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Why poverty alleviation needs to be the primary goal in furthering sustainable development.



Kirjoittanut: Saana Keränen - tiimistä FLIP Solutions.

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By Kaisa Oksala & Saana Keränen

 

The UN’s 17 Sustainable development goals are something that we see discussed often in relation to business. Usually, the focus is mainly on environmental issues and creating solutions for those. These innovations are of course something greatly needed, but there is also a good reason to why ending poverty is the number one goal. It’s obvious that people’s basic needs need to be met before they can focus on environmental issues, but we also need joint efforts from the whole world in order to truly alleviate environmental problems. This is why fixing poverty needs to be at the forefront of discussion.

 

What is poverty?

In general, poverty is defined as a situation where a person lacks the resources needed to meet their basic needs such as food, shelter, clothing and healthcare. The effect that poverty can have on an individual’s life goes beyond this too, often poverty is accompanied by social exclusion, limited access to job opportunities and education, and inadequate social and political participation. When discussing poverty it is often divided into two categories, poverty and extreme poverty. According to the World Bank, the international extreme poverty line is set at $2.15 per person per day using 2017 prices. This means that anyone living on less than $2.15 a day is in extreme poverty. In 2019 about 648 million people globally were living below this line (The World Bank 2022) On top of this there are defined lines of poverty that change from country to country, in upper-middle-income countries that line is $5.50 per day, in 2015 almost half, about 46 percent of the world’s population was living on less than $5.50 a day (The World Bank 2018) Poverty alleviation is at the top of the UN’s 17 sustainable development goals, the purpose of this essay is to highlight the issue of poverty, and how it should be dealt with before a nation can focus on the rest of the SDG’s.

Multiple ideological theories look at poverty, its causes and alleviation in slightly different ways and being familiar with them might help gain perspective on the matter. Following are a few different theories, their understanding of poverty and their preferred approach to its alleviation.

The structuralist theory emphasizes the role of economic and social structures in causing and sustaining poverty. According to this theory, poverty is not exclusively the result of an individual’s actions or shortcomings, but it is rather the outcome of social and economic forces beyond an individual’s control. The structuralist theory implies that different systemic factors such as economic policies, political systems, and social norms cause poverty through the unequal distribution of opportunities and resources within a society that they result in. This theory argues poverty to be a collective problem that calls for collective solutions, rather than something that could be resolved solely through personal efforts or charity.

Like the Marxist theory, also Neo-Marxist theory blames capitalism and class struggle for creating and perpetuating poverty. Furthermore the latter builds on Marxism and emphasizes the role of culture, ideology, and hegemony in creating and upholding poverty and inequality. According to this theory, poverty is not only a result of economic structures but it is also a consequence of ideological and cultural domination by the ruling class. Therefore Neo-Marxist theory suggests that poverty should be alleviated through a combination of economic and political reforms that challenge the prevailing cultural and ideological norms. This would include policies that promote democratic participation, reduce inequality, and empower marginalized groups of people to participate more in decision-making processes.

One relatively new and popular theory is the Post-Washington Consensus (PWC), which is a set of policy recommendations that emerged in the late 1990s as a response to criticisms of the Washington Consensus. The PWC recognizes poverty to be a multifaceted problem that cannot be solved through any one-size-fits-all policies, but instead it emphasizes the need for context-specific policies that look at local priorities and conditions. According to the PWC, poverty should be alleviated through economic growth, social investment, and institutional reform. It emphasizes the importance of investing in human capital, such as education and health care, as well as infrastructure development and support of economic growth. When the Neo-Marxist and Structuralist views are more focused on the transformation of society and the establishment of alternative economic structures, the PWC takes a more market-friendly and pragmatic approach that emphasizes poverty reduction through policies that promote economic growth and social protection.

Poverty measures

Measuring poverty can be a difficult task, as it is such a complex issue that affects many areas of life. However, there are several measures of poverty which are commonly used, each with its own strengths and limitations.

Income-based measures are perhaps the most commonly talked about measure of poverty. Using these measures involve setting a poverty line, meaning the minimum amount of income needed to meet basic needs such as housing, food, and healthcare. Since costs of living differ greatly between countries, many countries have their own set poverty line which is a percentage of the median or average income. As an example, on a global scale the World Bank defines poverty as living on less than $5.50 per day, and in developing countries numbers like this are common. But then in Finland for example, anyone making 1229€ per month or less (about 39€ per day) is considered to be below the poverty line. This goes to show that income-based measures fail to account for many other factors that contribute to poverty, such as access to education and healthcare, and how different poverty can look all around the world.

Multidimensional measures refer to ways of measuring poverty that aim to look at multiple areas of good quality of life and people’s access to them. The United Nations Development Program (UNDP) has developed a Multidimensional Poverty Index (MPI) that measures poverty based on ten indicators; nutrition, child mortality, education, school attendance, cooking fuel, sanitation, drinking water, housing, electricity, and assets. (UNDP 2022) An approach like this offers a more comprehensive view on poverty than a solely income-based one, but can be more difficult to measure and compare across different communities  and contexts.

Finally, subjective measures highlight the fact that the experience of poverty in the end is subjective. Surveys and qualitative research can give insight to how people living in poverty define and experience it, and the data gathered can then be used create policy and different programs. The most common form of this is Participatory poverty assessments (PPA’s), this approach involves working with communities to identify their own priorities and preferred solutions to poverty.

Poverty alleviation as an SDG

Poverty alleviation is the number one goal on the UN’s Sustainable development goals list because on top of being a significant social problem, it also has far-reaching economic and environmental consequences. For this reason, addressing it should be a top priority of any nation. Living in poverty can lead to poor health outcomes, limited access to education, inadequate housing, and a lack of access to basic needs such as clean water and sanitation. People living in poverty are often forced to rely on unsustainable resourses  and practices, such as slash-and-burn agriculture and overfishing. Practices like this lead to deforestation, soil erosion, and biodiversity loss which can furthermore up keep poverty, creating a vicious cycle of poverty and environmental degradation. Often times, mostly because of inadequate education, people living in poverty are also simply not as aware of the impact their actions might have on the climate, or their environment and health. Which understandably means that before the issue of poverty is fixed, these communities cannot be expected to follow the same guidelines of living sustainably as once that have full access to quality education.

Addressing poverty requires a comprehensive approach that considers the issue from both the social and economic point of views. When creating strategies for poverty reduction, the focus should be on bringing economic opportunities and access to basic services, such as healthcare and education. The very traditional approach to poverty aid has been providing free food, water and other things to fulfil basic needs, but what is truly needed is to create a path out of poverty that helps people build a better life for themselves and their families. This approach is a reaction to the symptoms, rather than the root caus. Therefore economic growth and creating jobs are an essential part of reducing poverty, since simply offering aid in the form of fulfilling the absolute basic needs will not help take those communities out of poverty. These actions need to be accompanied by social policies that address the root causes, such as inequality, discrimination, and exclusion. For these reasons and more, eliminating poverty is essential for achieving other Sustainable development goals. When lifted out of poverty, people and communities will have better access to healthcare and education, tackling SDG’s #3 and #4, which in turn should support eliminating hunger, #2 on the SDG’s list. A major barrier in achieving many of the SDG’s is also gender equality, which is often highlighted in poor communities but proven to be alleviated by access to education among other things.

International Development Cooperation

International Development Cooperation refers to the various forms of support for the development of less developed countries. This can include aid from other countries, international organizations, and non-governmental organizations. The history of this type of aid can be traced back to post-World War II era, when the UN was established with the main goal of working for international cooperation and addressing global issues such as poverty and underdevelopment. Below are explained some of the most essential forms of international Development Cooperation and their strengths and weaknesses.

Bilateral aid refers to aid provided by one country to another, this is done through various channels such as grants, loans, and technical assistance. Often these programs are focused on poverty reduction and supporting programs in areas such as health, education and basic infrastructure. The main downside of bilateral aid is the possible dependency it creates.Particularly if this type of aid is not accompanied by proper measures to build local capacity it can hinder long-term development. Often bilateral aid is provided with conditions, such as the requirement from receiving countries to adopt specific economic policies or political reforms. This can be seen as interfering in the internal affairs of the country, which no matter the intent can be seen as politically questionable. Bilateral aid is also highly vulnerable to corruption and funds might often end up somewhere else than their intended target.

Non-governmental organizations (NGOs) are private non-profit organizations that provide a wide range of services and support to developing countries. Because these organizations are run privately there is a lot of room for flexibility and innovation in the way they offer aid. NGO’s also can offer very focused expertise on projects, have a community-based approach and advocate even for small communities. Since these organizations rely on external, private funding their funds can be at times inconsistent and unpredictable. Perhaps the biggest challenge with NGO’s though is accountability and transparency, NGO’s must up keep a good reputation and if this reputation is damaged that can hinder an organizations work greatly.

In conclusion, poverty is a complex issue that affects millions of people around the world. It is a problem that goes beyond income and includes various social, political, and cultural factors. Being able to measure poverty is an important part of alleviating it, but when doing so it is highly important to remember that poverty can look very different in various environments and contexts. As the number one goal of the United Nations SDG’s, tackling poverty requires a collective effort and a comprehensive approach that involves economic, social, and political reforms. Only once the population of the whole world is lifted out of extreme poverty, can we expect full effort from all countries to achieving the rest of the Sustainable Development Goals and through that create a more sustainable future.

 

The World Bank. 2022. Measuring Poverty. November 30. https://www.worldbank.org/en/topic/measuringpoverty.

—. 2018. Nearly Half the World Lives on Less than $5.50 a day. October 17. https://www.worldbank.org/en/news/press-release/2018/10/17/nearly-half-the-world-lives-on-less-than-550-a-day.

UNDP. 2022. 2022 GLOBAL MULTIDIMENSIONAL POVERTY INDEX (MPI). October 17. Accessed April 30, 2022. https://hdr.undp.org/content/2022-global-multidimensional-poverty-index-mpi#/indicies/MPI.

 

 

 

 

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