Presentation Poverty

Poverty Poverty is here to stay. 

Half the world’s population, about 3 billion, live on less than $2 per day. d ay.

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Malnutrition, lack of health care, substandard housing, and illiteracy breed desperation, disease and daily suffering. Poverty traps future generations in a vicious cycle without hope or opportunity.

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Poverty Statistics 

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Almost 30,000 children under the age of five die every day from malnutrition and preventable diseases. That’s one kindergarten class every minute. Approximately 790 million people in the developing world are chronically undernourished. That’s the equivalent of every single person in both bo th North and South America going hungry every day.  Nearly a billion people entered the 21st century unable to read a book or sign their names.

What is Poverty? (Conceptualized broadly, taking into account income & its impact in terms of human deprivation, development, and quality of life)

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The term “poorest” or  “very poor” refers to  people living on less than $1 per day or in the  bottom half of those living below their  nation’s poverty line.

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The term “poor” means those living in poverty above $1 per day or in the upper half of those living below their  nation’s poverty line.

Causes of Poverty 

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Decline in overall national growth Political instability  Natural Natural disasters Corruption Socio-economic disparities and  prejudices Lack of access to education

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Lack of infrastructure Lack of relevant laws & administrative  procedures Lack of access to investment & credit, to complete market information, and to opportunities to develop skills

Effects of Poverty 

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Without the security of formal jobs, each day the poor work from dawn to dusk  All or most of the money earned go to basic survival. There is little or no money left to improve quality of life Living in poverty almost always means that the harsh reality of today will repe at itself  w ill repeat tomorrow.

Effects of Poverty, continued… 

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Poverty breeds poverty. If one o ne cannot afford proper  nutrition or health care for one’s family, children grow up at greater risk ris k of acquiring a life-threatening or disabling disease. If one cannot afford to educate one’s children, they will have few avenues for a life different than that of  their parents. If one cannot afford to buy one’s own land or home or livestock, there are few opportunities to build bu ild assets that will last over time.

Can poverty be reduced? Can economic gr growth owth reduce reduce poverty?

Poverty Reduction Global Level Millennium Development Goals (MDGs), UN General Assembly, Sept. 2000 Objectives: eradicating extreme poverty and hunger  achieve universal primary education  promote gender equality reduce child mortality improve women’s reproductive health combat HIV/AIDS, malaria, and other diseases ensure environment sustainability develop a global partnership for development        

Targets of MDGs with Reference to Poverty 

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Target 1: Halve the proportion of people

living in extreme poverty between 1990-2115 Target 2: Halve the proportion of population  below minimum level of dietary energy consumption and halve the proportion of  underweight children (under five years) Target 3: Halve the proportion of people without access to safe drinking water or those who cannot afford it by 2115

Poverty Reduction Asian Level ADB’s Poverty Reduction Strategy Social Development (human capital development, population  policy, social capital development, gender, equality, social  protection) Good Governance (government accountability, public  participation, predictable legal framework, transparency, anticorruption initiatives) Pro-poor Growth (labor-intensive employment and income creation, public/private sector provision of basic services, poor  area public investment, regional and sub regional cooperation, environmental sustainability) 

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Poverty Reduction P hilippine Level Philippine The Medium-Term Philippines Development Plan, 2001-2004 Four primary strategies: Macroeconomic stability and equitable growth, using sound fiscal and monetary  policies to keep inflation low and avoid surges in unemployment; modernize all sectors through HR development and technology 

MTPDP, (continued..) 

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Comprehensive HR development, basic education, health, shelter, water, electricity; safety nets for most vulnerable sectors; encouraging poor to participate in governance Modernization of agricultural sector with social equity; agrarian reform, improving rural infrastructure, implementing land reform Effective governance through transparency, reducing graft and corruption, strengthening partnerships with civil society and the private sector 

Poverty in the Philippines 

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Tends to be associated with low education levels for  heads of households and large family size (5.2 million families below poverty line) Poverty line = P14,000 (urban = P16,000, rural = P12,000) 41% (about 31 million) of the total population are poor  69% of the poor lives in the rural areas, consisting of  indigenous people, small-scale farmers, landless workers, fishers, people in upland areas, and women in all all categories 31% lives in the urban areas, consisting consisting mostly mostly of of the informal settlers

A Glimpse on the Economic Policy and Poverty Reduction of the Past Policies that hindered growth and perpetuated income inequality, and hampered the reduction of   poverty—  

On exchange and trade policy. Industrial  policy encouraged import substitution rather  than promoting exports. Trade policies heavily  benefited the manufacturing sector rather than the agricultural sectors.

Economic Policy, continued.. 

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On tax policy. Consumption-based taxes (indirect taxes) are somewhat regressive  because the poor consume a larger percentage of their income than do the wealthy. Indirect taxes account for about 70 percent of the tax revenues of the Philippines. On capital and labor policy. Economic Ec onomic policy favored large firms and capital-intensive ca pital-intensive industries over micro entrepreneurs, and capital over labor.

Measures for Poverty Reduction 

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Adherence to policy on equitable growth, rural development, and social sector investment (thrust of  MTPDP) Tariff reforms Livelihood training Strengthening the state education policy which includes the creation of the TESDA to oversee technical and vocational education; adoption of the Dual Training System in accredited vocational and technical schools under DECS. Enactment of laws promoting the welfare, protection, and development of working youth.

Measures, continued.. 

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The poor should have greater access to the financial  products and services that help the gap g ap when times are tough. Without life or health insurance, diseases and illness go untreated and the death of an income earner is a dramatic hardship for a family. Greater reliance on entrepreneurial skill of the people in nation-building Access to loans or credit; shop-owners cannot buy  products in bulk and farmers cannot buy machinery or even seeds after a natural disaster or a poor  harvest.

Conclusion At a greater perspective, poverty crushes the spirit—of the  poor as well as the nation as a whole. With the past administrations, there was lack of progress in reducing poverty attributed to the country’s poor poo r performance. Economic growth— annual average of about 0.6 per cent GDP GDP for for aa  period of 20 years ,1975-1995, (UNDP 1999)—was dampened  by economic policies that favored capital over labor, and import-substituting industries over agriculture, that led to the underinvestment in the human capital of the poor and the devastating effect, particularly on the agricultural sector. These policies owe much to the important role played by the elites in the Philippine politics and society.

Conclusion, continued.. Economic growth reduces poverty as the different sectors of the economy are stimulated to increase  productivity. The agricultural sector comprising of  the greater number of the poor contributes a meager  19% to GDP. This sector needs reforms r eforms that would stimulate growth and should in turn alleviate poverty. The government can achieve even more by eliminating remaining biases against agriculture and investing more in health and education, especially in rural areas.