in a variety of terms (i.e., income, basic needs, human capabilities), equity is concerned with distribution within a population group.

Despite the clear distinction between the two concepts, analysis of poverty often employs indicators of equity because of inherent linkages between the two.

Recent studies have concluded that in certain country contexts it is easier to reduce poverty under relatively egalitarian conditions.

POVERTY AND VULNERABILITY

Although poverty and vulnerability are often related, they are not synonymous.

Some groups may be at risk of becoming poor because of inherent vulnerabilities (i.e., different types of discrimination based on class, gender,ethnicity, or factors such as disability, region of residence and family configuration).

Furthermore, certain combinations of vulnerability may be strongly correlated with poverty, such as female-headed households or families

living in remote and isolated mountainous regions. But not all members of a particular vulnerable group are

invariably poor—hence the need to distinguish between the two when dealing with indicators.

In short, poverty relates to deprivation, while vulnerability is a function of external risks, shocks, stresses and internal defenselessness.

POVERTY AND EXCLUSION

There is no broad consensus on the definition of social exclusion, or its relationship to poverty.

At one end of the spectrum, there are those who define social exclusion within the concept of poverty, focusing on those aspects of social deprivation that impede people from participating fully in their society and its development.

At the other end of the spectrum, there are those whose notion of social exclusion encompasses a much broader range of issues, including poverty itself. Needless to say, between these two extremes lies a range of different approaches to the concept.

Clearly, the definition of social exclusion depends to a great extent on how one defines poverty. If one’s definition of poverty were narrow, expressed in terms of material deprivation (such as lack of income), then it would not be surprising that the definition of social exclusion would be considered in broad terms, including material deprivation.

If, however, one’s definition of poverty is multidimensional, then it is likely that social exclusion would refer more specifically to issues of participation, empowerment and social rights.

POVERTY AND UNDERDEVELOPMENT

The distinction between poverty and underdevelopment also depends on how each is defined. When defined in broad human deprivation terms, poverty is often viewed as a form of underdevelopment.

The Human Development Report 1997 distinguishes between the two concepts by associating the former with individuals and the latter with an aggregate perspective.

“The contrast between human development and human poverty reflects two different ways of evaluating development. One way, the ‘conglomerative perspective,’ focuses on the advances made by all groups in each community, from the rich to the poor.

This contrasts with an alternative viewpoint, the ‘deprivational perspective,’ in which development is

judged by the way the poor and the deprived fare in each community. Lack of progress in reducing the disadvantages of the deprived cannot be ‘washed away’ by large advances—no matter how large—made by the better-off people.”

Given the close relationship between these two concepts, it is not surprising that many poverty indicators are the same as those used to measure underdevelopment.

From a policy and programme perspective, the necessity of recognizing a distinction between poverty and underdevelopment depends a great deal on two factors: the degree of equity within a society, and the prevalence of poverty. Effective anti-poverty policies and programmes in relatively inegalitarian societies with small pockets of poverty would look very different from those in relatively egalitarian societies with extensive poverty

DEPRIVATION

deprivation   a. The act or an instance of depriving; loss. b. The condition of being deprived.

Deprivation can be conceptualised as a continuum which ranges from no deprivation through mild, moderate and severe deprivation to extreme deprivation.

Continuum of deprivation

 

Mild moderate severe

 

No Deprivation Extreme deprivation

 

   

DEPRIVATION INDICATORS

In order to measure absolute poverty amongst children, it is necessary to define the threshold measures of severe deprivation of basic human need for:

1. food 2. safe drinking water 3. sanitation facilities 4. health 5. shelter 6. education 7. information 8. access to services

Poverty Line There is no international consensus on what poverty is and how it

should be measured. The common starting point of many poverty calculations is a food energy intake requirement of 2,100 calories per person per day which is a normal requirement of a human body (Ravallion, 1994). The method of calculation is to use a basket of foods consumed by a "reference population" to fix the mix of foods and their prices. The total food quantity is calculated by scaling the mix of foods to achieve the level of 2,100 calories based on commonly consumed local food items. The poverty line is the expenditure necessary to achieve this caloric intake (Pradhan et. al., 2000). In many cases, consumption expenditures may include other non-food essentials, e.g. clothing, housing and others.

The World Bank calculated the international poverty lines by standardizing consumption levels across countries. Purchasing Power Parity(PPP) is estimated based on new price data generated by the International Comparisons Program for115 countries. Internationally, an income of less than $1.25 per day per head of purchasing power parity is defined asextreme poverty.