Poverty in Global Context

The problem of poverty has crippled the world economic development from time to time. Poverty is visible in all the corners of the world; though, its severity varies. It is more prominent in the developing and less developed economies, while; the incidence of poverty is less common in the highly industrialized nations and OECD countries like the United Kingdom and the United States. The effects of poverty are particularly severe for sub-Saharan Africa.

Concepts of Poverty

The concept of poverty line is crucial in the context of poverty. It describes the minimum income level required to maintain a decent standard of living. The absolute poverty measures point to the total number of people living below the poverty line. These measures focus on the individual’s capacity to consume and are independent of the income distribution change. The concept of relative poverty is more or less like a measure of income inequality. If there is less disparity in the distribution of income in a particular economy, the relative poverty is bound to be low.

Poverty Line at a Glance

The definition of poverty line has been changed from time to time. As per the World Bank definition set in 1990, $1-a-day defines the international poverty line after adjusting for different measures of purchasing parities. Individuals earning less than this level are considered to be extremely poor. It is the most widely used measure of absolute poverty line. The absolute poverty line fixed by the World Bank is bit higher for the industrialized nations. Here, the level is $14.40-a-day. This poverty line is adjusted for the standards of living across the developing and industrialized nations. However, some of the leading economies of the world (like US) fix the measures of absolute poverty line as per their discretions.

On Cycle of Poverty

The Cycle of Poverty is another important term in the context of poverty. It describes the situation where poor people fail to get out of the poverty trap for successive generations due to lack of critical resources.

Human Poverty Index

Illiteracy, short life span and dearth of public and private resources are the common manifestations of poverty. HPI or Human Poverty Index developed by UNDP aims to measure the deprivations arising out of human poverty. The Human Poverty Index also describes the difference between income poverty and human poverty. The value of the index reveals the proportion of total population getting affected by the three basic poverty dimensions. The HPI is a good measure to get an idea about how deep-rooted the poverty is. Knowledge, longevity and proper standard of living are the three variables that are commonly used to measure the principal dimensions of HPI.

Poverty in Global Context

Sub-Saharan Africa has been witness to the most severe form of poverty. Nearly 50% of the population survives on less than $1-a-day. Malnutrition, internal conflicts, dreadful diseases like AIDS and improper governmental measures are the main reasons behind this extreme poverty.

As far as poverty goes, it is the Southeast Asia that comes next to sub-Saharan Africa. The World Bank report reveals that Southeast Asia is the home to around half of the total poor population of the world. Around 85% of the total population of the region survives on below $2-a-day.

The poverty situation is bit better for Eastern Asia and Pacific. Despite 50% of population living under $2-a-day, the number of poor people in this region has declined significantly in recent past. It is mainly due to the social and economic progress achieved by China over the passage of time.

When it comes to Latin America, inequality in income distribution resulting from poverty is a matter of great concern. According to a World Bank report, nearly 48% of the total income is concentrated in the hands of wealthiest 1/10th of the population of the country; while the impoverished 1/10th section earns merely 1.6% of the total population. However, there is a ray of hope as the economy is going through a phase of rapid economic growth. In conclusion it can be said it is a great challenge to alleviate poverty. However, attempts are on to implement the cost-effective measures of poverty alleviation uniformly across the world. The welfare organizations are also playing a crucial role in this context.