Poverty is one of the main global problems. This grave condition refers to the inability to address the basic needs of people who live in a country. Extreme or absolute poverty, especially in developing countries, poses a serious danger not only for national but also for international sustainable development. In fact, people in many developing countries suffer from poverty that endangers their life. The global poverty problem is especially acute because many developing countries continue to have the cohorts of people whose human rights have been undermined due to the low level of income. In addition, they do not have sufficient opportunities to alleviate poverty. Consequently, it is vital to provide extensive international support to eliminate the sources of poverty in the world. Thus, the problem of poverty has received a particular concern from the international community. This paper focuses on the ways how to overcome poverty by establishing the economic growth and providing state aid to the poor.
Poverty is a global problem that prevents people from having a normal life due to the lack of economic, political, or social resources. The elimination of poverty is an imperative. In order to address it, it is vital to understand the main reasons for the low quality of life which include small income, inadequate property security, bad health, unemployment, and other social injustices. The fact that poverty is predominantly associated with the third world countries does not make the problem irrelevant to highly developed countries. In fact, poverty is also a serious problem for developed countries. The most important factors in solving the poverty problem are the maintenance of economic growth and the provision of state assistance to the poor.
The Causes of Poverty
Poverty in developed and developing countries derives from different sources. Undoubtedly, it mainly affects poor countries. Primarily, it directly relates to the various economic crises in the world. Secondly, social and health factors can lead to poverty. The evidence shows that the most unprotected are people with disabilities, elder citizens, and groups that have a low level of social guarantees (Brady & Burton, 2016). In addition, the demographic factors can also result in poverty. Moreover, people with a low level of education may be affected. In some countries with military conflicts or forced migration, people have no opportunity to work and are forced to experience poverty. In general, uneven development of the regions is the main cause of poverty in third world countries.
There are different approaches to the causes of poverty in developed counties. One of them is the culture of poverty (Reuben, 2015). Supporters of this concept argue that poor people are unable to make changes in their life due to the cycle of poverty (Sevilla, 2015). It means that the attitude towards poverty is passed from one generation to another, which aggravates this problem without a chance to set the new values. Another approach to poverty is determined by a culture of dependence, where the poor are considered as a source of their own misfortunes (Vegh, 2013). In fact, social security programs can become a source of particular mindset which lures people into the poverty trap. Unfortunately, different programs often make the poor cease to rely on their own strength and encourage them to benefit from the society.
Effects of Poverty
Poverty hinders the development of the economy. Namely, it leads to the low purchasing power of society, insufficient demand for goods and services, reduction of the domestic market, and lack of investments in innovations. Indeed, poverty reduces the quality of human life. It affects the health of the nation because people become unable to receive proper healthcare. In addition, poverty leads to a higher level of crimes, drug and alcohol addictions, and various diseases. According to the researchers, poverty has a negative impact on the motivation to work. The social activity of the population changes profoundly. Indifference and ignorance make the economic growth of the country fictitious (Reuben, 2015). In addition to inevitable economic and health problems, poverty has a strong influence on the social life of less-advantaged people.
It is believed that poor people usually suffer from social exclusion. For example, children of poor parents experience limited opportunities in personal and professional development. Moreover, a large contingent of the poor who lack opportunities for a decent life is deprived of a chance to be the active members of social and economic transformations. As a result, they do not integrate into society thinking that they do not have a right to change the situation. The community becomes divided into the groups. This situation manifests in the disappearance of common values, social unity, and interests (Sevilla, 2015). In addition, poor individuals from the minority groups may suffer more due to the widespread racial discrimination and poverty. Nowadays, many immigrants and refugees are marginalized being forced to live in poverty.
Poverty has a long-term impact on the life of a person. In fact, it is known that children who have grown up in poverty are more vulnerable (Sheedy, 2013). For instance, they are more likely to contract a disease, to have learning difficulties, to deviate, to become pregnant early, to have lower skills, and to find badly-paid jobs. Ultimately, the effects of poverty are adverse because it aggravates economic, political, and social aspects of human life.
Overcoming Poverty with Economic Growth
The economic development reduces poverty as it creates the working opportunities and funding programs. Indeed, without rapid and sustained economic growth, there is no hope for a significant reduction in poverty, especially in the countries of South Asia and Africa (Vegh, 2013). Strong economic growth can create a large number of jobs, as well as increase tax revenues for funding programs aimed to combat poverty. Undoubtedly, economic growth plays an important role in providing the resources needed for maintaining a decent level of life. For example, in the Republic of Korea and Taiwan, the rapid development of labor-intensive industries attracted the masses of agricultural workers to well- paid jobs in the manufacturing industry (Brady & Burton, 2016). However, the opponents of this approach point out that, although economic growth contributes to poverty reduction, it should be monitored in order to prevent an increase in inequality.
Furthermore, the economic development does not bring positive results in the countries with a high level of corruption. For example, in Nigeria, state leaders stole about $400 billion of the countrys oil revenues (Brady & Burton, 2016). Moreover, the authorities often deprive people in poor countries of the means of assistance. They limit an access to the natural resources, keeping them in private hands. After, they usually decide to send the profits to the foreign banks because of omnipresent bribery. Indeed, the level of corruption remains high in the poor countries where the authorities focus on the personal benefits. Nevertheless, the international community strives to help poor countries and to resolve the global problems.
The State Assistance to the Poor
The state assistance to the poor is an important means of eliminating poverty, inequality, social isolation, and insecurity. The USA model of fighting poverty is based on a system of compulsory insurance. In accordance with it, the longer and the more fruitfully a person works, the higher his/her level of social protection, i.e. he/she has more benefits. The governments in Germany, the Netherlands, France, and some other European countries have adopted a similar system (Sheedy, 2013). In Southern Europe, a person in need should usually expect financial aid from the relatives. The government can support the poor by offering a small amount of money. The Nordic model guarantees that all the citizens have a high level of social protection, even if they never work and pay taxes. In addition, state programs are designed to protect poor families to overcome economic shocks, natural disasters. and other crises. These programs help children to grow healthy, to eat well, to attend school, and to develop. In recent years, the international community has allocated a considerable amount of money to combat world poverty. However, the problem remains.
A Comparison of Two Approaches
Although economic growth is considered to be a great tool to overcome poverty, it strengthens high socio-economic differentiation in society. In this respect, the problem of poverty has acquired a new character, gradually becoming chronic and focal (Sheedy, 2013). It is obvious that a high level of economic development facilitates the fight against poverty. However, there may be a situation when it could increase poverty. It happens when inequality pervades, belittling the positive impact of economic prosperity. In addition, economic growth hardly helps the poor to change their status since they rarely receive the benefits (Brady & Burton, 2016). It occurs because the main problem of poverty is the violation of distribution of goods and services among people. It means that the privileged few continue to control the market widening the gap between the poor and the rich. Consequently, the problem of poverty reduction relates to social justice where every person can have a right to receive decent income.
In the case of state assistance to the poor, the governments should not foster social dependency. Paradoxically, poverty is usually generated by the wealth. Thus, the communities that have accustomed to financial support are more likely to become contingent on the government. Obviously, the greater the amount of financial assistance in a rich society, the higher chance that people may be tempted to become poor (Sheedy, 2013). Admittedly, the countries have adopted different approaches to stimulate the society to fight poverty. For instance, in the United States, it is assumed that poverty is a personal choice. Therefore, state aid should not provide a comfortable existence to those who have decided to become poor. The main goals are to change the consciousness of poor people and to make them be active in life. However, this approached cannot be adopted in third world countries since the population does not have any resources to overcome poverty alone.
Obviously, state assistance programs are more beneficial to the poor than economic growth. Economic growth is a long-term process. However, state assistance programs and multilateral assistance provided by various organizations, such as the World Bank, the International Monetary Fund, and the Inter-American Development Bank, have been designed to promote the development of countries quickly (Vegh, 2013). Undoubtedly, these programs are not a miracle that could eliminate poverty completely. However, they are vital because they create a solid foundation where people can start searching for the alternative ways to overcome squalid conditions of their life.
Poverty is a global problem that requires effective solutions which include economic growth and state programs. Undoubtedly, their success depends on the region where they are implemented. Economic growth often does not solve the problem of poverty since it cannot solve the problem of corruption. Unfortunately, state assistance programs might not change the situation as well due to the high level of corruption. However, if the governments start to take responsibility, the insurance programs are more effective because they give real benefits to the poor. Unfortunately, these programs do not cover a great number of people in the developing countries.