A Rational And Effective Approach to Poverty Removal

Important to have the Right Poverty Perspective

Poverty can't be understood in Monetary terms alone.

Poverty can’t be understood in Monetary terms alone.

Although people are more used to seeing poor as people with little or no money, but in reality poverty is a state of multidimensional deprivations, lack of income is also one among them. Income perspective of poverty might be simple and makes it easy to count who are poor in comparison with some monetary standard but it lacks human angle and tells nothings about the kind of suffering the poor are going through. The latest World Bank estimates tell us that globally there are over 1 billion poor surviving within $1.25-a-day income. In fact, they are not just poor but extremely poor constantly battling with hunger and malnutrition. If we raise the poverty yardstick to 2 or 3 dollars, we have included more than half of the humanity.

If money is all they lack then distributing money should solve all their problems? Clearly, it doesn’t work like this. Poverty is such a dodgy thing that is symptoms and causes are often indistinguishable. This explains why most anti-poverty efforts fails – they keep attacking the symptoms! There are countless, charities, NGOs and anti-poverty organizations which have been working (honestly and diligently) for decades, yet the results are dismal compared to the efforts and resources put in.

A very basic problem is with their perspective of poverty: they see poverty as something like a disease and the poor as patients of poverty. Clearly then, they assume the role of doctors treating the patients!!! This is the most widespread folly that has been going on for decades. There are donors who are good human beings and desire to lift people out of poverty. They give money and other resources to “poverty experts” who have wonderful theories about the cause of poverty and regularly write research papers on the poor. They are also very sincere people and work according to their analysis to attack the “virus” of poverty! The “virus’ never dies because it has so many lifelines!! As a result, the game of poverty removal continues endlessly and perhaps will go on till climate change disasters eat away all the poor!!!

[These natural disasters preferably kill the poor because they don’t live behind the shield of concrete and lack protective resources and infrastructure. Moreover, the poor generally live in close contact with the nature, near rivers, oceans, and forests.]

The kind of anti-poverty approach depends upon what is perceived as the cause of poverty. Without attacking the root cause no disease can be cured; removing mere its symptoms don’t eliminate the disease permanently. That’s why there are so many approaches for eradication of poverty. Yet, why the world has so many poor people?

A More Accurate Perspective on Poverty

Poverty must be seen as the deprivation of basic capabilities rather than merely the lowness of incomes. – Amartya Sen

Poverty is lack of human development.

Poverty is lack of human development.

In Development as Freedom (1999), Nobel laureate of 1998 Amartya Sen defines poverty as a situation that severely decreases a person’s capabilities. The kind of life people lead clearly depends upon their personal skills and capabilities. For Sen, people well-being directly depends upon development of their capabilities. From a laymen’s perspective, the individual capabilities result from a cocktail of things like skills, knowledge, access to public resources, services and infrastructural facilities and his capacity to make his life better based on availability these things.

Seen from the viewpoint of capabilities, development includes all activities (personal, social, political) that enhance people’s capabilities. Thus, as a corollary, poverty is opposite of it. An important point to highlight about the capability perspective is that it considers both the material and non-material things. For example, “social exclusion” is both a cause and result of poverty in all societies. State policies following this approach will requires actions to eliminate “social exclusion” because it reduces the capabilities of people (the poor). Lack of proper nourishment is another example; undernourishment lowers people’s capabilities so the state or society must do something to eliminate it.

Economic activities and commerce will still go on, not as the only goal of development but as one among many other things that are important in life. The progress will no longer be measured by GDP growth but by some other suitable indicator of people’s well-being. In nutshell, this approach puts people at the center of development, rather than GDP or economy as the case right now.

The biggest tragedy of the current economic system is that it has made people secondary and wants to measure everything in terms of money or GDP. It is totally blind towards the human aspect of human-being! For example, the system is blind towards things like psychological or emotional pain, loss of motivation or self-confidence, loss of skill,   disruption of family relations, social stigma, and gender asymmetries. None of these issues have anything to do with income but are important factors of people’ well-being. Human life and its well-being has far too many dimensions to be measured accurately in monetary terms alone.

Thus, Sen’s definition of poverty has human angle and should play a key role in informing improvements in poverty alleviation schemes in India.

Empowerment is the Key to Effective Poverty Eradication

Wise people have always advised something like this: Teach the poor how to fish, rather than giving them the fish. Lack of income, resources, and options typically dictate the life of poor people. Remove these limitations which keep them in poverty and they can come out of poverty on their own. In a single word, it means “Empowerment.” Else, you are only playing with the symptoms of poverty.

As long as you see the poor as “patients” of the “poverty” disease, your thinking will stay confined around the symptoms of poverty. The capability approach of Sen sees people also as “agents of change” in their lives. In the technical jargon of the capability theory, it is called the “agency” aspect of people – they can act as”agents of change”. All you need to do as a poverty attacker is to create an enabling environment where they can discover ways to come out of their limitations and choicelessness (which force them to live in deprivations).

Ways to Empower the Poor

Now the whole anti-poverty strategy boils down to finding ways of empowerment. It must be realized that the same technique of empowerment might not work in all societies, but the idea remains. At the practical level, empowerment involves removing their voicelessness and helplessness which result in choiceless-ness and vulnerability – typical traits of poor people.

Creating Opportunities

Economic growth is essential for pulling people out of the poverty loop. A business environment conducive to investment, entrepreneurship, and technological innovation is necessary, as is political and social stability. The free-market capitalism creates considerable inequality in wealth distribution – it always favors the rich which results in concentration of wealth in very few hands. A high level of inequality can undermine the stability and sustainability of overall growth. While the employees and laborers get only limited salary and wages, the capital owners take away all the wealth created by business operations. State policies must redistribute its revenues by promoting infrastructure and services like schools and medicare-care for the lower income segment of the society.

Promoting Entrepreneurship Among the Poor

Another very good way is promoting entrepreneurship among the poor by promoting microfinance. Bangladeshi Nobel laureate Prof Muhammad Yunus has successfully shown that microcredit can change the lives of the poor. The key to expanding economic opportunities for the poor is to help build up their assets. It is funny that the formal banking sector considers the poor unworthy of credit and favors the rich. But the grameen bank experiment of Bangladesh which has been replicated arcoss the world, shows that the poor are “credit worthy” provided you work differently! Not only the small credits help them manage their life better, but also create small businesses which can keep the whole family productively engaged.

There is another dimension to microfinance. Absence of access to microfinance services forces the poor to turn to local money-lenders who charge very high interest and exploit the situation. As a result, the poor get pushed into debt trap and in deeper poverty.

Ending Social Exclusion

It is true of all society. The poor get pushed to the side lines of the society and lose the capacity to influence the social and political processes that affect their lives. Exclusion and marginalization can also happen due to stigma against certain group of people or communities. The Romas are well known example of a community that faces discrimination in practically all European societies. Dalits are marginalized in India due to caste based prejudice. African Americans and Hispanics meet the same treatment in the US

It is a fact that the governments are often more responsive to the concerns of the rich class than to the needs of poor groups. Therefore, organizing the poor into pressure groups to raise their concerns is a good strategy. Social and political connectivity is highly empowering; it also reduces vulnerability.

The customary practices and discrimination on the basis of gender, caste, religion, or social status are other forces that promote poverty. Gender inequity in India is ubiquitous and cuts across the divides of caste and religion; it even permeates to non-poor class of the society. Studies have shown that promoting gender equity leads to faster growth and development.

There are studies to point out that social, economic, and ethnic divisions are often sources of weak or failed development. In the extreme, the vicious cycles of social division and failed development erupt into internal conflict as has been observed in many countries such as Bosnia. In India, left wing (Maoist) violence in the “Red Corridor” is the glaring example.

Providing Security Net

Enhancing security for poor people means reducing their vulnerability to risks such as ill health, economic shocks, and natural disasters and help them cope with adverse shocks when they do occur. It involves strengthening risk management institutions at regional and national levels. The Food Security Bill passed in 2013, the National Rural Health Mission (NRHM) program and the Disaster Management Act (DMA) of 2005 are designed to enhance people’s resilience to various probable shocks. The DMA is important because storms, floods, and droughts are expected to become quite common due to global warming in the future. Of course, these disasters are risks to everyone but poor people are the most vulnerable and hence at significantly bigger risk.

Improving risk management institutions that help the poor manage risks should thus be a permanent feature of poverty reduction strategies. A modular approach is needed, with different schemes to cover different types of risk and different groups of the population. The tools include access to healthcare and education, old age assistance, unemployment allowance, microfinance programs, etc.

Concluding Remarks

Effective poverty reduction involves battling at several fronts. People can’t be treated as numbers and entities devoid of feelings and emotions, although this is how modern institutions want to treat them. Today’s system need to shift focus from economy to people and their well-being, as the human development approach of the UNDP and the capability theory of Amrtya Sen prescribe. People have the capacity to change their lives; all they need is the enabling environment to do so. The idea of treating the poor as people inflicted by a disease called poverty is outdated and condescending; it doesn’t work.

Exploring Further

Counting the Poor: The Changing Concept of Poverty
Why “Development” should Focus on People, Not Economy
Why Poverty? Let’s talk of People’s Development
Poverty Reduction: Using Business As Agent of Change in the Lives of Poor

About Goodpal

I am a firm believer in healthy people (mind and body both), healthy societies and healthy environment. I also undertake content writing and documentation projects. Please feel free to comment, share and broadcast your views. If you wish to write for this blog, please contact me at vj.agra@yahoo.com Thanks for stopping by. Have a Good Day!
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