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A Study on Scarcity as a Worldwide Issue and Resolutions to Combat It

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Poverty is a fundamental challenge that has been facing the world community for unlimited amount of time. It has a damaging effect on the economy, social relations, politics, culture; it directly affects the core characteristics of any human life as health and education. In turn, poverty is a product of several factors acting at the global level. In other words poverty is the result of violations of the proportions of social reproduction: the proportions of activities (the ratio of socially heterogeneous types of labor, the ratio of the employed and unemployed population in social production); proportions of state (different degrees of availability of material, spiritual and social benefits, the relation-ships among the elements of welfare and phases of reproduction); proportions of the relations of man with society and nature, people with a social group with the class and society. They are based on a key proportion between productive and consuming power of society, expression of which is the ratio of the working and leisure time. So poverty can be present in economically poor and rich countries. When it comes to solving the problem of poverty it is important to be clear whether poverty is a problem that has to be solved on a global level or it is a national matter and national governments has to fight this problem. Before answering the main question it is crucial to have a clear definition what is poverty, what factors caused the beginning of poverty what are the ways of poverty measurement.

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In the modern society problem of poverty and inequality is so well-known that whoever you ask about it will tell you what it is. Usually the definition of poverty would sound like a level of living when person does not have an access to the basic needs like food, water, roof above his or her head, basic education, confidence in protection and much more. The definition of poverty very much depends on the person who is defining it. There are people who have only basic access to food and water, and love in a small room with their family and who consider themselves rich people. On the other hand there are people who have huge mansions, cars and enough money to feed all of their family and more and they say that they are not rich enough. Probably it depends on person`s personality, greediness and ambitions. Also if the person grew up in a rich surrounding it is hard for him to understand what real poverty is because he never saw one. We always hear on the news about some very poor third world countries, where people are fighting for a drop of water, but for us it is like a movie. It is impossible to really believe it and understand the suffering of people until this tragedy will happen to us. The people who are in the culture of poverty have a strong feeling of marginality, of helplessness, of dependency, of not belonging. They are like aliens in their own country, convinced that the existing institutions don`t serve their interests and needs. Along with this feeling that they are powerless is a widespread feeling of inferiority, of personal unworthiness. There is no one single definition of poverty. So to get the full image of what it is we need to look at a few definitions.

The House of Commons Scottish Affairs Committee while defining poverty claimed that: “Basically there are thee current definitions of poverty in common usage: absolute poverty, relative poverty and social exclusion.

Absolute poverty is defined as the lack of sufficient resources with which to keep body and soul together.

Relative poverty defines income or resources in relation to the average. It is concerned with the absence of the material needs to participate fully in accepted daily life.

Social exclusion is a new term used by the Government. The Prime Minister described social exclusion as “a shorthand label for what can happen when individuals or areas suffer from a combination of linked problems such as unemployment, poor skills, low incomes, poor housing, high crime environments, bad health and family breakdown”.”

World Bank Organization defined poverty as: “The most commonly used way to measure poverty is based on incomes. A person is considered poor if his or her income level falls below some minimum level necessary to meet basic needs. This minimum level is usually called the “poverty line”. What is necessary to satisfy basic needs varies across time and societies. Therefore, poverty lines vary in time and place, and each country uses lines which are appropriate to its level of development, societal norms and values.” After reading these definitions of poverty we may draw some conclusions out of them. First is that poverty can be defined from a different perspectives. Second is that there is no single definition of poverty, every day new factors are being taken to consideration. And third is fact that any definition of poverty will contain the lack of something. In other words, poverty can be defined as a lack of some necessary things, but it depends what necessary things people are requiring.

Nowadays governments, aid workers and activists are looking for solutions to the serious problem of widespread poverty and are trying to combat its many negative effects; nevertheless there is a need to identify the causes of poverty in order to create sustainable change. Understanding what the factors that are causing global poverty are is a crucial part of the process of devising and implementing effective solutions. Most analysts would agree that there is no single cause of all poverty everywhere throughout human history. However, while taking into account the individual histories and circumstances of particular countries and regions we can see some significant trends in the causes of global poverty. The first factor that is worth mentioning is history. Several of the poorest nations in the world in the past were former colonies, slave-exporting areas and territories from which resources had been systematically extracted for the benefit of colonizing countries. Although there are notable exceptions like Australia, Canada and the U.S. whose economy and standard of living now is incredibly high. For most of these former colonies, colonialism and its legacies have helped create the conditions that prevent many people from accessing land, capital, education and other resources that let people to support themselves adequately. In these nations, poverty is one legacy of a troubled history involving conquest. The other not less important cause of the poverty is discrimination and social inequality. From the first sight poverty and inequality are two different things, but actually inequality can lead to widespread poverty by excluding groups with lower social status from accessing the tools and resources to support themselves. According to the United Nations Social Policy and Development Division: “inequalities in income distribution and access to productive resources, basic social services, opportunities, markets, and information have been on the rise worldwide, often causing and exacerbating poverty.” The United Nations and many other aid groups also argue that gender discrimination has been a significant factor in holding many women and children around the world in poverty. War and political instability are also playing a very important role when it comes to poverty. Both of these factors have often been connected with histories of colonialism, but whatever are the causes of war and political upheaval, it is clear that safety, stability and security are essential for survival and, beyond that, economic prosperity and growth. Without these basics, there is no chances that natural resources would be harnessed individually or collectively, and no amount of education, talent or technological experience will allow people to work and gain the benefits of their labor. Similarly, people need laws to protect rights, property and investments, because without legal defenses, business owners cannot safely invest in a country’s economy and farmers, would-be entrepreneurs. It is an obvious sign that the poorest countries in the world have all experienced civil war and serious political upheaval at some point in the 20th century, and many of them still have very weak governments that cannot or do not protect people against violence. It is also crucial to add vulnerability to natural disasters to our list of poverty causes. In some regions of the world that are not very wealthy, recurrent or occasional catastrophic natural disasters can pose a significant obstacle to eradicating poverty. The effects of flooding in Bangladesh, the drought in the Horn of Africa and the 2005 earthquake in Haiti are all examples of the ways that vulnerability to natural disasters can prove to be devastating to large portions of affected countries. In each of these examples, already poor people became refugees within their own countries, losing whatever they had, being forced out of their living spaces and becoming almost completely dependent on others for survival. According to the World Bank, the debt loads of local fishermen had doubled two years after cyclone Nargis hit Myanmar in 2008. The Solomon Islands experienced an earthquake and tsunami in 2007 and the losses from that disaster totaled 95 percent of the national budget. Without foreign aid assistance, governments in these countries would have been unable to meet the needs of their people. The fifth factor that is worth mentioning in this work is national debt of the country. Many poor countries carry significant debt loads due to loans from wealthier nations and international financial institutions. Poorer nations pay an average of $2.30 in debt service for every $1 received in grant aid. In addition to that, a lot of structural adjustment policies by organizations like the International Monetary Fund and the World Bank often require poorer countries to open their markets for external business and investors, thus increasing competition with local businesses and, many argue, damaging the potential development of local economies. In recent years, calls for debt reduction and forgiveness have been increasing, as activists see this too as a key means of reducing poverty. Also it is now a priority to the United Nations to observe how economic structural adjustment policies can be designed to put less pressure on weak nations. Now we mentioned only five main causes of the world poverty, but for sure there are much more.

In this stage of the work it is already obvious that poverty is more a global issue, especially in the age of globalization. Global society, different international organizations are supporting poor countries by proposing economic policies and offering them a financial aid. Nowadays the single world system is responsible for measuring and trying to solve the problem of world poverty. There are no chances that national government itself can lead the country out of poverty and famine. There are a lot of ways to measure poverty, and every year it is improving. In this part of the work we will try to understand how the measurement of the poverty works, and as we are not economists it is important to break it down into very simple level. The main instrument of determining the level of poverty in a country is a feature of the poverty line- the minimum acceptable level of live that has to be guaranteed to citizens by their government. Poverty line allows you to divide the population into poor and non-poor. This figure depends not only on the level of minimum essential needs of the people, but also on the economic possibilities of the state: the state of the economy, the average standard of living of the population, its mentality. This figure depends not only on the level of minimum essential needs of the people, but also on the economic possibilities of the state: the economy of the country, the average standard of living of the population, its mentality. What is poverty for one country is not considered to poverty in another. As a result, poverty line in the world is not the same: in developed countries it is higher than in developing ones. For example in Eastern Europe minimum subsistence level along with minimum consumer budget play the role of the poverty line and are used to quantify poverty. A minimum subsistence is a minimum set of goods and services necessary for the preservation of human life and health. It is aimed at lower (physiological) level of consumption, which is reflected in the limited number of goods and services in each product group. The budget of a minimum subsistence is a cost of the subsistence level plus mandatory payments and contributions. It is calculated on the average per capita income and by the main socio-demographic groups. The minimum consumer budget is the cost of buying a set of consumer goods and services to meet the basic physiological and socio-cultural needs of the person. It is calculated for different socio-demographic groups of the population. An average minimum consumer budget income per capita is considered to be the minimum consumer budget of a family of four consisting of two adults and two children. The basis of natural-material structure of the minimum consumer budget is the system of the consumer basket. Market Basket – this is a balanced set of science-based products and services that meet the specific functional needs of the individual, in certain periods of time based on the specific conditions prevailing in the country. It includes goods and services, representing all consumer systems, necessary for normal human activity. The minimum consumer budget is revised as necessary taking into account the increase in consumer prices, but not less than once a quarter, herewith the average prices of the last month of each quarter are used.

Differentiation of the population on the basis of the subsistence minimum and the minimum consumer budget allows you to create groups with different levels of material well-being:

  • poor families, per capita income is less than the minimum subsistence budget or is equal to it;
  • middle-class families, their per capita income is greater than the minimum subsistence level, but less than the minimum consumer budget;
  • rich or provided families whose per capita income is in the range between the minimum and rational consumer budget;
  • rich families with per capita income above the rational consumer budget.

Poverty is the lowest level of life. Households are considered poor if their consumption of food does not provide 80% of the minimum food ration, as defined by the World Health Organization or the cost of food exceed 80% of their total income.

Thus, we can say that the issue of fighting poverty is associated with the problem of income redistribution and social justice. Unjustified income differentiation causes a reduction in the number of middle class, which is the main bearer of the demand for goods and services, and thereby weakens its stimulating effect on economic development. Poverty and deprivation lead to an increase in social problems, professional degradation and deterioration of the quality of human capital. High income inequality provokes social tension, increases business and investment risks. Therefore, the more unequal a society is, the lower its level of economic well-being. For it is necessary to improve the redistribution of income in favor of the poor. The system by which government are measuring national poverty is rather international than domestic. Global community is controlling the level of poverty in the world, and always richer countries are doing everything that is in their power to support countries with poverty.

After analyzing the problem of poverty, where it takes its roots from, how to measure it, and what is the definition of poverty we can try to answer the main question of this work, whether poverty is a global issue or a national matter. Going back to what has been already written in this work we understand now what are the causes of poverty. Such factors like history, wars and political instability, national debt, discrimination and social inequality and vulnerability to natural disasters can be considered as the main causes of poverty in the country. Some of them are undoubtedly connected with other international actors. So in some way, not only poor country is responsible for the state of poverty it is in, but other countries too. Then it is logical that other international actors have to support and help the poor state. Also, as we are living in the twenty-first century, in the age of globalization, every country is very much dependent on each other. So if one becomes very poor, others will suffer too. It is then much better to maintain economic stability for everybody. Also the international system of measuring poverty proves that it is an international issue that everybody tries to solve. With the knowledge which country is in need of help or where people are suffering it is easier to act and to make some tangible changes.

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To conclude, it is important to say that poverty is a great global problem that cannot be ignored by the international community. To fight poverty all the nations have to work together and do their best to help the country in need. Unfortunately, it is a problem that cannot be solved without external help, so that means that international assistance is obligatory.

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