Poverty alleviation: Consider the income-based approach

That a pest has been in existence in the last 1 000 years does not justify ignoring pesticides.

By George Musvovi

Most African citizens are impoverished.
Most African citizens are impoverished.

The same can be said about poverty.

We can no longer afford to be miserable about past failures of poverty reduction initiatives.

The definition of poverty varies depending on who is defining it, hence the poor, politicians, development practitioners, NGOs, academics and international organisations have their own definitions.
Against such a background, defining poverty is fraught with complexities.

As such, the failure of some poverty reduction programmes can be attributed to many factors, chief among them, a flawed, broad, unachievable and politicised definition of poverty.

The English word “poverty” came from Latin word pauper, which means “extremely poor”.

The definition of poverty depends largely on context and the view of the person or party giving the definition.

There are basically two views on poverty, the income or monetary and non-money metric (the social aspect of poverty) views. Therefore, the starting point is an attempt to re-conceptualise the definition of poverty towards the determination of the best workable view.

Traditionally, poverty is failing to meet a realistic minimum level of income or expenditure as defined by a given society.

Absolute poverty or destitution is lacking the minimum amount of income to afford basic needs, which includes clean water, nutrition, healthcare, education, clothing, and shelter.

Relative poverty means the condition in which people lack the minimum amount of income needed to maintain the typical standard of living in a society.

The most achievable, yet unlikely to be believed definition of poverty is the global absolute poverty by the World Bank where poverty is set at an income of US$2 a day or less, and extreme poverty is set at US$1 a day or less.

More developed countries are permitted to set their poverty lines elsewhere. The idea is the quantification of basic needs into monetary terms. The rationale for using the aforementioned traditional money-metric methods is that if a household is able to meet all its income or expenditure requirements, chances are high it will be able to be free from any deprivation.

Composite social aspects of poverty indices were developed in the early 1990s and refined in 2011 to pair the money-metric measures of poverty.

These are the Human Poverty Index (HPI) and Human Development Index (HDI). In 1997 the United Nations developed the human poverty index (HPI).

The HPI intends to cater for desperately poor, particularly African nations, where their poverty is also due to deprivations. The main argument with HPI is that poverty is not only about the lack of income, but wider aspects of deprivations.

These deprivations include lack of a long and healthy life; knowledge; lack of access to health care; safe water and sanitation; lack of adequate food; freedom of participation; human rights among others. Consequently, this makes poverty a multidimensional and a confusing subject.

On the other hand, HDI views people not as a means to development, but as the ultimate beneficiaries of the development process in which they should participate actively.

HDI measures the average achievements in a country in three basic dimensions of human development: a long and healthy life as measured by life expectancy at birth; knowledge as measured by adult literacy and average years of schooling; and a decent standard of living as measured by mean income per person.

The concept of HDI has been continuously refined by the United Nations to include a key issue like sustainability. However, this makes poverty a broad term yet poverty is simply a household issue.
Furthermore, poverty can socially link conditions of scarcity to the distribution of resources and power in a society. Therefore, social aspects of poverty may include lack of access to information, well-being, or power.

The extreme angle of looking at the social aspect of poverty is security (knowing what tomorrow will bring and how we will get food). Such definitions of poverty make everyone in a country poor to some extent, making poverty reduction a tiresome initiative.

For most of economic history, poverty had been mostly accepted as inevitable as traditional modes of production were insufficient to give an entire population a comfortable standard of living.

After the industrial revolution, mass production in factories made basic needs increasingly more inexpensive and accessible.

The modernisation of agriculture, through the use of advanced types of machinery, have led to the provision of enough to feed the entire population largely for privileged nations.
Surprisingly, a bundle of developing countries has been on a bandwagon of launching Interim Poverty Reduction Strategy Papers (IPRSP), hoping that the successful implementation of the IPRSP should lay a firm foundation for the implementation of a full Poverty Reduction Strategy Paper (PRSP) — which has been greatly futile.

Countries seeking debt relief through the Heavily Indebted Poor Country Forgiveness (HIPC) initiative had to prepare a full PRSP to demonstrate how funds saved from debt servicing would be harnessed to alleviate poverty.

Currently, developing nations like Zimbabwe have an IPRSP (2016-2018) anchored on seven broad pillars, namely: Agricultural Productivity, Growth and Rural Food Security; Social Sectors; Private Sector; Infrastructure and Climate Change; Environment and Climate Change; Gender, Women and Youth Empowerment; and Strengthening Governance and Institutional Capacity.

The chief problem with this approach is an attempt to achieve so many things simultaneously, while mistakenly equating growth in national output with poverty reduction. The end result is spreading resources, rendering poverty reduction ineffective.

Nevertheless, some poverty reduction initiatives are broad yet there is a need to narrow and make them effective based on available resources to avoid “spray gun approach” to poverty reduction.
Initiatives should simply target availing basic human needs or increase the disposable income to purchase those needs. These include increasing the supply of basic needs through mass production by reviving the manufacturing and public sector, making goods inexpensive and accessible to the poor.

Similarly, increasing personal income by creating formal jobs or supporting informal entities is described as the core and quickest methods of the anti-poverty effort as three-quarters of the poor are believed to own labour or informal entities as a means of survival.

Deductively, economic agents in developing nations ought to focus on money-metric income poverty since they lack the capacity to address all poverty definitions. Poverty reduction must be based on a diagnostic analysis of the most binding poverty definition and then focus on attacking that poverty type in a narrow sense.

As a way of laying a compact foundation for poverty reduction, government should focus on building conducive “rules of the game” or institutions, while other economic agents are focussing on attaching money-metric poverty.

The Institute for Sustainability Africa in partnership with the Netherlands embassy have successfully piloted a mushroom poverty reduction initiative with the Zimbabwe Association of Crime Prevention and Rehabilitation of the Offender and ZELWIM Trading with the field technical support of the Ministry of Agriculture.

This initiative was part of a vision for sustainable employment creation for vulnerable group in our society which targeted supporting efforts of the Zimbabwe Prisons and Correctional Services in reintegrating ex-inmates back into society in a way that does not plunge them into poverty after serving sentences.

The initiatives kept poverty definition simple: monetary-based absolute poverty. Through proper training on business skills, the programme reintegrates women back into the society after serving their prison terms.

This was against the background that ex-prisoners, male or female, face labor market discrimination in the form of a requirement for a clean criminal record as a condition of employment.

Based on the documentary evidence, as contained in a DVD produced for the programme, the model used in implementing this pilot programme could achieve greater results towards sustainable poverty reduction in Zimbabwe if partners would support expansion and new phases with different groups.

George Musvovi is a development economist with the Institute for Sustainability Africa. These New Perspectives articles are co-ordinated by Lovemore Kadenge, president of Zimbabwe Economics Society. E-mail: kadenge.zes@gmail.com and cell number +263 772 382 852.