What is poverty? World Bank view Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom.

Measuring poverty Absolute poverty: When people / households do not have enough resources or abilities today to meet their basic human needs World Bank defines extreme poverty as living on less than US $1.25 (PPP) per day, and moderate poverty as less than $2 a day

Percentage of population in extreme poverty (World Bank Report, Jan 2010) Less than $1.25 a day China India Sub-Saharan Africa Latin America Total Less than $2.00 a day China India Sub-Saharan Africa Latin America Total

Percentage of global population living on less than 1 dollar day

Globalisation and absolute poverty Has globalization reduced extreme poverty? $1.25 dollar (PPP) a day measure is criticized Income poverty is only one aspect of deprivation What of access to sanitation / clean water? Under-nutrition / life expectancy PPP adjustment is subject to error When China is removed from figures, number of people in absolute poverty has barely changed in developing countries : Crisis of food and energy price inflation Global recession hitting lowest income countries

Relative poverty Refers to inequality Income or wealth compared to other members of society Gini-coefficient of inequality is the most commonly used measure of inequality The coefficient varies between 0, which reflects complete equality and 1, which indicates complete inequality (one person has all the income or consumption, all others have none).

Economic development The process of improving people’s economic well-being and quality of life

The process of development Development is a process, not a one-off event Development focuses on the outcomes of economic activity and resource allocation Different people will specify different indicators of development – there is a normative element – an element of value judgements

Michael Todaro specified three objectives of development: 1. To increase the availability and widen the distribution of basic life- sustaining goods such as food, shelter, health and protection. 2. To raise levels of living, including, in addition to higher incomes, the provision of more jobs, better education, and greater attention to cultural and human values, all of which will serve not only to enhance material well-being but also to generate greater individual and national self-esteem 3.To expand the range of economic and social choices available to individuals and nations by freeing them from servitude and dependence not only in relation to other people and nation-states but also to the forces of ignorance and human misery.

Economic growth Growth raises a nations income and it is possible to provide better health care, better education and more jobs to reduce poverty

Economic growth Additional income may be unequally distributed. Affluence and poverty may co-exist Natural resources may be depleted so future generations can not achieve the same level of income Economic growth may be achieved by capital intensive methods of production, generating few additional jobs Economic growth might be achieved by methods resulting in high levels of pollution, damaging health and reducing living standards

Activity Use the UN website to research the Millennium Development Goals (MDGs) These goals were due to be achieved by 2015 For a developing country of your choice, research its progress in achieving four of the targets below Using your findings, comment on economic development in the developing country you investigated TARGETS Eradicate extreme poverty and hunger Achieve universal primary education Promote gender equality and empower women Reduce child mortality Improve maternal health Combat HIV/AIDS, malaria and other diseases Ensure environmental sustainability Global partnership for development