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How can poverty be measured? (6)
- GDP per capita
- Literacy rate
- Life expectancy
- Crime rate
- Population density
- Child mortality
- Infant mortality
- Number of years in education
What is HALE?
Health Adjusted Life Expectancy
What are the issues with using GDP as a poverty indicator?
- Doesn't accurately describe bigger populations
- Small countries may have a group of extremely wealthy and extremely poor which is masked
Define: extreme poverty
The most severe state of poverty defined as a person living on $1.25 (PPP) or less a day
Define: Absolute poverty
Living on an income less than the defined income poverty line. This will vary from country to country and from region to region depending on the cost of living
Define: relative poverty
Determined by inclusion in a bottom income group in a community, such as the poorest 10%
Define: primary product dependant country
Countries that rely on one or a small range of primary products for most of their exports
What are LDCs?
Least developed countries. THe poorest and most economically weak of developing countries, with formidable resource problems which are compounded by geographical handicaps.
What are NICs?
Newly industrialised countries
How many LDCs are there in the world as identified by the UN?
- Approximately 50.
- they make up 10% of the world's population but only one-tenth of 1% of the total world income
How many people die every day from poverty, as estimated by the UN?
What is the Grameen-Phone scheme?
- In Bangladesh, this major service provider provides mobile phones to more than 50 million people in order for micro-enterprises to operate efficiently.
- it is a pro-poor policy
What are pro-poor policies?
Systems that ensure poor people are able to contribute to the growth process through increased output and rising productivity.
What are the UN Millennium development goals?
- 1. Eradicate poverty and extreme hunger
- 2. Achieve universal primary education
- 3. Promote gender equality+empower women
- 4. Reduce child mortality
- 5. Improve maternal health
- 6. Combat HIV/AIDS, malaria and other diseases
- 7. Ensure environmental stability
- 8. Develop a global partnership for development
How many children in the world are severely deprived of basic human needs?
1 billion (approx)
According to the Human Development Report (2005), what is 'the most brutal suppression of human development'?
- Violent conflict
- Because people die but are also injured and cannot work for a long time and education stops and all that jazz
The process of change or growth over time. For example a country may change from a traditional economy to one based on technology
What is the development gap?
The widening difference in levels of development between the world's richest and the world's poorest countries
How many people live in moderate poverty?
Define: moderate poverty
Living on between US$1 and US$2 a day
What is 'Purchasing Power Parity'?
measurement that takes the cost of living into consideration when looking at per capita income.
Which three factors does the human development index (HDI) consider?
- Life expectancy
- Literacy rate
- GNP (using PPP$)
On what scale is HDI measured?
From 0 - 1
1 is the highest. Norway has highest score of 0.944
What are the causes of poverty? (6)
- Communicable diseases, such as malaria or HIV
- Lack of clean water and sanitation
- Natural disasters
- Physical geography (landlocked-less able to trade)
- Government failures/corruption
How has HIV/AIDS affected the life expectancy of people in Botswana?
Dropped from 65 years in 1995, to less than 40 years in 2005.
What percentage of people in Africa live in extreme poverty?
What percentage of children in the world live in poverty?
Almost 50% (1 billion children)
Why might a country be poor? (list 5)
- Politically unstable
- Poor economic management
- Conflict either presently or in the past
- High population growth
- Endemic corruption (disease)
- Dependant on one primary product for trade
What is aid?
The voluntary transfer of resources from one country to another, with the aim to improve the human condition in the country receiving the aid
What is bilateral aid?
- Where aid is given directly by the government of a donor country to the recipient country.
- It may have a clause, such as it can only be used for one particular project/need
What is multilateral aid?
Aid given by a donor country to an international organisation, such as the World Bank, who then use the money in programmes to assist developing countries
What are NGOs?
Non-governmental organisations that are primary charities that raise money to use for aid programmes, which can be in the form of short or long term assistance.
When is aid not effective?
- When the government it is being given to is corrupt
- When aid reaches 16% of the GDP it ceases to be as effective
- When it is unevenly distributed, and the poorest do not receive it
How can making aid an incentive for reform improve the effectiveness of it?
Incentives closely align with the priorities of the recipient government, with implications if the conditions are not met. This can then increase the training and level of skills amongst the population who have new employment opportunities
How many children, on average, does a family in poverty have?
- compared to the global average of 2
Define: budget deficit
- A budget deficit occurs when government spending exceeds its income.
- Budget deficits as a percentage of GDP often decrease during periods of economic prosperity when there is lower unemployment and governments tend to be able to increase tax revenue and reduce costs
Define: capacity building
This is the training and development of the workforce within a country
Define: diminishing returns
A term used to refer to the point at which the money made is less than the amount invested
The social process of exclusion (eg countries being unable to trade within global markets)
A remittance is a transfer of money by a foreign worker to an individual in their home country
A sum of money granted by the government to help an industry or business to keep the price of a commodity or service low
Define: technical assistance
Non-financial assistance usually in the form of sharing information or training skills
How can reducing trade barriers reverse marginalisation?
Improve a country's ability to efficiently export their produce
Give an example of a country where ineffective trade policies have been in practice
- Used to be self-sufficient in rice production
- When markets were opened it became cheaper to import rice from the USA
- Ghana's debt increased as the rice market decreased
What are the arguments for cancelling third world debt?
- Commercial banks were reckless in their lending
- It is keeping the poorest countries poor
What are the arguments against cancelling third world debt?
- Unfair on the governments who have been able to pay their debts off
- Cancelling old debt will only result in new debts
How can remittances help to reduce poverty?
- Leads to higher human capital accumulation
- Greater health and education expenditures
- Breaks the cycle of poverty due to increase in income
Give an example of a country where remittances have helped to reduce poverty
- 25% of Nepal's GDP is from remittances of people working abroad
- This helps to pay off the $4blln debt in the country
What is debt relief?
The partial or total remission of debt, or the slowing or stopping of debt growth, owed by individuals, corporations or nations
What is modernisation?
Was it successful?
- An approach adopted in the 1950s and 1960s to increase the economies of developing countries
- It is an increase of international trade and intensive industrialisation to allow for exportation of goods
- By the end of the 1960s it was clear that this model was not having a desired impact
What is neoliberalism?
- Became popular during 1970s
- Idea that free trade is essential for economic growth, so markets should be allowed to be as open as possible with no restrictions
Which countries have benefited as a result of neoliberalist ideas?
The Asian Tigers - Taiwan, South Korea, Singapore, Hong Kong
What is 'trickle down' aid?
A term used to describe the belief that if high income earners gain an increase in salary, then everyone in the economy will benefit as their increased income and wealth filter through to all sections in society.
What is 'bottom-up' aid?
Target the people most in need of the aid and help them directly, without any government interference. Aid from charities tends to be bottom-up aid.
What is the Rostow Model?
- A diagram that shows the economic growth pattern of a country in five steps. Each step takes a varying length of time to complete.
What is 'dutch disease'?
Pouring in of dollars to small economies meaning the domestic currency becomes strong and nobody can buy goods, which means more poverty.
How successful has debt relief been?
Data shows that countries that have had their debts written off have better economic policies than the rest of the developing world.
Over the past 30 years, how many African countries have had their debt written off?
- Many of these countries have borrowed from MEDCs in the past to build infrastructure but haven't been able to pay it back because of conflict, natural disaster or corruption.
What does a country have to do to qualify for their debts to be cancelled?
- Produce a Poverty Reduction Strategy Paper
- Manage their economy well (not corrupt)
- Stay away from expensive borrowing in the future
- Put whatever they have saved on debt repayments into social programmes
What is the FAO End Hunger Campaign?
- A UN campaign to ensure universal access to nutritious food in the 1000 day window between the start of pregnancy and a child's second birthday.
- Launched in 2003
Has the FAO End Hunger Campaign been successful?
- Yes in Brazil the percentage of its population that could be classified as 'food insecure' went down by 40%.
- 24 countries are now following a similar model as was used in Brazil to eliminate hunger in their own nation
What are the sustainable development goals?
17 goals that were constructed at the Rio+20 Summit in 2012 which are expected to be used as frameworks for new political agendas until 2030.