The prevalence of poverty is the biggest socio-economic challenge that world has to deal with. As the world population is increasing at the exponential rate, the rate of poverty is increasing proportionally. Poverty could be characterized with the following Macroeconomic and Microeconomic indicators such as Income Levels, Education levels, Unemployment Rates, Purchasing Power Parity, Social Development, and Deficit balances of Trade .According to the (The World Bank, 2011) 14.5 percent of world population is characterized as poor . The indicator that World Bank has used for data collection is Income levels and the people who live on less than $1.45 a day.
The table below shows world poverty percentages by region.
The prevalence of poverty is a macroeconomic challenge that can be attributed to unequal distribution of wealth & resources that leads to unequal demographic distribution of income, education, food resources.
From the data above Sub Saharan African Regions & Conflict areas form the highest percentage of World Poverty. The main causes of poverty are these areas are high corruption in their political systems, political instability, and lack of transparency. The Sub Saharan regions of Somalia & Sudan were victims of civil war in past decades. Various World institutions such as UN, World Bank and IMF have put in efforts to overcome the challenges, but lack of transparency, corruption in political systems in those regions couldn’t pave for the efforts of international organization. Same is the case with South Asian countries. Misuse of World Organization Funds, Democratic instability is the main hurdles for people to overcome poverty.
According to the (The World Bank, 2013) , the total world GDP contribution is $ 74.91 trillion. Inefficient Monetary & Fiscal policies in developing nations are widening the income gaps, and people are getting into the poverty trap.
Effect of Poverty
Poverty Increases Income & Social Gaps in Society. The poor get poorer. Nations wealth remains in few hands. Reduces the purchasing power of people. People get socially excluded, as a result crime rates are increasing. People in poor regions of world turn up to criminal activities as a result of economic & social exclusion. Unemployment in Youth is one of major indicators of poverty that leads to youth stress levels & extreme cases they turn out to suicide .Poverty & Inadequate medical facilities in the Sub-Saharan Regions have led to malnutrition amongst children. Lack of medical resources and & poor hygienic conditions has led the Children suffer from various disease such malaria, dengue, Hepatitis B and C. Women in poverty hit areas are widely effected. The Women in Poverty Hit region of Sub Saharan Africa and South Asia doesn’t have fundamental rights.
According to (UNDP, 2014) , they are not provided with fundamental education, medical and constitutional rights. And are not empowered about the hygiene and birth control techniques. In South Asian Countries such as India & Pakistan women are often exploited in on the labor rights. They are manipulated through the political systems in those countries.
Reducing Poverty through Different Initiatives
As Poverty is not a challenge for a specific region it’s a global dilemma. Hence World Institutions and Leaders need to tackle it with the Uniform Policies.
There are a lot of ways.
People need to be empowered about their fundamental rights. This could only be done through education and awareness. People living in poor areas need to be informed about their labor and citizenship rights. The political systems of developing countries don’t give much citizenship rights to people. The World Institutions should create an environment of transparency in the local systems of regions. Women should be made aware of the medical conditions. The Local NGO’s should make mass awareness among local populations. Recent cases of Polio Viruses and its Vaccination in Pakistan are example of lack of medical awareness. Local teams of NGO’s who were vaccinating the children were attacked by Pakistani citizens in remote Northwest areas. This was solely due to result of an inadequate knowledge of Polio Virus and its devastating effects. And in return more children are becoming Polio Virus victims. Labor should be given fundamental rights on wages, working conditions.
b) Create a system of transparency of Funds:
UN, World Bank & IMF provide lot of financial assistance to South Asian countries such as India and Pakistan and lot of development aid to African regions, but due to lack of proper political system and transparency these funds are often misallocated towards local people. Proper risk audits should be carried out by international agencies in order to facilitate those deprived.
c) Exploration and Exploitation of Domestic resources and Creating domestic industries
Developing countries would be self-sufficient when there will be increase in domestic industrial expansion. More people will get jobs. As a result the monetary position of families would increase. The dependency ratio will decrease. The developing economies of South and West Asia are mainly agrarian economies. The dependency ratio is high. One person in a family earns other remain unemployed. There should be a drift from depending on one sector of economy. Many natural resources are still unexplored. If explored could change fortunes of people.
d) Education for all
According to (CIA, 2014) illiteracy rate in developing countries is alarming. Female literacy rate in Sub Saharan Regions of Somalia is around 25.8 percent and in South Sudan its 16 percent, as compared to developed nations which have literacy rate of 99 percent. These data are self-explanatory for poverty conditions prevailing in the third world countries.
UN (UN, 2014) made certain resolutions. It developed an eight point agenda known as Millennium Development goals, in order to eradicate certain issues ranging from Poverty to Illiteracy, health, Inequality, Global Sustainably, Health and. reducing Child Mortality by year 2015.
The main reason behind poverty is uneven distribution of resources in developing countries. The resources should be use efficiently within government systems. Accountablity of Funds and Transparency should be encouraged in developing nations.
The World Bank (2013).” Data Index World Bank”: http://data.worldbank.org [Accessed Date 23 Oct,2014 ]
CIA. (2014).”CIA Facts”.https://www.cia.gov/library/publications/the-world-factbook/fields/2103.html [Accessed Date 22 Oct ,2014]
UN. (2014).”UN Millenem Goals”: http://www.un.org/millenniumgoals/ [Accessed Date 23 Oct,2014]
UNDP. (2014).”UNDP Poverty reduction”. http://www.undp.org/content/undp/en/home/ourwork/povertyreduction/overview.html [Accessed Date 23th Oct,2014]
The World Bank. (2011).World Bank: http://data.worldbank.org/topic/poverty ,[Accessed Date 24th Oct,2014]