Home ›› 19 Aug 2021 ›› Editorial
Digital technology and the use of cyberspace have erased frontiers over the last decade and have helped spur economic development throughout the world. Due to the use of electronic and social media, the international community is also more aware of the scourge of poverty. We are now confronted in real time with tales of prevailing inequity, discrimination and corruption that might have facilitated the growth of underdevelopment or misuse of scarce resources.
We need to refer in this context to the global initiative to reduce poverty through the Millennium Development Goals (MDGs). This has helped take us forward. The problem has, however, remained on a large scale in several areas in South Asia and in Africa. There has also been special focus on South Asia, with its population of nearly 1.5 billion which includes about 360 million living below the recognized poverty line.
Some measure poverty as a form of income deprivation and try to identify changes in the level of poverty through the index related to the rise and fall in the income of poorer people "above and below the poverty line". According to this equation, if the income of the poorer people improves marginally, sufficiently enough to carry them over a predetermined poverty line, it is then recognized as a form of poverty reduction.
However, the problem with this precept lies in the continuity of vulnerability with such people who still exist on the margins. For example, slight movements upwards and gains, as is evidenced by people living in the coastal areas in the south-west of Bangladesh, could easily be wiped out with one single natural disaster. It then moves back to square one.
Such continuing challenges have persuaded economists to redefine poverty as a process and try to understand it as a format that might be excluding sections of the population from participating within the economic process on equitable terms in terms of opportunities, either because of discrimination or politicization or mis-governance. They are also monitoring if efforts for further improvement of living standards and making them permanent is being held back due to absence of scope of credit extension to such marginal communities.
Analysts now appear to be in agreement that realistic policies for poverty reduction should also identify the difficulties and then help create opportunity structures for the excluded segment of the population. They stress in this context the need to initiate measures that will enable the neglected sections of the population to avail of work, healthcare, and education and also credit facilities. This will then assist in the generation of micro-entrepreneurship. It is felt that if such a structural facility can be assured, market forces will then move the wheel forward.
It is generally believed that such an approach based on the structuralist perspective of poverty reduction eventually creates the momentum that generates a larger and wider number of assets in the form of human resources and also removes existing unequal capacity. This, in turn, promotes the possibility among the 'excluded' to participate not only on an equal basis in both domestic and global terms but also to be able to stand up to any misgovernance arising out of abuse of political power. This also enhances culpability and accountability. Such a matrix, in turn, has a multiplier effect and can considerably reduce transaction costs. Relevant institutional structures can then take this forward.
Consequently, if one analyses the socio-economic matrix from this point of view, one can attribute structural injustice as being related to certain decisive factors that create opportunities - productive assets, markets, prospective possibilities for human development and governance - or hampers their evolution. Any asymmetry within these factors affects eradication of poverty in the affected population.
Professor Rehman Sobhan has quite correctly underlined that areas where evidence of poverty exists, reveal that 'inequitable access to wealth and knowledge'. Several surveys carried out by civil society in Bangladesh have, consistent with this presumption, revealed that rural poverty tends to originate from insufficient access to land, water and water bodies. Within this scenario, the landless or land poor have to access to such resources under 'exploitative tenancy arrangements'. This is also true in the case of the urban poor without sufficient access to corporate assets. This dynamics perpetuates poverty.
Land ownership, for example, in a densely populated country like Bangladesh, both in its urban and rural areas, has also another connotation. It not only has income generating potential but also unfortunately becomes a measure of reflected power and position within the social hierarchy. It also sits as a buffer for garnering credit from financial institutions when required.
It is consequentially generally agreed that 'inequitable access to productive assets', particularly in South Asia's rural economy, has affected the region's agricultural performance. This has resulted in it being below its productive potential. This has also impeded those without land from being able to come out of the rural poverty trap.
Lately, however, small and subsistence farmers have been focusing on stimulating secondary activity in the rural economy. This has contributed significantly to the growth of non-traditional farm economies and to the reduction of income poverty. Excellent examples of this have been poultry farming and cultivation of high-end fruits like strawberries and dragon fruits for eventual marketing in urban areas. Some others in the south-western parts of Bangladesh have also got involved in flower cultivation as a cash crop.
Another aspect that is playing an inclusive role in promoting the economic prospects of the rural poor is digitalization and mobile phone technology. The unfair advantage enjoyed by unscrupulous middlemen in the marketing of products has been reduced. The rural producer is now able to ascertain the potential retail price in urban markets and that impact on the profit margin of the middlemen.
Meanwhile, the micro-credit facility has originated as a riposte to the failure of the formal credit market. In practical terms it may have helped to meet the subsistence needs of a section of the excluded but it definitely does not appear to have empowered its clients sufficiently to be able to participate in the context of the macro-economy. As a result, its clients have remained, according to some economists, impounded in the ghetto of the micro-economy with its limited potential and high interest rates.
It would be necessary to refer here also to the fact that low productivity is an important factor associated with income poverty. This, in turn, affects access to higher levels of education and technology at an affordable price. It is this which makes it imperative for the political authorities to spend more on providing education and vocational training in an inclusive manner. This will build the human resource base that is essential to emerge from poverty.
Fortunately, for us in South Asia, some countries, including Bangladesh, have introduced the vital process of Right to Information. This is assisting in the process of accessing vital information by the disadvantaged and sections of the minority community. It is also promoting gender empowerment, good governance and accountability through transparency.
We need to understand that any form of poverty is unacceptable and needs to be removed through correction of the factors that might have caused it. We need to intervene in a coordinated and meaningful manner that is inclusive, collective and able to rise above political frontiers. Removing impoverishment is consistent with democratic values that maintain that we are all equal and that some are not more equal than others.
The writer, a former ambassador, is an analyst specialized in foreign affairs, right to information and good governance
