DR. PETROS KOSMASLECTURER

VARNA FREE UNIVERSITY

ACADEMIC YEAR 2010 - 2011

LECTURE 5

GLOBALIZATION AND

ECONOMIC DEVEPOPMENT

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POVERTY

Poverty is the lack of basic human needs, such as clean water, nutrition, health care, education, clothing and shelter, because of the inability to afford them. This is also referred to as absolute poverty or destitution.

Relative poverty is the condition of having fewer resources or less income than others within a society or country, or compared to worldwide averages. About 1.7 billion people live in absolute poverty; before the industrial revolution, poverty had mostly been the norm.

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POVERTY

Poverty reduction has historically been a result of economic growth as increased levels of production, such as modern industrial technology, made more wealth available for those who were otherwise too poor to afford them. Also, investments in modernizing agriculture and increasing yields is considered the core of the antipoverty effort , given three-quarters of the world’s poor are rural farmers.

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Definitions

World Bank

Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes

and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate

physical security, lack of voice, and insufficient capacity and opportunity to better one’s life.

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Definitions

United Nations (UN)

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 in marginal or fragile environments, without access to

clean water or sanitation. ECO-1010

Definitions

Government of Ireland

People are living in poverty if their income and resources (material, cultural and social) are so inadequate as to preclude them from having a

standard of living which is regarded as acceptable by Irish society generally. As a result of inadequate

income and resources people may be excluded and marginalised from participating in activities which are

considered the norm for other people in society. ECO-1010

Definitions

Amartya Sen (1983)

To meet nutritional requirements, to escape avoidable disease, to be sheltered, to be clothed, to

be able to travel, and to be educated.

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Effects of Poverty 1) Health

Deaths from povertyOver the last decade, disasters around the world have caused an average 90,000 deaths a year.

The UN estimates that 34,000 children and 16,000 adults die each day from hunger or preventable diseases with poverty-related causes. That amounts to 18 million a year.

(See R Riddell, Does Foreign Aid Really Work?, Page 121).

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Effects of Poverty 1) Health

Hunger, disease, and less education describe a person in poverty. One third of deaths - some 18 million people a year or 50,000 per day - are due to poverty-related causes: in total 270 million people, most of them women and children, have died as a result of poverty since 1990. Those living in poverty suffer disproportionately from hunger or even starvation and disease.

Those living in poverty suffer lower life expectancy. According to the World Health Organization (WHO), hunger and malnutrition are the single gravest threats to the world's public health and malnutrition is by far the biggest contributor to child mortality, present in half of all cases.

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Effects of Poverty 2) Education

Research has found that there is a high risk of educational underachievement for children who are from low-income housing circumstances. This often is a process that begins in primary school for some less fortunate children. In the US educational system, these children are at a higher risk than other children for retention in their grade, special placements during the school's hours and even not completing their high school education.

Families and society who submit low levels of investment in the education and development of less fortunate children end up with less favorable results for the children who see a life of parental employment reduction and low wages.

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Effects of Poverty 2) Education

Poverty often drastically affects children's success in school. A child's "home activities, preferences, mannerisms" must align with the world and in the cases that they do not these students are at a disadvantage in the school and most importantly the classroom. 

Therefore, it is safe to state that children who live at or below the poverty level will have far less success educationally than children who live above the poverty line. Poor children have a great deal less healthcare and this ultimately results in many absences from the academic year. Additionally, poor children are much more likely to suffer from hunger, fatigue, irritability, headaches, ear infections, flu, and colds. These illnesses could potentially restrict a child or student's focus and concentration. ECO-1010

Housing3) Housing

Slum-dwellers, who make up a third of the world's urban population, live in a poverty no better, if not worse, than rural people, who are the traditional focus of the poverty in the developing world, according to a report by the United Nations.

Most of the children living in institutions around the world have a surviving parent or close relative, and they most commonly entered orphanages because of poverty.

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Violence4) Violence

According to a UN report on modern slavery, the most common form of human trafficking is for prostitution, which is largely fueled by poverty. In Zimbabwe, a number of girls are turning to prostitution for food to survive because of the increasing poverty.

In one survey, 67% of children from disadvantaged inner cities said they had witnessed a serious assault, and 33% reported witnessing a homicide. 51% of fifth graders from New Orleans (median income for a household: $27,133) have been found to be victims of violence, compared to 32% in Washington DC (mean income for a household: $40,127).

Also there are also many effects of poverty closer to home. For example after dropping out of school children may turn to violence as a source of income i.e mugging people, betting during street fights etc...

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Almost half the world — over three billion people — live on less than $2.50 a day. 

Poverty Facts and Stats 

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Poverty Facts and Stats

1) Over the last decade, disasters around the world have caused an average 90,000 deaths a year.

2) More than 80 percent of the world’s population lives in countries where income differentials are widening.

3) The poorest 40 percent of the world’s population accounts for 5 percent of global income. The richest 20 percent accounts for three-quarters of world income.

4) According to UNICEF, 22,000 children die each day due to poverty. And they “die quietly in some of the poorest villages on earth, far removed from the scrutiny and the conscience of the world. Being meek and weak in life makes these dying multitudes even more invisible in death.

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Poverty Facts and Stats

5) Around 27-28 percent of all children in developing countries are estimated to be underweight or stunted. The two regions that account for the bulk of the deficit

are South Asia and sub-Saharan Africa.

6) Based on enrollment data, about 72 million children of primary school age in the developing world were not in

school in 2005; 57 per cent of them were girls. And these are regarded as optimistic numbers.

7) Nearly a billion people entered the 21st century unable to read a book or sign their names.

8) Less than 1% of what the world spent every year on weapons was needed to put every child into school by the

year 2000.ECO-1010

Poverty Facts and Stats

9) Infectious diseases continue to blight the lives of the poor across the world. An estimated 40

million people are living with HIV/AIDS, with 3 million deaths in 2004. Every year there are 350–

500 million cases of malaria, with 1 million fatalities: Africa accounts for 90 percent of

malarial deaths and African children account for over 80 percent of malaria victims worldwide.

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Poverty Facts and Stats10) Water problems affect half of humanity:

1.1 billion people in developing countries have inadequate access to water, and 2.6 billion lack basic sanitation.

Almost two in three people lacking access to clean water survive on less than $2 a day, with one in three living on less than $1 a day.

Access to piped water into the household averages about 85% for the wealthiest 20% of the population, compared with 25% for the poorest 20%.

Millions of women spending several hours a day collecting water.

To these human costs can be added the massive economic waste associated with the water and sanitation deficit.… The costs associated with health spending, productivity losses and labour diversions … are greatest in some of the poorest countries. Sub-Saharan Africa loses about 5% of GDP, or some $28.4 billion annually, a figure that exceeds total aid flows and debt relief to the region in 2003.

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Poverty Facts and Stats11. Number of children in the world = 2.2 billion

1 billion (every second child) lives in Poverty

Children out of education worldwide 121 million

Shelter, safe water and health For the 1.9 billion children from the developing world, there are: 640 million without adequate shelter (1 in 3) 400 million with no access to safe water (1 in 5) 270 million with no access to health services (1 in 7)

Worldwide, 2.2 million children die each year because they are not immunized 15 million children orphaned due to HIV/AIDS (similar to the total

children population in Germany or United Kingdom)

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Poverty Facts and Stats12. Rural areas account for three in every four people living

on less than US$1 a day and a similar share of the world population suffering from malnutrition. However, urbanization is not synonymous with human progress. Urban slum growth is outpacing urban growth by a wide margin.

13. Approximately half the world’s population now live in cities and towns. In 2005, one out of three urban dwellers (approximately 1 billion people) was living in slum conditions.

14. Indoor air pollution resulting from the use of solid fuels [by poorer segments of society] is a major killer. It claims the lives of 1.5 million people each year, more than half of them below the age of five: that is 4000 deaths a day. To put this number in context, it exceeds total deaths from malaria and rivals the number of deaths from tuberculosis.

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Poverty Facts and Stats

15. In 2005, the wealthiest 20% of the world accounted for 76.6% of total private consumption. The poorest fifth just 1.5%

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Poverty Facts and Stats

16. The poorest 10% accounted for just 0.5% and the wealthiest 10% accounted for 59% of all the consumption:

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Financing the MDGs (Millennium Development Goals)

According to the Zedillo report to the UN, the MDGs will cost approximately the following to implement:

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Financing the MDGs (Millennium Development Goals)

These contrast with the following spending figures (for 2005):

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Financing the MDGs (Millennium Development Goals)

These contrast with the following spending figures (for 2005):

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#1 Approximately 45 million Americans were living in poverty in 2009.

#2 According to the Associated Press, experts believe that 2009 saw the largest single year increase in the U.S. poverty rate since the U.S. government began calculating poverty figures back in 1959.

#3 The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.

#4 According to the U.S. Department of Agriculture, on a year-over-year basis, household participation in the food stamp program has increased 20.3%.

#5 The number of Americans on food stamps surpassed 41 million for the first time ever in June.

 

15 Shocking Poverty Statistics  

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#6 As of June, the number of Americans on food stamps had set a new all-time record for 19 consecutive months.

#7 One out of every 6 Americans is now being served by at least one government anti-poverty program.

#8 More than 50 million Americans are now on Medicaid, the U.S. government health care program designed principally to help the poor.

#9 One out of every 7 mortages in the United States was either delinquent or in foreclosure during the first quarter of 2010.

#10 Nearly 10 million Americans now receive unemployment insurance, which is almost 4 times as many as were receiving it in 2007.

15 Shocking Poverty Statistics  

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#11 The number of Americans receiving long-term unemployment benefits has risen over 60% in just the past year.

#12 According to one recent survey, 28% of all US households have at least one member that is looking for a full-time job.

#13 Nationwide, bankruptcy filings rose 20% in the 12 month period ending June 30th.

#14 More than 25 percent of all Americans now have a credit score below 599.

#15 One out of every 5 children in the United States is now living in poverty.

15 Shocking Poverty Statistics  

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Poverty Reduction

Historically, poverty reduction has been largely a result of economic growth. The Industrial Revolution led to high economic growth and eliminated mass poverty in what is now considered the developed world.

 Economic growth in agriculture is, on average, at least twice as effective in benefiting the poorest half of a country's population as growth generated in non-agricultural sectors. However, aid is essential in providing better lives for those who are already poor and in sponsoring medical and scientific effort.

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Poverty Reduction

In The Protestant Ethic and the Spirit of Capitalism, Max Weber, first suggested that cultural values could affect economic success, arguing that the Protestant Reformation led to values that drove people toward worldly achievements, a hard work ethic, and saving to accumulate wealth for investment.

Marxian Theory – class struggle

More on InequalityThe richest 50 million people have the same income as the

poorest 2.7 billion. As Larry Elliot, ‘The slice of the cake taken by 1% is the same size as that handed to the poorest 57%’.

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Poverty Reduction

1) Capital, infrastructure and technology

Investments in human capital, in the form of health, is needed for social and economic development.

Nations do not necessarily need wealth to gain health.

Cheap water filters and promoting hand washing are some of the most cost effective health interventions and can cut deaths. 

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.

UN economists argue that good infrastructure, such as roads and information networks, helps market reforms to work.

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Poverty Reduction

1) Capital, infrastructure and technology

It was the technology of the steam engine that originally began the dramatic decreases in poverty levels.

Twelve years of education, that is completing secondary school, protects 80 per cent of young people against poverty.

(See ECLAC, 1997, Social Panorama of Latin America, Santiago de Chile: ECLAC; also the Chronic Poverty Report 2008.)

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Poverty Reduction

2) AidAid in its simplest form is a basic income grant, a form of

social security periodically providing citizens with money.

Researchers say it is more efficient to support the families and extended families that care for the vast majority of orphans with simple allocations of cash than supporting orphanages, who get most of the aid.

Another form of aid is microloans, made famous by the Grammeen Bank, where small amounts of money are loaned to farmers or villages, mostly women, who can then obtain physical capital to increase their economic rewards. 

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Poverty Reduction

3) Empowering Women

Empowering women has helped some countries increase and sustain economic development. When given more rights and opportunities women begin to receive more education, thus increasing the overall human capital of the country;

when given more influence women seem to act more responsibly in helping people in the family or village; and when better educated and more in control of their lives, women are more successful in bringing down rapid population growth because they have more say in family planning.

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