This web page has the following sub-sections

:
1. Introduction 2. World Bank’s Poverty Estimates Revised 3. Inequality 1. Inequality in Industrialized Nations 2. Inequality in the US 3. Inequality, globalization and a new global elite 4. Inequality in Cities Around the World 5. Inequality in Rural Areas 6. Inequality Between Genders 7. Inequality and Health 8. Inequality fueled by many factors 9. Inequality increases social tensions 10. Fragile Democracies, Inequality turn good people to evil 4. The Wealthy and the Poor 5. The World Bank and Poverty 6. Poverty in Industrialized Countries 7. Corruption

Introduction
What does it mean to be poor? How is poverty measured? Third World countries are often described as “developing” while the First World, industrialized nations are often “developed”. What does it mean to describe a nation as “developing”? A lack of material wealth does not necessarily mean that one is deprived. A strong economy in a developed nation doesn’t mean much when a significant percentage (even a majority) of the population is struggling to survive. Successful development can imply many things, such as (though not limited to): • • • • • An improvement in living standards and access to all basic needs such that a person has enough food, water, shelter, clothing, health, education, etc; A stable political, social and economic environment, with associated political, social and economic freedoms, such as (though not limited to) equitable ownership of land and property; The ability to make free and informed choices that are not coerced; Be able to participate in a democratic environment with the ability to have a say in one’s own future; To have the full potential for what the United Nations calls Human Development: Human development is about much more than the rise or fall of national incomes. It is about creating an environment in which people can develop their full potential and lead productive, creative lives in accord with their needs and interests. People are the real wealth of nations. Development is thus about expanding the choices people have to lead

lives that they value. And it is thus about much more than economic growth, which is only a means—if a very important one—of enlarging people’s choices. — What is Human Development?, Human Development Reports, United Nations Development Program At household, community, societal, national and international levels, various aspects of the above need to be provided, as well as commitment to various democratic institutions that do not become corrupted by special interests and agendas. Yet, for a variety of reasons, these “full rights” are not available in many segments of various societies from the richest to the poorest. When political agendas deprive these possibilities in some nations, how can a nation develop? Is this progress? Politics have led to dire conditions in many poorer nations. In many cases, international political interests have led to a diversion of available resources from domestic needs to western markets. (See the structural adjustment section to find out more about this.) This has resulted in a lack of basic access to food, water, health, education and other important social services. This is a major obstacle to equitable development. Back to top

World Bank’s Poverty Estimates Revised
In August 2008, the World Bank presented a major overhaul to their estimates of global poverty, incorporating what they described as better and new data. The World Bank’s long-held estimate of the number of people living on the equivalent of $1 a day has now been changed to $1.25 a day. The World Bank also adds that the previous $1 a day estimate for the international poverty line would have been $1.45 a day at 2005 prices if only inflation was accounted for. The revised estimates include a lot more recalculations and the $1 a day measure used in some of the charts below are therefore not to be confused with the old $1 a day measure, and where available, a $1.45 measure is also provided as well as a more current $1 a day measure. (Because some developing countries also have poverty lines at $2 and $2.50 a day, those are also shown, where available.) At a poverty line of $1.25 a day, the revised estimates find • • • 1.4 billion people live at this poverty line or below This is more than the previous estimate of 984 million with the older measure of a $1 a day in 2004 In 1981, the estimated number of poor was also revised upward, from 1.5 billion to 1.9 billion

The World Bank notes that “the incidence of poverty in the world is higher than past estimates have suggested. The main reason is that [previous data] had implicitly underestimated the cost of living in most developing countries.” The data also does not reflect the recent global food crisis and rising cost of energy, which is feared will bring another 100 million into poverty. Accounting for the increased population between 1981 and 2005, the poverty rate has, however, fallen by about 25%. While this at least sounds encouraging, it masks regional variations, and perhaps most glaringly the impact of China:

• • •

China’s poverty rate fell from 85% to 15.9%, or by over 600 million people China accounts for nearly all the world’s reduction in poverty Excluding China, poverty fell only by around 10%

As a result, the World Bank feels that while China is on target to reach the Millennium Development Goals to reduce poverty and tackle various other issues, most other countries are not. Here are the World Bank’s new estimates of poverty at different poverty levels: • • • Different poverty levels Data in other graph formats Raw data

Different poverty levels
Poverty lines shown here include $1 a day, $1.25 a day, $1.45 a day, $2 a day (typical for many developing countries), $2.50 a day (which includes a poverty level for some additional countries), and $10 a day, which a World Bank report referred to if looking at poverty from the level of a wealthy country, such as the US.

inequality is quite high in many regions around the world: .But even with some poverty reduction.

numerous studies have shown that sometimes the poor in wealthy countries can be unhappier or finding it harder to cope than poor people in poorer countries. their relative poverty can also have serious consequences such as deteriorating social cohesion. as opposed to absolute poverty. Inequality is often discussed in the context of relative poverty. it is also bad for economic efficiency — Growth with equity is good for the poor. the poor may not be in absolute poverty (the most basic of provisions may be obtainable for many) or their level of poverty may be a lot higher than those in developing countries. Some of these things are hard to measure. and 2. the Overseas Development Institute (ODI) for example sees poverty reduction as a twin function of 1. June 2000 While poverty alleviation is important. so too is tackling inequality. even in the wealthiest countries. . such as social cohesion and the level of trust and comfort people will have in interacting with one another in the society. In the context of tackling poverty then. increasing crime and violence.Back to top Inequality Inequality is not just bad for social justice. Oxfam. but in terms of their standing in society. The rate of growth. That is. Changes in income distribution. Nonetheless. and poorer health. over the years.

) Inequality in Industrialized Nations Professors Richard Wilkinson and Kate Pickett. Health is related to income differences within rich societies. there is almost always the same tendency for outcomes to be much worse in more unequal societies. additional key factors to reducing poverty will be: • • The reduction in inequality The reduction in income differences A few places around the world do see increasing rates of growth in a positive sense. more equal societies almost always do better in terms of health. • • • Outcomes are substantially worse in more unequal societies The problems tend to move together. Why More Equal Societies Almost Always Do Better (Penguin. For example: • • About 0. they noticed a clear tendency for countries which do badly (or well) on one outcome to do badly (or well) on others. not between them Health and social problems are worse in more unequal countries Health and social problems are not related to average income in rich countries Child well-being is better in more equal rich countries Child well-being is unrelated to average incomes in rich countries Levels of trust are higher in more equal rich countries The prevalence of mental illness is higher in more unequal rich countries Drug use is more common in more unequal countries Life expectancy is longer in more equal rich countries Infant mortality rates are higher in more unequal countries As they note in a presentation of their findings: • • • • • • • • • • . implying that they share an underlying cause Whether their findings are tested internationally among the rich countries. there is also a negative change in income distribution. The wealthiest 20% of the world’s population consumes 76. compelling evidence is presented by the two professors that once nations are industrialized. March 2009). But globally.The ODI also adds that as well as increased growth. Equality Trust. produced an informative lecture video titled Inequality: The enemy between us? based on their recently released book. In the lecture. or among the 50 states of the USA. They looked at a wide range of health and social problems and found that. well-being and social cohesion and that large income inequalities within societies destroys the social fabric and quality of life for everyone: Inequality: The enemy between us?. 2009 As they studied the data for industrialized nations.6% of the world’s goods while 80% of humanity gets the remainder.13% of the world’s population controlled 25% of the world’s assets in 2004. (See poverty facts and stats on this site for more examples. The reality unfortunately is that the gap between the rich and poor is quite wide in most places. The Spirit Level. from the Equality Trust.

• • • • • • • • • More adults are obese in more unequal rich countries Educational scores are higher in more equal rich countries Teenage birth rates are higher in more unequal rich countries Homicide rates are higher in more unequal rich countries Children experience more conflict in more unequal societies Rates of imprisonment are higher in more unequal societies Social mobility is higher in more equal rich countries More equal societies are more innovative More equal countries rank better on recycling An interesting point they make is that economic growth alone — which is supposed to raise the income of all — is not necessarily a good determinant of life-expectancy and well-being: individuals in some developing countries can attain a level of life-expectancy comparable to industrialized nations even when their income may be far lower: Income per head and life-expectancy: rich & poor countries. 2009 (previous link has larger image) . The Spirit Level Slides. The Equality Trust.

disrespected and loss of face. the worse the problem generally: Violence is more common in more unequal societies. and the differences are large: there are five-fold differences in murder rates between different countries related to inequality.” The next example compares social mobility (the ability for someone to move up the social ladder. The Equality Trust.In other words. 2009. but after that equality may be more important. but the trends are always the same: the more unequal the society. “The link between inequality and homicide rates has been shown in as many as 40 studies. From the source for the above graph. economic growth is important when developing. The following graphs (reproduced with kind permission) are just examples of the problems they looked at. escape poverty etc) with inequality: . The most important reason why violence is more common in more unequal societies is that it is often triggered by people feeling looked down. Evidence: Violence. the Equality Trust notes that.

accessed December 7. For example. The UK is also surprisingly at the low end. social mobility has slowed. what is less discussed is whether that means carbon emissions of poorer countries must be similar to today’s industrialized nations. It may be surprising to see the US at the low end of social mobility when it is touted as the land of dreams and possibilities for anyone. it is often said that to develop and industrialize. 2009 The implications of all these findings are important in many ways. While income differences have widened in Britain and the USA. Interestingly. Evidence: Social Mobility. but with far less carbon emissions in the process: . Many of today’s industrialized nations are often seen as over consuming with respect to the planet’s health (climate change being something largely a result of greenhouse emissions from wealthier nations. As the next graph shows. Yet. The Equality Trust. no matter who they are. However. developing nations’ carbon emissions must increase. 2009. — Evidence: Social Mobility. The Equality Trust. as industrialization implies a more energy-intensive economy. a number of developing nations have achieved average life expectancies that are close to industrialized nations. It looks as if the American Dream is far more likely to remain a dream for Americans than it is for people living in Scandinavian countries. Greater inequalities of outcome seem to make it easier for rich parents to pass on their advantages. the US and UK are the biggest proponents of neoliberal economic ideology. Bigger income differences may make it harder to achieve equality of opportunity because they increase social class differentiation and perhaps prejudice. which has often played down concerns about inequality and instead focused more on raising the lot for everyone (as the interview with Tony Blair noted further below reveals). the Equality Trust finds that.Social mobility is higher in more equal rich countries. for example).

6 million people — 14. Inequality in the US The US for a long time has had the largest gap and inequality between rich and poor compared to all the other industrialized nations. The United States currently has the highest number of people in poverty it has ever had since the government began counting in 1959. For example in 2003. 2009 (previous link has larger image) Addressing inequality implies tackling many. the data they used for the study came from the early 2000s. so are not distorted by the global financial crisis that started around 2008. The Spirit Level Slides. The Equality Trust.. but first.S. Inter Press Service also summarizes an updated report by the US Census Bureau that 1 in 7 people in the US are in poverty. in the last 20 years while the share of income going to the top 1% has increased. some more on inequality. 43. many social. Furthermore. economic and environmental issues. .2 percent of the population in 2008. political. for they are all inter-related in many ways. the top 1% received more money than the bottom 40% with the gap widest in 70 years. In 2009.High life expectancy can be achieved with low CO2 emissions.6 percent of the population — were living in poverty in the U. it has decreased for the poorest 40%. up from 13.) Further below there is more about poverty in industrialized nations. (Interestingly.

The report notes similar findings to that in earlier years. Percentage change in US income since 1979. the expansion of financial services. increasing pay for those working in the financial and legal professions. October 2011. p. adjusted for inflation. increases in corporate pay. IPS also notes factors such as the global financial crisis. But the article also adds that the poverty estimate may be understated because of assumptions made in calculations years ago and changes in costs of living since then as well as regional differences. Factors included more market income in the top percentages. a larger increase in wage rates for those at the top. mentioned further above that the top 1% received more than the bottom 40%: . “we are the 99%” (or its variations) are popular slogans in the protests against the current economic conditions and those who largely caused it or are benefiting from it. some 7 times more than the remaining 99%.although the percentage of people this represents is lower than it was then (due to the increased population size since then). Their income had grown some 275% over that period. stagnant wages and more contribute to this deepening poverty. US The US Congressional Budget Office released updated figures for US household income between 1979 and 2007 which showed that the top 1% were driving the main increases in income. etc.3 Figure 2 . the expansion of technology disproportionately benefiting those at the top. where in the US in particular. This is likely to add fuel to the so-called “Occupy” protest movement in the US and around the world. Trends in the Distribution of Household Income Between 1979 and 2007 CBO.

US Congressional Budget Office. by 2007. “inequality in America is mainly a story about a small elite pulling away from everyone else. the top 1 percent received about the same share of income as the lowest income quintile. Instead.” In a short follow-up. who have been winning here.1%. whereas the share received by low. the share of total after-tax income received by the 1 percent of the population in households with the highest income more than doubled between 1979 and 2007.and middle-income households declined…. The share of income received by the top 1 percent grew from about 8 percent in 1979 to over 17 percent in 2007.2005. the top percentile received more than the lowest two income quintiles combined. “It’s a tiny minority. comments on earlier CBO data that even within the top 1% the big gains have gone to the top 0. including ordinary college grads.3 .” And stressing his point about education. October 2011.As a result of that uneven income growth. those shares were 53 percent and 47 percent.” . US Congressional Source: Supplemental data for 1979 .… In 2007. p. December 2008 Nobel prize winner for economics. Paul Krugman. — Trends in the Distribution of Household Income Between 1979 and 2007 Budget Office. not a broad class of well-educated Americans. respectively. Krugman adds that the change in income share in that period shows that “just about all of the redistribution has taken place from the bottom 80 to the top 1. In 1979. The 99%/Occupy protest movement is aiming too low he remarks! Krugman also notes that lack of education is not a driving factor for inequality in the US as some have argued.

New York Times. while those already with large inequality in emerging developing countries are getting more unequal too. and have.Noting that around the world there is a new global working wealthy dominating the new global elite. had a terrible effect on the rest of the economy as the current financial crisis has shown.” — Chrystia Freeland. mainly banks.000 — accounted for less than 1 percent of national income in 1974. Furthermore. January 25. not only by seemingly benign forces like the technology revolution and global trade. globalization and a new global elite Globalization has. Of those companies. . Adam Smith. who was amongst the first to argue for free markets. according to Tyler Cowen. the figure was 6 percent. That difference translates into hundreds of billions of dollars. benefited a new working elite globally. but also by malign ones. By 2007. corruption and undue influences: One concern some economists express about the emergence of a global plutocracy is that it may be driven. particularly the elite’s ability to shape government and other public policy activities in its own self-interest. An analysis of over 43. to compare American bankers with emerging-market oligarchs. The generous government bailouts of United States financial institutions prompted Simon Johnson. a problem in just a handful of them can. but collusion. not just in the US. Johnson wrote that American financiers had pulled off a “quiet coup. But for a while many have talked of countries like the US also showing similar patterns. as noted above. for example.000 transnational corporations (TNCs) has identified a relatively small group of companies. with disproportionate power over the global economy. … The rise of government-connected plutocrats is not just a phenomenon in places like Russia. India and China.” Countries like Russia have been seen as having an oligarchical structure. in his name. an economist at George Mason University outside Washington. such as Germany and various Scandinavian countries. The problem with such super concentration is that a small minority can influence the world system disproportionately — what is good for them is not necessarily good for everyone else. • • • There was a core of 1318 companies with interlocking ownership The 1318 companies represents around 60 per cent of global revenues by collectively owning through their shares the majority of the world’s large blue chip and manufacturing firms — the “real” economy An even tighter 147 (about 1%) of these were described as “super entities” that controlled 40 per cent of the total wealth in the network. Mr. even in more egalitarian countries. In addition. achieved the same position. an earlier New York Times article notes for the US that “the gap [in the US] between the super rich and everybody else is now greater than at any time since before the Depression of the 1930s”. a professor of economics at the Massachusetts Institute of Technology. And so a long-time concern is that a lot of this increased concentration in wealth is not just from successful business practices. Working Wealthy Predominate the New Global Elite. “The richest one-hundredth of 1 percent of American families — about 15. They “have largely pulled away from their compatriots”. had also warned against the impacts and undue influences of such concentration. In an article in The Atlantic magazine. but it would seem the modern TNCs have. which he later expanded into a book. given the enormous position in the world system. 2011 Inequality.

former mayor of Bogotá. the issue of equality was noted: As a municipal official. or to spend it on public utilities and amenities. the report adds that in many developing cities. the UN Habitat’s State of the World’s Cities 2008/2009 report has found that disparities within cities and between cities and regions within the same country are growing as some areas benefit more than others from public services. This exacerbates insecurity and social unrest which. is to build equality. developing nations. For legitimacy to exist in society. in democracy. For example. infrastructure and other investments. Amnesty International. according to UN Habitat. from poverty in the countryside. While there have been some successes in reducing the number of people living in such areas in recent years by about a tenth (mostly in China and India). with economic growth. Urban World: Bridging the urban divide. p. December 2009-January 2010. wealthier citizens live in private spaces and may even avoid visiting or walking around in city centers. The report also added that in such cities. October 2009 . There is therefore a dilemma that the public sector faces compared to the private sector: for the private sector. rather than engineering alone. “they do not care much about city’s parks or public schools” but may be more interested in better roads. Colombia.9) Yet different priorities and interests easily result. thus providing for a majority of the population. which in developing cities mostly serves higher income citizens with cars. a police station. and almost counter to conventional wisdom. By contrast. in turn. not reduces. approximately 1 billion people live in slums in the cities of the world — approximately 1 in every 6 people on the planet. sometimes at levels similar to those of some developing countries. “in the public sector every project is ‘good’. a school or a park all provide a benefit which is difficult to measure. Why cities must build equality. This is why the major issues for today’s cities have to do with equality and politics. Numerous factors create this rise. globalization factors and so on. particularly benefiting the poor. This is because high levels of urban inequality have a dampening effect on economic growth and contribute to a less favorable environment for investment. diverts public and private resources from social services and productive investments to expenditures for safety and security. The problem is so immense that. In another UN Habitat report. numerous problems persist. one has to decide whether to spend taxpayers’ money on road infrastructure. studies have shown that many wealthier nations also suffer from inequality. UN Habitat. As a result. World Habitat Day — Stop forced evictions in Africa. — Enrique Peñalosa. changes towards neoliberal economic ideology. a road. For example.” (p. the report finds that in cities that have high levels of inequality increases the chance of more disparities increases.Inequality in Cities Around the World Inequality is usually associated with poorer. deciding where to invest usually boils down to where the best returns will be. But for many years. for example. citizens must perceive that inclusion and equality are fundamental objectives of public authorities. In addition. 8 Factoring in democratic principles also makes things harder: “Government has many roles but a fundamental one.” In parallel with growing cities are growing “informal settlements” or slums. corruption. the lack of social mobility tends to reduce people’s participation in the formal sector of the economy and their integration in society.

where some 1 in 3 people living in cities are living in slum areas. the urgency to address this has never been more. Nairobi. is an example of a massive settlement without official recognition which has been around for decades. electricity. With increasing migration to cities (almost half of humanity lives in urban areas). highlighting that despite the grinding reality of poverty. Nairobi’s two million slum-dwellers p. Some American cities are as unequal as African and Latin American cities. the threat of forced eviction is commonplace as private developers often want prime land for development. education. garbage collection. A short video summarizes a number of other videos they have compiled on this. Kibera. Image: Deep Sea slum in Kenya. Amnesty International provides numerous examples of this from around the world. . Sub-Sharan Africa’s largest informal settlement. addressing greenhouse emissions from urban areas can go a long way to helping combat climate change. people in informal settlements often find that in addition to less services.(© Amnesty International) In developing countries. Furthermore. New York was found to be the 9th most unequal in the world while Atlanta. sanitation. Share The World’s Resources. June 2009. The video clip shows that despite the hardships there is still a sense of vibrant humanity. human nature can still prevail and people work together to help each other and are enterprising despite all the circumstances.Without the ability to make their voices heard. there is increasing pressures on providing sufficient resources in a sustainable way. health. New Orleans. Sub-Saharan Africa’s largest slum. Some settlements don’t have official recognition. “residents have been denied a range of essential services provided by the government to other residents … [such as] water. from Share The World’s Resources work on Megaslumming. access roads and transport” (from Amnesty International’s report: Kenya: the unseen majority.7). as cities grow in this way. For example. Some of the other findings the 2008/2009 UN Habitat reported included that • • Some 3 million people per week were added to cities of developing world. . Kenya’s Kibera slum. an organization that produced the video. released the book Megaslumming which described this further. As a result.

the Netherlands and Slovenia were classed as the most equal countries while Greece. The most unequal cities were in South Africa and Namibia and Latin America. The International Fund for Agricultural Development (IFAD). Challenging some of these core myths about slums can help focus on the structural causes of urban poverty that result in the rapid growth of informal settlements. Beijing was now the most egalitarian city in the world. “The life expectancy of African-Americans in the US is about the same as that of people living in China and some states of India. rural areas exhibit more poverty than urban areas which is briefly looked at next. and the percentage of poor people residing in rural areas.” India was becoming more unequal as a direct result of economic liberalization and globalization. “of the 1.47) Changes over time are not the same in all regions. and a majority of the world’s poor will live in rural areas for many decades to come. It points to what it describes as “emerging opportunities for rural growth and development” and suggests how to help rural women and men move out of poverty and become part of the solution for the global food security challenges of the next several decades. and Miami had similar inequality levels to those of Nairobi. released a major report on the state of rural poverty in the developing world in December 2010. Denmark. the UK and Spain were among the most unequal. despite the fact that the US is far richer than the other two countries. “poverty remains largely a rural problem. December 2010 The Rural Poverty Report 2011 contains updated estimates by IFAD of the number of rural poor people living in the developing world. as Adam Parsons from Share the World’s Resources organization notes. an international financial institution and a specialized UN agency. In addition.Washington. particularly in the developing world. • Race is one of the most important factors determining levels of inequality in the US and Canada. The report also includes new information on how many people move in and out of poverty over time.25/day] in 2005. poverty rates in rural areas. Europe was found to be generally more egalitarian than other continents. however. the section further below on poverty in industrialized areas also suggests that inequality is unfortunately widespread. approximately 1 billion — around 70 per cent — lived in rural areas.” In addition. just ahead of cities such as Jakarta in Indonesia and Dire Dawa in Ethiopia. Reuters summary of IFAD report. . • • • • Conventional thinking on development issues is often characterized by many assumptions. more generally. Finland. For example.4 billion people living in extreme poverty [less than US$1. Kenya Abidjan and Ivory Coast.” (p. Inequality in Rural Areas Poverty and inequality in rural areas is also high. The report adds that despite an historic shift towards urbanization. clichés and rationalizations about the residents of slums. Although the above focuses on cities.

South East Asia and sub-Saharan Africa. over three-quarters of the poor live in rural areas. a majority of the poor now live in urban areas In South Asia. and the proportion is barely declining.25/day).Rural share of total poverty (Rural people as percentage of those living on less than US$1. despite urbanization But rural areas are not with poor only. • • • • As a total average. yo% of those in extreme poverty live in rural areas East Asia has reduced the rural share of total poverty to just over 50 per cent Latin America and the Caribbean. Rural Poverty Report 2011.47 As the IFAD chart shows. In recent years. and the Middle East and North Africa. many have been lifted out of poverty: . by contrast. the most urbanized regions. p.

inequality is high even while absolute poverty is slowly being reduced.Incidence of extreme rural poverty (Percentage of rural people living on less than US$1. just under 35% of the total rural population of developing countries is classified as extremely poor. • • Rural poverty has declined more slowly in South Asia. In addition.25/day poverty line. South Asia and sub-Saharan Africa are where most rural poor live: .25/day). For example. the report also warns that the numbers there that can be classified in poverty would be higher if using their own national poverty lines. where the incidence is still more than 45 per cent for extreme poverty and over 80 per cent for US$2/day poverty Likewise. the IFAD reports that some countries and sub-regions fared better than others. The various regions have fared differently.25 a day. In other words. in terms of raw numbers of people. IFAD also noted that the number of those living on less than $2 a day is also down. as a total average across developing nations.48) Despite successes in areas like Latin America when using the internationally comparable $1. however. down from around 54% in 1988.48 As the IFAD chart shows. Even within these regions. from around 80% of all rural populations to around 60% (but mostly due to massive rural poverty reduction in East Asia (mostly China) where today the incidence of rural poverty is around 15% for the US$1. p.25/day line and 35% for the US$2/day line. where more than 60% of the rural population lives on less than US$1. sub-Saharan Africa’s rural poverty decline is also slow. and almost 90% lives on less than US$2/day. (p. Rural Poverty Report 2011.

instead.” (p.63) For more information. 2008. .Rural people living in extreme poverty (Millions of rural people living on less than US$1. the World Health Organization’s Commission on the Social Determinants of Health presented a 3-year investigation into the social detriments to health in a report titled the Closing the gap in a generation: Health equity through action on the social determinants of health. but poverty more broadly. Yet. poverty has also been described as the number one health problem for many poor nations as they do not have the resources to meet the growing needs. but also to the growth of the wider economy. Inequality and Health A Canadian study in 1998 suggested that the wealthiest nations do not have the healthiest people.49 Although the graphs seem to show progress. see this site’s section on women’s rights which goes into the above further. For many years. and that doing so is crucial to address interlocking deprivations which result in poverty – not only for women. yet barely feature in recognition or policy. it is countries with the smallest economic gap between the rich and poor. and A range of natural resource constraints • Inequality Between Genders IFAD also notes that women tend to do more work (for less pay) and are the primary care givers in virtually all rural societies. more secure jobs is not only beneficial to them and their families. the report warns of complacency as further efforts to reduce rural poverty will be complicated by • • Increasingly volatile food prices as seen in 2008 The uncertainties and effects of climate change.25/day). … women’s access to better paid. it is not beyond humanity: At the end of August. p. IFAD also adds that “The general implication of these findings is that achieving gender equality requires challenging social institutions. Rural Poverty Report 2011.

Most common generalizations will be things like greed. Even within a country such as the UK. Commission on Social Determinants of Health. — Closing the gap in a generation: Health equity through action on the social determinants of health . on the ‘gap’ between the poorest and the rest. They are the cause premature of disease and suffering. policy choices and individual actions (or inactions) can all contribute to inequality. political and economic policies affect health. But even in societies where governments are well-intentioned. Sir Michael Marmot explains why social. the report finds that the average life-span can differ by some 28 years. chair of the Commission. The political right in the wealthier nations generally argue that in most cases. then. and so more emphasis and responsibility should be placed on the individual to help themselves get out of their predicament. poor working conditions.” Marmot expands on this further in the video clip. live. . And that’s why we say a toxic combination of poor social policies. grow. to help avoid worsening social cohesion and a weakening society. that’s unnecessary. western nations have overcome the important challenge of inequality of opportunity. lack of amenities. bad politics and unfair economics are causing health and disease on a grand scale. in a few dramatic cases. This is discussed in more detail on this web site on this page: Global Health Overview. These all apply to the socially disadvantaged in low-income countries in addition to the considerable burden of material deprivation and vulnerability to natural disasters.The report noted that health inequalities were to be found all around the world. Those at the bottom of the distribution of global and national wealth. Both views have their merits. those marginalized and excluded within countries. unemployment and job insecurity. Source: WHO. “The key determinants of health of individuals and populations are the circumstances in which people are born. with their consequent impact on family life. have the worst health. the political left usually argue for addressing inequality as a matter of moral obligation or social justice. August 28. money. Higher quality video Sir Michael Marmot. “And those circumstances are affected by the social and economic environment. is only a partial response. not just the poorest countries: The poorest of the poor. 2008.” he says. World Health Organization. and countries themselves disadvantaged by historical exploitation and persistent inequity in global institutions of power and policy-making present an urgent moral and practical focus for action. … In rich countries. In wealthier nations. work and age. around the world. noted in an interview that most health problems are due to social. So these dimensions of social disadvantage – that the health of the worst off in high-income countries is. being “lazy” or trying to “live off the system” is as abhorrent as inequalities structured into the system by those with wealth. low socioeconomic position means poor education. Inequality fueled by many factors Various things can create inequality. p. depending on whether you are in the poorer or wealthier strata of society. power. political and economic factors. power and influence. worse than average health in some lower-income countries … – are important for health. But focusing on those with the least. and unsafe neighbourhoods.31 Get the Flash Player to see this video.

but there are also additional factors that have a larger impact than they would on most wealthier countries. various international economic factors and more. The Guardian (August 6. well into 2003. concentrated wealth and so on. and girls and young women had overtaken their male counterparts in education. with the latter earning the highest wages in the region. However. Yet. have all contributed to problems. too. The UK and US are often two of the more dynamic nations. Inequality increases social tensions Andrew Simms. Guatemala. risking the very fabric of society if it gets out of control. Much of the above was written around early 1999. Inter Press Service (IPS) reports that 10 of the 15 most unequal countries in the world are in Latin America: Bolivia. Such levels of inequality implies that it is overly simplistic to blame it all on each individual or solely on government policy and “white-collar” corruption. affecting the poorer citizens the most (because the costs such as the debt gets “socialized”). sometimes in much more extremes. the foreign policy of the US in that region has often been criticized for failing to help tackle the various issues and only being involved to enhance US national interests and even interfering. He suggests that as well as a minimum wage. Indonesia is another example as part of this Noam Chomsky interview by The Nation magazine reveals. Ecuador. a combination of successive military governments (often supported or aided by the West) and/or corrupt leadership. (which spear-headed the Jubilee 2000 campaign to highlight the injustices of third world debt) makes an interesting suggestion in the British paper. economically and opportunities to make a very successful life is well within the realms of possibility. Unfortunately. 2003). affecting the course and direction of the nations in the region through overt and covert destabilization. in some poorer countries. the World Bank reported that the Latin American rich-poor gap is widening. which is tied in fifth place with Colombia. those same dynamics may be present too. Nigeria is one often-mentioned example. both the political left and right agree that social cohesion (social justice or family values. these two tend to have the worst levels of inequality amongst industrialized nations. which is sometimes overlooked by political commentators in wealthy countries when talking about inequality in poorer countries. has contributed to poverty there. Panama and Paraguay. This. inequality is very high.” Into 2010. as well as international economic policy have combined to create debt traps and wealth siphoning. combined with factors such as corruption. Brazil. For example. while the poorest tenth earns only 1. . While ideological debates will always continue on the causes of inequality. Latin America on the whole is another. etc) is suffering. and Chile. as Jubilee 2000 highlights where Western backed dictatorships have siphoned off much of the nation’s wealth in the past leaving the country under immense debt for later generations to suffer under.In poorer countries. regional and external geopolitics. Honduras.K.6% Race has also been a factor where “Indigenous and Afro-descended people are at considerable disadvantage with respect to whites. For example. followed by Haiti. There has been progress in closing the gender gap in income. for the sake of social cohesion there should perhaps be a maximum wage. foreign debt. For example: • • Income inequality in the region had worsened with the richest one tenth of the population earning 48% of its total income. policy directory for the New Economics Foundation in U. Latin America has the highest disparity rate in the world between the rich and the poor: Internal.

Above subsistence levels. by the BBC prior to the June 2001 elections. The Guardian. Tony Blair. the documentary noted the increasing alienation and exclusion of people in society where inequality was high. In the UK the bottom 50% of the population now owns only 1% of the wealth: in 1976 they owned 12%. and that also parallel many parts of the world today. — Andrew Simms. has come to the conclusion that “the widening gaps between rich and poor within nations” is “morally outrageous. While individuals are making understandable decisions regarding their security. however.” In addition: Crime and unhappiness stalk unequal societies. titled IF. but if government tried to do something about it. Even the former hardline conservative head of the International Monetary Fund. Michel Camdessus. that neoliberal economic ideology may lead many to think inequality is not important. fragmentation.Amongst various things. economically wasteful and potentially socially explosive”. ○ Opportunities. Now for a maximum wage. is causing a “flood-up” of resources from the poor to the rich. regardless of the levels of inequality between rich and poor. ○ Space. This partial transcript of an interview with Britain’s then-Prime Minister. Further inequality of ○ Wealth. and kept suggesting that he wants to improve the lot of the poor. It looked into a scenario of what would happen in a few years if the growing inequality in the United Kingdom continued to widen. the documentary noted some important issues that are already present. Inequality leads to instability. there is the additional effect of cutting off from the rest of society. but how big the gaps are between us and our peers. instead of “trickle-down”. and because highly unequal societies have a habit of falling apart. they would face a powerful obstacle: the rich. the last thing the country or world needs right now. Simms notes that tackling inequality from the other end is important because “the economic case for high executive pay in terms of company performance doesn’t hold up. and exclusion. Allowing the super-rich to live apart from society is as damaging in its own way as the exclusion of the poorest. The remainder of this subsection provides more details: “Gated communities”. Yet. While the predictions of what would happen are always tough to make. while providing an opportunity to develop otherwise derelict areas. leading to consequences such as: • • • Resentment. Britain’s BBC aired a documentary on March 17. also represents a sign of growing inequality. at the same . Our economic system’s incentive structure. 2004. what undermines our sense of well-being most is not our absolute income levels. A divided society (described as an “apartheid” of society). In summary. 2003 It seems. August 6. whereby those who can afford to do so live in areas where security is paid for and managed to ensure undesirables are kept out. reveals an example of that where Blair appeared to evade the question of the importance of reducing inequality. Side Note» These are times when the “welfare state” is failing people because it gives people a false sense of security and uses an element of coercion (payment of taxes to pay for the services).

. the documentary noted.K. • • • • The experiment involved a system of guards and prisoners. Addressing the root causes of inequality would therefore seem to be where the challenge lies. • However. The documentary concluded that on a more general sense. Inequality “turn good people to evil” In May 2002. When a fear of crime exists then it is understandable that people will want security services that can protect their property. children naturally take precedence. some of the former prisoners themselves instituted what was becoming an almost fascist regime before the experiment was eventually stopped. Wealthier people of course can afford to take more measures. Regrettably though. people can. leading to further frustrations.time. In theory then. In the U. policing is meant to be more than protecting things of material value. there is less the state is able to do. structures and accountability are also different. Furthermore.K. The economic costs of fighting effects are also high. the documentary also noted. the BBC also noted that for each dollar spent on poverty causes. can afford more private security than the poor. an effect of inequality. the costs. Citing some research. seven dollars was saved on consequences. but they will anger the rich”. one of the many things that makes up a functioning. it was noted that inequality has been increasing to levels not seen since around the Second World War. ○ Our democracies are more fragile than we realize. Fragile Democracies.. the BBC aired another documentary related to inequality. (as elsewhere) private security services are increasing. The wealthy. Unfortunately. providing a quasipolicing role. However. If crime is perceived to be increasing and the police are not seen as trusted. This is in response to the increase in crime. But this has important implications. The concerns for their immediate family. stable and democratic society is an uncorrupted judicial system and law enforcement. This typically implies possessions of individuals. one would not expect an individual concerned with their own well-being to appear to sacrifice that for the sake of society. and do take actions into their own hands. As a result. a downward spiral potentially emerges that seems hard to get out of. because they “can try to address inequality. called The Experiment. where they showed in detail how inequality can “turn good people to evil”. such as off-shore tax havens. what is making this situation more complicated is that the super rich are taking advantage of globalization and all the loop holes it provides. At the same time. nor is usually created for. because of the increasing fragmentation and exclusion that this results it. The prisoners eventually revolted against the initial inequality. something a private security firm neither is mandated to have. The political costs of inequality are recognized and accepted as being too high. For example: • • Such services are good at protecting everything that is a commodity and has a price. in U. governments are in a difficult situation. Due to the different roles. the police are supposed to have social and human concerns for society as well.

it can be a very large sector. The text to the part on realism of US relations in the Far East. 2. We should make a careful study to see what parts of the Pacific and Far Eastern world are absolutely vital to our security. which inequality can create and exacerbate. 1948. housing and medical care. which means a concentration of political power. clothing. David McGowan. State Department Policy Planning. 1948 And contrast that with the following around the same time. Derailing Democracy. (Common Courage Press. The less we are then hampered by idealistic slogans.3% of its population. those likely to lose out in such an equalizing effect are the rich. one of the main reasons for continued poverty has been in order to maintain this power. an impartial media. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity. elite power holders. there is a pattern of inequality caused by the powerful subjugating the poor and keeping them dependent. It is from George Kennan. 1976 for the full text where this was first published. but only 6. Often.…In this situation. the better. 1993). . Study #23. U. Outside influence is often a large factor and access to trade and resources is the usual cause. from a key superpower that helped create the United Nations. The day is not far off when we are going to have to deal in straight power concepts. the raising of the living standards. Chapter 2. (See also Foreign Relations of the United States 1948. In most cases when they do.…To do so. a functioning and non-corrupt democracy.…We should cease to talk about vague and… unreal objectives such as human rights. and our attention will have to be concentrated everywhere on our immediate national objectives. 1. can seriously threaten to undermine democracy. all help in realizing a successful nation and society. For example. — George Kennan. to just and favourable conditions of work and to protection for himself and his family [and] an existence worthy of human dignity … Everyone has the right to a standard of living adequate for the health and well being of himself and his family. head of the US State Department planning staff until 1950. and democratization. p. we cannot fail to be the object of envy and resentment. Vol.S. and we should concentrate our policy on seeing to it that those areas remain in hands which we can control or rely on.169. they face incredible and often violent oppression from their ruling elites and from outsiders who see their national interests threatened. Noam Chomsky. we will have to dispense with all sentimentality and day-dreaming. No. etc. equitable distribution of land and a well structured judicial system (and other such factors). any power vacuums. While it is recognized that strong institutions. including food. Back to top The Wealthy and the Poor In the developing world. — Universal Declaration of Human Rights. What Uncle Sam Really Wants. Consider the following from the United Nations: Everyone has the right to work. and his comments on US relations with Far East: we have about 50% of the world’s wealth. February 24. (Odian Press. Historically. Inequality is also characterized by a concentration of wealth.○ In addition. 2000). It is often asked why the people of these countries do not stand up for themselves. … We should recognize that our influence in the Far Eastern area in the coming period is going to be primarily military and economic. a lack of any of these things can lead to a marginalization of a sector of people.

once the “people” won. would proclaim their “Divine Right” to rule over their subjects. Mass “luxury” consumption in Europe expanded as well as a result of the increased production from the industrial revolution. which was much of the rest of the world. and hence. Trading superiority was maintained by raiding and plundering areas deemed as a threat. For continual support. • • • • The “discovery” of the Americas. they started to tax the wealthy nobility. or the resourceproviders. they used slavery where they could. The effects of colonialism and imperialism are still felt today. ○ It was only at that point did the revolutions such as the French Revolution take hold (because now the nobility had their wealth affected and were able to influence the peasants to fight for their cause. These peripheries would therefore be raided and their means of production would be destroyed. to continue this growth. which were centers of wealth. For example. Take for example the medieval days of Europe where the wealthy of the time controlled land via a feudal ruling system and hence impoverished the common people intentionally. but to share it a bit more. If the countryside became more efficient and produced better. would control their countryside as the source of their resources and production. of maintaining security and so on (not unlike what we hear today about national security). there were concessions made that allowed the elite to retain their power. the “country side”. which required even more resources and wealth to be appropriated.As a result of their ability to own and/or influence one of these above-mentioned things. power and influence of the city. or threatened to trade with other neighboring cities. expansion of trade routes etc brought much wealth to these “centers of empire” which helped fuel the industrial revolution. They had an army of Lords and Bishops to advise on policies that benefited these groups (religion was used—and still is—to control and influence people. to keep profits up and costs down. this would be seen as a threat to the wealth. and the countryside expanded to include today’s “third world”. Eric Toussaint: globalization’s roots lie in colonialismSee link for transcript But this had a further negative impact on the colonized nations. • • • • • The rulers (Kings etc). they affect the lives of millions. This is a pattern seen throughout history. Get the Flash Player to see this video. those rulers would proclaim various reasons to their people. while Lords and Knights were an extension to the ruling family that would carry out the wishes. the source of their wealth. A strong military was therefore necessary (just as it is today) to ensure those trade advantages were unfairly maintained.) ○ While this helped bring more rights. When the elite could no longer tax the poor. Even some laws were established that basically allow these practices. Those European city states evolved into nation states and imperial powers. Summarizing from the works of the Institute for Economic Democracy: • The old European city states. .) They would heavily tax the people of their land. Not allowing the peasants to own the land upon which they lived meant that they would be stuck in poverty and dependency. The cities would fight over each other for similar reasons.

(1st Books. wars are primarily fought over resources and trade. Smith.W. Britain. about 10 percent of the world’s population. decimated. Sharpe. but include a more sophisticated “plunder by trade”: The powerful and cunning had learned to plunder by trade centuries ago and societies ever since have been caught in the trap of those unequal trades. restructuring to equal trade would mean the severing of arteries of commerce which provide the higher standard of living for the dominant society and collapse of those living standards would almost certainly trigger open revolt. What Western nations were observing. introducing others when indigenous populations had either been wiped out. if there were no countryside under the firm control of an imperial center. and those resources could no longer be siphoned to the old imperial-centers-of-capital for a fraction of their value. p. Except for religious conflicts and the petty wars of feudal lords. 2000. Smith summarizes this: Virtually the entire colonial world was breaking free. its resources would be turned to the care of its own people. 2nd Edition). And. … If India and the rest of the world’s former colonies continued to take the rhetoric of democracy seriously and form the nonaligned bloc as they were planning. if Japan.” which citizens were coached (propagandized) to believe meant fear of a military attack. the entire neo-liberal/neo-mercantilist belief system will have disappeared.) Side Note» As with the previous wars throughout Europe’s rise. — J. Smith. Europeans also carved out artificial borders to reflect their territorial acquisitions. impoverished world’s valuable resources. sometimes bringing different groups of people into the same borders that had never been forced to live together in such short times. of course. over 80 percent of the world’s population would be independent or on the other side of the ideological battle. and even there the ideological hold would be tenuous at best.sometimes transferring people across continents. (Some poorer countries today still suffer the effects of this.58 Plundering the “countryside” to maintain dominance and control of the wealth-producing process has been an age-old process. is there any woman.E. Economic Democracy: The Political Struggle for the Twenty-First Century. J. still under the old belief system. 1st Edition). World War I and II were also battles amongst the various European empires who struggled over each other to control more of the world’s resources and who would “decide the rules of unequal trade”. These mercantilist processes continue today. Once unequal trades were in place. Canada. Germany. that would leave only the United States. The world is trapped in that pattern of unequal trades yet today. let me say any child here that does not know that the seed of war in the modern world is industrial and commercial rivalry?” — J. “National security” and “security interests. and France could not be held (it was far from sure they could be). President Woodrow Wilson recognized that this was the cause of World War I: “Is there any man. After all. was the same potential loss of the resources and markets of their “countryside” as the cities of Europe had experienced centuries earlier. Chapter 2 The geopolitical events of the post World War II era have been crucial for their impacts on poverty and most other issues. or proved too resistant in some way. Economic Democracy: The Political Struggle for the Twenty-First Century. W. .W. and Australia. Those policies of “plunder by raid” have continued. (M. really meant maintaining access to the weak. Italy. 2002.

is an example where the wealthier companies and nations are able to determine the rules. The idea is that opening markets for foreign investment will also help improve exports and contribute to economic growth. during the Cold War. increasingly. The powerful nations would of course claim this was necessary for something like world stability. Prosperity for a few has increased. such as a secure and constant supply of cheap resources or some other reason related ultimately to maintaining influence and power.S. and assuming political and economic freedom as opposed to world neo-liberal/neo-mercantilist law dictated by military power. The world’s break for freedom must be contained. Smith. Today’s “corporate globalization”. or to save the other country from themselves. external meddling in internal affairs or even military intervention by the powerful nations. They may have faced external pressure. they could demand full value for their natural resources while simultaneously underselling the current developed world on manufactured product markets. is an example of that dependency. for foreign investors. With their own industrial capital.g. or to reduce dependency from the US/IMF/World Bank etc. national interest.) This means that it is hard to break out from poverty. Neoliberal economic ideology has been almost blindly prescribed to poor countries to open up their economies. 2002). Chapter 7 While European nations are now more cooperative amongst themselves (in comparison to the horrors of World War II) and the U. The managers-of-state had to avert that crisis. “democracies” are supported. but it would often be to do with protecting “their” national interests. Cutting back on social spending (e. as has poverty for the majority. as described in a previous section on this web site.The “domestic prosperity” worried about was only their own and the “constantly expanding trade” were unequal trades maintaining the prosperity of the developed world and the impoverishment of the undeveloped world as the imperial-centers-of-capital siphoned the natural wealth of their “countryside” to themselves. poorer country governments often found that if they tried to improve the situation for their people. shape the international institutions and influence the communication mechanisms that disseminate information to people. Dictators and other corrupt rulers have often been placed/supported in power by the wealthier nations to help fulfill those “national interests” in a similar way the old rulers of Europe used the Lords and Knights to control the peripheries and direct resources to the centers of capital. . In this backdrop. but ones where the economic choices are so limited. • • • Structural Adjustment (SAP). international trade arrangements and various economic policies still lead to the same result. had long taken the lead in the international arena. Economic Democracy. The Political Struggle for the 21st Century (1st Books. The World Breaking Free Frightened the Security Councils of Every Western Nation.W. — J. how do developing nations contend with poverty? • During the Post World War II period. that the “democracy” provides a similar environment that a dictatorship did. health and education) which are seen as inefficient will also help pay back loans and debts. Second Edition. now. (Although. but without the overt violence and oppression. … Those crucial natural resources are in the Third World and developed world capital could never compete if those people had their own industrial capital and processed their own resources into consumer products. they could have been perceived as a threat or worse still going communist. for the rest of the world.

but allow very lively debate within that spectrum—even encourage the more critical and dissident views.) With this in mind. Joseph Stiglitz explains the effects of liberalization & subsidized agriculture on poor farmers(see link for transcript) Hence. money will be spent to purchase it. educational systems. politics that are always at play and the effects on the economy the world over. One key choke-point is political control through the “co-respective” support of local elites. Smith. saying to each other “your money or your life. sometimes themselves subsidized (hinting a more mercantilist economic policy for the rich. In some societies those who try to say something may just face ridicule due to the embedded belief . That gives people the sense that there’s free thinking going on.But what ends up happening is the poorer nations lose their space to develop their own policies and local businesses end up competing with well-established multinationals. 1998 • Those that have opposed such things in the past may have been persecuted in some way. why would so many people not oppose such things? There are many reasons.W. An enormous proportion of the income of nations and individuals. Where loyalty is lacking.” and generally taking both. the reality of it is that it is not matching the rhetoric that is broadcast.… The pattern has been well established repeatedly throughout history and throughout the world. (Institute for Economic Democracy. The World’s Wasted Wealth 2. or whatever. many back the economic neoliberal policies without realizing the background to it. The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion. visit the Institute for Economic Democracy web site. Whether it be via an aristocracy or by simple distortion of information. — Noam Chomsky. The Common Good.…Modern nations are highwaymen. is blood money: payment exacted by the threat of death. p. It is another example that while international trade and globalization is what probably most would like to see. It is in the interest of power-holders to ensure as little is questioned by outsiders as possible. corrupt groups will be financed and armed to overthrow that government and. Odonian Press. — J. Therefore the most prudent nation is the nation which is in the best position to levy blackmail. It provides much more in-depth research into these backgrounds and in far more detail than what I have summarized above. 1994). as noted by the well-known philosopher Bertrand Russell. another country will be financed to attack and defeat it. different nations have had various means to handle this. while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate. J. (To find out more about the political dimensions of the economy of the world and to see the detailed links between history (how it is both told and repeated). even though free market capitalism is the claim and the prescription for others). If a government cannot be bought or otherwise controlled. including: • Most people don’t know—this is not an accident. Get the Flash Player to see this video. 134.W. nowadays. in extreme cases. Smith has researched this in depth and the following offers a relevant summary: The Third World remains poor because the powerful strive to dominate every choke-point of commerce.

among the poor. p. The following summarizes this aspect quite well: [W]e should be familiar with the sincerity with which people will protect the economic territory that provides them their livelihood and wealth. — J. whereas the big money is nomadic and travels at the speed of bytes. And when considering how today’s global economic model promotes the liberalization of capital more and more. The World’s Wasted Wealth 2. 1994). and nonfunctional. “slow”. Such an admission could lead to the loss of their economic niche in society. Few even admit.W. Stationary money (of local businesses.” Those above the poverty level vigorously insist that they are honest and productive and fulfill a social need. 1994). trade has now become so complex that few of today’s powerful are aware of the waste and destruction created by the continuation of this neomercantilist struggle for markets. and labor are indiscriminately consumed—living standards in the over-capitalized nations have continued to improve.” Governments now do this more than ever because the poor are rooted.W. (Institute for Economic Democracy. wage and salary earners) will be taxed to the limit for the simple reason that it can be got at. 158. It is important to their emotional well-being that they believe this. quoted above.systems which are being questioned. professionals. The complexities of some of today’s economics and trading systems also make it harder to address root causes of poverty: Although in [the] early years the power brokers knew they were destroying others' tools of production (industrial capital) in the ongoing battle for economic territory. J. Smith. also points out (and details in his work) how we have moved from “plunder by raid to plunder by trade” in recent centuries. “When it’s money you’re after. that their hard work may not be fully productive. This emotional shield requires most people to say with equal sincerity that those on welfare are “lazy. p. people may even face violent oppositions. They would then have to find another territory within the economy or drop into poverty themselves. Smith. Smith. 1999). resources. Besides the necessity of a job or other source of income for survival. They dare not acknowledge that their segment of the economy may have 30 to 70 percent more workers than necessary or that the displaced should have a relatively equal share of jobs and income. The World’s Wasted Wealth 2. (Institute for Economic Democracy. stationary. And societies are so accustomed to long struggles for improved living standards that to think it could be done much faster seems irrational. the effects of rapid flows of capital and other impacts of over-liberalization is borne largely by the poorer members of society: A French humorist once wrote. — Susan George. they feel that it is they who are responsible for the world’s improving standards of living and that they are defending not only their rights but everybody’s rights. while in other societies. ignorant. 186 Back to top . (Pluto Press. 90. This would expose their redundancy and. This illusion is possible because in the battle to monopolize society’s productive tools and the wealth they produce. under current social rules. people need to feel that they are good and useful to society. The Lugano Report. — J. undermine their moral claim to their share. p. Instead. look for it where it is most abundant. • Some dare not entertain the thought that the work they may be doing could be at the expense and exploitation of someone else. industrial capital has become so productive that—even as capital. even to themselves.W.

For the 2000 report. which started construction in 2000. called the World Development Report. Ravi Kanbur’s draft has raised a few too many doubts about this agenda. it is essential that the Bank’s policies and public pronouncements do not err too far from its main shareholder and political protector.The World Bank and Poverty The World Bank is a major international institution involved in poverty and development. in a favorable light. thus affecting the chance of real progress being made on poverty issues around the world. the US Treasury. June 2000 The World Bank has often come under criticism for its development projects not actually helping the societies that they claimed they will. and its policies that it prescribes to the rest of the world.) The way the 2000 report was released highlighted another problem with the World Bank. something the Bank has been criticized for not doing (which is a problem in itself!). a professor from Cornell University had been asked to lead up the report team. Another example is the devastating Structural Adjustment Policies pressured upon poor countries by the First World. and social capital scattered over it as a relish. the second is the US Treasury. — Focus on Trade. 5 July. Bangkok. These have had devastating consequences for much of the third world. the environment has degraded and crucial arable land has been flooded. 2000 To keep the Bank afloat Wolfensohn has to steer between two major constituencies. This is discussed further on this site’s hunger and poverty causes section. amongst other things called for developing nations to accept market neoliberalism cautiously. Focus on the Global South. Issue Number 51. The following quotes collected from the Bretton Woods Project. as the report was to be published. and how it doesn’t like to accept criticism on the current forms of globalization and neoliberalism. The overall implication of the resignation is fairly clear. though benefiting the First World. It has the capacity to lend a lot of money and expertise to developing countries and advise on development matters. The World Bank produces an annual report. reveal some interesting insights: The Washington Consensus has emerged from the Asia Crisis with its faith in free markets only slightly shaken. The first are the critics. The World Bank was apparently influenced itself by the US Treasury on this—this is not new though. and his own reputation. critics have long pointed out that the Bank is very much influenced by the US. However. while at the same time. and it is one of the few reports on development that the US mainstream media reports on (because it usually shows the US. The US does not want the World Bank to stray too far from its agenda of economic growth and market liberalisation. he resigned because he was unreasonably pressured by the Bank to tone down sections on globalization. The Bank regards this as its flagship report. Most mainstream economists use this report in some way or form. and strayed too much towards politics. Ravi Kanbur. You don’t need to be a World Bank economist to do the cost benefit analysis. but the main dish is still growth and market liberalisation. The World Bank and the IMF. with social safety nets added as a side dish. The World Bank had also stressed commitments to ensure policies were observed that would . where millions have been displaced and people have not seen the benefits promised. — The Nation. To save the Bank. One such example is the numerous dam projects that have seen lives devastated. which. Poverty eradication is now the menu. Kanbur won respect from NGO circles as he tried to be inclusive and take in a wide range of views. Another example involves a recent Chad-Cameroon oil pipeline project.

in this era of globalisation.” 4.” 5. would be the wealthy elite and multinationals. 6. which has had so much political. while helping millions of poor in Chad out of extreme poverty (Chad is the fifth poorest country in the world) and also providing land-locked Cameroon with much needed revenue. which are principally attracted by ground mineral resources. noting that. weakening states and the World Bank. interestingly. the eggs most often broken are those of the poor who are left with no alternative livelihood. “global levers of development outcomes like the World Bank cannot exercise sufficient clout on oil multinationals' penchant for profits” 3. As a result. designed to carry oil wealth not to a few but to the mass of the poor. “The investment agreements . 2. to respect ecological and social principles. and that people in Chad were becoming disillusioned at the project. In mid-2004. economic and environmental problems associated with it. The World Bank’s actual monetary investment amount was just four percent of the cost. which they would not have been able to otherwise do. the human rights organization.protect society and the environment. “The World Bank is incapable of respecting its own weakening safeguard policies. economic justice. The World Bank had therefore highlighted this project as a prototype for the extractive industry. implying that those who would “eat the omelette” so to speak. is fundamentally incapable of addressing the unequal power relation between fattening multinationals. “Public Private Partnership [PPP]. However their participation and stated commitment to poverty-combating development gave political backing that allowed multinational oil companies (who were the main investors) to raise sufficient capital on the international capital markets. the buzz paradigm of sustainable development. which are premised on controlling damage rather than avoiding harm. AfricaFiles issued a report looking to see how the World Bank’s claims held up. Amnesty International criticized the project investment agreements for undermining human rights.’ As this paper has demonstrated.” The paper has also noted the high level of corruption. This is particularly significant as Africa banks on the increasing trend in Foreign Direct Investments (FDIs). They concluded that 1. This cannot be over-stressed. This was also a recommendation from a report commissioned by the World Bank itself. “Oil corporations cannot be transformed into development agencies even with the best intentions and monitoring mechanisms” referring to the sidelining of time-intensive parts of the project such as capacity building and taking social and environmental issues into consideration.” AfricaFiles also. “The flawed contention of the World Bank is ‘you cannot eat omelettes without breaking some eggs. especially as the World Bank prepares to engage in what it calls high risk/high reward projects in developing countries. “The embryonic neo-liberal governance structures in Africa are incapable of forcing FDIs. Given the World Bank’s claims and presenting this project as a flagship of sorts. suggested the World Bank use its precious resources to support more renewable energy sources development rather than oil. which has not been followed. In September 2005. AfricaFiles is an organization about African issues from the perspective of human rights. and African perspective and alternative analysis. the committee set up to oversee transparency in the oil revenues in Chad has protested about the lack of resources from both the government and the oil company involved.

” In mid-January. the BBC reports that the World Bank shut down the Chad oil account which was to keep 10% of the oil revenue for future generations of people in Chad. in the United States for example. preventing another African country to determine its own policies and be accountable to its own people. They felt that “Learning that (possibly) 95% or more of the [developing country] population is poor by such a standard is unlikely to have much relevance. For example. during the long period the $1 dollar a day measure was used the World Bank was criticized for almost arbitrarily coming up with a definition of a poverty line to mean one dollar per day. while others will see the World Bank’s influence at play here. Earlier. the number of people living on under $10 dollars a day is estimated to be just under 80% of humanity (95% of developing countries).” Nearby fisherman and farmers have also been denied access to water and land. as also stated in the previous link. too. as also mentioned earlier. and that “there is a prevailing climate of fear and intimidation around the pipeline. such as those presented further above. The Chad government argued it needed to fight against poverty now and had a right to that revenue and signed a law allowing access to that account early. making the oil companies de facto unaccountable in the pipeline zone. 2006.25) definition then misses out much of humanity. Some will raise concern of possible intention for corrupt practices by the Chad government. However. the poverty threshold for a family of four has been estimated to be around eleven dollars per day. health.governing the project risk seriously undermining the ability and willingness of Chad and Cameroon to protect their citizens’ human rights.25 dollars a day using newer data and updated techniques) has also fallen under criticism in the past. some of whose critics have already been arrested and intimidated.) This can be seen more vividly in that chart also shown earlier: . as the chart earlier showed. a number of studies show that some of the poorest in rich countries can be regarded as worse off than some in developing countries. the World Bank did explain why they did not use a $10 dollar a day poverty line.” It does seem sadly true that this level is sadly not attainable in the near future for so many people. it serves as a useful figure to remind us how divided the world may indeed be (although. etc. given that US standards of living are not within the foreseeable reach of most people in a typical developing country. the World Bank had suspended some loans. Indeed. The $1 a day (now $1. To be fair. depending on what you measure such as well-being. numbers alone do not capture all the issues. social cohesion. The World Bank also provides the main source of poverty figures. as also mentioned earlier. In addition. The $1 dollar a day poverty line (now upgraded to $1.

An ill-defined poverty line. 2.Another critique of the $1 a day figure came from Columbia University. Morgan Spurlock. These errors. The report describes 3 main errors as being: 1. attributing this “success” to the design and implementation of “good” or “better policies”. The links provided earlier from the World Bank do provide a better explanation of why their poverty lines were chosen as they were. they feared. while they have also given their reason for not using a $10 a day poverty line (because most poor people are unlikely to reach that level in the foreseeable future). And while the data this time significantly includes China and India for the first times. At the same time. would lead to “a large understatement of the extent of global income poverty and to an incorrect inference that it has declined. and its effects. we must still wonder if poverty. they also acknowledge various challenges with collecting the data. and 3.” (Emphasis added). Incorrect extrapolation of limited data giving the false impression of precision while masking the high probably error of the estimates. Since that report. A misleading and inaccurate measure of purchasing power equivalence. the World Bank has indeed revised the poverty line as explained earlier and they noted more people were in poverty than previously realized. produced another documentary where he tried . it allowed the World Bank to insist that the world is indeed “on the right track” in terms of poverty reduction strategy. are worse than the figures reveal. called How not to count the poor . As an aside. the Oscar nominee for his documentary Super Size Me where he went 30 days on a diet of burgers to see what the effects would be. However.

where the ratio is 16 to 1. Germany. The remaining third—particularly Greece. the gap is much smaller. The incomes of the richest 10% average around five times those of the poorest 10%. In addition. Canada. for example. (For many years. nearly nine times that of the poorest 10%. Sweden and Finland. but their gaps are not as large as those first three. However. making it the top 5. that the past five years saw growing poverty and inequality in two-thirds of OECD countries. USA. the relative poverty and high inequality in many wealthy nations creates significant issues.15 per hour for 30 days. Back to top Poverty in Industrialized Countries As mentioned earlier. amongst those 30 countries. the study finds that the economic growth of recent decades has benefited the rich more than the poor. While many poor in wealthy countries may not be in absolute poverty as the many poor people in developing countries. where the richest have incomes of more than 25 times those of the poorest 2. Portugal and Poland also have large gaps. the US was regarded as having the largest gap between rich and poor of any industrialized nations. At times he was earning $50 to $70 a day and yet the tremendous hardships he faced was incredible (including a ludicrous $40 for a bandage in a hospital. such as Denmark. As summarized by an OECD briefing . according to a study of income inequality and poverty by the Organization for Economic and Cooperative Development (OECD) released in October 2008. but the group of industrialized nations has slightly grown since to include Mexico and Turkey—also the two poorest OECD countries—amongst others. . Mexico. however. the income of the richest 10% of people is. results are mixed.) In Nordic countries. The gap between rich and poor has grown in more than three-quarters of rich countries since the mid1980s. The average hides large variations. The study finds. and some $500 for just being seen to). For example the top 3 countries with the highest income gaps are: 1. poverty in industrialized nations is also an important issue. Turkey. where the ratio is 17 to 1 3.to live on the minimum wage of $5. Norway and the United States are the most affected. on average across OECD countries. Mexico and the United Kingdom—have seen a shrinking gap between rich and poor since 2000.

” . while they were below or close to that average 20 years ago. the risk of them falling into poverty has reduced over the last two decades such that “people aged 66-75 are now no more likely to be poor as the population as a whole. October 2008. p.2 Although the elderly are more likely to be poor. “children and young adults have poverty rates that are now around 25% higher than the population average.” Worryingly.from Are we growing unequal?. OECD Briefing. however.

the British are richer and healthier — but no happier than in 1973. the UK National Office of Statistics found that disparities between rich and poor continued to grow in UK.4 The OECD report noted for example UK’s shrinking gap between rich and poor. compared to elsewhere in the EU.” In addition. p. October 2008. the BBC noted that the UK figures “follow trends from around the world that show that happiness and satisfaction do not correlate with average income once countries reach ‘middle-income’ levels. In April 2008. the BBC noted that after 30 years of unprecedented economic growth. Back in 2000. OECD Briefing. as more children were likely to be born in to poverty there.from Are we growing unequal?. “one in six UK adults reported that they suffered . Despite a period of boom. in April 2000. As well as growing inequality and other issues. the UK was the worst place in Europe to be growing up if you were poor.

from a variety of mental health problems in the latest survey, of which the largest category was ‘mild anxiety and depression.’” As Britain’s wealth generally increased, improvements in health were also accompanied by unhealthy luxury consumption including excessive alcohol consumption and excessive unhealthy eating creating a rise in alcohol related deaths and in obesity. Andrew Simms, policy director of the New Economics Foundation in an article mentioned further above about inequality notes that Crime and unhappiness stalk unequal societies. In the UK the bottom 50% of the population now owns only 1% of the wealth: in 1976 they owned 12%. Our economic system’s incentive structure, instead of “trickle-down”, is causing a “flood-up” of resources from the poor to the rich. Inequality leads to instability, the last thing the country or world needs right now. Even the former hardline conservative head of the International Monetary Fund, Michel Camdessus, has come to the conclusion that “the widening gaps between rich and poor within nations” is “morally outrageous, economically wasteful and potentially socially explosive”. — Andrew Simms, Now for a maximum wage, The Guardian, August 6, 2003 However, although there has been some improvement, there is a long way to go. A UNICEF report in February 2007 found that UK is failing its children as it comes bottom of all industrialized nations in terms of child well being. UK child poverty has doubled since 1979, for example. As another example, it may be surprising for some readers to learn that the United States, although the wealthiest nation on Earth, has often had one of the widest gaps between rich and poor of any industrialized nation. United For a Fair Economy reported that for 1998 almost 70% of the wealth was in the hand of the top 10%. In another report, they mentioned that the gap had widened in recent decades. “In 1989, the United States had 66 billionaires and 31.5 million people living below the official poverty line. A decade later, the United States has 268 billionaires and 34.5 million people living below the poverty line-about $13,000 for a three-person family.” In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one’s home), the top 1% of households had an even greater share: 42.7%. — Prof. G. William Domhoff, Wealth, Income, and Power, Who Rules America, University of California, Santa Cruz, last updated July 2010 Inter Press Service also summarizes an updated report by the US Census Bureau that 1 in 7 people in the US are in poverty. In 2009, 43.6 million people — 14.6 percent of the population - were living in poverty in the U.S., up from 13.2 percent of the population in 2008. The United States currently has the highest number of people in poverty it has ever had since the government began counting in 1959, although the percentage of people this represents is lower than it was then (due to the increased population size since then). IPS also notes factors such as the global financial crisis, stagnant wages and more contribute to this deepening poverty. But the article also adds that the poverty estimate may be understated because of

assumptions made in calculations years ago and changes in costs of living since then as well as regional differences. As with Britain, even during the “booming economy” in the late 1990s and early 2000, there was an increasing gap between the rich and poor. Into 2002, fighting poverty did not appear to have been a major election campaign issue (nor was it in previous election campaigns). Then chairman of the Federal Reserve, Allan Greenspan, revealed concerns in mid-2005 that the increasing and widening income gap might eventually threaten the stability of democratic capitalism itself in the US. While health and education are key to any economy or nation to grow and be strong, both of these suffer issues of access, equality and pressure to cut back (including elsewhere around the world as discussed in the structural adjustment part of this site). For example,

As a summary of a report titled Economic Apartheid in America mentions, “that the United States is the only industrialised nation that ‘views health care as a privilege, not a basic human right.’”. (Unfortunately the report itself not available on the Internet, but is produced by United for a Fair Economy where you can see many extracts and similar reports.) In addition, as good education is linked to a strong economy, Business Week reports (February 14, 2002) on a study that analyses OECD data from 1994 to 1998, and summarizes that “the literacy of American adults ranks 10th out of 17 industrialized countries.” In addition, the issue of inequality was highlighted: “More troubling, the U.S. has the largest gap between highly and poorly educated adults, with immigrants and minorities making up the largest chunk of those at the bottom.” While Business Week concentrates on the U.S. they also point out that “Despite the mediocre U.S. ranking, it still beat out most of its major trading partners except Germany, including France, Britain, and Italy. (Japan didn’t participate [in the study].)”

The above-mentioned UNICEF report on child health found that as well as the UK being ranked bottom of all rich countries, the US ranked second to last. The report suggests that absolute wealth isn’t necessarily a guarantor of poverty alleviation or a measure for indicators such as child well-being, and factors such as inequality are also important. And it isn’t in just these two industrialized nations that these problems persist. A Guardian news report, for example, shows that certain types of poverty in various European cities can be regarded as worse than in some other parts of the world which one would not normally think would compare with Europe, such as India.

Almost half the world — over 3 billion people — live on less than $2.50 a day. The GDP (Gross Domestic Product) of the 41 Heavily Indebted Poor Countries (567 million people) is less than the wealth of the world’s 7 richest people combined. Nearly a billion people entered the 21st century unable to read a book or sign their names. Less than one per cent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn’t happen.

• • •

1 billion children live in poverty (1 in 2 children in the world). 640 million live without adequate shelter, 400 million have no access to safe water, 270 million have no access to health services. 10.6 million died in 2003 before they reached the age of 5 (or roughly 29,000 children per day).

— More Facts (and Sources) » Poverty is the state for the majority of the world’s people and nations. Why is this? Is it enough to blame poor people for their own predicament? Have they been lazy, made poor decisions, and been solely responsible for their plight? What about their governments? Have they pursued policies that actually harm successful development? Such causes of poverty and inequality are no doubt real. But deeper and more global causes of poverty are often less discussed. Behind the increasing interconnectedness promised by globalization are global decisions, policies, and practices. These are typically influenced, driven, or formulated by the rich and powerful. These can be leaders of rich countries or other global actors such as multinational corporations, institutions, and influential people. In the face of such enormous external influence, the governments of poor nations and their people are often powerless. As a result, in the global context, a few get wealthy while the majority struggle. These next few articles and sections explore various poverty issues in more depth: 13 articles on “Causes of Poverty” and 6 related issues:

Poverty Facts and Stats
Last updated Monday, September 20, 2010. Most of humanity lives on just a few dollars a day. Whether you live in the wealthiest nations in the world or the poorest, you will see high levels of inequality.

to say the least. reduced wages and cheaper resources. . the wealthier you are. The amount the world spends on military. education and other vital social services around the world have resulted from structural adjustment policies prescribed by the International Monetary Fund (IMF) and the World Bank as conditions for loans and repayment. As a result. It also forms a backbone to what we today call globalization. By contrast. developing nation governments are required to open their economies to compete with each other and with more powerful and established industrialized nations. education and other services. compared to the amount spent to address the daily crisis of poverty and related problems are often staggering. Read “Poverty Facts and Stats” to learn more. malnutrition and disease afflict the poorest in society. In addition. making it even harder to escape poverty. it maintains the historic unequal rules of trade.The poorest people will also have less access to health. Structural Adjustment—a Major Cause of Poverty Last updated Sunday. The poorest are also typically marginalized from society and have little representation or voice in public and political debates. This has increased poverty and inequality for most people. 2010. poor countries enter a spiraling race to the bottom to see who can provide lower standards. Read “Structural Adjustment—a Major Cause of Poverty” to learn more. To attract investment. Problems of hunger. Cutbacks in health. financial bailouts and other areas that benefit the wealthy. November 28. Some facts and figures on poverty presented in this page are eye-openers. the more likely you are to benefit from economic or political policies.

inequality—the gap between the rich and the poor—is quite high and often widening. World Bank figures for world poverty reveals a higher number of people live in poverty than previously thought. bad government policy.25 a day. In most nations today. Absolute poverty. Around the world.50 a day and at least 80% of humanity lives on less than $10 a day: . in rich or poor nations. poverty has always been present. With that measure based on latest data available (2005). 1. Inequality is often a measure of relative poverty. 2011. the new poverty line is defined as living on the equivalent of $1. The causes are numerous. including a lack of individual responsibility. or some combination of these and other factors. exploitation by people and businesses with power and influence. November 12.4 billion people live on or below that line. Many feel that high levels of inequality will affect social cohesion and lead to problems such as increasing crime and violence. Furthermore. For example. almost half the world—over three billion people—live on less than $2. is also a concern. however.Poverty Around The World Last updated Saturday.

September 24. 2011. around 21. Images © UNICEF Around 21.000 children die every day around the world.Read “Poverty Around The World” to learn more. Today.000 children died around the world Last updated Saturday. That is equivalent to: • • 1 child dying every 4 seconds 14 children dying every minute .

prime-time.6 million children dying every year Some 92 million children dying between 2000 and 2010 The silent killers are poverty. August 22. or cheap food. around 21. it rarely manages to achieve. below market prices undercuts local farmers. 2010. Food and Agriculture Issues Last updated Sunday. Read “Food Dumping [Aid] Maintains Poverty” to learn more. further slanting the market share of the larger producers such as those from the US and Europe. 2011. . Food aid (when not for emergency relief) can actually be very destructive on the economy of the recipient nation and contribute to more hunger and poverty in the long term. 2007. who cannot compete and are driven out of jobs and into poverty. much less sustain. December 10. Meaningful long-term alleviation of hunger is rooted in the alleviation of poverty. While resources and energies are deployed to relieve hunger through technical measures such as improving agriculture. headline coverage. more powerful nations have used this as a foreign policy tool for dominance rather than for real aid. In the past few decades.000 children died around the world” to learn more. Food Dumping [Aid] Maintains Poverty Last updated Monday. easily preventable diseases and illnesses. If efforts are only directed at providing food. Many poor nations are dependent on farming. or improving food production or distribution. July 31. then the structural root causes that create hunger. World hunger is a terrible symptom of world poverty. and so such food aid amounts to food dumping. and as important as these are. inter-related issues such as poverty means that political solutions are likely required as well for meaningful and long term hunger alleviation. Read “World Hunger and Poverty” to learn more. Despite the scale of this daily/ongoing catastrophe. subsidized. Free. Read “Today. and other related causes. poverty and dependency would still remain. as poverty leads to hunger. World Hunger and Poverty Last updated Sunday.• • • • • • A 2011 Libya conflict-scale death toll every day A 2010 Haiti earthquake occurring every 10 days A 2004 Asian Tsunami occurring every 11 days An Iraq-scale death toll every 19–46 days Just under 7.

and many economic policies they prescribe have exacerbated the problem. and more. 2011. 2011. Since that time.Food and agriculture goes to the heart of our civilizations. Read “Trade. but so too must it be on the priority lists of rich countries. Corruption in developing countries definitely must be high on the priority lists (and is increasingly becoming so in the wake of the global financial crisis). Trade. June 05. food dumping and wasteful agriculture such as growing tobacco. For an issue that goes to the heart of humanity it also has its ugly side. Foreign Aid for Development Assistance Last updated Sunday. to issues of food aid. November 12. the rich countries themselves are often active in the largest forms of corruption in those poor countries. & Related Issues Last updated Saturday. While that definitely needs to happen. cultures and even modern civilization have food and agriculture at their core. We often hear leaders from rich countries telling poor countries that aid and loans will only be given when they show they are stamping out corruption. & Related Issues” to learn more. beef. Economy. Economy. annually. sugar. In 1970. billions have certainly been given each year. the world’s rich countries agreed to give 0. This issue explores topics ranging from the global food crisis of 2008. 2011.7% of their gross national income as official international development aid. Read “Corruption” to learn more. Read “Food and Agriculture Issues” to learn more. Corruption Last updated Sunday. Religions. September 04. but rarely have the rich nations actually met their promised target. world hunger. .

For example.7% target. . but ranks amongst the lowest in terms of meeting the stated 0. the US is often the largest donor in dollar terms.

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The second type of malnutrition. also very important. The related technical term (in this case operationalized in medicine) is malnutrition. is micronutrient (vitamin and mineral) deficiency. This is the type of malnutrition that is referred to when world hunger is discussed.1 Malnutrition is a general term that indicates a lack of some or all nutritional elements necessary for human health (Medline Plus Medical Encyclopedia). . This article explores who has benefited most from this aid. 2012 World Hunger and Poverty Facts and Statistics World Hunger Education Service (Also see World Child Hunger Facts) This fact sheet is divided into the following sections: • • • • • • Hunger concepts and definitions Number of hungry people in the world Does the world produce enough food to feed everyone? Causes of hunger Progress in reducing the number of hungry people Micronutrients Hunger concepts and definitions Hunger is a term which has three meanings (Oxford English Dictionary 1971) • • • the uneasy or painful sensation caused by want of food. the recipients or the donors. of foreign aid. aggregated to the world level. money can often be embezzled away. This is not the type of malnutrition that is referred to when world hunger is discussed. have included the following: • • • • Aid is often wasted on conditions that the recipient must use overpriced goods and services from donor countries Most aid does not actually go to the poorest who would need it the most Aid amounts are dwarfed by rich country protectionism that denies market access for poor country products while rich nations use aid as a lever to open poor country markets to their products Large projects or massive grand strategies often fail to help the vulnerable. The first and most important is protein-energy malnutrition-the lack of enough protein (from meat and other sources) and food that provides energy (measured in calories) which all of the basic food groups provide. craving appetite.Furthermore. for many years. aid has often come with a price of its own for the developing nations. though it is certainly very important. Also the exhausted condition caused by want of food the want or scarcity of food in a country a strong desire or craving World hunger refers to the second definition. Read “Foreign Aid for Development Assistance” to learn more. Common criticisms. There are two basic types of malnutrition.

Food is converted into energy by humans. 10). says that 925 million people were undernourished in 2010 (FAO 2010). but rather too many (although poor food choices. often due to poverty. are part of the problem). Protein is necessary for key body functions including provision of essential amino acids and development and maintenance of muscles. but it is certainly not typically due to a lack of calories. Considering obesity as malnutrition expands the previous usual meaning of the term which referred to poor nutrition due to lack of food inputs. The statistic most frequently cited is that of the United Nations Food and Agriculture Organization. although obesity is certainly a health problem and is increasingly considered as a type of malnutrition.2 It is poor nutrition. Take a two-question hunger quiz on this section Number of hungry people in the world 925 million hungry people in 2010 No one really knows how many people are malnourished.] Protein-energy malnutrition (PEM) is the most lethal form of malnutrition/hunger.[Recently there has also been a move to include obesity as a third form of malnutrition. and the energy contained in food is measured by calories. It is basically a lack of calories and protein. which measures 'undernutrition'. Obesity will not be considered here. the most recent. The 2010 estimate. As the . The FAO did not publish an estimate in its most recent publication. 'The State of Food Insecurity in the World 2011' as it is undertaking a major revision of how it estimates food insecurity (FAO 2011 p.

retardation. and 3) the significant increase of food prices in the last several years which has been devastating to those with only a few dollars a day to spend. or almost 1 in 7 people are hungry. by reducing the body's ability to convert food into usable nutrients. and the reasons for its emergence as a concept is not clear to Hunger Notes. as measured by stunting. blindness and premature death. and minimum food energy requirements. (It should be said as an aside. more than 70 percent of malnourished children live in Asia. Malnutrition can also be caused by diseases. 1969-2010 Source: FAO In round numbers there are 7 billion people in the world. malaria (57%). Under-nutrition among pregnant women in developing countries leads to 1 out of 6 infants born with low birth weight. and measles (45%) (Black 2003.3 Undernutrition is a relatively new concept. with an estimated 925 million hungry people in the world. but is increasingly used. According to the most recent estimate that Hunger Notes could find.9 million child deaths each year--five million deaths. 26 percent in Africa and 4 percent in Latin America and the Caribbean. Number of hungry people. mental. such as the diseases that cause diarrhea. Thus. Using this information. It should be taken as similar to malnutrition..6 percent of the estimated world population of 6. poor health. malnutrition. affects 32. FAO estimates how many people are likely to receive such a low level of food intake that they are undernourished. 2) the current worldwide economic crisis. . 925 million people is 13. Bryce 2005).5 percent of children in developing countries--one of three (de Onis 2000).8 billion. The FAO first estimates the total food supply of a country and derives the average per capita daily food intake from that.figure below shows. but also causes learning disabilities. The estimated proportions of deaths in which undernutrition is an underlying cause are roughly similar for diarrhea (61%). The increase has been due to three factors: 1) neglect of agriculture relevant to very poor people by governments and international agencies. the number of hungry people has increased since 1995-97. Children who are poorly nourished suffer up to 160 days of illness each year. This is not only a risk factor for neonatal deaths. Poor nutrition plays a role in at least half of the 10. In many cases.) Children are the most visible victims of undernutrition. pneumonia (52%). Geographically. Nearly all of the undernourished are in developing countries. including measles and malaria. 13. Undernutrition magnifies the effect of every disease. The distribution of average food intake for people in the country is then estimated from surveys measuring food expenditure.1 percent. its relationship to malnutrition. their plight began even before birth with a malnourished mother. The FAO estimate is based on statistical aggregates. that the idea of undernourishment.

low levels of energy. What are the causes of hunger? What are the causes of hunger is a fundamental question. p. By the end of 2008.3 This compares to the later FAO estimate of 1. political and economic power that typically ends up in the hands of a minority. and anguishing for those involved conflict is less important as poverty (and its causes) as a cause of hunger. thus leading to even greater hunger. The causes of poverty include poor people's lack of resources. with varied answers. See the Hunger Notes special report: Hunger. and especially. Providing exact figures on the number of stateless people is extremely difficult But. Hunger Notes believes that the principal underlying cause of poverty and hunger is the ordinary operation of the economic and political systems in the world. flooding.25 a day or less. despite some progress that reduced "dollar--now $1. the global number of refugees was at its lowest level in almost a quarter of a century. with the major improvement occurring in China. who live well. and even mental impairment. if they do.Take a three-question hunger quiz on this section Does the world produce enough food to feed everyone? The world produces enough food to feed everyone.720 kilocalories (kcal) per person per day according to the most recent estimate that we could find. The principal problem is that many people in the world do not have sufficient land to grow. The statement that 'poverty is the principal cause of hunger' is.02 billion undernourished people. especially articles . the total number of refugees under UNHCR’s mandate exceeded 10 million. We have described the operation of this system in more detail in our special section on Harmful economic systems. despite a 70 percent population increase. due primarily to the violence taking place in Iraq and Somalia. The number of conflict-induced internally displaced persons (IDPs) reached some 26 million worldwide at the end of the year . By causing poor health. Extreme poverty remains an alarming problem in the world’s developing regions. Despite some large-scale repatriation movements. (relatively) visible though it is. As of 2008 (2005 statistics). the number of people in extreme poverty has increased. enough food. Conflict as a cause of hunger and poverty.02 billion people suffer from chronic hunger while 36 million people are displaced [UNHCR 2008]) Hunger is also a cause of poverty.a day" poverty from (an estimated) 1900 million people in 1981. Poverty is the principal cause of hunger. though correct. Harmful economic systems are the principal cause of poverty and hunger.9). conflict. World agriculture produces 17 percent more calories per person today than it did 30 years ago. and hunger itself. while those at the bottom barely survive. and thus of hunger. In Sub-Saharan Africa. a reduction of 29 percent over the period. hunger can lead to even greater poverty by reducing people's ability to work and learn.25-. important. and climate change for further information. or income to purchase. an extremely unequal income distribution in the world and within specific countries. Progress in poverty reduction has been concentrated in Asia.(FAO 2002. the environment. unsatisfying. At the end of 2005.345 million poor people in developing countries who live on $1. Why then are (so many) people poor? The next section summarizes Hunger Notes answer. This is enough to provide everyone in the world with at least 2. East Asia. and changing climatic patterns requiring a shift in crops and farming practices that may not be easily accomplished are three key issues. Essentially control over resources and income is based on military. Increasing drought. the World Bank has estimated that there were an estimated 1. Climate change Climate change is increasingly viewed as a current and future cause of hunger and poverty. (Using the statistics above 1. the last three years have witnessed a significant increase in refugee numbers.

a grave. Fifty million people have some degree of mental impairment caused by IDD (World Health Organization). (FAO uses three year averages in its calculation of undernourished people.' so we have attempted to spell them out briefly in "World Hunger Facts. frequently exacerbated by malaria and worm infections. 2011) Footnotes 1. Region % in $1. resulting in lowered school performance. In 2010. anemia contributes to 20 percent of all maternal deaths (World Health Organization). the number had climbed to 925 million people. and in Latin America and the Caribbean. (Updated December 4. 3. physical and cognitive development are impaired.) The (estimated) number of undernourished people in developing countries was 824 million in 1990-92.000 to 500 000 vitamin A-deficient children become blind every year.000 deaths a year. IDD also causes mental impairment that lowers intellectual prowess at home. in press. Micronutrients Quite a few trace elements or micronutrients--vitamins and minerals--are important for health. global warming and the effect on poor people such as Global warming causes 300. Later. in $1 a day poverty (millions) . An estimated 250. irreversible form of mental retardation that affects people living in iodine-deficient areas of Africa and Asia. So. IDD affects over 740 million people. Two billion people—over 30 percent of the world’s population—are anemic. mainly due to iron deficiency. health consequences include premature birth. For example. are: Vitamin A Vitamin A deficiency can cause night blindness and reduces the body's resistance to disease.25 a day poverty Population (millions) Pop. 4. Three. In children Vitamin A deficiency can also cause growth retardation." 2. and other terms such as undernutrition is not 'perfectly clear. abortions and congenital abnormalities such as cretinism. Between 100 and 140 million children are vitamin A deficient. in developing countries.in the section: Climate change. at school. low birth weight. overall. 13 percent of the world’s population. the present outcome indicates how marginal the efforts were in face of the real need. the Oxford English Dictionary (1971 edition) has 'insufficient nutrition' as the only meaning for malnutrition. (World Health Organization) Iron Iron deficiency is a principal cause of anemia. the world is not making progress toward the world food summit goal. study says and Could food shortages bring down civilization? Progress in reducing the number of hungry people The target set at the 1996 World Food Summit was to halve the number of undernourished people by 2015 from their number in 1990-92. infections. The relation between hunger. For pregnant women. according to the World Health Organization. For children. and elevated risk of death. For discussions of measuring hunger see Califero 2011. malnutrition. The WFS goal is a global goal adopted by the nations of the world. 1 out of 3 people in developing countries are affected by vitamin and mineral deficiencies. and at work. perhaps the most important in terms of health consequences for poor people in developing countries. although there has been progress in Asia. half of them dying within 12 months of losing their sight. Serious iodine deficiency during pregnancy may result in stillbirths. Headey 2011 and Masset. The table used to calculate this number. Iodine Iodine deficiency disorders (IDD) jeopardize children´s mental health– often their very lives. and.

.East Asia and Pacific Latin America and the Caribbean South Asia Sub-Saharan Africa Total Developing countries Europe and Central Asia Middle East and North Africa Total 16. you can compare it with the less dated FAO world poverty map in our Poor in a Rich World section .04 0. And 2010 saw a French government deporting poor Roma gypsies to a poverty-stricken Romania. but more modern societies have generally tended to involve poverty being confined to an often substantial minority only . And 2012 sees extreme drought famine in East Africa affecting Somalia. though progress has reversed for now and it is not as good a target as it looks.476 763 316 45 596 388 1345 17 11 28.this is a good but slightly dated measure.4 50. 2009 saw richer G20 countries doing £trillion-plus bailouts of their misrun banks. 2010 also saw many governments pledging to stick to the UN's Millennium Development Goals to 'halve global poverty and hunger' by 2015. Often with 'justifications' that they are witches or devil-possessed. But the UN is now reporting that recent cuts in aid by richer countries and poor investment practices have been increasing poverty in Africa.04 4673 473 305 1372 5451 Poverty has existed for a very long time.2 40.8 8. and worldwide now the poor are facing increased hardship. The present economic downturn also seems to have increased the abandonment of children and of elderly women in poorer countries.8 0. One measure of world poverty is given in the FAO poverty statistics map below . and to have increased the murder of children and of elderly women in poorer countries. meaning hunger for many.884 550 1. Ethiopia and Kenya. The UN food agency reported that world food prices in January 2011 reached their highest level ever recorded . while a new UK Deputy Prime Minister backed the old unhelpful view that 'poverty affects children little if they have good parenting'.Victims. and to different extents it remains worldwide still now in this 21st century.though this can often harm those concerned even more than universal poverty does.9 1. see . while charities called for more aid for poor countries to prevent the economic crisis from destroying more poor people's lives as poorer countries are being hit by dramatic declines in trade and foreign investment. In primitive societies it was most often the case that everybody was equally poor.and looking likely to keep rising for at least some time. with total annual numbers estimated to be some millions. News.

and is still common in many Third World countries in Africa. Asia and South America especially where it can afflict the majority of the population.Absolute poverty involves people and their children having extreme difficulty in merely surviving. insofar as it can maintain a divided conflict society where the poorer conflict with the richer and acceptance of poverty generally encourages social badness rather than goodness. often combined with inadequate shelter or housing and clothing. The wider benefits of reducing poverty are not widely understood. Most governments in both rich and poor countries do not see poverty-reduction as being any priority to them. And of course all governments . 1. and so do not make much attempt to reduce poverty. Such poverty at its worst can involve hunger amounting to starvation. as poverty does come in different forms and extents. partly from new Biofuel policies. allowing different definitions of poverty. mostly helping to worsen global poverty. but it is always harmful to those concerned and especially harmful to children whose biological development and survival chances can also be greatly harmed. In a society where 90% rely on their own computer and car. have commonly wasted much of the resources they use in mistaken attempts at poverty reduction from not understanding their best policy options for that. Poverty itself means misery to the poor and it also greatly limits their freedom of life choices and makes them vulnerable to other various nasty forms of exploitation including child exploitation. 2. But many of today's richer societies like the USA and UK have a poor who are a minority and suffer relative poverty . then those who cannot afford these things may function badly and are poor and may well be ostracised or socially excluded (unlike someone richer who chooses to not have such things and may merely be considered eccentric). Two issues have been preventing most governments from handling poverty well . 2009 has also seen richer countries hitting a substantial economic downturn that could make it harder for them to help reduce poverty for some years. The few governments in rich or poor countries that do see poverty-reduction as being of some priority to them. Absolute poverty has been common in more primitive societies. Recently food prices have been rising worldwide. Poverty can also be very harmful to society as a whole. Hence the answer to what is poverty is not simple.which generally involves the inability to obtain social necessities available to the majority and is often intensified by social exclusion.

and indicators of vulnerability to risks and of socio/political access. poverty has to be defined. as shown in world poverty maps. what works and what does not. adequate shelter. access to education and health.and each carries further poverty information and informative links to give a wider picture of poverty worldwide. remittances to poor families in Africa. Its economy is facing fluctuations now a day.com. Causes of poverty in Pakistan: . Most often. Unfortunately the politicians of Pakistan were all not well aware of modern global system and the progress processes and the needs of country. Poverty is not having a job. social indicators. Poverty is lack of shelter.do have other problems to try to deal with. Pakistan is a poor country. see Poems and Personal Accounts of Poverty). Exploitation Poverty. protection from violence. Poverty in Africa. The continuous failure of policies leads the people of country to miserable conditions. the current world recession is also causing family remittances from overseas workers or migrant workers to fall. Solutions to World Poverty and other sections . Better understanding about poverty issues and poverty statistics are really needed to help end poverty. living one day at a time. lack of representation and freedom.pk and its sources of Causes of Poverty in Pakistan. this website also seeks to seriously examine the various real causes of poverty and the various real possible solutions to poverty. Poverty in Latin America. Poverty is not having access to school and not knowing how to read. Poverty is the biggest causes of inflation in Pakistan. Main Causes of Poverty in Pakistan Causes of Poverty in Pakistan. Economic Poverty. Poverty is powerlessness. To know what helps to reduce poverty. and has been described in many ways (for a collection of readings. so the processes of progress were very slow. poverty is a situation people want to escape. is fear for the future. what changes over time. Poverty is being sick and not being able to see a doctor. Main Causes of Poverty in Pakistan is given by ilm. The major problem in the country is poverty which is becoming the cause of crime and social disorder. Social Poverty. Due to bad policies today Pakistan is facing a lot of problems. changing from place to place and across time. and studied — and even experienced. NOTE: As well as looking at the persisting extent of poverty worldwide. measured. As poverty has many dimensions. and also all have some resource limitations that restrict the actual amount that they can achieve. it has to be looked at through a variety of indicators — levels of income and consumption. At the time of independence Pakistan has very low resources and capital. Poverty has many faces. Poverty is hunger. But mostly governments could certainly do better. In many poorer countries. and a voice in what happens in their communities. So poverty is a call to action — for the poor and the wealthy alike — a call to change the world so that many more may have enough to eat. As more migrant workers lose jobs in Western Europe and the USA. Poverty is losing a child to illness brought about by unclean water. Environment Poverty. The menu on the left clicks to give our Poor in a Rich World. There are several causes of poverty in different nations and in Pakistan these causes expand in different aspects Causes of Poverty in Pakistan. Central Asia and Eastern Europe are expected to be hardest hit. Biological Poverty. Poverty in Asia.

Most of people are farmers by profession. The suitable medical facilities are not provided to people and they are forced to get treatment for private clinics which are too costly. After implementation the policies do not get effective result. Officials waste their time has low efficiency. Justice can be bought by money only. The policies of government are base on the suggestions of officials which do not have awareness about the problems of a common man. One has land which is fulfilling the needs of his family but he has to divide the . After the failure of one policy. Corruption: Another cause of poverty is corruption. In this whole scenario some corrupt people has been occupying the resources and common man is living in miserable conditions. There are two types of corruption. One has to pay a heavy cost to get his right. Only one relationship that is exists in society is money. But government is unable to control such type of things. Law and order conditions are out of control and institutions are failed to provide justice to a common man. There is not morality and every one is trying to earn more and more by using fair and unfair means. government does not consider its failure and announces another policy without studying the aftermaths of last one. Heavy taxes and unemployment crushes the people and they are forced to live below poverty line.It is difficult to point out all causes of poverty in Pakistan but the major causes of are given below: Government Policies: Government is not well aware of present conditions of country. Division of Agricultural Land: Pakistan is an agricultural country.

even raw material has to import for industry. Most of people do not have any concept about the modern earning sources. People are not ready to help each other. After division the land is not sufficient to support a family. Large Scale Import: The import of Pakistan is greater than export. . By agriculture we mean producing from land through farming and cultivation.land into his children when they got young. that’s why business do not meet international standards and results as decrease in revenue which lead the society to poor financial conditions. 96. Approximately 70% of the total population is living in villages where their main source of income is through agriculture.096 square kilometers out of which almost 25% of the area is under cultivation. A race of material object has been started even no one tried to understand the problems of others. At last every one has lose his trust on others which effect our social and economic system and it is another cause of poverty. In a census held in 1950-51 it was stated that 66% of the total workforce of Pakistan is employed in the agriculture sector. Every one is gradually changing from human to a bioman which only know about his needs and have no concept about the limitations of others. Now the families of his children are suffering and spending their lives below poverty line. Pakistan is a developing country whose economy is not that much stable as other countries have. Most people are unable to adopt technology for their business needs. A large proportion of our economy heavily relies on agriculture. If we decrease import and establish own supply chains from our country natural resources the people will have better opportunities to earn. Materialism: In our society social bonding are gradually becomes thinner and thinner. Big revenue is consumed in importing good every year. which later in 1999-2000 decreased to 47. Lack of Education: The literacy rate of Pakistan is very low. Pakistan is an agricultural country having a total area of 7.3% showing how people are becoming least interested to indulge themselves in this sector.

The sector of agriculture contributes to up to 26% of the total GDP and almost 52% of the total population of Pakistan is earning their living from this respective sector. It is being observed that the foreign exchanges earned through the export of agricultural products are about 45% of the total exports of Pakistan. as they are not aware of various processes and perceptional measures. monopoly of foreign companies and dis loyalty in the nation is responsible for this cause. The irrigation system in Pakistan is not up to prescribed standards which results in heavy water wastage causing water shortage. provide raw material for industrial purposes and is one of the major constituent of the country’s foreign trade. The only way of communication in rural areas is television or radio which is not that much effective. However Primary school enrollments is less than 70% and among those 30% got dropped off before acquiring . Most of the farmers are using old and traditional means of cultivation and harvesting which reduces the efficiency in the process ultimately decreasing per acre yield while in other countries like Nepal. Another major issue is that no real focus is made by the government in educating the farmers. Education has never been a top national priority and got the serious attention and adequate resources in Pakistan despite the fact it is the basic human right. This sector carries immense importance and can be denoted as the backbone of the Pakistan economy.The importance of this sector for Pakistan lays in this fact that it is multifarious as feeds the local people. Current economic survey 2009-10 revealed that literacy rate in the country has improved from previous 56% in 2008-09 to 57% in 2009-10%. The pesticide companies have formulated partnerships with the World Bank and due to IMF policies they are selling expensive fertilizers and pesticides to the poor farmers which are breaking their backbone and leaving them helpless. If these threatening problems are not resolved at emergency basis Pakistan economy can be in great danger and a living threat of losing one of their major sources of income and economy can go in vein. but still unfortunately this sector is exploited due to several reasons. Soil erosion is one of the most critical problems as no specific mechanism is adopted to eliminate soil erosion which is continuously decreasing the fertility of the land. Government. India and Bangladesh are using modern techniques resulting in high productivity. Small farms are increasing which disables them to get facilitated from the credit policies of the government.

Since Independence attempts have been made to relate the education system to the needs and inspirations of the country but statistics showed nothing was done in this regard.basic literacy skills (details by the UNESCO in its 2008 report). and sometimes they ended up with few useful recommendations but before implementations. quality of education. Promote with special care the educational and economic interests of backward areas. 1970. Pakistan stands at 163 of 180 countries in literacy ranking—these statistics show that Pakistan has terribly poor progress in Educational sector. Educational policies and plans have been of key importance for social researchers in Pakistan. While like other political parties PPPP also pledged to allocate 5% of GDP in its electoral manifesto. Weakness of the system or political parties will to ensure people of their interest instead of explaining official stand. Make technical and professional education generally available and higher education equally accessible to all on the basis of merit. . Each policy stressed on Islamic ideology and character building. Unfortunately the unsustainability of the National Educational Policies due to rapid regime change has effected the education system overall. Several factors and complexities have led to current situation including national spending on education. agriculture and industrial development . Remove illiteracy and provide free and compulsory secondary education within minimum possible period. However critical analysis of these manifestos shows. Because In parliamentary systems of governance the main stream political parties influence policy making process whether in government or happen to sit in opposition in accordance with these manifestos. these used to be abstract and remained quite on several issues including education.e. In Budget 2010-2011 allocated for education sector is 31 Billion Rupees that is 2. Enable the people of different areas. 1992-2002. Because every government indulged in setting up useless reform commissions. fortunately lot of reviews and research studies have been conducted to analyze different angles of educational policies. The 1973 constitution i. 1979. and 1998-2010. First All Education Conference was held in 1947 to provide the basic guidelines for the future development of education in the country. and other methods to participate fully in all form of national activities including employment in the services of Pakistan. given by Pakistan peoples Party when it was in government earlier tells that the state shall: • • • • • • Promote unity and observance of the Islamic moral standards. training. political parties found to be less interested in their manifestos or publicizing it.6% of GDP. and access to educational opportunities equally. Hitherto five educational policies have been framed (In 1959. Hence a lot of published material is present to give insight of these educational policies and their effective implementations. and Ensure full participation of women in all the spheres of national life. through education.) yet. It is inevitable for all political parties to issue its electoral manifesto that explains parties’ policy and positions on various issues including education as per Election Commission’s rules. Taking over power from the military Pakistan Peoples Party pledged to reform the education system. standing committees. the Universalization of primary education and promotion of literacy. This fact can be conformed from last election campaign in which Election manifestos were issued by the political parties just one week before the polling day. either government changed its priorities or new government came to establish new reform programs. and task forces. science education.

government of Nawaz Sharif of Pakistan Muslim league (N) adopted an education policy in 1992. scientific and higher technical and university education. e. It is a general observation that the majority of the literate population doesn’t check manifestos for their voting choice. • • • • While they consciously try to be “all things to all people“. Unfortunately General Pervez Musharraf ousted Premier Nawaz Sharif and imposed military rule and generally rejected the policies of its civilian predecessors.5% within five years and expansion in the infrastructure of vocational. improved school facilities. secondary and higher levels In October 1999. Although the government continued its predecessor’s education policy. Sharif’s of Pakistan Muslim League returned with a new Education Policy 19982010. After that. little was achieved as Prime Minister Bhutto was again dismissed less than half way through her term by the Time president. In February 1997. Now Again the PPPP has taken power from the military gave a new educational policy with some alterations. In addition. Lacks of awareness besides lesser publicity of manifestos are strong causes of this behavior. they evade prioritizing them – as well as the pledged solutions. It pledged to provide free and compulsory primary education. To be implemented jointly by provincial governments. they rarely specify how resources. These ambitious goals were left unrealized when the Sharif Government was forced out by the military less than half way through its term. The Sharif Government also launched a World Bank-funded Social Action Program (SAP) for social sector development. It signed the Education for All (EFA) Policy but was dismissed by the military in 1990 before it could formulate a full education policy. Political parties are seen to be less interested in their formulation of manifestos or its . and to raise the adult literacy rate to 70% by 2002. teaching methods and evaluation techniques. Ritualistically. announced in 1972. and improved teaching techniques. It is the commitment of the government to provide free secondary education to citizens” The new education policy provided time-bound targets for the promotion of education at the elementary. It focused female enrollment and improvements in the quality of primary education through measures including: an enhanced non-salary education budget. a primary goal was promotion of primary education. to fulfill basic learning needs. not only financial and economic but political. After the military rule Benazir Bhutto’s PPP government committed to raise the 30% literacy rate to 90. the new policy identified measures to improve the quality of public instruction through changes in curricula. administrative. shifted the goal of universal primary education to a more realistic target. better quality textbooks. which emphasized: “Education is a basic human right.Bhutto’s education policy. textbooks. While they promise an array of outputs. which set the target of universal primary education for 2002. they are also high nuance documents – nuances that only seasoned and native political analysts can adequately fathom. every party has its manifesto issued at election time but these manifestos hide a number of contradictions or we ignore them deliberately. Later Pakistan Peoples Party returned to power in the general elections of 1993. Parties are rarely serious enough to sift through and solve even serious contradictions among pledges made in their manifestos. and the participation of NGOs and the private sector. cultural and social are to be generated and allocated to mutually competing promises.g. acting at the military’s behest. adequate classroom materials. While manifestos tend to address a long list of problems. with communitybased involvement. to eliminate dropouts.

In 2006. ISLAMABAD: For the third year in a row.publicizing.243 per month. 20 Jan 2011 10:00 pm | Comments (6) Poverty is a curse. It is consistently on the rise around the globe. Poverty rates in urban areas are lower by as much as 20% compared to rural areas. Since the last poverty survey in 2006. said Finance Secretary Waqar Masood. The change in Educational system.2% of Pakistan’s population below the poverty line. The ongoing global financial and banking crisis. In Pakistan. while relatively medium-paced economic growth can also bring several million people out of poverty as well. poverty in Pakistan has increased to an astonishing 43%. During much of the press conference. it requires a level of political will and commitment that prioritizes education and makes the actual implementation possible that has been lacking since inception of the country.25 per day. both Finance Minister Abdul Hafeez Sheikh and the finance secretary refused to answer the question on poverty and unemployment rates. even though this year’s economic survey seems to include suggestions on how much it might have increased by. the government had determined that 22. which is any person earning less than $1. the government of Pakistan refused to state how many people in the country live below the poverty line. Hassan Ali Thursday. If the ADB’s estimates hold across several years. By the ADB’s estimates. that figure comes to any person living on less than Rs3. saying that he had no new information on the matter. The government has not given any reason as to why it does not produce even estimates of the poverty rates. According to the latest report of the World Bank. Data from the finance ministry suggest that nearly 75% of the population lives very close to the poverty line and very small changes can push very large numbers of people below it.3%. a figure that hid the fact that there was an increasingly wide gap between the poverty rates in urban and rural areas. as cited by the ministry of finance. The ministry estimates that food prices have risen 94% since its last poverty survey. there are no new figures on poverty. although estimates based on data provided by the finance ministry in its economic survey suggest that the poverty rate may have increased to an astonishing 43%. . despite the fact that nearly every journalist present started off by asking about those two key metrics of the nation’s economic health. The government is in the process of compiling the results of its new poverty survey and will be able to release the data next year. especially in the USA and the EU has already pushed millions of people into deeper poverty. Process of Compiling: The question was usually summarily ignored by both the minister and other officials present before the finance secretary finally gave a non-answer. during a press conference that marked the release of the 2011 Economic Survey. every 10% increase in food prices pushes 2. global poverty ratio is on the rise and Pakistan is not an exemption. The government uses the World Bank’s definition of poverty.

‘health for all by the year 2000’. are carrying the ball. actions will follow. Only the donor agency officials. I have chosen it for two reasons. I talk about it simply because I am totally convinced from my experience of working with poor people that they can get themselves out of poverty if we give them the same or similar opportunities we give to others. High inflation. I would like to suggest the following steps to the government to wage a war against poverty. A World Bank report titled Sparing lives. The poor themselves can create a poverty-free world — all we have to do is to free them from the chains that we have put around them.5 million people living below the poverty line but in 2008 their number increased to over 64 million. 40 percent of the urban population lives in slum areas. The South Asia region still has nearly 400 million poor people out of a population of 1. poverty rate has jumped from 23.5 percent in the last three years. The commission has estimated that in 2005 there were 35. true. Poverty is widespread in Pakistan and is predominantly a rural phenomenon.42 billion. better reproductive health for poor women in South Asia has revealed that Pakistans 37.9 to 37. unemployment has also increased. this is the most courageous goal mankind ever set for itself. METROPOLITAN ECONOMIC STRATEGY ELIMINATING POVERTY THROUGH MARKET-BASED SOCIAL ENTREPRENEURSHIP Muhammad Yunus I have chosen to discuss the most daring of all Millennium Development Goals — halving poverty by 2015. Nearly two thirds of our population lives in rural areas. A high poverty ratio has decreased Pakistans spending on social sector further. Leaders who made this bold announcement went back to their other important commitments feeling happy that they have captured the world's imagination. Moreover. Unfortunately. Transportation sector should also be reactivated. They are expecting that as the decision has been made at the highest level. it is increasingly becoming concentrated with the passage of time. Infrastructure development would be an effective tool to curb the rising ratio of poverty. Pakistan is ranked among the 43 countries most exposed to poverty risks. Poverty is not just endemic. Better law and order situation would be helpful in the restoration of business activities and to reduce rising poverty. I talk about it not because it is unjust to have a world with poverty. education and other social services. Reduction in social sector spending is increasing poverty and has reduced the standard of living in the country. Housing is another sector which needs to be promoted and encouraged through a well planned incentives package. A massive effort for job creation and employment generation in order to reduce the high levels of poverty must be launched. primary health care. which is. almost 40 percent of 107 developing countries are highly exposed to the poverty.4 percent children under the age of five are malnourished. of course. Consequently. Most of them depend on agriculture for their livelihoods. so far it has not happened.According to the latest estimates of the World Bank. According to Pakistans Planning Commission. It is the hallmark of our macro-economy. I have chosen this subject secondly because a feeling is getting stronger in me everyday that very few people are really serious about reaching the goal of halving poverty by 2015. First. supported by the thriving consulting business. For the last two decades I have been talking about creating a world free from poverty. with appropriate changes in the text. merely replacing the ‘year 2000’ with the ‘year 2015’. Many of them lack basic needs such as safe drinking water. and a wellcoordinated powerful machinery will get activated to get the job done. My worry is that these courageous Millennium Development Goals may degenerate into a cut-and-paste job of the earlier edition. price hike and shortage of commodities have also added to the problem. . ‘everything else for all by the 2000’. What is emerging reminds us of the decade of the 1990s when the global goals were put in the form of ‘education for all by the year 2000’.

I assure you that I remain a compulsive optimist despite all the bad signs that I see. A human being is born into this world fully equipped not only to take care of himself or herself (which all other life forms can do. The total amount they borrowed was US $27! What a lesson for an economics professor who was teaching his students about the Bangladesh Five Year Development Plan with billions of dollars in investments to help the poor. poverty we must go back to the drawing board. The question that arose in my mind was. In this article I will draw your attention to five issues which need to be urgently revisited: (a) widening the concept of employment. This is about people. It is the concepts we developed to understand the reality around us. made us see things wrongly. If we can intelligently rework these framing conditions. In 1974. I decided to find a way to make myself useful to others on a one-on-one basis. institutions. (c) recognizing every single human being as a potential entrepreneur. Let me narrate how I came to face these issues in the real world and how they affected me. All the ingredients for ending a person's poverty always comes neatly packaged within that person. It is the failure at the top. The excitement that was created by this action got me further involved in it. but also to contribute in enlarging the well-being of the world as a whole (that's where the special role of a human being lies). I am an optimist because I am convinced that poverty is not as difficult a subject as the experts keep warning us. rather than lack of capability at the bottom which is the root cause of poverty. poverty will be gone. Poverty is not created by people who are poor. and feel so proud of. I wanted to find something specific that I could do to help another human being just to get by another day with a little more ease than the previous day. that caused this problem for many human beings. I wanted to do something immediate to help people around me. never to come back again. I was shocked to discover a woman borrowing US $0. which created poverty.Please forgive me if I sound too pessimistic. and took us down a wrong path. Poverty has been created by the economic and social system that we have designed for the world. So we shouldn't give them an accusing look. and framing conditions which created poverty cannot end poverty. causing misery for people. The essence of my argument is that in order to reduce. I became involved in the poverty issue not as a policymaker or a researcher.25 under the condition that the lender would have the exclusive right to buy all she produced at the price the lender decided! What a way to recruit slave labor. Poverty is not created by low-income people Here is my explanation. and progress. I could not turn my eyes away from it. why shouldn't you do more of it? . and ultimately eliminate. harmony. This will help us achieve the 2015 Millennium Development Goals. or about an intricate design of a complicated machine. (d) recognizing social entrepreneurs as potential agents for creating a world of peace. too). I found it difficult to teach elegant theories of economics in the university classroom in the context of a terrible famine then occurring in Bangladesh. (e) recognizing the role of globalization and information technology in reducing poverty. if you can make so many people so happy with such a tiny amount of money. When my list was done it had the names of 42 victims. Suddenly I felt the emptiness of those theories in the face of crushing hunger and poverty. It is our policies borne out of our reasoning and theoretical framework. It is the institutions that we have built. Not knowing what I could do. I became involved because poverty was all around me. That brought me to the issue of poor people's struggle and helplessness in finding small amounts of money to support their efforts to eke out a living. I could not think of anything better than offering this US $27 from my own pocket to get the victims out of the clutches of the moneylenders. It is not a difficult subject because it is not about space science. I don't see the possibility of a human being becoming a 'problem' when it comes to his or her own well-being. I decided to make a list of the victims of this money-lending ‘business’ in the village next door to our university campus. They are the victims. (b) ensuring financial services even to the poorest person. Then why should 1 billion plus people on the planet suffer through a lifetime of misery and indignity and spend every moment of their lives looking for food for physical survival alone? We must find some explanations. Concepts. I keep hoping that these signs will change. which contributed to the creation of poverty. with which we explain interactions among institutions and people.

children are healthier. giving loans to more than 4 million poor people. It has no room for self-employment. the obvious question that anybody will ask: if poor people can achieve all this through their own efforts within a market environment. etc. More than 620. housing loans. including agricultural loans. Yet self-employment is the quickest and easiest way to create employment for the poor. child mortality has declined by 37%. If we now classify microcredit into different categories to sort this out. It has enough deposits to carry out its lending program. At that time the number of families reached with microcredit was only 7. The Bangla-language term that I use for it translates as ‘micro-capital’. if we had called it ‘micro-capital’. I named it Grameen Bank. has improved dramatically. This outreach crossed the halfway mark of 50 million at the end of 2003. It now works all over Bangladesh. If microcredit NGOs can open the door to taking public deposits. The bank is owned by its borrowers. Generally the repayment rate has been nearly 99%. I have been arguing that credit should be accepted as a human right. Credit can create self-employment instantaneously. Impact studies done on the Grameen Bank by independent researchers find that 5% of borrowers come out of poverty every year. But gradually the label of ‘microcredit’ got into general use for all types of small loans. rural credits. institution-building. Why don't we pass laws to bring microcredit programs under legal oversight. by 2005. I think we can come out of this confusion. establishing special regulatory commissions to regulate them and allow them to take public deposits? This will make local deposits in the villages work for local poor people. It is a very strange phenomenon in many countries to see that conventional banks with a repayment rate of below 70% are allowed to take huge amounts of public deposits year after year. expansion of their outreach could be very rapid. instead of being siphoned off to the big cities to finance big businesses. I am still hoping to double these results and reach our goal of 100 million by the end of 2005. savings bank loans. That's what it really is. and in designing regulatory frameworks. Grameen's banking methodology has become known as microcredit. It gives income-generating loans. Finally in 1983 I succeeded in doing that. This always seems to me a strange argument. It is often argued that since microcredit programs do not come under any law. these programs can expand their outreach with loans from the market or from savings deposits. it is highly risky to allow them to take deposits. Nearly 100 countries have Grameen-type microcredit programs. and the ownership of assets by poor women. co-operative loans. and student loans to poor families. and stopped taking loans from the domestic market in 1998. This has created confusion in policymaking. because it is so important for a person who is looking for an income. The bank said that the poor were not creditworthy. Why wait for others to create a job for you? A person can create his or her own . The poor paid back their loans every single time! But I kept confronting difficulties in expanding the program through the existing banks. This is the frustrating part of our experience. because this would free them from the dependence on donor money. to some extent.8 billion. but much more could have been achieved.I have been trying to do just that ever since. Now. of which 5 million were in Bangladesh. but microcredit institutions with an unbroken record of over 98% recovery are not. why isn't the world doing more of this? Some progress has been made. It did not work. which adopted a goal to reach the 100 million poorest families with microcredit and other financial services. DC.5 million globally. education and nutrition levels are higher. and financially it is selfreliant. a Microcredit Summit was held in Washington. but strangely. But orthodox economics recognizes only wage-employment. the bank has loaned a total of more than US $4. preferably through the women in those families. the status of women has been enhanced. Self-employment is the quickest way The most important step to ending poverty is to create employment and income opportunities for the poor.) Grameen-type microcredit has spread around the world over the last two decades. Several years later I decided to create a separate bank for the poor. including housing. But the biggest problem for expanding the outreach is not the lack of capacity. After all my efforts over several months failed. 96% of whom are women. The Grameen Bank makes profits. to give loans without collateral. or village bank. I was stunned by the result. microcredit NGOs are not legally permitted to take deposits. (I think we could have avoided the confusion. One difficulty may have arisen from confusion. Beyond that level. The first thing I did was to try connecting the poor people with the bank located on the campus. It stopped taking international donor money in 1995.000 houses have been built with loans from the Grameen Bank. One feels like throwing one's arms in the air and screaming in protest. housing conditions are better. In 1997. In most countries. the lack of availability of donor money to help microcredit programs get through the initial years until they reach the breakeven level. I offered to become a guarantor for the loans to the poor. Over the past two decades.

Unless we change our mindsets. We read the great classics about making payment with a ‘pound of flesh’ and get horrified by it. organize. and definitely much better.job. all to ensure that the movers and shakers of the economy find it convenient to go in the direction they wish to go. people who are not interested in making money stayed away from business and the market in a capitalist world. there is still no job for you. That's why the money-lending business thrives. Try to imagine how the economists would have built their theory if they had started out with an axiom that all men and women are created equal. and improved. They are born to take orders from a small group of a very special kind of people known as ‘entrepreneurs’. we cannot change our world. and everything else has been built in such intricate detail around it. As a result the poor go out and create their own jobs. The money-lenders' business is as old as money itself. about its 98% repayment record. and most damaging. It recognizes the profit motive as the only motive behind this. policies. and each of them is a potential entrepreneur. about poor people getting out of poverty with microcredit loans. Economic theory in its simplest form visualizes people as providers of labor. even if you march in the streets. Market economies missed a great opportunity Economic theory took the second. It will be an uphill task to end poverty in the world unless we create new economic thinking and get rid of the biases in our concepts. there are no supportive institutions or policies to help them. wrong turn when it came to explaining the driving force behind the competition among entrepreneurs. The level of well-being of the working people depends on the level of their wages. A big step towards eliminating poverty is to make sure that we offer financial services even to the poorest people. that each of them is endowed with unlimited creativity. Each person is a potential entrepreneur In some important ways our designing of the theoretical framework of economics or the misrepresentation of it is responsible for perpetuating poverty. And if you don't get a job. All other people simply fill in the work slots created by the thinking and driving people. Maximization of profit is the battle cry. I am sure you'll agree with me that with this as a starting point. rebuilt. We read about the cruelty of money-lenders in our religious books. These special people are the only people who can think. And this is so much more convenient for women who would prefer to work out of their homes. support systems are created. They just went ahead in a routine manner to create their own jobs and incomes. We condemn them as a part our religious duty. These banks continue to practice the same old banking as they have been doing from the very start of their business — as if nothing new happened in the world! Probably they still shield themselves by arguing that the poor are not creditworthy. people who enjoy making money headed straight for . After creating a world overwhelmingly populated by uninteresting working people. it has had no impact whatsoever on conventional banking. Since economics textbooks do not recognize them. Its conceptualization of individual human beings as ‘labor’ took the rest of the theory on a completely wrong track. While we keep hearing about the spread of microcredit around the world. they would have built a very different economic theory. economic theory gets busy with the interesting people — the entrepreneurs — because they are the movers and shakers of the economy. world as a result. but we had done nothing significant about addressing that problem until Grameen credit came around. our mindsets created by the existing orthodoxy. and we would have created a very different. It is a very strange world. We are so much influenced by orthodox economics that we forget that our forefathers did not wait for someone else to create jobs for them. and research undertaken. The role assigned to human beings in economic theory is certainly not something a self-respecting person can celebrate. powerful institutions are built. that nobody is rejected by a bank on the ground that he or she is a poor person. Accepting this as the ultimate truth about capitalism. For the same reason. that nobody dares to question it. They were lucky. then march in the streets! In developing countries. institutions. about women’s empowerment. Taking their cue from economic theory. This explanation occupies such a central position in economic theory. policies formulated. They did not have to learn economic theories and end up with a mindset that the only way they can make a living is to find a job in the job market. and above all. detailed legal systems developed. and are able to utilize every last bit of their talents without any hindrance. and act. guidelines created.

The moment we open the door for making a social impact through investments. but it would help the world solve many of the problems that the profit-driven market doesn't solve today. a day may come when personal-profit-driven enterprises will find themselves hard-pressed to protect their market share. This has happened because people have not been offered any choice. The higher the social impact per dollar invested. all the investment money now is locked up in only one category of investment: investment for making personal profit. economic theory also missed the greatest opportunity to become a truly social science and escape from being a cut-and-dried dollars-and-cents science. Because of the way the orthodoxy of economics has given shape to the existing world. Nobody doubts that an entrepreneur can set up a pharmaceutical company to make a big personal profit. investors will start putting their investment dollars through this door. only in a different context. Social-objective-driven investors will need a separate (social) stock market. rather than the prime consideration. 2. But it can be equally plausible that a person may set up a pharmaceutical company to sell quality medicines at the lowest possible price so that even the poorest family can afford them. the higher will be the market rating of the social entrepreneur. They will be forced to imitate the language and style of social enterprises to stay in business. regulatory frameworks. personal-gain driven and social-objective driven. of their investment money to social enterprises. This personal profit may range from zero to a significantly large amount. Some of the existing profit-driven entrepreneurs may start revealing another dimension of their entrepreneurial ability. even larger than the personal gain-driven competitors. On the other hand. this flow will become larger and larger. If economics could envisage two types of entrepreneurs. it would not only be more realistic. Almost everything that we have forprofit-driven enterprises will be needed for social-objective-driven enterprises. is as follows: 1. Initially some investors will divert a part. or any group of disadvantaged people. a personal profit-driven entrepreneur may contribute in achieving some social objectives. Obviously none of them are looking for an opportunity to make money by investing in the . i. as conventional profit-seekers in one. and with different methodologies. So the market became an exclusive club of the fortune seeker only. But this will be a by-product of the business. Behavior pattern of a social entrepreneur The behavior pattern of a social-objective-driven entrepreneur. rather than remaining narrowly focused on their own personal benefit. due diligence. etc. This will not make him or her a social entrepreneur. separate investment rating agencies. too. personal profit is a secondary consideration.e. while making a significant impact on the lives of poor people. He or she competes in the marketplace inspired by a set of social objectives. but if social entrepreneurs show concrete impact. Here ‘market’ will consist of the potential investors who are looking for opportunities to invest their money in social objective-driven enterprises. or a secondary consideration in the business. such as audit firms. I don't think I need to work hard to convince anybody that there are millions of investors right now who would gladly put their money into a social enterprise if they can be assured that their investment will at least retain its original value. Social investment dollars will move from low social impact enterprises to higher social impact enterprises. They may successfully operate in both worlds. social venture capital. If social enterprises can demonstrate high impact and creative enterprise designs. This is the basic reason for being in the business. a social entrepreneur. and impact assessment methodologies. and standardization. There is only one type of competition: competition to amass more personal wealth. and as dedicated social entrepreneurs in the other. What a shame for missing a great opportunity! Economic theory missed the most thrilling opportunity to change the fate of the world by completely ignoring the number and power of people who are more interested in social gains than personal financial gains. from general impact enterprises to specific and visible impact enterprises. separate financial institutions. maybe a small part. and those passionately interested in making the world a better place to live in. I receive many letters from people around the world asking me if they can invest in the Grameen Bank. social mutual funds. He or she may earn personal profit as well. deprived people. from traditional social enterprises to highly innovative and efficient social enterprises. Soon a new type of investor will be appearing on the scene who will put all or almost all their investment money into social investments. But in this case. By restricting the driving force of the market to narrow self-interest. 3.the market.

uncertainty about donor money always remains a big problem for non-market social entrepreneurs. The problem addressed may be a small local problem or a big global problem. He can grow as much as he wishes and has the capacity to manage. he is operating at a positive point on the cost recovery scale. You may gain some. the more powerful they become as a business community. because of their philosophy. and to the world. It can generate very attractive profits. Why has our business world failed to offer opportunities to people who want to invest for the benefit of the people? If socially motivated people can dedicate their lives in politics to bringing changes in their communities. Who is a social entrepreneur? Let me define social entrepreneurs in a broad way and then divide them into two categories: market-based and non-market-based. In terms of cost recovery a social entrepreneur can work within a scale ranging from zero cost recovery to 100% cost recovery. This is the most critical point on the cost-recovery scale. We may call them non-market social entrepreneurs. A completely new world can be created by making space for social entrepreneurs and social investors in the business world. Transforming from a non-market social entrepreneur to a market social entrepreneur is almost like converting a bicycle into a race-car. We must change this situation. nations. he or she is operating at zero level of cost recovery. ensuring 100% cost recovery. and put non-market social entrepreneurs into serious difficulties. the total donor money in the world is only a small fraction of the total business money. In addition. So far they have not done so because neither the opportunity nor the supportive framework exists. Some will make deliberate efforts to cross the critical point and become internally sustainable. almost as old as human beings on this planet. part of which will find market social entrepreneurs just the right kind of investment. and social investors can put their investment money into supporting the work of social entrepreneurs. creating different types of socially-oriented programs. although making profits is not the goal of the enterprise. and even far beyond cost recovery. it must be recognized that they have the longest tradition of social entrepreneurship. The size of their operations will always be limited by the size of the donor money they can obtain. I see no reason why some socially-motivated people will not dedicate their lives to building and operating social objective-driven enterprises. Some non-market social entrepreneurs will find it advantageous to move gradually towards self-sufficiency. If a social entrepreneur distributes food to the hungry. It may need cooperation and coordination with others. Social entrepreneurs must be very innovative in this conversion process in order to pursue the maximum extent of their social agenda while gaining economic power to scale up and ensure large outreach. They can start gaining access to the trillions of dollars of market capitalization money. It may be organized as a sustainable business. This is a very important agenda for all of us. Together both types of social entrepreneurs can form a very strong coalition to bring changes in the ways that people do things. while you also lose some. Some social entrepreneurs may operate on both sides of the scale. . If a social entrepreneur can stay on the correct side of this point he or she can become a legitimate player in the marketplace. She can draw on the resources of the market. or may not need money. availability of funds. one can go so much faster in reaching the goal. Market social entrepreneurs have a lot to learn from them. It may need fund-raising. The action of a social entrepreneur may need money. that policymakers make policies. Some non-market social entrepreneurs will continue to operate at the same point on the scale all the time. she becomes a market-compatible or sustainable social entrepreneur.Grameen Bank. and that institutions treat people. or other considerations. to get a better grip on their finances and reduce outside dependence. Donor priorities and procedures change frequently. Once she reaches 100% cost recovery. From non-market to market social entrepreneurs Given all the limits of non-market social entrepreneurs. Obviously. It may be a personal campaign for or against something. Anybody who is offering his or her time and energy to address any social or economic problem of a group or community is a social entrepreneur. But there may be some cost to this conversion. Eliminating poverty will become so much easier if social entrepreneurs can take up the challenge of ending poverty. Social entrepreneurs operating on one side of this critical point are dependent on subsidies and philanthropy money to carry out their noble mission. If he provides health services and charges a fee which covers part of the cost. The more that social entrepreneurs are in the category of market social entrepreneurs.

But I raise a question with it. So they carry out their mission as some kind of misfits or freak characters. Businesses are getting bigger and more powerful. pro-environment agenda. and for big powerful enterprises and small weak enterprises. They exist in the real world. I am an ardent supporter of the process of globalization. prowomen. Social entrepreneurs are not characters in an economic fiction. the knowledge economy. It comes into serious conflict with the pro-poor. but I would like to emphasize some. (d) Social entrepreneurs must be supported and encouraged to get involved in the process of globalization to make it friendly to the poor. information technology. Globalization must promote harmony and partnership between the big and the small economies. (c) Each nation must make serious and continuous efforts to bring information technology to poor people to enable them to take maximum advantage of globalization. If one of our prime objectives is to bring the quick reduction of poverty we must choose the global architecture which best ensures this result. (b) Globalization must ensure the easiest movement of people across borders. the highways of globalization will be littered with ugly sights. The least the world should do is to set up a global regulatory body to stop globalization from going in the ‘wrong’ direction. everyone is quick to recommend ‘hand it over to the private sector’. But we refuse to recognize them because we have no place for them in our analytical framework.Global efforts should be organized to help the interested non-market social entrepreneur cross the critical point by giving him or her legal support. and welfare programs efficiently. This is particularly important for poor countries. and to encourage and facilitate it to go in the ‘right’ direction. and technology. Globalization should not turn into an open house for bulls to enter the china shop. Economic theory has not provided us with any alternative to this familiar private sector. Special privileges should be offered social entrepreneurs enabling them to scale up and multiply. The future of the world lies in the hands of the market-based social entrepreneurs. Without that. anti-poor country globalization. The poor must be made active players in the process of globalization rather than becoming passive victims. I argue that we can create a powerful alternative — a social-consciousness-driven private sector. That's what anti-globalization demonstrations are trying to tell us. including cutting extreme poverty in half by 2015. and providing advisory services. while governments are shrinking in power and prestige. With the failure of many developing country governments in running businesses. ‘Free trade’ must mean freedom for the weakest. We cannot cope with the problem of poverty within the orthodoxy of capitalism preached and practiced today. There may be many features of this architecture. education. But it would be naive to think that there is only one architecture of globalization. I think globalization can bring more benefits to the poor than its alternative. in the context of a set of objectives. This dreadful outcome must be checked forthwith. Unless we go through this exercise and make serious efforts to build it. Through globalization the whole world is turning into a gaming table of the extraordinarily rich people and extraordinarily rich countries. We should initiate a global debate and generally agree on the features of a ‘right’ architecture of globalization rather than drift into terribly wrong globalization in the absence of a framework for action. Globalization and the role of social entrepreneurs The role of social entrepreneurs becomes very important in the context of the race for globalization. They are: (a) The creation of a level playing field for the rich countries and the poor countries. health. almost distanceless. I endorse this recommendation wholeheartedly. created by social entrepreneurs. We should change that viewpoint immediately and turn them into heroes of our economic endeavors. Social entrepreneurs. The rule of the ‘strongest takes all’ must be replaced by a rule that ensures everybody a place and a piece of the action without being elbowed out by the stronger players. and student loans . rather than become a vehicle for unhindered dominance by the rich economies. connecting him or her with mentors among the successful market social entrepreneurs. Leaving the business world exclusively in the hands of the personal profit-driven entrepreneurs and investors will create more and more social and political tension within and among countries than ever before. With the advance of technology the world is getting smaller. Which private sector are we talking about? The personal-profit-based private sector has its own clear agenda. Globalization. Grameen scholarships. We can easily divide all the options of globalization into two broad classes: 'right' globalization and 'wrong' globalization. access to business capital. marketing skills. and microcredit can play key roles in taking globalization in the right direction. Globalization needs traffic rules and traffic police. the most likely architecture that will emerge is the anti-poor people.

and gives student loans to 100% of students who are enrolled in higher education institutions. sensitive. Information technology can be a big help. and Grameen IT Park were created to bring information technology to the poor and to build IT capacity in Bangladesh. The ‘Sixteen Decisions’ adopted by Grameen Bank borrowers commit them to making many non-economic changes in their lives. An individual poor person is an isolated island. we can Now. connection with markets. Grameen Cybernet. Poor people are condemned to survive as Lilliputians in the land of super-giants. offers a scholarship management service. Yes. or 6% per year on the grant amount. Information technology can end that isolation overnight. ideas. if designed appropriately for the poor. In a similar way. . Information technology and education will make a big impact on the capacity of poor people and poor nations to change their economic situation. This goal of halving extreme poverty must be achieved by 2015 — if we pride ourselves to be sensible. It has expanded its services to become the largest mobile phone company in South Asia within five years its operations. poor people are sad replicas of the real persons hidden inside of them. to make sure our efforts to reach the 2015 goal become a thumping success. information technology can open doors. education. such as practicing family planning. Poverty and the human species just do not go together. a scholarship of Taka 500 (US $8. They could have grown as giant trees if they were supported by the right environment for growth. can bring dramatic results in eliminating poverty. where it belongs. sending children to school and making sure they stay in school.000 (US $1. it also promotes a strong social agenda. is given to any poor student. providing opportunities for innovative financing. Because of the Sixteen Decisions. Grameen or non-Grameen. The Grameen Bank offers nearly 4. Today there are more than 21. The future of nations will no longer be decided by the size of financial wealth of a nation. but by the quality of human resources it has. but some of them are also in colleges. unequivocal answer is: yes. Grameen Phone. Grameen Star Education. Grameen borrowers have taken great care to send their children to school. Each human being is too resourceful and intelligent to suffer from the misery of poverty. All we have to do is to remove the heavy crust that keeps their abilities unknown to them. Grameen Phone brings internet-enabled mobile phones to the Grameen borrowers and makes them ‘telephone ladies’ of their villages. etc. and professional schools.724). and friendships. Soon these women can become ‘internet ladies’ if we can design appropriate services for them. Another Grameen company.000 telephone ladies selling telephone services in half of the villages in Bangladesh. making sure everyone drinks clean drinking water. They cannot grow to their potential size because society does not offer them the social and economic base to grow. universities. going back to the original question — can we really reduce extreme poverty by half by 2015? My emphatic. Enabling people to explore their full potential is an agenda we must take up seriously. Grameen Phone also has done very well as a business. While extending telecommunications services to the poor. The Grameen Bank hopes to see that the second generation of the borrowers will grow up to take advantage of the knowledge economy and permanently shift away from poverty. Grameen Software. Today not only are all of them in school. The Grameen Bank not only focuses on giving financial services. with microcredit. We should look at the emerging knowledge economy supported by the process of globalization as an unprecedented opportunity for poor people and the poor countries. Technology is already in their hands. Supported by microcredit. called Grameen Education. A group of Grameen companies have been created to bring both information technology and education to the poor people of Bangladesh. Grameen Information Highway. Many of these phones are powered by solar power because electricity does not exist in those villages.62) per month.000 scholarships every year to students of Grameen families. A poor person can be at the central shopping mall of the world. We can set ourselves on a course to eliminate poverty from the world for all time to come. It can be easily and sustainably done. in perpetuity or as long as the money is kept with Grameen Education. Information technology and telecommunications can eliminate layers of middlemen between the poor and the market. It is the size of the pots in which they were made to grow that turned them into sad replicas of the real trees. and direct access to information. we can! We can do more than that. Information technology. But in reality poverty has persisted because we created wrong mindsets which did not allow poor people to know how much potential they truly have. gaining access not only to finance and the market but also to health. We can get ready to put poverty in the museum.Poor people are like bonsai trees. breaking away from the custom of giving dowry to the bridegroom's family. If a sponsor gives a recoverable grant of Taka 100. and creative human beings. Grameen Education hopes to find hundreds of thousands of sponsors for these scholarships to prepare the poor boys and girls of Bangladesh for the knowledge economy and globalization.

chairman of the Ways and Means Committee.Muhammad Yunus is the founder and Managing Director of the Grameen Bank in Dhaka. "The goal to cut poverty in half over the next [ten] years is not an overly ambitious task when you look at what other industrialized countries are doing. we saw every economic quintile growing together.. it rose just $200 for the bottom fifth during that same period. and those at the lowest level were growing the fastest. Yunus is the author of the best-selling book. His article is adapted from a lecture he delivered at the Commonwealth Institute in London. the CAP Task Force on Poverty released the results of fourteen months of work in its report." Rangel said." Kennedy said. Edward Kennedy and Rep." Kennedy said. and a member of the Advisory Board of Global Urban Development..000 for a family of four). Twelve Steps to Cutting Poverty in Half by Katrina Vanden Huevel Last Wednesday. Sen. with President Reagan.78 an hour and brought 900. income inequality has reached record highs and is getting worse. Dr. the United States ranks 24th out of 25 developed nations in the share of the population with an income below 50 percent of the national median income-and the US is dead last among 24 rich nations when the same measurement is used to assess child poverty.. In the richest industrialized nation in the world. Lastly. were both on hand to pledge their leadership on what Task Force co-chair Peter B. [The Task Force] summary of what we can do to move a whole group of our fellow citizens forward makes enormous sense." In fact. and it's estimated that allowing children to grow up in persistent poverty costs our economy $500 billion per year.000 children and 2. The report offers twelve concrete recommendations to reduce over the next ten years. professor of Law at Georgetown University.971 income for a family of four)." Edelman said that the Task Force worked hard to pull out some key points from the extensive list of what needs to be done to address poverty. "I can't think of anything more patriotic that we can do than eliminate poverty. There should be no one [in this country] who's poor. "From 1947 to 1973. creating a stronger middle class and setting our country on a course to end American poverty in a generation. Banker to the Poor: Micro-Lending and the Battle Against World Poverty. He noted that Great Britain has raised its minimum wage to $9. you see the beginning of growing apart." Kennedy said. and is printed with permission of the author." This is one of the great scandals of our times. Charles Rangel. the post-tax income of the top 1 percent rose $145. at the Center for American Progress (CAP) in Washington. Nearly 20 percent of American children are poor. .And now. "In 1980.. called "a national shame….5 million workers out of poverty in the last three years. more than 90 million Americans had incomes below 200 percent of the poverty threshold (less than $40. Ireland has reduced childhood poverty by 40 percent with a minimum wage of $9. From Poverty to Prosperity: A National Strategy to Cut Poverty in Half. Edelman. It was not a top-down process. "No single measure is going to answer the problem. but rather a response to what people in diverse communities feel is needed.60. "But nonetheless we can see how important it is that we put [actions] together. 37 million Americans--one in eight citizens--live below the official poverty line (just $19. in 2005. he said. Bangladesh. those at the lowest end of the ladder are not even keeping up while there is an explosion at the highest level. UK." "With the exception of getting the hell out of the Middle East.500 between 2003 and 2004.

Federal and state governments should guarantee child care help to families with incomes below about $40. This would require employers to recognize a union after a majority of workers signs cards authorizing union representation. raise and index the minimum wage to half the average hourly wage--that would presently be $8.000 gets a family of three out of poverty.") Doing all of the above would move as many as 5 million people out of poverty." The funding would be about twice the level of current federal funding for quality state initiatives. "That's a concept that's deeply flawed.. Our focus is on full inclusion in this country for everybody who has a tough time.. "Totally absurd. Now it's at its lowest level in real terms since 1959. 2. It's not true. vast parts of this country. The report notes that for most of the 1960's and 1970's a worker with a full-time minimum wage job could lift a family of three above the poverty line.. Over a 10-year period. single public policy step alone. who has trouble making ends meet. and help people build wealth so that they can weather periods of flux and have the resources that may be essential to upward mobility. you're not out of poverty. when you get a dollar over those numbers. or doesn't pay enough to make ends meet." said Edelman.000 gets a family of four out of poverty." The twelve recommendations revolve around four core principles: promote decent work that pays enough to avoid poverty. Here are key excerpts from the twelve recommendations: 1. ensure economic security so that no American falls into poverty when work is unavailable. (Currently people with incomes below $10. Thirty-seven million people is bad enough.. and promote equitable development in and around central cities." 4. Nearly 8 million Americans live in neighborhoods where at least 40 percent . Promote unionization by enacting the Employee Free Choice Act. 3. Create 2 million new "opportunity" housing vouchers. The Task Force recommends tripling the EITC for childless workers and expanding help to larger working families. an income of $20. "This is a powerful anti-poverty step…. And so really this report is about roughly 90 million people whose incomes are up to twice the poverty line… all the way down to the bottom--those nearly 16 million people who have incomes below half the poverty line--below $7. "We're not going to achieve this unless communities take the initiative with civic leadership to pull that together. unstable. It should be made fully refundable so that it's available to all low."The focus here is not just what we technically call 'poverty' in this country. vast. And so this report is really about everybody in this country who's having a difficult time." Edelman said. and save for the future." Edelman said.Who has to make a decision whether or not to go see a physician for something quite important because they're not sure that they're going to [be able to] pay for it.000 do not receive this credit. The EITC is an earnings supplement that raises incomes and helps low-income working families build assets.and moderate-income families.000 a year. "Unions are absolutely a backbone of getting fair labor standards and fair wages in our country. meet basic needs.40 an hour. it's a really bad joke. This childcare expansion would raise employment among low-income parents and help nearly 3 million parents and children escape poverty.500 for a family of three--astonishing! And that's gone up by over 3 million people under the current administration. who has trouble paying the bills at the end of the month. Expand the Earned Income Tax Credit and Child Tax Credit. "We would have an Innovation Fund as part of that effort. The Child Tax Credit provides a tax credit of up to $1. In vast. Guarantee child care assistance to low-income families and promote early education for all. "It's very important that we get this legislation enacted this year." Edelman said. provide opportunity for all-maximizing people's opportunities for success from childhood through adulthood.000 per child but provides no help to the poorest families. But when you take the idea that an income of a little bit over $15. 5. It will get over 3 million people out of poverty just from that one.

11." Edelman said. Two-thirds are rearrested within three years and about half return to prison. and the grants gradually raised to reach 70 percent of the average costs of a four-year public institution. A new Upward Pathway program would offer low-income young people opportunities to train in fields that are in high-demand and provide needed public services. And the Temporary Assistance for Needy Families Program should be reformed to shift its focus from cutting caseloads to helping needy families find sustainable employment. Reduce the high costs of being poor and increase access to financial services.of residents are poor. Ensure equity for low-wage workers in the Unemployment Insurance system. 6. All states should develop comprehensive reentry services aimed at reintegrating former prisoners with full-time. 7. 9. The federal government should restore Youth Opportunity Grants to help the most disadvantaged communities and expand funding for effective and promising youth programs--with the goal of reaching 600. . Pell Grants play a crucial role for lower-income students. Over the next ten years.Lower-income families often pay more than middle and high-income families for the same consumer products. States should not bar former prisoners from receiving public benefits like food stamps or deny them the right to vote. broaden eligibility for part-time workers and workers who have lost employment as a result of compelling family circumstances. Approximately 35 percent of the unemployed. The Food Stamp Program should be strengthened to improve benefits. "People should also be able to choose where they live. and a smaller share of unemployed low-wage workers. The United States has the highest incarceration rate in the world--600. 10. Help former prisoners find stable employment and reintegrate into their communities.A functional safety net should help people get into or return to work and ensure a decent level of living for those who cannot work or are temporarily between jobs. eligibility. they should be able to live near the jobs and get to the jobs. consistent employment. and access. or in gentrifying communities. and allow benefits to continue when workers are in programs that upgrade their skills and qualifications. The Pell grant application process should be simplified. even among those of comparable abilities. The federal government should also establish a $50 million Financial Fairness Innovation Fund to support state efforts to broaden access to mainstream goods and financial services in predominantly low-income communities. the federal government should fund 2 million new "opportunity vouchers" designed to help people live in opportunity-rich areas." Any new affordable housing should be in communities with employment opportunities and high-quality public services.7 million poor youth ages 16 to 24 were out of school and out of work in 2005. Our current system fails to do so.000 disadvantaged youth through these efforts. Simplify and expand Pell Grants and make higher education accessible to residents of each state. Low-income youth are much less likely to attend college than their higher income peers. Federal and state governments should address the foreclosure crisis through expanded mortgage assistance programs and by new federal legislation to curb unscrupulous practices. Modernize means-tested benefits programs to develop a coordinated system that helps workers and families. "The housing vouchers that we currently have reach only a quarter of the people who are eligible. We should seek to end such concentrated poverty. Connect disadvantaged and disconnected youth with school and work. Most are low-income.000 prisoners are released to their communities each year. About 1. States should reform eligibility rules that screen out low-wage workers. receive unemployment insurance benefits. following promising models already underway in a number of states. minority men returning to high-poverty communities. 8. States should develop strategies to make post-secondary education affordable for all residents. The government should simplify and improve benefits access for working families and improve services to individuals with disabilities.

more than halfway toward the ten year goal. In Pakistan. lack of representation and freedom. The combined cost of the twelve recommendations is approximately $90 billion a year. was on the Task Force. . and doing something in a time period that people can measure and hold us to…. the civic organizations. EITC.12. saving for purposes such as education. and bring it back. lack of access to credit. and college savings plans. we know what it will accomplish.. Expand and simplify the Saver's Credit to encourage saving for education. "Maude Hurd.000 is projected to be $100 billion. Are we as a nation going to do what we should be doing?" Pakistan Poverty Alleviation Fund Project print version updated August 2005 OVERVIEW Poverty is hunger.with faith-based groups. homeownership and retirement. National President of ACORN is a member of the Task Force--they work with millions of people around the country who are struggling for economic justice. the value of tax cuts solely for households exceeding an annual income of $200. "Making a commitment to cut poverty in half in a ten year period is a bold goal." "What we need here is a massive effort to reach out both through every communications method and the grassroots. Poverty is lack of shelter. Also. The federal "Saver's Credit" (a relatively new tax provision which matches voluntary contributions to retirement savings accounts with a tax credit) should be reformed to make it fully refundable. child tax credit. [We are] working with the unions--Linda Chavez-Thompson [(Executive Vice President of the AFLCIO)]. Poverty is not being able to go to school and not knowing how to read.. This Credit should also be broadened to apply to other savings vehicles such as individual development accounts. "This isn't just about lamenting the fact that we have so much poverty. For many families.. Poverty is being sick and not being able to see a doctor. as well as a lack of basic services in education and health. For many people in developing countries. when the faith institutions. Poverty is not having a job. acute poverty means difficulty making a living." Edelman said." said Angela Glover Blackwell. this report comes at a time when the mayors. In 2008.. The current annual costs of the Bush tax cuts (skewed for the wealthy) enacted in 2001 and 2003 are approximately $400 billion. The Urban Institute studied the impact of just four of the Task Force recommendations--the minimum wage. this is about doing something about it. or a small business is key to making economic progress. Poverty is losing a child to illness brought about by unclean water. and child care assistance expansion--and found that together they would reduce poverty by 26 percent. living one day at a time.. The question is the political will. is fear for the future.This has got to reach all around the country and people need to own it. a home. children's saving accounts. are all looking at what we're going to do about poverty… [So it] comes into an atmosphere in which Americans are saying 'we can do something about this'..We know what to do. Poverty is powerlessness. Task Force co-chair and Founder and CEO of PolicyLink. and say this is what we have to do.

As the lead Apex institution of the country wholesaling funds to civil society organizations. As a result. The project provides access to much-needed microcredit loans and grants for infrastructure and capacity building. especially in under-served rural and urban areas. The World Bank funded Pakistan Poverty Alleviation Fund Project was designed to reduce poverty and empower the rural and urban poor in Pakistan. Benefits accrue directly to the vulnerable through income generation. the Government of Pakistan created the Pakistan Poverty Alleviation Fund (PPAF) as an autonomous body working with local partners to provide loans. Women and girls in particular have benefited. nongovernmental institutions can be more effective in reducing poverty by delivering better services to the poor. the PPAF forms partnerships on the basis of rigorous criteria. the PPAF project aims to help the rural poor in Pakistan get out of a cycle of misery.training in income-generating activities.6 percent of the population is poor. and get into a virtuous cycle of opportunities. a resource base of US$500 million.has shown that autonomous. and training and skill development support. As such. with specific emphasis being placed on gender and empowerment of women.and worldwide . the poor must often rely on money lenders and traders for credit – paying interest rates from 80 to 120 percent per year. According to the latest figures. More importantly. High administrative costs and lack of collateral resources have kept traditional financial institutions from supporting small businesses and self-employment in poor areas. The PPAF was funded by a US$ 90 million World Bank credit and an endowment of US$ 10 million from the Government of Pakistan in 2000. improved physical and social infrastructure. To help poor people gain access to resources to earn an income and to develop projects aimed at improving their lives. Traditional development programs have focused on women’s . UPDATE The Pakistan Poverty Alleviation Fund (PPAF) represents an innovative model of public private partnership. the PPAF ensures that the partners have well targeted community outreach programs that are committed to enhancing the economic welfare and income of the disadvantaged peoples. THE CHALLENGE Poverty remains a serious concern in Pakistan. which had fallen substantially in the 1980s and early 1990s. where the per capita gross national income (GNI) is US$520. Although the government has tried to address the problem. 32. as measured by Pakistan’s poverty line. basic social services and infrastructure are critical factors behind the persistence of substantial poverty. The target population for the project is poor rural and urban communities. experience in Pakistan . Sponsored by the Government of Pakistan and funded by the World Bank and other leading donors the PPAF has as of now. differences in income per capita across regions have persisted or widened as have gender gaps in education and health. started to rise again towards the end of the decade. grants and technical assistance to the poorest individuals and communities in the country. Poverty rates. since they bear a higher share of the burden of poverty because of fewer economic opportunities and lower endowment of land and other income-generating assets. Before finalizing partnerships.

The PPAF has also enhanced public awareness through community participation. as the majority of the women in the village are. and the project was evaluated as "highly satisfactory" (the highest possible ranking by the Operations and Evaluation Department (OED) of the World Bank). Total disbursements have crossed the Rs10 billion mark.000 new community organizations have been formed (these can transform into Citizen Community Boards). with little focus on the economic empowerment needed to truly improve the situation for women. As a result of the above a second project of US$ 238 million was negotiated between the Government of Pakistan and the World Bank in January. over 40. a small village in Sindh’s Thar desert.000 community members and staff of partner organizations have participated in trainings facilitated by the PPAF. The timely completion of the projects is improving the quality of life of the beneficiaries. 2004. beneficiaries of the program. As of today. . micro credit lending has exceeded the Rs. LOOKING AHEAD The first US$ 107m phase was completed in the year 2004. 6 billion figure with 100% recoveries. direct or indirect. which in turn allows for partner organizations to reach new levels of understanding and maturity. social and economic capital and moving towards a long term integrated program. The experiment was so successful that there has not been any default. take precedence over others. and the communities are willingly contributing to the infrastructure and training programs of the partner organizations. In this sense. the lowest tier of local government in Pakistan more than 8. PPAF envisions itself to be the vanguard of civil society endeavors for achieving a decisive impact on poverty by building human. At the qualitative level PPAF has met the biggest challenge which was to change a deeply entrenched "grant" culture towards a more pragmatic and professional approach among the civil society organizations. PPAF focuses on improving the lives of women by ensuring that community projects and loans responding to their priorities. This creates a framework of shared values and mutual trust.social development. and over 100.500 stand completed. After the huge success of one integrated area development program.000 infrastructure schemes have been initiated of which 5. PPAF has now planned 300 such programs across the country. PPAF is working with 56 partner organizations in 96 districts of Pakistan. Partner organizations are engaged and have been finding their individual solutions to indigenous problems and challenges. The Fund is contributing significantly to mitigate affects of drought in Sindh and Balochistan through preparedness programs. Impact studies carried out by independent observers have shown significant change in the quality of life of PPAF beneficiaries. All targets and forecasts were surpassed well before time. Daiyanand and Sughar are no exception in Nenisaar. and designed with their participation.

only about 25 km from the Federal Secretariat. Now they are earning members of the family. Rain-fed agriculture constituted its only economic base. Their . Women and girls of school going age had to make several trips to the adjacent dug well to bring enough water for drinking and cooking. MAKING PROGRESS A village comes into its own – Story of Dhok Tabarak village A village of about 800 people. Dhok Tabarak is located on Lehtrar Road. Nenisaar community approved the construction of a 750-foot tube well. which was severely hit by persistent drought.Through partnership with TRDP. Microfinance facility has empowered these women.

street surfacing. . Like all PPAF assisted community infrastructure interventions. there is a provision of implementing similar projects in 300 villages. almost half of which are girls. but also led to skin diseases and malaria. which was also channeled in by PPAF. This included consensus building on the scope of work and cost sharing. Household latrines were nonexistent. Living rooms are being re-floored and house facades are being plastered or painted. resulting in synergistic impact in improving the quality of life in the village and creating demand for micro credit. This was done in collaboration with two of its partner. the National Rural Support Program and Human Development Forum. Major physical infrastructure components include: safe drinking water supply. Boundary walls are being rebuilt with cement mortar.84 million. A basic health unit has been set up in the adjacent village. There is also a solid economic justification for these investments as the environmental improvements brought about by the Integrated Project has resulted in two to three folds increase in land values. most of which have been voluntarily set back to help increase the width of the street. household latrines. who have acquired additional livestock and revitalized their family businesses. small-bore sewerage. A bold departure from the conventional single intervention approach. A walk through the neatly paved streets of Dhok Tabarak reveals many improvements at the houses. All this is happening owing to the enormous lifting of spirits following the integrated development of community infrastructure in the village and ready access to health and education facilities. The Plan has since been implemented and the facilities built are being successfully maintained by the community. which provides both preventive and curative health services. Owing to the vivid and conspicuous improvement in the quality of life at Dhok Tabarak. the Dhok Tabarak Pilot Project experimented with an integrated delivery of physical and social services. Under the World Bank’s Second PPAF Project. remaining dusty during most of the year. A grant funding of Rs 3. The greatly improved living environment has provided the people of Dhok Tabarak a strong impetus to lead a more dynamic and fulfilling life.miseries increased manifolds as the adjacent well dried up during drought and they had to walk several kilometers to bring water from a distant source. communities from all over the country are approaching PPAF for the implementation of similar projects in their areas. which not only made it difficult and hazardous to walk through. Micro-credit has been extended to 34 entrepreneurs. turning muddy in the rainy season. A community managed school is fully functional with an enrollment of 75 students. treatment and disposal. demand driven approach in accordance with its operational policies. There were no health or education facilities. Water borne and respiratory diseases were common and iodine deficiency widespread. Many of them remained inundated with wastewater. where people have been living in apathy for decades. the Dhok Tabarak Project followed a community based. wastewater collection. Streets were un-surfaced.11 million by PPAF was matched by a community contribution of Rs 0.