Chapter 15E (Poverty)

Question 1

Concepts of poverty

Answer 1

What is Poverty
(lack of means to attain a minimum standard of living)

Absolute Poverty
- minimum subsistence
- being inadequate to afford a bundle of goods and services that are regarded as essential to the physical need of an individual or a family

Relative Poverty
- a person’s income is much lower than others in the population, so he/ she has not enough money to support a certain standard of living
- a person has less than others in society

Question 2

Understanding Poverty– 4 Tools for Defining Poverty
-DEFINITION+LIMITATION-

Answer 2

Poverty line:
- indicator for defining population who are living in poverty
Limitation:
- assets are not taken into account and this may overstate the number of people living in poverty

Proportion of Median Income:
- people with income lower than a proportion of the median income (e.g. 50% below) are regarded as living in poverty
Limitation:
- only measure income, not reflect the individual’s ability to participate in the everyday life of a society / assets are not taken into account

Income Proxy Measures:
- The proportion of expenditure on necessities based on the consumption patterns
Limitation:
only measure the proportion of expenditure on necessities, not reflect the access to resources and opportunities in social, cultural and political activities

Budget Standards Methods:
- Based on the notion of a basket of goods and services, having the elements of “subsistence” and “basic minimums for social lives”
Limitation:
- only measure the proportion of expenditure on necessities, not reflect the access to resources and opportunities in social, cultural and political activities

Question 3

Income Gap
-EXAMPLE+LIMITATION-

Answer 3

Gini Index /Gini coefficient /Gini ratio
- Measures the inequality of income distribution of individuals or families

Limitations
-It does not measure “property” or “investment income” possessed by people, but measures the “salary” only

Question 4

Causes of Poverty on 4 levels

Answer 4

Global
- Economic ups and downs – unemployment due to global financial crisis
- Natural disasters
- Wars

National
- Governance – corruption; ineffective / lack of policies for alleviating poverty
- Social Inequality - some individuals are placed in the deprived social condition due to gender, races, ethnic groups and social classes
- Unemployment due to the shift of labour market (e.g. from low-skilled to high-skilled)

Community
- Lack of job vacancies available in the community
- Lack of social service and support available for some disadvantaged groups to enable them to seek job in labor market (e.g. child care service)

Individual
- Family background / Educational level = Less incentive to work
- Disease and disability

Question 5

2 Approaches in Alleviating Poverty

Answer 5

Need-based:
- Uses direct aids and tangible services to meet the needs of the poor
(e.g. Financial assistance/Student Travel Subsidy Scheme/Comprehensive Social Security Assistance (CSSA))

Asset-based:
- Aims to help the poor to build assets, which include capital assets and capacities
(e.g. Saving/Child Development Fund (CDF)/Neighbourhood support scheme)

Question 6

International Organisations that Alleviate Poverty and Inequality

Answer 6

Poverty:
- World Bank = To provide financial and technical assistance to develop infrastructure / create job opportunities (e.g. Low-interest loans, interest-free credit and grants)
- International Monetary Fund (IMF) = To provide temporary financing to support policies aimed at correcting the underlying problems (e.g. Loans to low-income countries)

Inequality:
- World Health Organization (WHO) = To provide technical support
to countries for monitoring and assessing health trends (e.g. Immunization for children living
in poor / developing countries)
- United Nations (UN) = To handle disputes among countries (e.g. Rules and guidelines designed
to facilitate laws regulating international trade / meetings or conferences among countries)

Question 7

3 Approaches in Alleviating Poverty

Answer 7

Personal development plan
- To draw up personal development plans with specific targets under the guidance
- To explore more resources for their personal growth

Mentorship programme
- assist participating person to draw up and implement their development plans
- Mentors will share their life experience with the people to broaden their horizon

Targeted savings
- To realise their personal development plans