Stabroek News
April 22, 2001

Last week's presentation on the conceptual weaknesses of the World Bank's poverty measures of US$1 and US$2 per day now widely used as indicators of global critical and absolute poverty, respectively, concentrated on the failure of these measures to envision poverty as a process. As it was argued, these measures are indicators of what has occurred, or outcomes. When poverty is viewed as a process the need for such related indicators as those which highlight the linkage between poverty and unemployment and under-employment, poverty and the proportion of the workforce in low skilled, low productivity occupations; poverty and the lack of access of the self-employed to productive assets and credit; and, poverty and education and household composition, and so forth, becomes readily apparent. Such process indicators present poverty as an on-going phenomenon. One in which persons are born into, move into, remain poor, or escape from poverty.

Systemic origins

Important as these process indicators are they still do not direct us to the systemic origins or causes of poverty. When we turn to consider these it then becomes obvious how difficult it is to find a generalized, uniquely global characterization of poverty. Indeed, to be meaningful, poverty has to be located in its historical, social, cultural, and economic context.

It should not be overlooked that the poor occupies certain historically conditioned situations in society, as in fact do those who are not poor. Clearly therefore, the relations between those who are poor and those who are the wealthy in society would determine in large measure how much attention and how much resources are directed to poverty reduction as against efforts to contain social explosions by the poor. The poor in most societies is socially marginalized, politically powerless, as well as systemically lacking in economic assets and income, in ways which are culturally and historically fashioned.

This difficulty of finding an acceptable universal measure of poverty should encourage us therefore to pay particular attention to its specific social context, when addressing it.

The only Region whose poverty characteristics I am familiar with, having made it the subject of a number of research reports and academic papers, is Guyana and the wider Caricom. That experience has led me to the view that there are at least five types of poverty which exist in our Region. A household may belong to one or more of these types, but the main idea is that each type of poverty is determined by its own central dynamic and rhythm, which governs its evolution through time.

Types of poverty

The first type is what I have termed as a "hard core of systemic poor." These are persons who are born poor and remain so over their lifetime.

The systemic cause of their poverty is the underdeveloped state of the national economy and the manner in which persons in this category have been historically located in the system of production, the ownership of assets, access to credit, and ability to garner public resources to help them and their communities to overcome this historical condition.

The second type I have referred to as the "newly poor." The main feature of this group is that traditionally the classes and social strata they come from and the occupations they hold, have shielded them from poverty. In this category I would include such persons as those who work as teachers, clerks, and salespersons in small establishments, security workers, and so on. However, as a consequence of the Economic Recovery Programme (ERP) and other stabilization measures pursued elsewhere in the Caribbean the real income of this group was severely compressed. Cuts in public expenditure led to layoffs and wage freezes, while falling demand led private sector firms to retrench. Of course, if the economy grows and public and private expenditure rises the fortunes of this group could be reversed.

The third group is the "transient poor." This group is made up of persons who move in and out of poverty from time to time. Why does this occur?

Very often it is because these persons work in seasonal occupations. For example agricultural workers, or in the island states of the Caribbean those heavily dependent on seasonal tourism.

The transient poor also rises and falls in numbers with the overall level of activity in the economy, or the business cycle of the market economy as it goes through its recession and boom phases.

The fourth category refers to a phenomenon that is becoming increasingly noticeable. In the 1960s and 1970s much of the poverty in the Caribbean was linked to unemployment.

Over the past decade the trend has been for persons to be working in such low-paid jobs that the households they support are poor. This category I refer to as the "employed poor."

Finally, in all the societies there are particular groups of persons who are poor for a variety of reasons. This assemblage I have referred to as "special categories of the poor."

In Guyana the most distinctive example of this is the Amerindian community, as the income and consumption measures of poverty show that Amerindians, are the poorest of the poor.

We noted last week that the national poverty rates in Guyana for 1999 were 36 per cent absolute poverty, and 19 per cent critical poverty and that this marked an "improvement" from the year 1992/93 when the respective rates were 43 and 28 per cent. However, among the Amerindian communities the measures of absolute and critical poverty were more than twice as large.

No social vacuum

Focusing on the origins and causes of poverty is important as it dramatizes the fact that poverty does not exist by itself in a social vacuum as it were.

Nor, for that matter should the poor be blamed for their condition. Poverty is a complex social phenomenon, which is inseparably linked to inequality, marginalization, dispossession, and powerlessness. From this linkage a 'culture of poverty' often emerges, as it has in the Caribbean. When this happens, poverty becomes as much a psychological condition as an economic and social phenomenon.

Excepting for religious devotees and such like, persons do not choose to be poor. If anything, their drive is to escape from poverty as it is a form of bondage and confinement of human potential.

Because of these observations the increasing thrust has been to search for broader more acceptable measures of global poverty.

There is no doubt that the most successful attempt so far has been the UNDP's family of development indicators. In particular, there is the UNDP's Human Develop-ment Index and Human Poverty Index.

These data are available annually for almost all countries and now rival the World Bank's US$1 and US$2 per day approximation of global poverty.

Next week we shall look at these measures and the recent United Nations indicators introduced in its Year 2000 Report entitled, A Better World for All.