Wednesday, September 19, 2007

Root causes of poverty?

Express your thoughts on the root causes of poverty.

To start the discussion, I will put forth a simple "downward spiral theory" as what I call it.
Assume a family is currently in a state of basic sustenance but without much savings (i.e. the earnings barely match the spendings of the family). My theory is that one of the main causes of driving such a family into a state of poverty is an "action" that triggers a downward spiral where the family is forced into a situation where the spending drastically overshoots the earnings for a short timeperiod. This leaves the family in a big debt trap that they are unable to come out of.
Now if this negative cycle continues for a prolonged period (say 2-3 years), then it would make it much harder for them to come out of it. The moneylenders who milk this situation by lending money at exhorbitant rates further worsen it.

In my opinion, healthcare has been a main cause of poverty in Africa. The average expectancy in Africa is in the 40s. So an average person gets ill in the mid 30s and ends up spending a big chunk of their earnings on healthcare. Some statistics state that in certain places more than half of the earnings is spent on healthcare. Also, a very low expectancy rate drastically reduces the working population which is critical for maintain the "earnings" in a family. In Africa, I feel healthcare costs drive the downward spiral.

your thoughts?


Ankit said...

Healthcare is definitely one of the root causes of poverty in many nations. But illness cannot be avoided. So people should be made aware about insurance schemes that are prevailing so that common people can make use of it and all their money does not get drained off on healthcare.
One more cause of poverty can possibly be the lack of awareness and education. Few facts and figures can be found here:
Also, the people in Africa have a low standard of living. Since they have a low standard of living they are exposed to diseases more frequently.
Rather than gathering funds and help from nations, Africa should make a good attempt to educate people which can help them think better and live a better living.

Lakshminarayanan Subramanian said...

Is insurance a good thing? I think insurance can also take a society into a scenario with burgeoning healthcare costs. Many developed countries push for standardised healthcare policies which can in turn lead to insurance companies pushing for basic healthcare standards. In many developing countries, often non-standard practices can lead to much lower cares of delivery - for example, do we really need a doctor to do healthcare delivery for basic healthcare problems?

Ankit said...

That's a good point you raized. Maybe insurance is not a very good option, but then I wonder that why are more and more people supporting insurance by buying the insurance policies.
I think that Insurance will not make the poor people pay a huge sum of money for their health care and at the same time they can have the best medical treatment for their illness, thus this can reduce the mortality rate.

Shobhit S Thapar said...

Certain facts on poverty across the globe:

* Half the world — nearly three billion people — live on less than two dollars a day.

* According to UNICEF, 30,000 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.”

That is about 210,000 children each week, or just under 11 million children under five years of age, each year.

* The GDP (Gross Domestic Product) of the poorest 48 nations (i.e. a quarter of the world’s countries) is less than the wealth of the world’s three richest people combined.

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

* Less than one per cent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn’t happen.

* 1 billion children live in poverty (1 in 2 children in the world). 640 million live without adequate shelter, 400 million have no access to safe water, 270 million have no access to health services. 10.6 million died in 2003 before they reached the age of 5 (or roughly 29,000 children per day).

Shobhit S Thapar said...

Hunger a big cause of poverty:

In 2005, in all developing countries 32% of children under 5 years of age (178 million children) were estimated
to be stunted (that is, their height fell –2 standard deviations below the median height-for-age of the reference
population). In that year, more than 40% of stunting was found in the WHO regions of Africa and South-East
Asia, around 25% in the Eastern Mediterranean Region and 10–15% in the regions of the Americas and the
Western Pacifi c. Of the 39 countries with a prevalence of stunting of 40% and higher, 22 are in the African
Region, 7 in South-East Asia, 4 in the Eastern Mediterranean, 4 in the Western Pacifi c, and 1 each in Europe
and in the Americas. Of the 35 countries with a stunting prevalence lower than 20%, 13 are in the Region of the
Americas, 11 in Europe, 6 in the Eastern Mediterranean, 3 in the Western Pacifi c and 2 in South-East Asia.
Wasting (defi ned as being –2 standard deviations below the median of weight-for-height) is a sign of acute malnutrition
and is a strong predictor of mortality among children. The global estimate of wasting occurring among
children under 5 years of age based on WHO’s new standards is 10% (or 55 million). The highest number of
affected children – 29 million – is estimated to live in south–central Asia. The same regional pattern is found
for severe wasting (defi ned as being –3 standard deviations below the median), with an estimated total prevalence
of 4% – or 19 million – children affected. Many of these children are likely to die before reaching the age
of 5 years. In general, compared with estimates based on the previous international reference, stunting rates
are higher for all age groups when the new WHO standards are used.

Dhara said...

I believe that one of the root causes of poverty in developing countries is CORRUPTION.

I would define Corruption as "The misuse of public resources for private gain"

Most directly, corruption inhibits development when people who have the power and authority help themselves to money that would otherwise be used for development projects. Corruption reduces governance capacity by weakening political institutions and citizen participation and leads to lower quality government services. The poor suffer disproportionately from reduced public services.

Specially when corruption occurs at the lower levels in the Government.
For example, in a developing country like India, it is not uncommon for a traffic officer to take a bribe from a driver instead of giving him a ticket. Thus, the money goes into his pocket for personal use, instead of the Government using it for development of the country.

Corruption affects
the daily life of poor people in developing countries in many different ways, and tends to make them even poorer, by denying them their rightful share of economic resources

On the other hand, one can argue that poverty is one of the causes of Corruption.

Since, people are poor they try to make money by taking bribes.

Thus poverty and corruption are inter-related and one causes the other.

Anita said...

Apart from population, education, healthcare and corruption, I believe Natural and Public disasters are a big cause of poverty.
Disasters such as fire, earthquake, flood, volcanic eruption produce adverse and anomalous conditions and it can also result in destruction of entire city.

It’s very difficult to cope with such calamity. The poor simply lack the sufficient finances to protect themselves from inevitable unfortunate conditions. They also do not have the financial strength to rebuild quickly and to recover their livelihood.
If the workplace is damaged, then many people lose their source of earning.
If the earning member of the family gets killed or injured, then rest of the family members are sometimes stuck without a means of living. In case of flood and fire, it’s very difficult to rebuild everything because of the tremendous amount of damage that has been done. As a result people plunge deeper into hardship and suffering. Many are left without homes, jobs and lives.
Such disasters bring a lot of people under the poverty line and if factors such as corruption and improper healthcare are added, then the situation becomes dreadful.

Anwar Farooq Rana said...

yes you are right but you have written too short for complete details of cause of poverty in pakistan you must study