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Poverty is about money and what you can buy with that money, but beyond this statement, there is no simple definition as poverty is not monolithic but deeply nuanced in its cause and effects. Thus, in this article, I will begin to demist poverty, providing a springboard to the wider literature shrouded in discord. Firstly, I will address the various definitions of poverty, the cycle of poverty and why it is so hard to break, and finally, what can be done to alleviate the plight of the world’s poorest.
What is poverty?
There is no one definition of poverty, but rather it is measured by different metrics for different types. Relative poverty is when you are excluded from the ‘normal’ activities of society, and is measured by a central summary statistic, normally mean or median. For example, in the UK you are in relative poverty if your income falls below 60% of the median income, which currently stands at roughly £35,000. Additionally, relative poverty metrics are often used to calculate child poverty. Absolute poverty, or anchored poverty, is when you are unable to afford a minimum basket of human necessities, such as food, water, shelter, electricity, sanitation and education. It is measured by the domestic poverty line, which roughly captures how much this hypothetical basket of goods would cost, thus varying from country to country.
The international poverty line is derived from the median of the national poverty lines in the 28 poorest countries , and after being updated in 2022 sits at $2.15 per day. Anyone living on less than this is said to be in extreme poverty. A staggering 719 million people, or 9.2% of the world’s population, are in extreme poverty according to the World Bank.
Whilst the aforementioned metrics are most widely used, other metrics have been developed, enhancing and nuancing the debate about what poverty is, particularly the more severe extreme poverty. Multidimensional poverty measures, particularly those developed by the World Bank, are burgeoning methods of quantifying and understanding who is in poverty, such as the Multidimensional Poverty Index (MPI). This is because whilst there is a strong correlation between the ability to access basic human necessities and living under $2.15, it is not perfect. Some people may earn less than $2.15 but have access to necessities, or at least some, whilst others earning more than $2.15 may still lack the requisite resources to survive. For example, 14.5% of Chile’s population is in income-based poverty, whilst 20.4% are in multidimensional poverty.
The Cycle of Poverty
Once an individual or family falls into poverty, particularly extreme poverty, it can be very difficult to get back out. To illustrate this, I will provide an example. If you live under the poverty line (national or international) you are unlikely to be able to afford necessities for sustenance, such as food. This leads to myriad problems, principally struggling to work due to low energy and the excessive time spent attempting to access food, compounded by the risk of catching a disease from inadequate food sources. This inability to work makes it nearly impossible to garner the necessary funds to ameliorate your situation. By extension, children born into the cycle struggle to break out due to the difficulty in accessing education.
These difficult and precarious life circumstances are exacerbated by the effects of climate change and land degradation. Land degradation can be caused by numerous factors but is more prevalent in countries worst affected by rapidly growing populations and climate change as families desperately attempt to meet the requisite food yields, overcultivating and destroying the soil in the process. Climate change in addition to fuelling land degradation can constrain access to human necessities such as food and water, making them more expensive and consequently pushing more people into poverty.
What can be done?
There is no silver bullet for solving poverty, but where progress has been made a handful of macro conditions are often present, principally equitable economic growth. Growth in the economy increases the resources of governments to address the problem, allowing governments to implement comprehensive safety nets, protecting individuals and families from falling into poverty whilst simultaneously lifting others out. Additionally, economic growth creates new job opportunities, thus offering invaluable income to so many. On a global level, climate change abatement is one of the most important factors in controlling poverty, particularly in developing countries worst impacted by climate change.
NGOs and governments, often working together, are critical to ensuring that poverty is alleviated domestically and internationally. NGOs such as UNICEF, World Vision and The Borgen Project are all dedicated to tackling poverty wherever it is found. But, despite the invaluable work of NGOs, when it comes to money and the ability to make change no one can match the power of national governments, but with only 5 countries reaching the UN aid expenditure goal of 0.7% GNI in 2023, more support is urgently needed. Unfortunately, in many developed countries, aid expenditure is faltering under the weight of populism and fiscal consolidation, such as the UK shaving £4bn of its Official Development Assistance (ODA) budget in 2021.
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