TOPIC 4.POVERTY

POVERTY

Indicators of Poverty

Meaning of Poverty

Define poverty

Poverty refers to a situation where a person cannot attain the minimum level of well-being. The concept of well-being can be applied to different dimensions like consumption, income, education and other basic needs.

·         Poverty is characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information.

·         Poverty is also characterized by lack of income and productive resources to ensure sustainable livelihoods, hunger and malnutrition, ill health, limited or lack of access to education and other basic services. Poverty also includes homelessness and inadequate housing, social discrimination and exclusion.

·         It is also characterized by lack of participation in decision making and civil, social and cultural life.

The main poverty line used in the Organization for Economic Cooperation and Development (OECD) and the European Union is based on “economic distance” - a level of income set at 60% of the median household income. This states as follows:

1.       In 1985, a poverty line set as US $ 14.40 a day per person. This was suggested for industrialized countries like the USA.

2.       By 1987, a poverty line set at US $ 2 a day per person. This was suggested for Middle East and North African countries.

3.       In 1990, a poverty line set as US $ 4 a day per person. This was suggested for Latin America.

4.       In 1990, a poverty line set as US $ 4 a day per person. This was suggested for Eastern Europe and Commonwealth independent countries.

5.       In 2008, a poverty line set at US $ 1.25 a day per person. This was suggested for sub-Saharan African countries.

The International Poverty Line gives us a convenient way of understanding the state of poverty. However, it is a very blunt instrument for measuring a complex phenomenon. This is because:

1.       It does not take into account the cost of living differentials within countries. US $ 1 will buy different amounts of goods in urban and rural areas. For instance, food may cost more in urban areas.

2.       It does show who lives in permanent poverty and who lives in temporary poverty.

3.       It does not consider the distribution of income within the household. Distribution of income is sometimes affected by gender.

4.       It only values goods which are delivered in the market. In many poor countries people grow and rear food and animals respectively for their own consumption.

Different Levels and Types of Poverty

Point out different levels and types of poverty

Levels of poverty

The assessment of levels and trends of poverty is complicated by the lack of consistent information and absence of officially recognized poverty lines. This problem has forced some studies to develop and usetheir own lines. Thus, the lower lines donate basic food needs based on specific assumptions about eating habits, nutritional requirements and cost, while the upper lines cover in addition to such food requirements, and other essential needs such as clothing, housing, water and health. A poverty line of US $ 1 per day in real terms has been used by the World Bank to facilitate comparison with other countries.

The situation and level of poverty varies among community members and can be grouped into three categories depending on the degree of dependency and possession of valuable assets.

1.       The first group consists of those who have no money or possessions and have lost hope. They do not have enough food and in most cases depend on charity for survival. They are unable to sustain themselves. Most of these people are either too old or young and handicapped to work. Within this group also is a small fraction of the less poor who consist of few families - mainly single parents, widows and women married to irresponsible alcoholic husbands. They have inadequate standards of living and are often the most vulnerable in society. For those families, meeting the most basic needs is a daily struggle. These people are the source of cheap labour in communities.

2.       The second group consists of people who can meet their basic needs but do not have sufficient income to have any surplus income. This group comprises of many workers who are being paid low or insufficient salaries - asalary whichenablesthemto meet onlytheirbasic needs.

3.       The third group consists of the rich. At a village level, a rich person has all the material necessities of life such asadequate food to feed their children properly and live in good houses made of bricks and roofed with corrugated iron sheets. They are able to assist others or hire their labour. They have a reliable source of income either from livestock or agriculture. They produce in surplusandpossess valuable assets such as radios, television, bicycles, and motorcycles, and have money to purchase basic essentials like clothes.

The World Bank has set the International Poverty Line at an expenditure level of $ 1 for every person a day. This figure represents the minimal amount on which a person is considered to be living in absolute poverty, if his or her income falls below this line. By this measure, at the present time about 1.2 billion people are living below this line calculated using purchasing power abilities which take into account difference in prices of goods in different countries, and allows us to compare poverty levels internationally. However, if someone is below the poverty line it is probably the person is living in a community without access to clean water, but this is not always the case and some countries have managed to reduce elements of human poverty than income poverty.

A developing country is a nation where the average income is much lower than in industrial nations; where the economy relies on a few export crops, and where farming is conducted throughprimitive methods.

Types of poverty

1.       Absolute and relative poverty. Absolute (extreme) poverty refers to a set standard which is consistent over time and between countries. The World Bank defines extreme (absolute) poverty as living on less than US $1.25 per day, and moderate poverty as less than US $ 2 a day. It estimates that in 2001, 1.1 billion people had consumption levels below US $ 1 a day and 2.7 billion lived on less than US $ 2 a day.

2.       Relative poverty views poverty as socially defined and dependent on social context, hence relative poverty is a measure of income inequality. Usually, relative poverty is measured as the percentage of population with income less than some fixed proportion of median income. Relative poverty measures income inequality rather than material deprivation or hardships. The measurements are usually based on a person‟s yearly income and frequently take no account of total wealth.

Indicators of Poverty

Identify indicators of poverty

The indicators of poverty include high rates of morbidity and mortality, prevalence of malnutrition, illiteracy, high infant and maternal mortality rates, low life expectancy, poor quality housing, inadequate clothing, low per capital income and expenditure, as well aspoor infrastructure. Others include high fertility rates, lack of access to basic services such as safe water, food insecurity and poor technology. These features can be used to identify poor and non-poor individuals, households or communities. An individual, household or community found to be characterized by some or all of these features can be identified as being poor.

Most elements of indicators of poverty are mainly based on economic considerations. Consequently, many of these indicators are quantifiable. Recently, the definition of poverty has been further broadened. The new definitions incorporate problems of self-esteem, vulnerability to internal and external risks, exclusion from the development process and lack of social capital. The new definition of poverty captures the qualitative aspect of socio-economic well-being. A combination of the quantitative and qualitative definitions of poverty are utilized to identify who the poor are and the extent of their poverty, where they live and what they do for a living. These definitions also influence the design of pro-poor policies for economic growth, public expenditure, safety net programmes and tools for assessing the impact of programmes and projects on poverty reduction.

Generally poverty is a result of many and often mutually reinforcing factors including lack of productive resources to generate material wealth, illiteracy, prevalence of diseases, natural calamities such as floods and drought, and man-made calamities such as wars.

At the international level, an unequal economic and political partnership, as reflected in unfavourable terms of trade and other transactions for developing countries, is also a major cause of poverty in these countries. Some causes of poverty are not direct, for example traditions and norms which hinder effective resource utilization and participation in income –generating activities.

Poverty is one of the global problems that have hindered socio-economic and political development of many societies.

Different Indicators of Poverty to the Tanzanian Situation

Relate different indicators of poverty to the Tanzanian situation

The Tanzanian economy is heavily dependent on agriculture, which accounts for about 50 percent of the gross Domestic Product (GDP). Agriculture provides 85 percent of exports, and is by far the largest employer. Lack of technical know-how, agricultural input, capital, unpredictable climate and unreliable markets contribute to low levels of output.

Lack of clean and safe water in a community is one of the major indicators of poverty. Tanzanian statistics show that by 1993, this service was provided to 75 percent of urban dwellers compared to only 46.4 percent of those living in the rural areas. As discussed earlier, more than 70 percent of Tanzanians reside in rural areas; therefore the majority of the population has no access to clean and safe water. Women and children are the most affected citizens. Traditionally, women have the role of fetching water for the family; they have to walk many kilometers looking for water. Currently, community members rely on swamps and other dirty water sources, which are mostly used by cattle and wild animals.

It is estimated that up to 1977, 73 percent of Tanzanians had basic literacy skills. However, this has been declining year after year. For example, in 1993 it had declined to 63 percent, while only 68 percent of all children of school going age were enrolled in primary schools.

The main reason for the decline is the introduction of the cost-sharing system in the 1990s whereby every family was required to pay school fees and other school-related costs, which were previously covered by the government. As a result of the poverty in the country, many rural families found it difficult to meet the costs. Thispartly contributed to the increased number of illiterate cases and school dropouts in the country.

The per capita income of Tanzania is estimated at about $ 250 per year. Through experience the $ 250 would not last for more than three months in a normal Tanzanian family which in most cases includes children and members of the extended family.

The situation of family income, particularly in rural communities, is probably worse today because most families are heavily dependent on agriculture which in turn isaffected by unpredictable rainfall, lack of capital, agricultural inputs and unreliable market. This has led toa higher rate of poverty among rural communities, and distorted the traditional Tanzanian support system.

There is a common belief that traditionally, the extended family in Tanzanian societites provides social and economic support for its family members in times of need. This has shown a high degree of self-reliance in the past in coping with other social disasters including famine, drought and economic hardships. Under this system, majority of the family members spend their resources supporting and caring for a person in need. However, as result of poverty, members of the extended family find it difficult to meet the traditional obligations for all members of their extended family and in some cases, even their children.

Inadequate health services are another sign of poverty in the country. Most illness are associated with poverty. In Tanzania, poor health services have been responsible for the prevalence of infectious diseases such as diarrhea, malaria, and tuberculosis. For example, according to Health Statistical Abstract (1977) there was one hospital bed per one thousand people.

A high mortality rate is another sign of poverty. According to the Health Statistical Abstract (1977), the average life expectancy at birth in Tanzania is 50 years compared to life expectancy of 77 years in developed countries. The infant mortality rate is 96 per 1 000 live births compared to 7 in developed countries.

Women–to-women marriages are another classic example of poverty situations in rural communities. This behavior is common in the northern part of the country, in areas including Tarime and Serengeti districts in particular. Through this, rich women choose young women from poor families and pay their bride price in terms of cash or materials, such as land, cows or crops, to their parents. The rich women later identify any man of their choice to be boyfriends of the chosen young women so that they can reproduce. The offspring then belong to the husband, who in this case are the rich woman. The poor families, including their married daughters, get involved in this system because of the economic hardship they experience. This puts poor women at risk of being infected with HIV and AIDS.

Causes and Effects of Poverty in Tanzania

The Causes of Poverty in Tanzania

Analyse the causes of poverty in Tanzania

The incidence of poverty varies greatly across the country but is highest among rural families living in arid and semi-arid regions that depend exclusively on livestock and food crop production. People of the central and northern highlands are nutritionally the most deficient, while coastal and southern highlands zones register the severest levels of poverty. From the point of view of policy and strategy design, no region is significantly better off than other, and are very poor by any international standard.

Poverty is caused by both internal and external factors. Whereas the internal causes can be clustered into economic and social factors, the external factors relate to international trade, the debt burden and refugee issues.

Internal Causes of Poverty

1.       A poor agricultural sector contributes to poverty in acountry. Failure in the agricultural sector contributes to the increase of poverty. It is claimed that though agriculture is the backbone of the economy, the support given to the sector over the years has not been relative to its importance. This is indicated by poor rural infrastructure, lack of modern farm equipment, lack of fertilizers and pesticides at reasonable prices, low prices for agricultural produce, and lack of irrigation schemes.

2.       A low level of science and technology has contributed to poverty in Tanzania. The use of scientific and technological knowledge inproduction helps to increase the economy of an individual country. In Tanzania, poor and/or inappropriate technology is still being used; this leads to low productivity in all sectors of production. For instance, a majority of farmers are still using hand hoes. This act has contributed a lot to the increase of poverty in Tanzania.

3.       Government taxes contribute to poverty. Increasing taxes without considering people's ability to pay contributes to the increase of poverty in Tanzania.

4.       Lack of self-motivation to perform one's duties due to laziness and irresponsibility has contributed a lot in increasing poverty. At the government level, officials do not deliver relevant services and goods to the people as required. This habit has hindered many people in implementing their various projects; for instance the issue of land and right of occupancy.

5.       Mismanagement of public funds that could develop the common people. This is done by the government officers and top leaders who ought to set a good example. As a result, our country loses a lot of public funds through mismanagement. For instance, government officers and politicians are paid big allowances and use very expensive cars.

6.       Common and communicable diseases such malaria, diarrhea, pneumonia, TB and anemia are the main causes of death in Tanzania. Children youngerthan five years old are the most affected. Explosion of diseases such as HIV and AIDS, cholera and typhoid have increased the poverty problems. The government and family members are spending a lot of money for curative and preventive measures- money which could have been used to finance the agricultural and industrial sectors is used to fight such diseases.

7.       Education. Majority of people of Tanzania, like other Africans are uneducated; this limits their ability to participate in the development of their country's profitably. For instance, FAO's1974report on the state of food and agriculture shows that Africa's annual population growth from 1952 was 2.2% while food production growth from 1952 to 1962 was 0.0%. World Bank‟s Development Report of 1982 shows that Africa's annual population growth from 1960 to 1970 was 0.1%. The same report bythe World Bank shows that Africa's annual population growth from 1970 to 1980 was 1.1% while food production growth dropped by 1.1%. This low percentage in food production in relation to high increase percentage in population growth indicates ignorance and lack of technical know–how.

External Causes of Poverty

1.       External debts burden. The government spends the little resources ithas to pay external debts.

2.       Unequal exchange in international trade has contributed to poverty in Tanzania. The developed or rich countries control the “world market" and developing or poor countries have no say in the world market as they are economically poor. Tanzania is one of the developing countries, so the prices for her imported and exported goods and goods are fixed by rich countries. The prices offered to the goods from developing countries are very low but are high for those from developed countries. This imbalance of trade has forced poor countries like Tanzania to remain poor. This trade relationship is difficult to break.

Activity 2

Suggest some possible measures which can be taken by the Tanzanian government toreduce or alleviate internal causes of poverty to her people.

The Effects of Poverty in Tanzania

Analyse the effects of poverty in Tanzania

There is widespread poverty Tanzania,which has contributed to numerous effects. At present, about 38 percent of people living in rural areas are classified as poor. This progress is reflected in the United Nations Development Programme's Human Development Index for Tanzania, which rose from 0.3% in 1991 to 0.4% in 2002.

Poverty in Tanzania is more common in rural areas. About 85 percent of the country's poor people live in rural areas and rely on agriculture as their main source of income and livelihood. According to the Household Survey of 2000/01, some 20 percent of rural people live in extreme poverty and about 39 percent are considered poor. Within the agriculture sector, food crop producers are generally poorer than cash crop farmers, but both operate under cyclical and structural constraints, and are subject to frequent natural calamities (drought and flooding) and lack market linkages, inputs, credit and irrigation water.

Income inequality for rural areas has remained more or less constant and is rooted in inequitable access to productive assets, including land, financial services, livestock and education. According to a poverty profile survey of rural households, the percentage of the rural population producing food for home consumption has dropped by 10 percent in the last decade. Fewer rural households have access to safe drinking water, primary education and medical treatment. There is also clear evidence that poverty increases with the distance from markets, drinking water supplies and health clinics.

Observations show that poverty has caused a lot of socio–economic and political effects in Tanzania, such as:

1.       Increase inilliteracy; normally, poor societies fail to send its children to school. There are so many cases of parents failing to pay school fees for their children after they have been selected to join secondary schools.

2.       People cannot afford to use modern equipment and machinery such as electric or gas cookers. Hence, they rely on cheap sources of energy like charcoal and firewood, which causes deforestation.

3.       Lack of modern agricultural machinery such as tractors forces people to use hand hoes which leads to lowagricultural yields.

4.       Increase in illness. Poverty in local communities has contributed to the increased number of malnutrition and infant mortality, disruption of Tanzanian traditional support systems and the spread of HIV and AIDS in the country.

5.       There is an increase of criminal acts such as robbery, prostitution, drug abuse, and theft. Many people are forced to indulge themselves in these social evils because of poverty.

6.       Poor people cannot afford a balanced diet; this leads to malnutrition and failure to engage in economic activities for development.

Activity 3

Why do you think poverty in Tanzania is more common in rural areas?

Strategies for Poverty Alleviation in Tanzania

Strategies in Place for Poverty Alleviation in Tanzania

Analyse the strategies in place for poverty alleviation in Tanzania

The United Republic of Tanzania is the only country in Africa, and perhaps in the world, that within a span of 40 years has gone through rapid and radical transformations - from a colonial system to a systemlinking rural households to social services and to a market economy - without sacrificing basic democratic ideals and social equanimity.

During the process, all of the country's social, political and economic institutions underwent drastic transformations to adjust and conform to rigid national guidelines and priorities. Such changes seriously affected the economy, and resulted in a gradual and protracted decline of all growth indicators during the 1970's and 1980's. Since then, the country has recovered significantly, mainly through the implementation of various structural adjustments and restructure programmes led by the government with the help of a coalition of donors.

The strategies suggested by the international community to alleviate poverty in this country, at grass-root level in particular, have been ineffective. This is mainly because the poor people were not involved in the designing, implementation, or evaluation of the poverty reduction strategies. However, a way forward should be astrategy which seeks full representation of the poor and other stakeholders in the designing, implementation, monitoring and evaluation of the poverty alleviation strategy. The strategies should address the actual needs of the poor communities and target them directly.

After independence in 1961, Tanzania developed different strategies and policies to alleviate poverty such as the Arusha Declaration of 1967, in whichthe Government nationalized all means of production such as land, industries and mining. In 1986, the government embarked on Structural Adjustment Policies (SAPs) including trade liberalization, public sector reform, elimination of price controls and established monopolies, multiparty system and good governance. These strategies were suggested by the international community and were set as a condition of accessing loans and other assistance.

Despite all these efforts, the situation of poverty in Tanzania is worse than it was in the 1970s. The International Monetary Fund's (IMF) findings conclude that poverty in Tanzania has stagnated, and that some social indicators have worsened, but that the main characteristics of the poor have remained unchanged.

One of the intervention measures suggested by the government of Tanzania is;

The introduction and implementation of social and economic policies which address the issue of poverty both at national and individual level. This may necessitate increased state intervention in education and other social welfare services, and the creation of an enabling environment for private investment in the production sector.

In addressing the key challenges instrategizing to reduce pervasive poverty, Tanzania prepared and adopted aDevelopment Vision 2025 in the year 1999 and aNational Poverty Eradication Strategy (NPES) in 1997 which spell out a vision for the society with object poverty and improved social conditions. The NPES that was adopted in 1997 aimed at providing guidance to all stakeholders in identifying, formulating, implementing and evaluating their poverty.

The overall goal of NPES was to provide a framework to guide poverty eradication initiatives in order to reduce absolute poverty by the year 2025. For achieving the goals of NPES, the government identified five key sectors, namely education, health and nutrition, water, agriculture and rural roads.

The NPES has identified three areas of strategic interventions, namely creating an enabling environment for poverty eradication, building the capacity for poverty eradication and eradicating poverty. The strategy has also spelt out roles at various levels for poverty eradication initiatives. This vision 2025 is in line with the international developing goal.

Strategies to eradicate poverty are viewed as instruments for channeling national efforts towards broadly agreed objectives and specific inputs and outputs. The elaboration and implementation of the strategy are fundamentally an ongoing process. While a wide variety of key interventions have already been launched, the preparation of strategies for certain sectors such as agriculture and education are still under way. The implementation of reforms aimed at shifting the responsibility of formulating and monitoring poverty reduction intervention by districts, municipalities, and communities at the grass roots.

The fight against poverty is nationwide. The government's role is to ensure that its people are free from poverty and live a decent life including putting in place an enabling environment for all stakeholders to effectively participate in poverty eradication activities. The government should also strengthen good leadership and coordination mechanisms for poverty eradication initiatives.

The government recognizes the role of the private sector in poverty eradication. The private sector has a role of creating employment opportunities by increasing investments. The private sector needs to invest in the provision of social services, provision of credit facilities and dissemination of information on poverty eradication efforts. Non –Governmental Organizations (NGOs) have the ability to contribute effectively in poverty eradication efforts because their activities are based at the grass roots. Non-Governmental Organizations play a role of sensitizing people and expand participation of beneficiaries in poverty eradication.

The National Poverty Eradication Strategy (NPES) recognizes the important role of donors and other stakeholders; hence they are included in the implementation of poverty eradication plans and programmes.

People are the main stakeholders in bringing about decent living conditions. It is their duty to denounce poverty and carry out efforts to eradicate it. At different levels, people themselves have to identify the available resources at their disposal and direct them into poverty-eradication programmes.

Therefore, the strategies for poverty alleviation in Tanzania are;

1.       The Arusha Declaration of 1967, whereby the Government nationalized all means of production.

2.       In 1986 the government embarked on Structural Adjustment Policies (SAPs), including trade liberalization, public sector reform and elimination of price controls.

3.       Tanzania prepared and adopted the Development Vision 2025and the National Poverty Eradication Strategy (NPES) in 1999.

Effectiveness of the strategies in place for Poverty Alleviation

Assess the effectiveness of the strategies in place for poverty alleviation

The effectiveness of the strategies in place for poverty alleviation rests withTanzanians as well as their government. As far as the effectiveness of the strategies is concerned, some significant changes have been observed. These include:

1.       Agricultural output has grown at 3.7 percent per annum since 1990.

2.       Mining has begun to generate higher output as a result of the investment undertaken by multinational corporations.

3.       Social service sectors like health and education have expanded rapidly since the 1990s due to government consideration of them as a priority sector, as well as the expansion of the private sector into social service sector.

4.       The government is paying more attention to cross-cutting issues like environment, gender, HIV and AIDS, employment, and malaria and restructuring local government.

5.       Policy formation and strategy are more transparent than before.

Ineffectiveness of the strategies in place for poverty alleviation

The vision 2025 strategy projected a future free of poverty and characterized by good governance and the rule of law. But the document did not provide a strategy of how to achieve them. The National Poverty Eradication Strategy of 1997 defined areas for economic growth, income levels, primary education, literacy, access to water and sanitation, unemployment, mortality and health and infrastructure. This strategy failed to specify priorities among many planned activities. It did not incorporate the costs and targets to be made.

The Poverty Reduction Strategy Paper (PRSP) was a strategy for poverty reduction with the country's own ongoing processes and agenda. The shortcoming of PRSP were the lack of concrete operational guidelines and costing of interventions. The proliferation of poverty-eradication strategies made it harder for officials and other stakeholders to see the PRSP differently compared toprevious attempts.

Exercise 1

Answer the following questions.

1.       Briefly explain the main types of poverty.

2.       Mention any five indicators of poverty.

3.       Explain why ignorance is believed to be one of the reasons for poverty in Tanzania.

4.       Describe the external causes of poverty in Tanzania.

5.       Alleviation and eradication of poverty do not demand only internal support but also the external push. Discuss.

6.       Despite Tanzania being endowed with natural resources it is still poor. Elaborate.

7. Show the impacts of poverty on socio-economic development in Tanzania.
8. Debts burden in Tanzania can be avoided. Discuss.
9. How can good leadership and government help to alleviate the poverty problems in African countries?
10. Suggest strategies that the Tanzanian government can take to alleviate poverty.