Introduction
Poverty is a condition in which a person or community lacks the financial resources and essentials required for a minimum standard of living. It includes lack of income, inadequate access to food, housing, clean water, education, and healthcare. Poverty is not just an economic issue but also a social, political, and psychological challenge.
Definition of Poverty
Poverty can be defined in absolute or relative terms:
- Absolute Poverty: A condition where individuals cannot meet basic needs such as food, shelter, and clothing. Example: Earning below the international poverty line (USD 2.15/day as per World Bank).
- Relative Poverty: A condition where individuals have significantly less access to resources compared to others in their society, leading to inequality and social exclusion.
Vicious Circle of Poverty
The vicious circle of poverty is a self-reinforcing mechanism which keeps individuals or countries poor. This concept was popularized by economist Ragnar Nurkse.
Explanation:
Poverty is both the cause and the effect of underdevelopment. Poor people cannot invest in health, education, or skills. This leads to low productivity and low income, which in turn reinforces poverty. Similarly, in poor countries, low income leads to low savings, which means less capital formation and poor infrastructure, leading to low productivity and income again.
Types of Vicious Circle:
- Supply-side Vicious Circle: Low income → Low saving → Low investment → Low productivity → Low income.
- Demand-side Vicious Circle: Low income → Low purchasing power → Low market demand → Low production → Low income.
Diagram (Text Version):
Low Income → Low Saving → Low Investment → Low Productivity → Low Income
Causes of Poverty
Poverty is caused by a combination of historical, structural, economic, and social factors.
1. Unemployment and Underemployment
- Inability to find decent and stable employment leads to irregular income and financial insecurity.
2. Lack of Education
- Low literacy and lack of skills prevent individuals from accessing better jobs and income opportunities.
3. Rapid Population Growth
- Increases demand for resources like food, education, and healthcare, putting pressure on public systems.
4. Social Inequality and Discrimination
- Discrimination based on caste, gender, ethnicity, or religion excludes certain groups from growth opportunities.
5. Poor Governance and Corruption
- Weak institutions and mismanagement of resources lead to ineffective poverty alleviation programs.
6. Environmental Degradation
- Loss of agricultural productivity due to deforestation, soil erosion, and climate change affects rural incomes.
7. Health Issues
- Illness and lack of access to healthcare result in high medical expenses and loss of productivity.
8. Low Agricultural Productivity
- In rural areas, reliance on outdated methods and lack of irrigation leads to low crop yields and income.
Conclusion
Poverty is a multi-dimensional problem that requires multi-sectoral solutions. Breaking the vicious circle of poverty involves investing in education, healthcare, skill development, and employment generation. Government policies, community participation, and international cooperation are key to creating a just and inclusive society where every individual has the opportunity to thrive.