Lesson 1 : Multiple faces of poverty and implication to development

Video Lesson

Competencies

At the end of this section, you will be able to:

• Understand and define the concepts of poverty and economic development.
• Identify and explain the multiple dimensions of poverty and their indicators.
• Analyze the causes of poverty, including structural and behavioral explanations.
• Examine the relationship between conflict and poverty and how they interact.
• Discuss the advantages and disadvantages of globalization and its impact on developing countries.

Key terms

Brainstorming question

How do you express poverty in your local context? What are the main dimensions and indicators of poverty?

Introduction

Economic development is a crucial aspect of any society’s progress. However, many challenges hinder development, especially in less developed countries. This lesson explores poverty, its types, causes, and its relationship with conflict, as well as the effects of globalization on developing economies.

Concepts of Poverty

• Poverty refers to the lack of essential resources needed for a basic standard of living.
• Poverty is a state where individuals, families, or communities lack the financial resources and essentials to achieve a basic standard of living.

Figure 5.1 Poverty

Poverty can be categorized into two main types:

A. Absolute Poverty

• It is when household income is so low that basic needs, such as food, shelter, clean water, healthcare, and education, cannot be met.
• Example: A family living on less than $1.90 a day (international poverty line), unable to afford necessities.
• Absolute poverty remains unchanged regardless of economic growth if it is based on income thresholds.

Figure 5.2 Absolute Poverty

B. Relative Poverty

• It is when a household earns significantly less than the average income of society, affecting their quality of life.
• when households receive 50% less than average household incomes,
• lack of enough money to afford anything above the basic need.
• Example: A family living in a city without access to the internet, proper clothing, or housing, even if they can meet basic needs.
• Key Point: Relative poverty is measured based on income disparities and can change as a nation becomes more prosperous.

Dimensions and Indicators of Poverty

Poverty is multifaceted and can be measured using various dimensions:

• Income and Assets: Availability of financial resources, property, or savings.
• Health: Access to healthcare services and adequate nutrition.
• Education: Literacy rates and educational attainment.
• Vulnerability: Risk of exposure to unexpected events and the inability to recover.
• Powerlessness: Lack of influence over decisions and resources in society.

Table 5.1. The selected dimensions and indicators

Figure 5. 3 Poverty Trap

Causes of Poverty

Poverty is influenced by numerous interrelated factors. The two main approaches to explaining these causes are:

A. Structural Cause

• points to systemic reasons for poverty
• racial and gender discrimination embedded in our markets and institutions;
• the low wages making it difficult for some families to escape poverty;
• failure to invest sufficiently in education, health care, and social insurance.
• reduce opportunity and increase economic insecurity.
• Point to patriarchy, capitalism, white privilege, and racism
• come to be associated with those on the political left.

B. Behavioral/cultural /causes of poverty

• culture, behavior, and personal differences
• They argue that there is a poverty culture or a set of attitudes and behaviors that tends to get passed along from parents to children and tends to perpetuate bad, self-defeating decisions, and hence poverty.
• Those attitudes (fatalism and the rejection of common societal norms like hard work, rationality,
• and non-violent dispute resolution) make many of the poor less attractive in the labor and marriage market and less capable parents.
• This perspective insists that each person has free will and is ultimately responsible for their own life.

Reflective Question: Why do you think some people are unable to break the cycle of poverty?

Figure 5.4 Causes of conflict

Relationship between Conflict and Poverty

Understanding the link between poverty and conflict is crucial:

A. Conflict Causes Poverty

• Wars and violence disrupt economic activities, reduce GDP, and lead to resource depletion.
• Example: Destruction of infrastructure during conflicts, leaving communities impoverished.

B. Poverty Causes Conflict

• Economic downturns, unemployment, and societal dissatisfaction can spark conflicts.
• Scholars argue whether poverty is a direct cause or a trigger among other factors.

C. Resource Wealth and Conflict

• Resource-rich regions may experience conflict due to competition for control.
• Example: Civil wars in countries with abundant minerals or oil.

Activity: Discuss how conflict in one part of the world might impact other regions economically and socially.

Figure 5.5 Poverty and Conflict History

Globalization: Advantages and Disadvantages

Globalization is the growing interconnectedness of the world through trade, communication, and culture.

A. Advantages of Globalization

• Free Trade: Expands markets for goods and creates job opportunities.
• Information Flow: Media and technology connect people worldwide.
• Cultural Exchange: Exposure to diverse ideas and lifestyles.
• Example: Access to global markets can help countries like Ethiopia improve their coffee exports.

Figure 5.6 Globalization

B. Disadvantages of Globalization

• Environmental Impact: Weak regulations in developing nations lead to pollution.
• Economic Inequality: Wealthy corporations may exploit cheap labor, creating disparities.
• Cultural Loss: Traditional customs and languages may be overshadowed.
• Example: Local crafts being replaced by cheaper, mass-produced imports.

Discussion Prompt: Can globalization benefit developing countries without causing cultural or environmental harm?

Globalization and Developing Countries

Globalization in the developing countries is manifested in the following three important fields

such as economic and trade processes, education and health systems and culture effects.

1. Economic and Trade Processes Field:

• Globalization helps developing countries to increase their economic growth, solving the poverty problems
• World Bank and International Management encourage developing countries to go through market reforms and radical changes through large loans.
• Many developing nations began to take steps to open their markets by removing tariffs and free up their economies.
• The developed countries were able to invest in the developing nations, creating job opportunities for the people.

Negative aspect:  Developed countries set up their companies and industries to the developing nations to take advantages of low wages and this causing

• pollution in countries with poor regulation of pollution.
• setting up companies and factories in the developing nations by developed countries affect badly to the economy of the developed countries and increase unemployment.

2. Education and Health Systems

•  Globalization contributed to develop the health and education systems in the developing countries and support economic growth
•  growth in economic, living standards and life expectancy for the developing nations certainly get better.
• The government of developing countries can provide more money for health and education to the poor, which led to decrease the rates of illiteracy. This is seen in many developing countries whose illiteracy rate fell down recently.

Negative aspect: migeration of skilled workers, qualified professionals, such as scientists,  to developed countries to benefit from the higher wages and greater lifestyle

• This leads to decrease skills labor in the developing countries.

3. Culture Effects:

• destroying of their own culture, tradition, identity, customs and even their languages.
• globalization leads to disappearance of many words and expressions from local languages because many people use English and French words
• changes in  family, young people are trying to leave their families and live alone when they get 18 years old.

Figure 5.2 shows the main actors, processes they follow and benefits of globalization.

Figure 5.2. Actors, processes and benefits of Globalization