What is poverty, how is it measured?

Towards the end of last year (2016), The Nation carried a series of news stories on poverty, mainly focusing on the expiry of the second Malawi Growth and Development Strategy (MGDS II) implemented between 2011 and 2016.

Briefly, the conclusion was that MGDS II, as a tool to fight poverty, had failed to deliver on a number of set targets.
Malawi, as a country, is also often rated among the 10 poorest countries in the world. In fact, in that unenviable bracket of poorest countries, Malawi tends to “jostle” for better positions alongside mostly war ravaged nations despite the country enjoying peace during the 52 or so years of independence.

What is poverty? How is it measured? These two questions often come about whenever people discuss how poor or rich a nation is or indeed its people are.
In economics, poverty is widely defined as a situation when it is not possible for people to meet the most basic needs in life. These basic needs include food, clothing and decent housing (shelter) over their heads. Founding president Hastings Kamuzu Banda (may his soul continue resting in peace) used to describe decent shelter as: “A house that does not leak when it is raining”.
There is absolute poverty and relative poverty. By definition, poverty is said to be absolute when it is measured by set standards such as housing, shelter and food. It is relative where one’s economic situation is compared to another person’s.

In terms of measurement, experts use poverty head-count–a fraction of a country’s population living below the poverty line. According to a World Bank definition, one is said to be living below the poverty line where they live or exist on $1.90 (around K1 300 at current exchange rates) per day.
MGDS II failed to reduce poverty in general and worsened deprivation in urban areas where headcount poverty remained largely unchanged in a statistically significant way between 2010 and 2013, standing at 40.2 percent and 38.7 percent respectively.

Between 2010 and 2013, urban poverty surged 8.3 percent from 17.9 percent to 26.2 percent.
The sharp jump in urban paucity has presented a fresh headache to policy makers who have traditionally invested a lot of thoughts and resources in tackling rural poverty while giving the urban poor a cursory glance.

During the same period of implementation of MGDS II, rural poverty marginally improved from 44 percent in 2011 to 40.9 in 2013. However, looked at proportionally in terms of the urban-rural population, the situation is much worse in villages.

To achieve the rates of poverty alleviation envisaged in MGDS II, Malawi’s economic growth was supposed to average about 7.2 percent per annum between 2011 and 2016. But, in reality, growth ranged from 1.9 to 5.7 percent with an average of 4.2 percent over the implementation period.

Based on the 2012 population census-where the average population growth rate was estimated at 2.8 percent-under MGDS II, growth in output per capita would range from -0.7 to 2.9 percent with an average of 1.8 percent, according to the report.

Unavailability of opportunities to earn income, unequal access to income earning opportunities, failure to take advantage of opportunities and misfortunes in life have often been mentioned as some of the contributing factors to poverty.

In other words, poverty levels can be reduced where people are empowered to own assets and an environment is created to entice more investors to create jobs.
Transparency in job recruitments, especially in the public sector. Some people are not employed despite having required qualifications simply because they are “not connected” to “people of influence” in the public or p rivate sectors.

Safety nets have also been used to tackle poverty usually in the short-term. Here, public works programmes and cash transfer schemes come to mind. 

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