Economic Development

• Poverty


  A state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living. It is a difficult cycle to break and often passed from one generation to the next.
• Definitions of poverty


  • The inability of having choices and opportunities, a violation of human dignity
  • A pronounced deprivation in well-being, and comprises many dimensions
  • The lack of basic capacity to participate effectively in society
  • Lack of basic goods and services necessary for survival with dignity
  • Not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one's food or a job to earn one's living, not having access to credit
  • Low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one's life
  • Insecurity, powerlessness and exclusion of individuals, households and communities
  • Susceptibility to violence, and often implies living in marginal or fragile environments, without access to clean water or sanitation
• Absolute poverty


  Determined by the international poverty line (IPL) - those living below this line are considered to be under extreme poverty/absolute poverty
• Relative poverty


  Defined by the societal poverty line (SPL) - someone suffering from societal poverty who lives on less than US$1 plus half (50%) of what the median person in their country consumes
• Each nation has its own threshold for absolute poverty line
• In the United States, the absolute poverty line was US$15.15 per day in 2010 (US$22,000 per year for a family of four), while in India it was US$1.0 per day and in China, the absolute poverty line was US$0.55 per day, each on PPP basis in 2010
• Median level of consumption per person


  The middle value in a distribution of consumption levels across a population when those levels are arranged in ascending order. It's the consumption level that separates the higher half from the lower half of the population.
• Global poverty


  The condition where a significant portion of the world's population lacks the resources, income, or access to basic necessities needed to meet their basic human needs, such as food, clean water, shelter, education, and healthcare. It is a complex and multi-dimensional issue influenced by various factors including economic, social, political, and environmental conditions.
• Most countries of the world define poverty as a lack of money, yet poor people themselves consider their experience of poverty much more broadly
• Multidimensional poverty


  Measures that can create a more comprehensive picture of poverty by revealing who is poor and how they are poor - the range of different disadvantages they experience
• MPI = H x A
• Poverty rates are important statistics to follow for global investors since high poverty rates are often indicative of more severe underlying problems within a country
• Problems caused by high poverty rates

  • Increased tensions in society (rising crime rates in communities)
  • Alcohol and substance abuse
  • Less access to education
  • Poor housing and living conditions
  • Increased levels of diseases
• Global organizations that fight poverty

  • The United Nations
  • The World Bank
• Actionable plans to eliminate poverty

  • Installing wells that provide access to clean drinking water
  • Educating farmers on how to produce more food
  • Constructing shelter for the poor
  • Building schools to educate disadvantaged communities
  • Providing enhanced access to better health care services by building medical clinics and hospitals
• Amartya Sen's approach to poverty


  Poverty cannot be properly measured by income or even by utility as conventionally understood; what matters fundamentally is not the things a person has—or the feelings these provide—but what a person is, or can be, and does, or can do, which Sen refers to as "functionings". Sen argues that the "capability to function" is what really matters for status as a poor or nonpoor person.