Committed to PEOPLE'S RIGHT TO KNOW
Vol. 4 Num 192 Tue. December 09, 2003  
   
Point-Counterpoint


Beyond the poverty line


There is controversy about Bangladesh's performance in poverty reduction during different parts of the last two decades and about the percentage of the population who are currently living in poverty. But the absolute number of persons living in poverty is so large that there is no controversy about the urgency of reducing poverty. The following discussion will focus on a different set of controversies related to the question of poverty.

Whether a person is poor is decided on the basis of the poverty line. By now, the "poverty line" has become a part of common language and is no longer an economist's concept only. To recapitulate, the line refers to a level of income which is sufficient to allow the consumption of required calories and nutrients and other basic requirements (clothing, housing etc).

The most important controversy about the line is that it is a "livestock" concept and does not take into account the "humane" aspects. Researchers have conducted participatory investigation and found that human beings need the following, in addition to one's own current consumption: cost of schooling of children and for safe drinking water, expenses for essential health services, especially related to childbirth, expenses for legal protection in the case of robbery etc, savings for old age and natural calamity etc. (the list is by no means complete).

However, extension of the list of basic consumption and inclusion of income allocations for some of the items listed above will raise the position of the 'line' and would imply that a larger percent of the population will be labeled as poor.

Though it is not the main concern of this article, it should be clarified that the proponents of poverty line, did not, however, argue that a person must consume the suggested bundle. It is well known that people exercise their freedom and may spend a part of their income on items not prescribed in the bundle. The line cannot ensure that an individual consume the suggested bundle. But as long as the consumption bundle behind the line remains fixed, it can provide an intertemporal comparison of the number and percent of population below the line.

While leakages occur for the traditionally suggested consumption bundle, leakage may be even larger, if the poverty line is drawn with provisions for additional allocations so that it becomes an "effective poverty line" or "human poverty line." In fact, one should not be surprised if a large part of income of some urban poor is spent on harmful consumption items (e.g. narcotics etc).

The list has also been extended to include respect and human dignity which are very much non-material and non-consumption items. Many persons may wish to have these ingredients as much as or more than material well being. This may depend on one's present social status and experience of current deprivations.

In addition, access to social and community services provided by private and public organisations can improve the quality of life. Therefore, the human poverty index has been formulated, which consists of literacy and health related indicators as well as income indicators. This index can supplement the data on income poverty line based poverty estimates.

The current usage of the poverty notions and the emphasis on poverty reduction gives and impression that moving above the line is the ultimate goal. There may be doubts whether the current interest in analyzing poverty and its causes stems from the noble motive of wishing to battle and vanquish poverty, or whether it is just an opportunistic form of donor-driven research. Discussions and refinements of measurement methods, analysis and reanalysis of head-count data and setting and revision of targets of the rate at which the poverty line will be crossed may imply interference by donors in not only research but also in the domestic policies and in the setting of a long-term vision and goal of the society. Another argument against poverty research is that those countries which are poverty-free did not spend time researching and analyzing poverty, rather they jumped straight into action and eradicated poverty through their own initiatives. A third sympathetic voice can be heard, questioning whether the poor are such helpless, fragile creatures that they are subjected to head-count? And is it enough to merely provide them with a bare minimum of food and clothing? Even if the arguments behind some of these questions are not conclusive, the urgency of talking beyond the line must be accepted. The following (and many other) questions trigger this urgency.

Whichever concept of poverty we use, poverty alleviation is all about access to income and movement above the line. It has no link with how income is obtained. Such a notion is devoid of the people's concern about doing, about work and employment, which is the main route through which both poor and rich persons can contribute to the economy and the society. There are many other non-work routes to make contributions to society. Therefore, it should be clarified, why we begin with employment.

In countries like Bangladesh, where unemployment and underemployment rates are high, work or employment itself has an intrinsic value. This may be also valid for many high income countries with high unemployment rates. Type of work also contribute to one's satisfaction (or lack of it). Whether income is received as transfer (or charity) or safety net or through productive employment may thus be as important as the amount of income or consumption. Persons, especially younger persons who are without work and consuming daily rations in father's shelter (the Bangla phrase babar hotel cannot be more accurately translated) would be happier to eat less calories purchased with their own earning from a regular job. Thus, employment enhances both personal satisfaction and also enables a person to make a productive contribution to the economy.

The notion of income poverty line is based on a concept called "utility function" used in economics textbooks. To translate this concept to common language, it describes the behavioral features of human beings' satisfaction. Utility or satisfaction is supposed to increase continuously with increases in two items: income and leisure. Work does not enter the function because the result of work is income, which finds its place in the list. The particular formulation reflects the realities prevailing in advanced industrial economies where work is abundant, or in other words, full employment prevails.

We may think about the possibility of making contributions in another sphere. Irrespective of income and asset situation, one may contribute for the society and for other individuals a part of their wisdom -- which they may acquire not only through formal schooling but also through accumulated experience, spiritual endeavor etc. An immediate reaction to this statement will be that, such endeavor is almost impossible, when people cannot meet their basic needs. High thoughts in empty stomach: only the rich people can suggest such impractical things.

High thoughts by persons with less than adequate calories has been a tradition of this land. Gyan o dharma, joto kabbo-kahini were passed on to generations through informal discussions and teaching methods. Those were days of conviction that the ultimate goal is not material gain, but a freedom of soul, from the wishes of tiny material gains towards an understanding of the mystery of this creation and the intentions behind this creation. According to this view, simple living, sacrifice of material gains (Tyag-tikikhya) are the ideals of human kind.

The new emphasis on poverty reduction raises the question, whether those days are gone, when high thinking and philosophical endeavors amidst poverty were strived for and would command respect? Yes, those days no longer offer promises of return. One of the major reason is that, today, the problem of poverty is further compounded by the existence of inequality of income and its manifestations. The wealth inequalities between countries may be due to a conglomeration of historical and random factors. But the level of inequality that exists within our country is generated by forces which are much within our own control.

In addition to the problems of poverty, another quandary becomes more intense when we witness that like many of the developed countries there are groups within our own poor country who suffer from the opposite of poverty -- i.e. social problems arising from the existence of too much wealth. Not only it is intolerable to silently witness two different problems arising from two extremes of poverty and wealth, but the latter may act as an impediment to poverty reduction as well. A reduction of inequality can be the most effective means to poverty alleviation.

In the past much of the problem of poverty was caused by a lack of productive resources and the lack of suitable means for using many of the resources productively. Now we have the technology to make use of the resources scattered over and inside the layers of the earth. It should be possible to move from poverty to progress using all these assets and ensuring a better distribution of income and asset.

On the hard grounds of economic reality, it is not easy to work out of poverty or to fight along the teacherous paths to reach beyond the 'poverty line' reality. In today's world, individual philanthropic efforts to impact education or to establish health facilities cannot go far. One to one exchange of philosophy or 'Nyay' cannot be sustained.

The institutionalised systems must be made to work. Quality must be ensured in poor people's service delivery points, be it education or health. Movement beyond the poverty line reality will, in addition, require prospects of large scale employment creation, so that everyone can choose to work. It will require such economic growth as will reduce inequality. Other leakages through which inequality increases, must be stopped. All these are known strategies. Then why this is not happening? The problem is not people's lack of willingness to work. The workforce who are at the lowest rung of the ladder are still willing to work. Data on employment creation and unemployment rates, especially among the younger groups with some school education, do not depict an encouraging trend (concrete data and technical aspects of unemployment among new labour force and those suffering job loss may be presented in a future extension of this article). The presence of workforce willing to work at low wage rates should be a sufficient force to shake the conscience of those who cannot create an environment where enthusiasm about productive investment will be streaming in and quality services in social sectors will be available.

When the individual and the nation remain unaware of their abilities and strengths and remain unenthusiastic in a state of lack of work and participation in the development efforts, the more "useful" side of poverty cannot be noticed. Only if a nation and its people will use their own strengths and abilities, the calamity of poverty may be turned into a fight for a sustained improvement in all spheres and for a search of the space beyond the poverty line.

Dr Rushidan Islam Rahman is currently holding the position of Research Director at the Bangladesh Institute of Development Studies.