My first foray into India was an eye-opening experience. I was introduced for the first time, to what poverty really means. I had encountered poor communities before on my travels; throughout other Asian nations such as Cambodia, Nepal and Vietnam the problem is widespread. Nothing prepared me for India.
I was riding through the Indian capital of New Delhi on a rickshaw, just one in an endless sea of chaos. Never a moments respite from the blasting horns, the smells of open sewers and the polluted, humid air that fills your lungs… We stopped at a set of traffic lights and were immediately approached by a young girl of about 6 or 7. She was begging for a few coins from the most likely source; a white foreigner unaccustomed to the harsh life of the untouchables in New Delhi.
I tried to ignore her at first, it’s utterly impossible to help the hundreds of beggars you encounter on a daily basis in some parts of the world. Something drew me to look at her. As I glanced at her face, I was struck by the most haunting pair eyes I have ever seen. Naturally a green tinge, they were shrouded over by a dark grey, as though the window to her soul was clouded by a thick fog of misery and sorrow. They didn’t belong to a child.
If I was ever to be convinced of re-incarnation, it would’ve been in that moment. Her eyes told the story of generations suffering in the shadows, left behind by the waves of prosperity that have washed over a fortunate few in their own city and nation. She had inherited that despair.
As I emptied the remainder of my pockets into her tiny hands, she took one final look at me before running off to join her family on a grassy knoll next to the road. Her mother was tending to 2 babies; 2 more lost children, bound to grow up begging not just for their own survival but their families as well. If they ever reach that age…
I have never forgotten that young girl. I can only assume she still begs on that same road, hoping to scrounge enough money to feed her younger siblings as the world passes her by, anesthetised to her existence. That is, if she’s not already dead…
Such is life in the dog-eat-dog world of India and far too many other parts of the world, a life that we in the West have generally come to accept as the norm. The appalling fact is, it doesn’t have to be this way…
What constitutes poverty is open to interpretation. So for simplicities sake I will stick with the U.N guidelines, which measures poverty by determining the adequate minimum income in a particular country. What constitutes ‘adequate’ is the ability to cover basic needs- food, water and shelter. This is the measure of relative poverty, determined on a country by country basis. In the USA in 2015, the line was set at US$11,770 per annum. Although this wouldn’t go far in the U.S, you can guarantee the individual would be living a great deal more comfortably than the Sudanese counterpart on the poverty line.
The U.N also attempts to determine absolute poverty by adjusting purchasing power parities between nations. The international poverty line in 2015 was set at US$1.90 per day. That’s $693.50 per year. I’m assuming many of you make more than that in a week.
Here’s an infographic to show you what that looks like on a practical level. Everyone loves an infographic..
The Cause of Poverty
It hasn’t been this way for long. I don’t mean the poverty, but the prosperity. Not long ago, we were all in a similar boat. The lifestyle of those living in relative ‘poverty’ in developed nations of today would’ve been considered a life of pure opulence in the not so distant past. Before this recent wave of economic growth, the wealthiest nation (Britain) had around 4 times the income of the poorest (the African region). Today, the United States of America has earnings over 20 times those of the African continent, demonstrating a significant wealth disparity that has only evolved since the dawn of the industrial revolution, kicking off in the early 19th century.
The reason we have this great disparity between nations is largely due to what has occurred in the last 200 years. All nations have grown in prosperity during that period. What is significant, is the level of that growth. The U.S.A, Canada and Oceania have achieved just under 2% annual growth while the African continent for example, has achieved 0.7%. That doesn’t appear to be a significant gap, until you add the compounding effects of father time. This is what lead Einstein to label compound interest ‘the 8th wonder of the world’.
Poverty being the traditionally default setting for civilisation, the correct question to ask is not what causes poverty, but why impoverished nations haven’t been carried along in the prosperity experienced by many others in the modern world.
The main blame is often laid on the governments, or political institutions, of the aforementioned impoverished nations. This tendency is perhaps justified; they are indeed often to blame. In Why Nations Fail, the authors suggest the key reason some nations are prosperous and others are poor is due to the type of political institution in place.
‘Inclusive institutions’ that represent the majority of the population, rather than serving an elite few, allow free enterprise and encourage innovation, generally lead to prosperous nations. ‘Extractive institutions’ on the other hand, those generally found in a repressive dictatorship or monarchy, will usually lead a nation to fail in the long run. Orwellian societies do not typically lend themselves to economic prosperity across the board.
Corruption is of course cited as a common factor, leaders (elected and otherwise) or government representatives may funnel off money that has no place in their greedy paws. Not only revenues from taxation that should’ve been redistributed throughout the economy, but bribes and in the worst cases, aid specifically designated to the poor contingent of the population.
Then there are factors such as crippling government debt (meaning most revenue is spent on repayments rather than social services), poor fiscal policy, inadequate taxation of the wealthy or poor redistribution of wealth to societies most disadvantaged.
Let’s just say governments are often to blame. Not always though.
Geography has traditionally been of great importance to a nation’s prosperity. A nation with vast coastline and plentiful cross country river systems has a great advantage in trade compared with a landlocked nation or one sitting atop a mountain plateau (U.S.A and Great Britain compared to Bolivia or Tibet). Similarly, a nation with vast reserves of natural resources- timber, coal, oil and fertile land will quite clearly prosper over one that is lacking.
Then there are climatic factors such as rainfall or prevalence of particular diseases or viruses. No doubt the Sub-Saharan African region suffers immensely due to the fact it lies perfectly within the region most likely to harbor malaria carrying mosquitos.
Overpopulation leads to poverty and poverty leads to further overpopulation, a vicious cycle that continues to plague much of the under-developed world. The obvious way overpopulation causes problems is that it creates scarcity of resources (land, food, water). This can lead to conflict or simply inadequate supply to go round. When infant mortality is high and it is expected children may be lost to illness or malnutrition, it is likely to result in a higher birth rate. High birth rates mean children don’t receive the attention they require, particularly in regards to education and skills training, condemning them to a life of poverty in turn.
Certain cultural or religious beliefs can lead to a lack of economic prosperity. Certainly the key one is the suppression of women in far too many places around the world. By not allowing women to receive an education or enter the workforce, these cultures are foregoing great potential for growth and prosperity. Educated and working women also generally leads to lower birth rates as there is more opportunity cost in losing that potential income and less desire to have a large family.
There is often rampant discrimination between ethnicities, classes or religions that will impede growth, at least for a certain sector of society. Compare the prosperity of Kurds in Iraq or Aboriginals in Australia to the rest of the population. You will find a stark contrast. Civil unrest is often a result- you won’t have to do much digging to find countless examples of this throughout our collective history. It still continues today.
This is an altogether simplistic explanation of why poverty is so prevelant in the world today. There are no doubt many more variables that contribute to poverty or lack of prosperity; these are just some of the predominant causes.
I think it’s important to understand the causes before it’s possible to find adequate solutions. It’s clear that the traditional approach to aid is simply not working. It’s time for a different approach.
Relieving Chronic Poverty
Capital punishment is as fundamentally wrong as a cure for crime as charity is wrong as a cure for poverty. -Henry Ford
What now appears clear; the current system of poverty alleviation isn’t working. In fact, giving aid may be one of the key reasons why poverty is still so widespread today. As the saying goes; “Give a man a fish and he’ll eat for a day. Teach a man to fish and you feed him for a lifetime.” We’ve been doing just the opposite for so many years when it comes to trying to solve the poverty crisis. A change in approach is required.
Next post we’ll examine what exactly went wrong and what our options are for the future.
If you’d like me to send it directly to your inbox, send me your email via the form below.