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10.1: Defining Poverty

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  • Defining poverty begins with a consideration of conditions that prevent regions, states and peoples from having access to wealth. Though there are many elements to this, there are four key structural conditions to consider.

    1. History of exploitation

    Many of today’s poorest nations were previously exploited through colonialism and/or slavery. These actions have had lasting impact through entrenching inequalities between socio-ethnic groups within states. A prescient example is South Africa, which, under British and Dutch rule, restricted the rights of indigenous African groups in the areas of education, land ownership and access to capital. At the same time there was a concentration of wealth in the hands of the white colonising minority. Such actions were eventually enshrined in the creation of the apartheid system of racial segregation. However, even since its dismantling in 1994, poverty amongst the indigenous population is disproportionately high in comparison to white groups due to the fact that capital and land continues to be concentrated in the hands of a select few. Of course, some former colonial nations have emerged from their exploitation to become some of the world’s leading economies – consider the US and Australia. Yet, even in these ‘Western’ societies there remains a legacy of colonialism that often affects indigenous peoples disproportionately. In more absolute terms, as decolonisation unfolded in the second half of the twentieth century, many new nations, particularly in Sub-Saharan Africa, were left with inadequate or weak political structures that soon gave way to other types of exploitation via dictatorship or corruption. In these cases, the bulk of the population experienced exploitation. In some states, these problems still persist.

    2. War and political instability

    When thinking of the fundamental conditions for economic development to take place in a state, security, safety and stability often come to mind. This is because peaceful conditions permit a government to focus on developing natural resources, human capacity and industrial capabilities. War and political instability often act as significant distractions as efforts are directed at combating violence or insecurity. For example, think of the conflict in Syria that began in 2011. This has led to a mass flow of millions of refugees seeking to escape the conflict, leaving behind a war-torn state that lacks the human and economic resources to govern itself effectively. It is a pattern that has been seen before – for instance, in the 1990s in Somalia, where instability still persists. The outlook for Syria in the years to come could well be even worse. It is also something that can be seen in the developed world, though to a different degree. Consider the United States: it spent upwards of $3 trillion on the invasions and occupations of Iraq and Afghanistan as part of its ‘Global War on Terror’ while, simultaneously, relative poverty and inequality increased within its own society, in part due to the government prioritising public spending on warfare. It is no surprise, then, that when surveys on citizens’ qualities of life are undertaken, stable nations which do not typically engage in warfare – such as Switzerland and Denmark – are often top of the list.

    3. Structural economic conditions

    The way in which the international economic order is structured can either reinforce or ease poverty. Institutions like the World Bank and the World Trade Organization are dominated by wealthy nations. This has placed them under scrutiny due to embedded practices that often place developing countries at a disadvantage. For example, before the World Bank issues a loan to a low-income nation, certain conditions must be met. These are known as conditionalities. They can include policy changes such as the privatising of public services – for instance, the provision of water, sanitation and electricity. Imposing such conditions, or structural adjustments as the World Bank calls them, have frequently been shown to cause more harm than good.

    4. Inequality

    Inequality is an important contributor to poverty as it can reinforce divisions between the so-called ‘haves’ and ‘have-nots’. In a relative sense, it can result in certain elements of a population lacking the tools and resources needed to counter the challenges they face. In an absolute sense it can render a whole state unable to rescue its citizens from dire circumstances because it lacks the financial resources. For example, in the United States approximately 16 million children live in poverty. This is despite the fact that it is one of the richest countries in the world. Inequality can be measured by looking at how much income a family has relative to the cost of living in that society. It is not the same as the absolute poverty a child living on less than $2 a day would experience in the Democratic Republic of the Congo, one of the world’s poorest nations. Yet, it is still poverty when viewed in a relative sense through the lens of inequality. The nature of the problem is thus extensive since it is something that exists at both the domestic level (inequalities within states) and the international level (inequalities between states). Although there is a vibrant international charity system and a range of international assistance programmes, inequality remains a key structural condition associated with poverty.