Poverty

Poverty - Definitions

• 1. Material definition
• -> the more global trade with each other the less poor the people are
• -> are basic needs met?
• -> shelter, fod, health, companionship (?)
• 2. Social definiton
• -> needs met? related to what your society can reallistically provide
• -> food healthcare
• -> opportunities - personal development?
• -> Hygienic/astethic surroundings
• -> freedom from undue stress?
• -> freedom from oppressioon/ fear, are you safe?

Monetizing Poverty

• World Bank defines a monetary limit of absolute poverty and setted one dollar day
• -> says little of conditions in wealthier countries
• -> PPP dollars (goods of basket) do include items which are not used by the very poor

HDI

• HDI was begun in 1990, as means to find additional measures of "poverty", "growth", and "human capital"
• Human capital is a term for the potential earning power of a person, based on knowledge, skills, opportunities, connections, and habits
• HDI combines Per capita GNI PPP (decent standard of living/wealth), Life Expectancy (health), knowledge (skills) -> composite index -> all three are weighted equally
• Economic logic - if the underveloped countries develop, they could be a potential trade partner
• the more global trade the more GDP increase -> economic sense to develop them
• rich countries pay to develop the poorer ones
• Alternatives?
• exploitative capitalism?
• trade barriers?
• open borders creates more wealth and opportunity

Human Development - whose job is it?

• Pros:
• Wealth = Stability (political and economic)
• -> Stability = less requirements for intervention
• Underdeveloped regions represent huge investment potential
• -> Education: human capital, for cheap
• -> new companies, new infrastructure = new investment opportunities
• People have more opportunity and better lives
• Cons:
• Continuing colonialism?
• A waste of money?
• -> money goes to elites
• -> money goes to "high visibility" projects with little ultimate impact
• -> money encourages people to expect handouts
• -> money disfigures local economies

Criticisms of HDI

• Mostly directed at the fact that GDP (now GNI, to favour small states) is used, which does not measure the distribution of wealth
• Solution: Inequality Adjusted HDI
• -> using Gini Coefficient
• -> Problems with Gini: poor countries can look more egalitarian
• Gini Coefficient
• measures inequality = higher = less equal
• 0= complete equality (wealth is equally distributed)
• 1= complete inequality
• But: relatively high coefficient can mean that society is producing wealth
• Or, society is generally unequal

Gender and Inequality (Gender Inequality Index)

• GII is a measure of the challenges faced by women in a given community
• based on HDI idea: tripartite index
• Health (Maternal mortality, adolescent fertility), Empowerment (Secondery education and parliamentary participation), Work (labour market participation, but not hours or wages counted)