Economics

Give reasons why the poor remain poor. Can you suggest solutions to this?

Rich world should 'give till it heals'-Jeffrey D.sachs, 2/4/2005
Working out an escape from poverty-Juan Somavia 12/9/05
Diamonds are a despot's best friend
Equity and growth go hand in hand
Why the millennium goals won't work

1)Corrupt governance
People in power misuse country development funds to advance own selfish interests like amassing own wealth. Eg: President Mr Mobutu in Congo. Between 1972 and 1992, despite the inflow of a considerable sum of aid the country remained shrouded in poverty. The president misused the aid for his own personal enrichment, government expenditures on social services plunged from 17% to 0% while spending on the presidency skyrocketed from 28% to a whopping 95%. As a result, the poor in the country cannot benefit from the aid given.Also, most if not all of the profits earned from the country's sale of resources also end up in the pockets of corrupt politicians. Instead of utilising the financial resources to develop infrastructure to assist the people in escaping poverty, the money is used to fund the corrupt politicians' own vested interests. As such, the people in these countries remain poor.
Solution: Push for removal of corrupt governments. Ensure transparency and accountability of government action that will serve to protect the rights of people.

2)Lack of educational opportunities for self-improvement to earn more money and rise oneself up the social ladder. One of the Millennium Development Goals is to achieve universal primary education. A main function of education would be to empower people with knowledge necessary for them to break out of the vicious cycle of poverty and move up the social ladder. A line of argument would be that when they learn better farming methods to increase their productivity, and their profits increase. With more money earned, they can improve their lives. A larger part of the population can realise their economic potential and this bodes well not only for the country but for the citizens as well.
Solution: As the economies of these countries are usually not well-developed yet, a rudimentary system of schooling could first be introduced. And after the economy is stable, the system can be continually upgraded to suit changing needs.

3)Saddled by debt
Many poor and Third World countries owe the West billions of dollars of debt. Because these countries are required to service the debt, as such they are left with insufficient funds to develop the country
SolutiON: Write off the debts of these countries. For example, the G-8 writing off the debts of 18 poorest nations in the world. The money gained if they don't have to continually service the debt allows them to put it to better uses to develop the economy and improve lives of their citizens.

4)Underemployment or a lack of jobs. Working poor or not having a job at all.
Unemployment is growing at a rate of 26% in the past 1 years.More people are unable to find jobs to sustain themelves and to get out of the poverty trap.


5)Insufficient foreign aid.
Countries promised to provide aid to the poorest countries equal to 0.7& of their GNP. However, many countries are falling behind this goal, for example, US, which just spends 0.15% of its GNP on aid compared to the sizeable 4% of GNPit spends on its military. Foreign aid is necessary to provide the starting blocks from which countries can utilise aid to set the economic foundations of the country like that in Uganda which used to depend solely on foreign aid to set up its economy as it had no natural resources. Therefore, a shortage of aid means less resources to improve the economy to alleviate poverty, as such the poor remain poor.

6) Many of the poor are in Third World countries that are faced with a barrage of unpredictable disasters. These people survive mainly on agriculture and such disasters impose a heavy toll on them. They make heavy losses and take a long time to recover. Coupled with inefficient farming methods, some of them will sink down to abject poverty. To eke out a living based on the unpredictable means that their livelihood is not stable and secure, such that they even have trouble making ends meet. They remain poor as they are unable to eliminate the problems disasters cause them.
Solutions: Try to adopt measure that subject them to minimum impact of weather conditions. Also, set up disaster relief funds and come up with disaster plans so as to spur rapid economic recovery and resilience after a disaster.

7)Many Third World countries are finding difficulty trying to access to EU's and US's agricultural markets so that they can export and sell their produce to earn a living. The high import tariffs imposed on the goods makes gives them a competitive disadvantage. Moreover, farmers in these countries often receive hefty government subsidies to grow their goods as well, for example, cotton farmers. Such an economic setting serves to further disadvantage the poverty-ridden Third World countries. When farmers cannot sell their produce at a profitable price, they can only languish in poverty. Also when the country at a whole is not able to fare well economically, there are insufficient funds to alleviate the people from poverty as well.
SOLUTION: Rich countries remove import tariffs. However, this has shown not to be viable, as can be seen from the failed Doha Round of talks. An alternative could be to suggest to affluent countries to lower their tariffs in intervals and phase them out after some time. However, this solution might not work very well as rich countries still have their own national interests to protect so they might not be very willing to cooperate. Without the success of the trade talks, import tariffs remain high and poor people in ThirdWorld countries will not be able to export their goods. Their markets drastically decreaes and they remain poor.

The primary solution should be first to eliminate corrupt governance, or else the profits and funds garnered from the other solutions mentioned will not go to the intended target group which is the abject poor. After that, there can be focus on spurring economic activity within the country and to teach people proper technology so that they are able to increase productivity adn increase profits. There could also possibly be a larger market for export produce if the Western countries are able to cooperate and remove their export tariffs...

Public Policy

Articles:
"Marshmallows and public policy- The Self-Control Test"-David Brooks - May 12, 2006
"Finding an acceptable balance"-Andy Ho May 11 2006

In the face rapid changes occurring in the world nowadays, the emphasis on values in society is gaining momentum and weight. Public policy makers are awakening to the need to balance economic and social policy to achieve the desired effects of policy making. Some important areas of consideration would be to address the problems of the co-existence of religion and state, and also to inculcate self-control in people so that they can become better citizens to contribute to the country beneficially.

Religion is an aspect that frequently clashes with public policy. In the recent controversy surrounding the release of the Da Vinci Code in Singapore, people are starting to question what it means to shape both religious identity and national identity simultaneously. The state should take this clash of beliefs seriously in making public policy. There were many past instances when there were differing view, once in 2001 about the stem cell and cloning debate, then there was the issue of gambling and casino debate. To achieve effective public policy making, the nation should be able to maintain a creative tension between moral judgment and political or national priorities. Sometimes there are clashes between economic requirements and religious beliefs so there is a need to achieve a delicate balance between the two. Ignoring either side might bring about repercussions.

The main thing about taking into consideration about cultivating self-control of the people is to inculcate in them a strong sense of self-discipline. This is advantageous to the state as people with self-discipline are usually more successful and are not a drain on state resources, so this measure effectively maximises the nation's human resource and is beneficial to the country. While pursuing a high quality education and to ace international grading exams on the level of proficiency in subjects, education systems should at the same time allocate some of its resources to cultivating this aspect of people. Public policy should take into account this aspect and accord required attention. In a classic experiment in 1970, psychologist Walter Mischel left a succession of 4-year-olds in a room witha bell and a marshmallow. If they rang the bell, he would come back and they could eat the marshmallow. But if they did not ring the bell and waited for him to return on his own, they could then have two marshmallows. Eventually, the children who waited longer went on to get into better colleges and earned higher incomes. On the flip side, the children who rang the bell quickest were more likely to become bullies and were more likely to have drug porblems at age 32.

In conclusion, public policy should achieve one main aim, which is to adequately balance state interests with personal beliefs. That is what concludes successful policy making.

population

ARTICLES:
Who will feed the young? - 18/3/06
Japan's population may halve by 2100, says govt
Brake time for world's population

It has been said that taken as a whole, the problem with world population, usually manifested in the shortage of resources is not due to population growth as such but to the inequitable distribution of wealth and resources. What are your views?

There has been increasing pressure and strain on Mother Earth's resources and we often see it manifested in the form of erratic and severe weather conditions that inflict devastation on many areas worldwide. Analysts have attributed the recent shortage of resources to the population boom in the past few centuries. From one billion in 1820, it has soared to a whopping 6.3 billion today, a colossal increase in just a mere 200 over years. In my opinion, this unprecedented population growth has indeed created strains on the resources as with more people, it is natural that they need to use more energy, drink more water, and more resources will have to be consumed to meet the needs of the people. However, one should also not negate the possibility that the inequitable distribution of resources between affluent and penurious countries has translated the population growth to undue strain in the environment, especially for poor countries and on the citizens for industrialised nations.

P: Population growth strains world resources.
R: Rising human populations threaten our environment and prosperity. Rising populations increase energy use, combined with increased consumption, leads to rapid deforestation, land degradation, depletion of fisheries, and many more.
E: On average, each household in Britain produces one tonne of waste a year. Coupled with the fact that Britain has a population of 58.8 million, this means that in a year, Britain alone produces 58.8 million tonnes of waste a year. Moreover, there are 100s of countries all around the world and the people in these countries also produce a sizeable amount of waste yearly as well. The tremendous amount of waste generated from the large world population puts a tremendous strain on the environment. When the waste is incinerated, waste gases produced pollute the air, when rubbish is buried in landfills, many land areas cannot be utilised for other uses.
R: More people will inevitably cause more pollution as more factories have to be built to meet consumer demand, more waste gases produced, and there are some unethical companies also causing water pollution by dumping their industrial effluent indiscriminately. Many other kinds of pollution are likely to ensue as population grows.

P: Unequal distribution of resources causes problems with resources in poorer countries.
R:These countries are often poor and saddled with political rife and unrest. They have little resources except perhaps some natural resources like forests and land. However, these resources are also being quickly depleted. Because of the unequal distribution of resources, poor countries like Cuba with a low total fertility rate of 1.66, do not experience the similar economic prosperity as Denmark with a TFR of 1.7 =population is not the only issue affecting the resources and the quality of living of the people.
E: 17 countries that experience widespread instability and epidemics experience total fertility rates of 6 or higher. The great proportion of population growth that occurs in impoverished countries where the people experience a too mediocre standard of living that they even lack the basic impetus to protect the environment which is a transient issue to them. As most of these countries lack the ability to protect their environment, there can only be more strain on resources which will lead analysts to say that the problem with the resources is due to population growth which in actual fact, if richer countries were faced with this situation, they would be more likely to be able to cope better.


P: In richer countries, there is strain of resources as the greying population strains the countries' financial reserves.
R: More elder people, less younger people to make payments to sustain the social security system in countries. The inequitable distribution of the human resource, much more in poorer countries, and lesser in developed countries , contribute to this problem.
E: Japan, by 2100, the population may halve. The trend could severely hurt Japan's global competitiveness, result in tax shortfalls and an overburdened pension system. A declining population means lesser people to support the pension system and increasing strain on the working population which is a valuable human resource to Japan as well.