Poverty and the related problems of unemployment, economic inequality, poor social infrastructure and inability to access basic needs and services have for long been part of the international community. In 2005, the European Union developed the slogan “make poverty history”, that was directed at uniting developed countries in formulating policies for the eradication of poverty. The policy calls for a shift of focus from massive individual industrialization to synchronized growth of wage and capital goods, from substitution for self sustained development to export led growth.
The solutions to the major problems of unemployment, poverty and income inequalities for all countries lie within policies for the integration of changes in domestic production and expenditure patterns. The “make poverty history” calls for a change of attitude from the developed countries to formulate policies and establish assistance for the improvement of the economic status of the poor especially those in third world countries.
The policy aims at ensuring that the real world competition fair, the mobility of labor sufficient for development purposes and the governments aware of their fiscal responsibilities to the poor within their borders. Is It Possible? Many arguments support the proposition that if all developed countries united and came under one umbrella in fight against poverty, the issues related to poverty would be eliminated in a few years. The developing countries are in need of an economic mechanism in the international world that is capable of blending the interests of economic agents with those of the state more coherently.
The economic mechanism needs to recognize the prevailing growth obstacles that can be considered for economic reforms. Mawhinney (2002,p. 157)Countries that are part of an international economic order such as the international trade organization, can be thought to be a subset of the organization, with the rules and regulations implemented by the organization affecting the behavior of the nations with respect to implied international repercussions.
As such the economic order consists of “explicit or implicit” principles, rules and norms around which members are expected to converge. The rules and regulations prevail on the existing practices for making and implementing policies. It follows therefore that the decisions of the umbrella body will by far have more effect on individual country policies. For this reason the “make poverty history” polices that are implemented by the economic integration bodies will have a much higher success rate and impact on individual member country policies.
International trade and economic organizations have time and again prevailed upon individual governments to change their economic policies by imposing sanctions and quotas that make it difficult for the counties to trade. The economic and trade organization being one of the largest and most influential economic organization has the unique power o influence changes in the developed and developing countries. They can impose salient features and prevail upon countries to reform their economic and social policies that are enhancing and promoting the spread of poverty.
There is however a growing concern among experts that questions the impact of international economic organizations such as the European Union of individual and government state policies. Although the organization may have some form of control on their members, they are not very influential when it comes to private government policies. They may therefore be unable to influence their members with economic policy changes especially if such said members are powerful within their representation in the organization.
Additionally, even though the economic changes can be made by the members, economic organizations cannot influence the change by other non-member countries. This means that the impact of the policy changes will only be felt by a small percentage of the poor. The impact may in fact be so small that it does not justify the implementation of new policies. How Can It Be Achieved Improvement of the commodity market: the developing countries and low income groups are haunted by the trade policies in their countries which are characterized by duality.
The main parts of such markets (e. g. in agriculture) barter forms of transactions, rather than monetary transactions take place. The “make poverty history” campaign aims at educating the government and policy makers in the states to implement policies that encourage monetary trade. The value of the products coming from these countries is often higher than the value of the products included in the barter trade. The income trickling down to the producer and his workers therefore is much smaller than would have been possible in the monetary markets.
The state governments should take advantage of the quality products to demand higher prices for their individual producers and exporters. Industrialization: for more than a quarter century, the debate on industrial policy has ebbed and flowed, with it the interest and commitment of state governments. The international community has always been aware of the importance of industrialization to increase employment and per capita income of the poor. Yet even with all the evidence little has been done to improve the state of the industrial process.
The focus has quickly shifted to taking advantage of the countries with not industrialization power. Industries have to be allowed the chance to develop in order for the poor countries to be able to compete effectively in the international markets. Premised on the notion of strategic trade policies, proponents of this policy argue that it is possible for governments and the international community to intervene effectively to support local and national firms.
In the developing countries policies there has been an impression that industrial policy is no longer considered part of the political agenda, and that policies of privatization and deregulation have replaced them. While the latter do reflect an increased emphasis on market force, they are not key factors to the improvement of competitiveness. Therefore a change in government policies may be necessary to redefine the industrial polices and the principle tenets of the last two decades.
Unemployment and income distribution: the development designs for economies have to be structured around the objectives of maximum impact on employment. In the process of implementing policies for labor absorption, its quality and productivity have also to be enhanced so that the average level of incomes is not adversely affected. Without proper training and improvement of labor production, absorption of more people to employments will only lead to adverse effects on the income distribution patterns, (Strange and Bayley 2008, P.
42). In addition, a re-distribution of originating incomes has to be achieved simultaneously with changes in the product mix which match the altered structure of demands. This implies a much larger output of basic consumer goods and essential services like education, medical care, public transport and cheaper communication. Control population growth: the full employment and higher average income cannot be realized within a reasonable time structure if the poor populations continue to grow at the present rates.
Consequently it is important for governments to pursue more effective polices of family planning and population control. The most powerful aids in this policy include the spread of general education and health facilities, more working opportunities for women and higher family incomes. Nevertheless, specific measures to promote later marriages, birth control practices, and health education have to be intensified in the low income earning groups along with programmes to alter social attitudes towards family size, male progeny and women property rights.
Without a change in the total matrix, the desired benefits of income distribution and poverty alleviation cannot be achieved. Income Inequality and Bridging the Gap The probability of redistributing current incomes on any scale, while at the same time having positive welfare effects in the short run, is likely to be severely limited. There may be high cost in terms of growth in the long term from potentially damaging effect on the incentives, savings and investment of the upper income group.
The policies designed for income redistribution are also likely to face strong resistance from this group. There will be less resistance and hostility from the main investors in the economy if the redistribution of income does not affect their income in any way. However this then denies the logic of the income redistribution polices, (World Bank, 2008, p. 12). On the other hand investing in the human and physical assets of poverty groups is likely to have a high pay off in welfare terms as it will lead to income growth in groups that have higher welfare weights.
But it may also require some sacrifice of output in the short run in so far as returns on investment in human capital take longer to develop. To this extent it may involve a short run cost to upper income groups but these groups may also benefit in the long run as the productivity and income of the poor improve. Poverty: Problem or Affluence The main issue in economic development is the discussion on whether poverty is the problem or wealth. The problem facing the economic development is the structure of the poverty scale and not the wealth.
The country’s affluent contribute significantly to the national income and growth rate, while the poverty scales make it difficult for this impact to be accounted for. Personal income is spent on purchase of consumer goods and services, while a part of the same is saved. This is only possible for the wealthy who not only by their purchasing power influence the employment of others but also invest in new industries that improve the income earning of the poor. Issues to Be Considered In Poverty: Unemployment
Employment generation is a major factor in curbing poverty. The employment programmes often have more impact on the poor than temporary relief during periods of scarcity. International communities have invested heavily in local industries in order to increase the employment index. By investing in local industries, the international community hopes to increase the chances for employment in the countries, (Blakely 2002, P. 57). Locally, apart from investment in industries, the government has formulated policies that encourage employment generation.
The government aims at providing equal employment opportunities especially for the country’s youth by encouraging and supporting innovative self employment plans and encouraging institutional placement. Technology and Credit By making the technology available to citizens and small scale producers, experts imply that production will increase on a large scale while at the same time reducing the costs of production. The immediate impact will be higher income generation. Technology confers a superior position for small scale producers correlated by stronger willingness and capacity to bear risks.
Small scale producers are transformed to large scale employers through the implementation and use of new technology measures, (organization for economic cooperation and development 2001, P. 160). To ensure that small scale producers and entrepreneurs can access the technology available to make production less costly for them, the American government has reduced the lending rate and increased its investment in the government credit programs. This means that more and more entrepreneurs can access the credit necessary to purchase new and useful technology.
Assets and Skills The low income earners form a mixed group on the criteria of economic prospects and accessibility. They are less educated and therefore possess less skill to offer to the employment market. The international community has put pressure on countries with low education indexes to improve their provision of education. Additionally, implementation of adult programmes and technical colleges has seen an improvement in the human skills and as such the employment rate of the uneducated.
It is a constant struggle for the American government to impose on its population the importance of education in the employment world. While in the previous years the high school dropout rate has been a major concern to education officials, it has now become the trend for high school drop outs to return to school in an attempt to acquire the high school diploma. Government policies have made the small document so glamorous and easy to achieve that more and more American citizens are being drawn by the prestige of the diploma.
Welfare Programmes Welfare programmes play two different but equally important roles in removal of poverty. First, they try to provide subsidized cost or free a wide range of amenities and services which the poor would not be able o acquire for a long time given their low and slow growing incomes. The second role is that of helping the poor invest themselves to improve the attributes important for participation in economic development processes such as orientation, reception, absorption capacity and ability to take initiatives.
Although internationally and locally, the welfare policies and programs have drawn a lot of attention and increased their spread to the poor populations; careful monitoring and implementation of these programmmes is a dimension calling for priority attention . The polices need to be directed and implemented only when the poor move sufficiently beyond the subsistence level to appreciate the importance and advantage of investing in themselves European Union: Competition Policy
Although the pitfalls of monopoly and anti-competitive conduct have long been recognized by economists, the application of polices to curb such behavior has only been done recently. It is the uncompetitive nature of today’s markets; where the large firms are given monopoly and control of the market forces that is enhancing the poverty scale. If the small firms lack the opportunity to compete in new industries, then it means that they will either go bankrupt and the unemployment rate will continue to increase.
Like in the European markets it is necessary for the government to encourage competition by providing incentives for smaller firms wishing to enter monopolized industries and formulating integrated markets, (Pinder and Usherwood 2007, p. 67). The articles in the European Union agreement discourage and often penalize the action of firms and governments that may discourage competition and influence the market structure.
This means that large and influential firms and governments are not allowed to impose unfairly high or low prices, limit production or apply specific conditions that are not related to transition of goods. Governments and firms are permitted to seek aid to improve their competitive nature and promote their contribution to the economic development. Conclusion Make poverty history proposal envisages fundamental changes in the role of governments and economic bodies in development.
The shift to be considered is towards the sustainable development of the community. The make poverty history campaign has taken root in a number of countries that have committed themselves to implementing economic and social policies that will improve the lives of the low income earners. The United States is among the active players in the campaign to end poverty. Not only has the country taken part in policy changes but it has also increased its budget that is aimed at providing economic assistance to countries struggling with poverty.
The success of the “make poverty history” campaign has relied heavily on the economic sanctions implemented by major trade organizations and major players in international markets. Because of its ability to draw the support of major developed countries and international organizations, together with the campaigns’ global capacity, the “make poverty history” campaign is likely to be the most successful poverty eradication program to date. References 1. Blakely. E. J. 2002. Planning Local Development, Third Edition. London. Sage Publications 2. Mawhinney. M. 2002.
Sustainable Development: Understanding the Green Debates. Oxford. Blackwell Publishing 3. Organization for Economic Cooperation and Development. 2001. Sustainable Development: Critical Issues. Washington. OECD Publishing. 4. Pinder. J and Usherwood. S. 2007. The European Union: A Very Short Introduction. Oxford. Oxford University Press 5. Strange. T and Bayley. A. 2008. Sustainable Development: Linking Economy, Society, Environment. Washington. OECD Publishing 6. World Bank 2008. World Development Indicators 2008, Volume 2008. Washington. World Bank Publications