Article Analysis: World Poverty
In 2015, the United Nations is working with the World Bank’s ambitious plan to end extreme global poverty by the year 2030. This means that for the first time, every person in the world would afford common items and food to make their life easier. Many experts would debate on the main cause of poverty as it could be the changing trends in a certain country’s economy. Other factors would also include the lack of education, overpopulation, the presence of epidemic diseases like AIDS and malaria and even environmental problems like drought. Extreme weather can cause drought most especially in tropical countries. Other natural disasters like flooding is one of the biggest causes of poverty most especially if raising funds to repair damages can be difficult.
Another major reason for poverty is the presence of inequality of opportunity in the society like for jobs and proper education. The main cause of poverty in a nation is the lack of money. Today almost half of the world’s population only lives in less than $2.50 per day. Poverty rates can be related to the overall health of the economy of a country. As the economy grows, so do the opportunities for employment, education and income growth for its citizens. There will also be stronger labor markets and higher income levels that will help families move about the poverty line. The purpose of this paper is to analyze the article that talks about the 17 goals of the United Nations in order to end global poverty. With that, analysis related to economic theories and models related to the issue will also be done. It is important that using these tools one will know if these goals are possible and attainable considering the condition of the world today. This paper will also tackle the current global poverty statistics and the possible outcome of ending global poverty.
Facts about Global Poverty
Countries are being classified as third world or first world countries. Third world countries are often described as a developing nation while first world countries are the industrialized or the developed nations. The successful development of a country could imply many things. For one, there could be an improvement in the living standards of the citizens and this include the access to all basic needs like food, shelter, water, clothing, health and education. The United Nations would define a developed country to have the full potential for human development.
For the United Nations, human development is more than the rise and fall of the economy of a country. It is all about creating an environment in which people can improve their full skills and potential which will help them lead a productive life in accordance to their needs and interest. They consider people as the real wealth or treasure of the countries. That is why development must be about expanding the choices of the people so that they can lead lives which they can value. Although there are a lot of developed countries, majority of the people on earth are still hungry.
Statistics show that one in nine people in the world do not have enough food to eat. The worst are the countries in Asia where over 525 million are still hungry. UNICEF also revealed that an average of 22,000 children die each day because of poverty. People living in the Sub-Saharan Africa and South Asia account about 80 percent of the global pool and 81 percent of child deaths in the world, while 30 percent of the world’s extremely poor people live in India. Poverty is more apparent in people living in the rural areas and it was revealed that the poor people are most likely to earn income by doing agriculture (Olinto, Beegle, Sobrado, & Uematsu, 2013).
Goals to End Poverty
Last April 21,2106 more than 150 speakers and other delegates gathered in the U.N. General Assembly event to talk about the implementation of the 17 goals to end global poverty in 2030. The discussion ranges from ensuring the healthy lives of the people to the improvement of the quality of education in order to eradicate poverty. They also discussed how achieving gender equality, providing clean water and sanitation, using reliable modern energy sources can also help end global poverty. The goals also include promoting economic growth and encouraging good governance for the participating nations. Other speakers also expressed their concern about climate change and how it can affect poverty rates in the world (Lederer, 2016).
The goals and plans may be promising but all the countries that are participating need money from donors and investors in order to achieve these goals. Without funds, the implementation of these plans will become exceedingly difficult. There are also major constraints as some of the island nations are considered too small to be funded and major investors are not attracted to them. Aside from that, the world is also facing challenges and risks with the rise of many terrorist groups so organizations and investors would tend to avoid countries that are located in the Middle East.
Many of the participating countries vowed to make movements that will help in eradicating hunger and global poverty. Considering that this is an international movement, the countries must come together in order to achieve the goals. One leader suggested in using the $.17 trillion used to fund the military to be used in the welfare of the world population instead. Other countries are planning to cut down on food waste and also look into using renewable energy sources in order to address the issue on climate change.
According to the United Nations report, the first goal is to eradicate extreme poverty and hunger and it was recently that of the 23.3 percent that was recorded being undernourished between 1990 and 1992, only 12.9 percent remain. Another important goal to end global poverty is to achieve universal primary education. In the Sub-Saharan Africa, great progress has been made as the children who have access to primary education had a 20 percent increase between 2000 and 2015. Providing easier access to health care is also one of the goals of the organization in order to improve maternal health and reduce child mortality. Many nations now require vaccinations and providing it prevented nearly 15 million deaths between 2000 and 2013 while in 2014, over 75 percent of the mothers have been tended by a skilled health person (United Nations, 2015).
Relation of Poverty to Economy
The growth of a country’s economy does not automatically translate into giving benefits for the poor. Growth will much depend on the profile of the growth like employment and the location of the poor. The World Bank does not use only monetary measures of poverty but also specific measures that are based on the country’s condition. Between 1990 and 2010, the main driving force in order to reduce poverty in many countries was to increase their gross domestic product. It was reported that the regions with the most number of poor people all registered the highest gains in GDP after the recession. Many experts calculated that a rough estimate of one percent increase in GDP would result in 1.7 percent reduction of poverty.
However, GDP is not the best measure of the living standards and poverty reduction in a country. That is why, it is usually better to look at the household consumptions based on the surveys. With that, growth in the economy alone does not guarantee that a country will experience less poverty. A lot of factors must also be considered when decreasing poverty like income distribution. In 1980, China has the largest number of poor people in the world. Because the country experienced the most growth and also increasing the income of the laborers, they were able to cut the poverty rate from 84 percent to 10 percent in the past 30 years (The Economist, 2013).
But it cannot be denied that in order to continually reduce poverty rates in a country, economic growth must be maintained. A lot of developing countries are now trading more with each other, making them more resilient in the market. Third world countries like India and Africa are also looking into expanding their working age populations because of the relative numbers of dependent children and older people. Through this, development may be slow at first and poverty may not be entirely removed, but the increase of income and opportunities are the best tools in order to start diminishing poverty rates.
Neoclassical Economic Theory Related to Poverty
The neoclassical economic theory is a set of solutions used in economics which focus on the determination of goods, income distributions on markets by the law of supply and demand, and also the outputs of market studies. This theory dominates over microeconomics and it also dominates the mainstream economics being used today. This theory rests on three assumptions and the first one is that is assumes that people have coherent preferences between outcomes which can be measured and associated with values. The next is that people maximize utility and companies maximize profits. The last assumption is that people can also act independently when given full and important information.
The neoclassical theory is being used in teaching and practice of economics in many countries. It provides an analytical framework from which it defines wealth as something that results of the decisions that people make and not the result of processes like intimidation, theft and colonization. In this theory, it is assumed that people who are wealthy obtained their money by working hard and those who are poor became so because of laziness. In many ways, this theory has become a tool for the distribution of public policies and even international agreements in order to reduce the role of the government in shaping the economic activities. It is also used to promote the power of international firms or companies in order to address these economic activities.
It is often compared to classical theory which views people as largely responsible for their own destiny. It means, in classical theory, people choose to become poor by forming more children or by not looking for more opportunities in terms of jobs and educations. While the neoclassical theory is used to recognize the reasons for poverty which is also beyond a person’s control. These include the lack of social and private assets; market failures which exclude the poor people from credit markets and thus cause them to make adverse choices. Other factors are also being considered like barriers to education and employment, immigration status and poor health. Looking at the issue of reducing global poverty using this approach, one of the main advantages may reside in the use of quantifiable monetary units in order to measure the poverty in a country. It can also be a tool to measure the readiness with which the policies in order to reduce global poverty can be practiced (Davis & Sanchez-Martinez, 2015).
Given the plans and the goals of organizations like the United Nations to eradicate global poverty, it may not be totally possible with the use of the neoclassical theory. The neoclassical theory stresses in the role of the individual and considers his or her skills as capital which can determine productivity in work and in order to get out from poverty within a competitive economic system. Totally ending global poverty is beyond providing clean water and food to the people but also giving them proper education, health benefits and income in order for them to sustain their needs independently. The theory considers uncertainty as a major culprit in causing poverty because poor people are more vulnerable to shocks to their well-being like sickness and even economic recessions. This approach assumes that income depends on the productivity of the individual so that more productive a person is, the more he or she will earn to get out from poverty.
The United Nations and the participating countries that are helping out in eradicating global poverty must also consider in asking not only monetary help from first world countries but they should also look for private companies to invest in their lands in order to provide jobs for their people. Income should be the primary consideration in alleviating poverty. According to neoclassical theory, income enables the poor to gain purchasing power and this will provide them access to resources that are unavailable to them like housing and food. With that, this will address the issue on resource inequality and that is where the governments and the private sectors come in. Giving out free goods will not totally remove global poverty. Instead it is important for the people to learn how to work and how to manage their skills in order they can be productive in their lives rather than just sitting around and wait for help to come.
Davis, E. P., & Sanchez-Martinez, M. (2015, June 4). Economic theories of poverty. Retrieved from https://www.jrf.org.uk/report/economic-theories-poverty
The Economist. (2013, June 1). Not always with us. Retrieved April 23, 2016, from http://www.economist.com/news/briefing/21578643-world-has-astonishing-chance-take-billion-people-out-extreme-poverty-2030-not
Lederer, E. M. (2016, April 21). UN event spotlights 17 goals to end poverty and save planet - The Washington Post. Retrieved from https://www.washingtonpost.com/world/un-event-spotlights-17-goals-to-end-poverty-and-save-planet/2016/04/21/c07e6a7a-0823-11e6-bfed-ef65dff5970d_story.html
Olinto, P., Beegle, K., Sobrado, C., & Uematsu, H. (2013). The State of the Poor: Where Are The Poor, Where Is Extreme Poverty Harder to End, and What Is the Current Profile of the World’s Poor? The World Bank.
United Nations. (2015, July 30). What progress has been made in ending global poverty? Retrieved from http://www.un.org/sustainabledevelopment/blog/2015/07/what-progress-has-been-made-in-ending-global-poverty/