POVERTY AN INSIGHT
Poverty is not a
phenomenon limited to the third world countries; under development and even
developed nations have a significant number of people living below the average
income line. As a matter of fact poverty is not a subjective thing though at
times people feel it is; for a lower middle class family living in countries
like India the definition of poverty may slightly differ than those who are
practically homeless. In an economic context if an individual or family is
significantly below the average earnings per person of the nation than he or
she is classified as poor. Even countries like UK or USA have a population of
more than 3 to 5% that can be economically classified as poor.
Poverty an insight |
Now what about the
causes of Poverty; different nations have diverse issues that actually cause
poverty. If we go deep into the details I believe the causes would merit a 300
page comprehensive report often written and presented by leading financial and
economic institutions. However in general I will be listing some of those
causes that can give you some perspective on this issue which plagues most of
the world today.
1-INFLATION:
if you cannot fathom this concept in pure economic terms than in layman style
inflation is a phenomenon when prices of goods rise at a level much higher than
that of the earnings of an average person. We are certainly not talking about
‘Ambanis’ or ‘Tatas’ but a common man. Thus continuous inflation is definitely
one of the causes of poverty.
2-UNEMPLOYMENT:
no need to acquire a PhD in Economics to understand this cause of poverty. If
you are unemployed obviously it puts you in a position where you are not able
to feed yourself or your dependents. When you do not have an income you can be
poor sooner or later. The unemployment rate in countries like India is well
above 15% of the entire population though the official figures may not be so
dismal.
3-ECONOMIC
RECESSION: This particular one is tough to understand or
digest; countries have an ‘economy’ and if government policies are not planned
carefully or executed diligently the result is a slow down in the overall
economy of the country which definitely has its impact on other people. Income
levels tend to fall and you are bound to get poorer day by day.
4-GLOBAL
SCENARIO: countries do not live exist in isolation; they
trade with each other and this leads to FDI or what we call Foreign direct
invest. Then there is the balance of trade; these technical terms may make the
issue cumbersome but simply put if your major trading partner countries are
suffering from economic slowdown it is bound to have an impact on your country
and consequently on an individual as well.
5-LIVING
BEYOND YOUR MEANS: this one may catch you a bit off
guard; but trust me when I tell you this, if you are spending more than what
you earn or even equal to it. You are definitely not saving a dime; this
results in no investments in any business ventures. You have an income of
20,000 and you are saving 0 Rupees from it; the result is that you have nothing
to rely on neither anything to make an investment. Savings make up investments;
and when investments are made it generates revenues for people by creating
employment opportunities and poverty is bound to reduce.
I have barely touched
the tips of the iceberg; the causes of poverty can be multitudinous and may
differ a bit according to each nation. Even political instability can cause
poverty for all these elements are linked together in a vicious circle.
most people would define poverty as government disease though i somehow agree still I dont think they are the sole reason of poverty.
ReplyDeleteyou nail most of the reason of poverty and I so agree with living beyond your means, in my dear country we have the so called one day millionaire living for today and not thinking about tomorrow :) I do understand that it's their choice but then again they should not be wining after that but sad to say often times they do :)
nice article it was long read but it was worth it :)...
Thanks for reading Fina :)
DeleteBe hungry, work smart, work hard, and poverty will disappear.
ReplyDeleteIt is a mental illness, one that can be eradicated when we see abundance despite appearances.
By sharing this truth with all people everybody can be prospering.
Thanks for sharing Akhil!
Ryan
Living beyond the means is huge here in the US. Everyone wants to keep up with their neighbors.
ReplyDeleteSame things here in India too :(
DeleteThis was an interesting read Akhil, thanks for sharing! I will be back to visit more of your posts!
ReplyDeleteSure Melanie :)
DeleteWe try to avoid #5 at all costs. It's hard when you see folks driving around with new cars, living in big houses. We pay off our CC bill every month, currently have no car payment and live in the same house we bought in 1998 - it's nice to have some breathing room (cash flow) and it's nice not to have debt hanging over our heads! (But I still sometimes envy those big new houses!) Are we really better off Akhil? :)
ReplyDeleteWe were almost 7-8 years ago may be!!! I thing envy is human nature actually and we can't change it...We always get fascinated with these things but we can make our mind as you said you're doing by not purchasing a new car and by not renovating or buying a new home. :)
DeleteThanks for touching on this subject. Poverty is something that is happening a lot throughout the world. However, many people do not even take time to think about it.
ReplyDeleteI bet they will!! because poverty is growing too fast
DeleteI am amazed at how many people don't believe this exists in even their own city.
ReplyDeleteThank you for sharing such an insightful article!
Interesting article. I have to agree with all of the points that you made. We work hard to live on less and save more.
ReplyDeleteGood to know about that, keep saving and motivating people around you :)
DeleteAs always great information and absolutely interesting! Poverty is happening and as much as we try, we won't be able to stop it :(
ReplyDeleteIt's sad that so many people do live in poverty.
ReplyDeleteI really need to prepare myself for the worse!
ReplyDeleteWe definitely try to live below our means and save for a rainy day. SOmetimes I want some of the things my neighbors have but then think, don't want their debt!
ReplyDeleteWhen I got divorced I was in a financial crisis. I was a single mother making minimum wage without a car, a phone and about $20 a month for groceries. I have been there and done that. It is a terrible place to be and one that makes a person very humble. I am much older now and live much better but I do not live beyond my means in anyway. It is to easy to have everything taken away from you.
ReplyDeleteVery good post.... #5 describes American culture to a tee, sadly. :( It's probably one big reason the country is struggling so much economically, with this type of mindset so prevalent.
ReplyDeleteThis was an interesting read Akhil. Any way you cut it, it's not an easy problem to fix. By & large it originates from mindset - which is almost impossible to change en masse.
ReplyDelete