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Construction of Poverty - Essay Example

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There are three senses where poverty can be best understood. In the material sense, poverty is used to denote the "deprivation of essential goods and services" which can include basic necessities like food, clothing, shelter, and health care. In terms of social need, poverty implies "social exclusion, dependency, and the [in]ability to participate in society…
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Construction of Poverty
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Download file to see previous pages It is irrefutable that countries have not been totally successful in the alleviation of poverty. During 2001, The World Bank reports that one-third of the world population or less than three billion people live on less than $2 a day. What is also notable is a huge income inequality in the world as the three richest people in the world are seen to have more wealth than all 600 million people thriving in the world's poorest nations. It is also reported that 50, 000 people die each day due to poverty related causes (Millennium Campaign n.d.). These, together with a lot of empirical evidences show how the world thrives in poverty.
There are a lot of factors which are directly linked with poverty. In fact, there is a continuous debate on the underlying causes of poverty making it a politicized issue. Some critics argue that poverty ensues from personal choices or preferences while the other end associates poverty with factors beyond a person's choice. The last view poverty as "the result of many systemic factors" like the lack of opportunity which, is traced to the lack of education which, in turn, is due to the lack of government intervention and provision (Poverty 2006).
This report will look at the causes of poverty, specifically how poverty is constructed or heightened by factors beyond personal choices and preferences. This paper will focus on how different organizations, both public and private contribute to poverty. Institutions to be looked at are the International Monetary Fund, World Bank, World Trade Organizations, and multinational corporations. This report will conclude with its findings.
World Bank and International Monetary Fund (IMF)
Both the World Bank and IMF are agencies which aspire to alleviate global poverty. The mission of World Bank (2006) reads "Our mission is to help developing countries and their people reach the goals by working with our partners to alleviate poverty. To do that we concentrate on building the climate for investment, jobs and sustainable growth, so that economies will grow, and by investing in and empowering poor people to participate in development." On the other hand, IMF (2006) claims that it "provides low-income countries with policy advice, technical assistance, and financial support" and that "low-income countries receive more than half of the technical assistance provided by the Fund, and financial support is extended at low interest rates and over relatively long time horizons."
However, critics argue that these two institutions through their various policies cause poverty in many developing nations. These organizations have also been criticized as they promote poor countries' dependency on richer nations. This section will briefly examine the policies of these agencies which are seen to heighten, instead of alleviate, poverty.
The IMF and World Bank's primary program in reducing poverty is the extension of financial assistance to impoverished nations. However, this financial aid is coupled with "neoliberal"2 ideology or agenda which is a prerequisite for the fund. Examples of these conditions are "cutbacks" or "liberalization" of the economy, opening markets for trade, minimization of government intervention, privatization which causes the reduced protection of domestic industries, currency devaluation, mounts in interest rates, "flexibility" of the labor market, elimination ...Download file to see next pagesRead More
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