Q7. Causes of Poverty?

Ans: - Poverty is the state of one who lacks a certain amount of material possessions or money. Absolute or destitution refers to being unable to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live in absolute poverty today. Relative poverty refers to lacking a usual or socially acceptable level of resources or income as compared with others within a society or country.

Causes of poverty

Poverty has many causes, some of them very basic. Some experts suggest, for instance, that the world has too many people, too few jobs, and not enough food. But such basic causes are quite intractable and not easily eradicated. In most cases, the causes and effects of poverty interact, so that what makes people poor also creates conditions that keep them poor. Primary factors that may lead to poverty include overpopulation, the unequal distribution of resources in the world economy, inability to meet high standards of living and costs of living, inadequate education and employment opportunities, environmental degradation, certain economic and demographic trends, and welfare incentives

Overpopulation:- Overpopulation, the situation of having large numbers of people with too few resources and too little space, is closely associated with poverty. It can result from high population density (the ratio of people to land area, usually expressed as numbers of persons per square kilometer or square mile) or from low amounts of resources, or from both. Excessively high population densities put stress on available resources. Only a certain number of people can be supported on a given

Area of land, and that number depends on how much food and other resources the land can provide. In countries where people live primarily by means of simple farming, gardening, herding, hunting, and gathering, even large areas of land can support only small numbers of people because these labor-intensive subsistence activities produce only small amounts of food.

Global Distribution of Resources:- Many experts agree that the legacy of colonialism accounts for much of the unequal distribution of resources in the world economy. In many developing countries, the problems of poverty are massive and pervasive. In recent decades most of these countries have tried to develop their economies with industry and technology with varying levels of success. Some nations have become fairly wealthy, including the Republic of Indonesia, Malaysia, Singapore, South Korea, and Thailand. Many developing countries, however, lack essential raw materials and the knowledge and skills gained through formal education and training. They also often lack the infrastructure provided by, for example, transportation systems and power-generating facilities. Because these things are necessary for the development of industry, developing countries generally must rely on trade with developed countries for manufactured goods, but they cannot afford much.

High Standards of Living and Costs of Living:- Because people in developed nations may have more wealth and resources than those in developing countries, their standard of living is also generally higher. Thus, people who have what would be considered adequate wealth and resources in developing countries may be considered poor in developed countries. People in the United States, for example, may expect to make, on average, about $30,000 each year. They also probably expect to rent an apartment or own a house with electricity and running water, to be

Able to afford to eat and dress well, and to receive quality health care. In addition, many people aspire to afford discretionary expenses that is, purchases unessential to survival, such as cars, higher-priced foods, and entertainment.

Inadequate Education and Employment:-

Illiteracy and lack of education are common in poor countries. Governments of developing countries often cannot afford to provide for good public schools, especially in rural areas. Whereas virtually all children in industrialized countries have access to an education, only about 60 percent of children in sub-Saharan Africa even attend elementary school. Without education, most people cannot find income generating work. Poor people also often forego schooling in order to concentrate on making a minimal living.

Environmental Degradation:- In many parts of the world, environmental degradation the deterioration of the natural environment, including the atmosphere, bodies of water, soil, and forests is an important cause of poverty. Environmental problems have led to shortages of food, clean water, materials for shelter, and other essential resources. As forests, land, air, and water are degraded, people who live directly off these natural resources suffer most from the effects. People in developed countries, on the other hand, have technologies and conveniences such as air and water filters, refined fuels, and industrially produced and stored foods to buffer themselves from the effects of environmental degradation.

Economic and Demographic Trends:-Poverty in many developed countries can be linked to economic trends. In the 1950s and 1960s, for example, most people in the United States experienced strong income growth. Taking inflation into account, average family income almost doubled during this period. However, between the early 1970s and the early 1990s typical incomes, adjusted for inflation, grew little while the cost of living increased. Periods of economic recession tend to particularly affect young and less-educated people, who may have difficulty finding jobs that pay enough to support themselves.

Individual Responsibility and Welfare Dependency:- There are differing beliefs about individual responsibility for poverty. Some people believe that poverty is a symptom of societal structure and that some proportion of any society inevitably will be poor. Others feel that poverty results from a failure of social institutions, such as the labor market and schools. These people feel that poverty is beyond the control of those who experience it, but might be remedied if appropriate policies were enacted. Other people feel that the poor intentionally behave in ways that cause or perpetuate their poverty. For instance, if people voluntarily choose to use drugs and this leads them to poverty, it can be argued that they are to blame for their situation. However, such an argument cannot completely explain cases in which poverty leads to drug dependence.

Submitted By:- Anish Kumar

MBA (A) SEM 1