The problem of poverty is one of the most important in the world, which means the inability to provide necessary living conditions for most people in this country. Large scale of poverty, particularly in developing countries, is a serious threat not only to national, but also to the global sustainable development. Poverty is a condition caused by a lack of material resources to maintain a normal life, which is the usual and typical for a large part of society.

There are following groups of poverty:

  • Families of workers with low wages, especially in rural areas and small towns, including the unemployed. They form the so-called “economic poverty” and “new poor”;
  • Single pensioners or family pensioners with dependents;
  • Traditional poverty: incomplete and large families, families with disabled.

Poverty is caused by low quality of life due to small or insufficient monetary income property, especially housing. At the same time, the reasons for the low level of income can be such characteristics as poor health, lack of education, lack of competitiveness in the labor market, poor quality of family life, disability and limitations in other social settings (“Causes of poverty”, n.d.).

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There are following levels of poverty:

  • National
  • International

The national poverty rate is the share of population living below the national poverty line. In most countries of the world, living under the national poverty line means having an income below the subsistence minimum. This income cannot cover the costs of the consumer basket. Consumer basket is a set of essential goods and services by the standards of the country in a certain period of time. In many developed countries under the poor means the people with an income of 40-50% of the national median income.

International poverty level is the income, providing the consumption of less than $2 a day. Income, providing the consumption of less than $1 a day, is an international level of extreme poverty. This is an extreme level of poverty from the standpoint of human survival.

In world practice, there are three key concepts in the approach to the definition of poverty:

  • The concept of absolute poverty is based on the definition of income required for basic subsistence needs of the individual or family. The concept determines the official poverty level.
  • The concept of relative poverty used as the main criterion for the minimum human needs, and as the ratio of indicators of the wealth level in a given country. With this approach, the poor are those whose income does not exceed a certain percentage of the average income in the country (40, 50 or 60%).
  • Subjective poverty concept is based on the subjective determination of funds for socially acceptable standard of living. These concepts in a pure form do not apply; each country develops its own system.

Social poverty is identified primarily with the traditionally poor and poorly protected categories (large and incomplete families with children, single pensioners, the disabled), which have special difficulties in finding jobs.

Economic poverty is a concept referring to the employable citizens who are not currently providing an acceptable socially standard of living, and determine the conditions of the labor market (unemployment, vulnerable employment, the prevalence of low-paying jobs, etc.).

According to World Bank estimates, the total number of the poor, living on less than $2 a day, is the 2,5-3 billion in the world, among the total number of people living in extreme poverty (on less than $1 a day) – 1-1,2 billion people. In other words, 40-48% of the world population is poor, and 16-19% is extremely poor.

Since the 80’s XX century to the beginning of the XXI century number of people living in extreme poverty fell by about 200 million. This was mainly by decreasing the amount extremely poor in China.

There is a tendency to decrease the extremely poor number in other populous nations, such as India, in the early 90’s. At the same time, in sub-Saharan Africa for the past 20 years, by contrast, has been a steady increase in the number of extremely poor.

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The distribution of the poorest by the regions of the world since 1980 has not changed significantly. Two-thirds of the world’s poor still live in East and South Asia and a quarter – in Africa. Majority of the poor population lives in rural areas of developing countries.

In some developing countries, the problem of poverty has reached a critical level. For example, at the beginning of XXI century, 76% of Zambia’s population consumed less than $ 1 a day, 71% – Nigeria, 61% – Madagascar, 58% – Tanzania, 54% – Haiti. Since the early 90’s XX century, the problem of poverty and extreme poverty touched the former socialist countries. For example, in Moldova the poverty has reached 64%, and the category of extremely poor – 22% of the population (2001), in Mongolia, 75% and 27% (2001). According to a survey conducted by the World Bank in 2002, the share of the population living on less than $1 a day, less than 2%, with an income of less than $2 – 7,5% in Russia.

The most important factor in addressing the problem of poverty is economic growth, because that economic growth leads to an increase in gross national income, which forms the consumption fund. The main way of solving this problem is to make effective social policies. It should include the provision of assistance to the poor families, protection of living standards, development of education and ensuring people’s qualifications, unemployment assistance, and protection from monopolies. All developed countries in the world constantly continue to improve their systems of social assistance to the poor. They try to find the precise point at which this support should not go out. The very foundations of the economy, namely the willingness of people to work, should not be undermined. This is the only way to provide the citizens and their families with dignity and, in fact, a comfortable existence.

There are following ways to solve the problem of poverty:

  • Creation of conditions for sustainment of a normal level of welfare for all families.
  • Formation of effective support for vulnerable groups (the elderly, disabled, families with a high dependency burden, families in extreme situations) and guarantees of non-discriminatory access to free or subsidized resources;
  • The role of trade unions and government in providing rights to the workers, especially the disabled, women and parents with young children, workers from single-parent families, and young people should be increased.
  • Growth of the minimum wage, reducing the number of low-paid workers should be a major factor in reducing poverty.
  • Increase of employment.
  • Improving the social assistance of vulnerable groups: people with disabilities, seniors, single parents, refugees and others. (Crone, 2010).

Special urgency to problem of global poverty makes the fact that many developing countries due to low incomes do not have a sufficient capacity to mitigate this challenge. That is why wide international support is required for liquidation of poverty in the world economy. More and more attention from the international community should be paid to the problem of poverty. In 2000, the heads of government of 180 countries of the world signed the Millennium Declaration identified eight key challenges of global development for the period up to 2015, and called the international economic organizations to focus their aid programs to achieve them. The problem of reducing by half the number of people, forced to survive on less than $1 a day to 2015, has become the first among the objectives of the Declaration.

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There is a huge gap between “gold” and “hungry” billions; they have contrasting levels of quality and lifestyle. In the era of globalization, socio-economic polarization of humanity at the endpoints increases. At the beginning of XXI century the share of the most developed countries consist less than 12% of the population and about 60% of world GDP.

The inability of poorest countries to escape poverty on their own makes the problem of global poverty universal. The world community has a strong belief that the gap between rich and poor countries and people cannot be overcome by relying on the natural course of events, without a coordinated effort at all levels – from local to global. In its current form globalization, giving the world unprecedented integrity until now, does not destroy or reduce the internal contradictions and polarization of humanity. On the contrary, it increases and intensifies it.

The main danger of dividing the world into zones of wealth and poverty is the increasing connection between poverty and other global threats and risks such as illegal immigration, terrorism, the growth of transnational crime, etc.

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Social tensions, generated by the backwardness and poverty alleviation urge politicians and governments of poor countries to search for internal and external enemies; it also multiplies conflicts in the developing world and increases the danger of international terrorism. In a globalizing world all countries become vulnerable, regardless of their size, wealth or location. World poverty creates another serious problem for the developed world. Miserable existence, insanitary conditions, poor health create a conditions for the spreading of infectious and epidemic diseases that are dangerous for the developed countries to (HIV, Ebola, SARS and other pandemics).

Today, three quarters of the planet’s poorest inhabitants live in rural areas. However, urbanization is fundamentally changing the scope and nature of poverty. In 1950, the number of urban residents was one third of the world population in the 2000s – half, and by the middle of the XXI century, as predicted, the share will reached two-thirds. In 2005, 30% of the citizens of the world – 1 billion people – live in slums. The highest share of slum citizens inhabit in sub-Saharan Africa and South Asia, where it is more than 70% of residents. To the mid 20’s the number of slum dwellers will reach 2 billion with the current rate of urban population growth and income distribution. Life in the slums – is a high level of morbidity, infant mortality, crime and other forms of antisocial behavior. Closeness of life perspectives creates breeding ground for instability and increases the potential for violence. The world is sitting on a time bomb.

As a result, poverty is a complex issue: economic, social, cultural, political, international with a great destabilized potential of the global scale. There is no doubt that in the next decade, it will be one of the sore points of the global agenda.

The new report of the United Nations (UN) shows, that the world’s richest countries do not follow their responsibilities to combat poverty and must provide in this regard $18 billion more each year. In the report government of the U.S., Japan and the European Union are especially criticized. In addition, the document calls for redoubled efforts by governments towards the formation of rules of trade between rich and poor countries, which would facilitate poverty reduction. In this regard, the UN adopted a number of programs that are aimed to eradicate poverty. Although the first programs to eliminate poverty began operating 10 years ago, but the number of people living below the poverty line has not decreased. According to the UN report, poverty is not only a lack of money, but rewarding work, comfortable housing, access to good education and health care.

Specialists are concerned about the rise in food prices. Not less than 850 million people in the world suffer from hunger, the UN provided by food only a small part of needing – about 90 million. In such conditions these people may be left without help. UN budget may not be enough to help Africa and other poor countries. According to the UN, from the six billion people, half a billion are chronically malnourished. And one-third of which are children.

The World Food Programme (WFP) humanitarian missions provide famine relief in a number of countries, including Chad, Uganda and Ethiopia, as noted in Financial Times (“Financial Times Magazine”, n.d.). In 2006, the organization has spent on food about $600 million. The Executive Director of the World Food Programme (WFP) Josette Sheeran once explained in an interview with Financial Times, that the rise in food prices on a global scale is mainly caused by the increasing demand on biofuel – it is produced mainly from grains (mostly corn) and fruits. Therefore, the purchase prices for the last five years have grown by 50%. The only solution may be additional funding from donor countries for the implementation of food program. The world is in the midst of food crisis. The way out of it may take several years.

In an effort to remain or become competitive in economic terms, governments and employers around the world have taken numerous steps to increase the flexibility of the labor market, thus creating a greater problem of insecurity among most groups of workers, according to a UN report about the World Social Situation 2007. Around the world, informal employment and short-term contracts increase and give fewer rights and little confidence in relation to the employment of workers. Most young people in the world live in poverty, and a total of 130 million young people are poorly educated. In September 2000, at the summit of the heads of the UN 147 countries adopted the Millennium Declaration, in which one of the goals proclaimed reducing poverty by half by 2015.

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