Ecosan concept showing a separation of flow streams, treatment and reuse
Ecological sanitation, commonly abbreviated as ecosan (also spelled eco-san or EcoSan), is an approach to sanitation provision which aims to safely reuse excreta in agriculture. It is an approach, rather than a technology or a device which is characterized by a desire to "close the loop", mainly for the nutrients and organic matter between sanitation and agriculture in a safe manner. One of the aims is to minimise the use of non-renewable resources.
When properly designed and operated, ecosan systems provide a
hygienically safe system to convert human excreta into nutrients to be
returned to the soil, and water to be returned to the land. Ecosan is
also called resource-oriented sanitation.
Definition
The
definition of ecosan has varied in the past. In 2012, a widely accepted
definition of ecosan was formulated by Swedish experts: "Ecological sanitation systems are systems which allow for the safe recycling of nutrients to crop production in such a way that the use of non-renewable resources is minimized. These systems have a strong potential to be sustainable sanitation systems if technical, institutional, social and economic aspects are managed appropriately."
Prior to 2012, ecosan has often been associated with urine diversion and in particular with urine-diverting dry toilets (UDDTs), a type of dry toilet. For this reason, the term "ecosan toilet" is widely used when people mean a UDDT.
However, the ecosan concept should not be limited to one particular
type of toilet. Also, UDDTs can be used without having any reuse
activities in which case they are not in line with the ecosan concept
(an example being the 80,000 UDDTs implemented by eThekwini Municipality
near Durban, South Africa).
Use of the term "ecosan"
The
term "ecosan" was first used in 1995 and the first project started in
1996 in Ethiopia, by an NGO called Sudea. A trio, Dr Torsten Modig, Umeå
University, Almaz Terrefe, teamleader, and Gunder Edström, hygiene
expert, chose an area in a dense urban area as a starting point. They
used urine diverting dry toilets (UDDTs) coupled with reuse activities.
In the ecosan concept, human excreta and wastewater
is regarded as a potential resource – which is why it has also been
called "resource oriented sanitation". The term "productive sanitation"
has also been in use since about 2006.
Comparison with the term "sustainable sanitation"
The definition of ecosan is focusing on the health, environment and resource aspect of sustainable sanitation.
Thus ecosan is not, per se, sustainable sanitation, but ecosan systems
can be implemented in a sustainable way and have a strong potential for
sustainable sanitation, if technical, institutional, social and
economical aspects are cared for appropriately. Ecosan systems can be
"unsustainable" for example if there is too little user acceptance or if
the costs of the system are too high for a given target group of users,
making the system financially unsustainable in the longer term.
Overview
Poster by EcoSanRes program: Closing the loop on Sanitation (2005)
Ecosan closing the loop poster (in French), by the NGO CREPA in 2005, UDDTs are used in this example
The main objectives of ecological sanitation are to reduce the health risks related to sanitation, contaminated water and waste; to prevent groundwater pollution and surface water pollution; and to reuse nutrients or energy contained within wastes.
The statement in the definition of ecosan to "safely recycle"
includes hygienic, microbial and chemical aspects. Thus, the recycled
human excreta product, in solid or liquid form, shall be of high quality
both concerning pathogens and all kind of hazardous chemical
components. The statement "use of non-renewable resources is minimized"
means that the gain in resources by recycling shall be larger than the
cost of resources by recycling.
Ecosan is based on an overall concept of material flows as part
of an ecologically and economically sustainable wastewater management
system tailored to the needs of the users and to the respective local
conditions. It does not favor a specific sanitation technology, but is
rather a certain philosophy in handling substances that have so far been
seen simply as wastewater and water-carried waste for disposal.
The first proponents of ecosan systems had a strong focus on increasing agricultural productivity (via the reuse of excreta as fertilizers) and thus improving the nutritional status of the people at the same time as providing them with safe sanitation. Disease reduction was meant to be achieved not only by reducing infections transmitted via the fecal-oral route but also by reducing malnutrition in children. This link between WASH, nutrition, a disease called environmental enteropathy (or tropical enteropathy) as well as stunted growth of children has risen to the top of the agenda of the WASH sector since about 2013.
Agricultural trials around the world have shown measurable benefits of using treated excreta in agriculture as a fertilizer and soil conditioner. This applies in particular to the use of urine. Reuse trials in Zimbabwe showed positive results for using urine on green, leafy plants such as spinach or maize as well as fruit trees.
Another study in Finland indicated that the use of urine and the use of
urine and wood ash "could produce 27% and 10% more red beet root
biomass".
Urine has been proven in many studies to be a valuable, relatively easy
to handle fertilizer, containing nitrogen, phosphorus, potassium and
important micro-nutrients.
Phosphorus recovery
Another aspect that ecosan systems are trying to address is the possible upcoming shortage of phosphorus. Phosphorus has an important role for plant growth, and therefore in fertilizer production, but is a limited mineral resource.
The situation is similar for potassium. Known mineral phosphate rock
reserves are becoming scarce and increasingly costly to extract – this
is also called the "peak phosphorus"
crisis. One review of global phosphate supply suggested that if
collected, phosphate in urine could supply 22% of the total demand.
Conservation of resources through lower water consumption, substitution of mineral fertilizer and minimization of water pollution.
Less reliance on mined phosphorus and other non-renewable resources for fertilizer production.
Reduced consumption of energy in fertilizer production: Urea is a major component of urine, yet we produce vast quantities of urea by using fossil fuels. By properly managing urine, treatment costs as well as fertilizer costs can be reduced.
Challenges
The
ecosan approach has been criticized for being overly focused on reuse
in agriculture, whilst neglecting some of the other criteria for sustainable sanitation.
In fact, ecosan systems can be "unsustainable", for example, if there
is too little user acceptance or if the costs of the system are too high
for a given target group of users, making the system financially
unsustainable in the longer term.
Some proponents of ecosan have been criticized as being too
dogmatic, with an over-emphasis on environmental resource protection
rather than a focus on public health protection and provision of
sanitation at a very low cost (for example UDDTs,
which some people call "ecosan toilets", may be more expensive to build
than pit latrines, even if in the longer term they are cheaper to
maintain).
The safety of ecosan systems in terms of pathogen destruction
during the various treatment processes is a continuous topic of debate
between proponents and opponents of ecosan systems. However, the
publication of the WHO Guidelines on Reuse, with its multiple barrier
concept, has gone a long way in establishing a common framework for safe
reuse.
Nevertheless, the question remains whether ecosan systems can ever be
scaled up to reach millions of people and how they can be made
sufficiently safe to operate. The initial excitement in the early 2000s
by the ecosan pioneers has changed into a realization that changing
attitudes and behaviors in sanitation takes a lot of patience.
Acknowledgement for ecosan came with the awarding of the Stockholm Water Prizein 2013 to Peter Morgan, a pioneer of handpumps and ventilated pit latrines (VIPs) in addition to ecosan-type toilets (the Arborloo, the Skyloo
and the Fossa alterna). Peter Morgan is renowned as one of the leading
creators and proponents of ecological sanitation solutions, which enable
the safe reuse of human excreta
to enhance soil quality and crop production. His ecosan-type toilets
are now in use in countries across the globe, centred on converting a
sanitary problem into a productive resource.
Also many of the research projects that the Bill and Melinda Gates Foundation
have been funding since about 2011 in sanitation are dealing with
resource recovery – this might well be a legacy of the ecosan concept,
even if the term "ecosan" is not used by these researchers.
Technologies used in ecosan systems
Possible technology components for sustainable sanitation, of which ecosan is a sub-set focussing on the reuse possibilities
Ecosan offers a flexible framework, where centralized elements can be
combined with decentralized ones, waterborne with dry sanitation, high-tech with low-tech,
etc. By considering a much larger range of options, optimal and
economic solutions can be developed for each particular situation.
Technologies used in ecosan systems often - but not always - include
elements of source separation, i.e. keeping different waste streams
separate, as this can make treatment and safe reuse easier.
Examples of ecosan projects worldwide can be found in a list published by GIZ in 2012, as well as in those case studies published by the Sustainable Sanitation Alliance that are focused on reuse activities.
The recovery and use of urine and feces in "dry sanitation
systems", i.e. without sewers or without mixing substantial amounts of
water with the excreta, has been practiced by almost all cultures. The
reuse was not limited to agricultural production. The Romans, for example, were aware of the bleaching attribute of the ammonia within urine and used it to whiten clothing.
Many traditional agricultural societies recognized the value of human waste for soil fertility and practised the "dry" collection and reuse of excreta.
This enabled them to live in communities in which nutrients and organic
matter contained in excreta were returned to the soil. Historical
descriptions about these practices are sparse, but it is known that
excreta reuse was practiced widely in Asia (for example in China, Japan,
Vietnam, Cambodia, Korea) but also in Central and South America.
However, the most renowned example of the organised collection and use
of human excreta to support food production is that of China. The value of "night soil"
as a fertilizer was recognized with well-developed systems in place to
enable the collection of excreta from cities and its transportation to
fields. The Chinese were aware of the benefits of using excreta in crop
production more than 2500 years ago, enabling them to sustain more
people at a higher density than any other system of agriculture.
In Mexico the Aztec culture collected human excreta for agricultural use. One example of this practice has been documented for the Aztec city of Tenochtitlan
which was founded in 1325 and was one of the last cities of
pre-Hispanic Mexico (conquered in 1521 by the Spanish): The population
placed the sweepings in special boats moored at docks around the city.
Mixtures of sweepings and excreta were used to fertilize the chinampas
(agricultural fields) or to bolster the banks bordering the lake. Urine
was collected in containers in all houses, then mixed with mud and used
as a fabric dye. The Aztecs recognized the importance of recycling
nutrients and compounds contained in wastewater.
In Peru, the Incas had a high regard for excreta as a fertilizer,
which was stored, dried and pulverized to be utilized when planting
maize.
In the Middle Ages, the use of excreta and greywater
in agricultural production was the norm. European cities were rapidly
urbanizing and sanitation was becoming an increasingly serious problem,
whilst at the same time the cities themselves were becoming an
increasingly important source of agricultural nutrients. The practice of
directly using the nutrients in excreta and wastewater for agriculture
therefore continued in Europe into the middle of the 19th century.
Farmers, recognizing the value of excreta, were eager to get these
fertilizers to increase production and urban sanitation benefited. This practice was also called gong farmer in England but carried many health risks for those involved with transporting the excreta and fecal sludge.
Traditional forms of sanitation and excreta reuse have continued
in various parts of the world for centuries and were still common
practice at the advent of the Industrial Revolution. Even as the world
became increasingly more urbanised, the nutrients in excreta collected
from urban sanitation systems without mixing with water were still used
in many societies as a resource to maintain soil fertility, despite
rising population densities.
Decline in recovery of nutrients from human excreta in dry systems
Recovery
of nutrients from excreta in non-sewered sanitation systems was
addressing the sanitation problems in settlements in Europe and
elsewhere and was contributing to securing agricultural productivity.
However, the practice did not become the dominant approach to urban
sanitation in the 20th century and was gradually replaced with
sewer-based sanitation systems without nutrient recovery (apart from
agricultural reuse of sewage sludge in some cases) – at least for cities that can afford it.
There were four main driving factors that led to the demise in
the recovery and use of excreta and greywater from European cities in
the 19th century:
Growth of urban settlements and increasing distance from agricultural fields.
Increasing water consumption and use of flush toilet: Water flushing
greatly increased the volume of sewage, at the same time diluting the
nutrients, making it virtually impossible for them to be recovered and
reused as they previously were.
Production of cheap synthetic fertilizers, making any efforts to
recover and reuse the nutrients and organic material from the large
volumes of sewage obsolete.
Political intervention as a consequence of the perceived need for a
change with regards to how to deal with odorous substances: Up until the
end of the nineteenth century the dominant theory on the spread of
illness was the miasma theory.
This theory stated that everything that smelled had to be gotten rid of
because inhaling bad smells was thought to lead to illness.
The use of (odorous) animal manure
in agriculture has continued through to this day, probably because the
odor of manure was not thought to contribute to human illnesses.
The recovery of nutrients from wastewater still continues in two forms:
Wastewater reuse or resource recovery:
Use of raw, treated or partially treated wastewater for irrigation in
agriculture (with the associated health risks if it is done in an
improper way which is often the case in developing countries); and
Application of sewage sludge
to agricultural lands which is not without controversy in many
industrialized countries due to the risks of polluting soils with heavy
metals and micropollutants if not managed properly (see biosolids).
Research from 1990s onwards
The Swedish International Development Cooperation Agency
(Sida) funded the "SanRes R&D programme" during 1993 to 2001 which
lay the foundation for the subsequent "EcoSanRes programme" carried out
by Stockholm Environment Institute (2002–2011).
A publication by Sida called "Ecological sanitation" in 1998 compiled
the knowledge generated to date about ecosan in a popular book which was
published as a second edition in 2004. The book has also been translated into Chinese, French and Spanish.
The German government enterprise GIZ
also had a large "ecosan program" from 2001 to 2012. Whilst the term
"ecosan" was preferred in the initial stages of this program, it was
from 2007 onwards more and more replaced by the broader term "sustainable sanitation". In fact, the Sustainable Sanitation Alliance was founded in 2007 in an attempt to broaden the ecosan concept and to bring together various actors under one umbrella.
Research into how to make reuse of urine and feces safe in
agriculture was carried out by Swedish researchers, for example Hakan
Jönsson and his team, whose publication on "Guidelines on the Use of
Urine and feces in Crop Production"
was a milestone which was later incorporated into the WHO "Guidelines
on Safe Reuse of Wastewater, Excreta and Greywater" from 2006.
The multiple barrier concept to reuse, which is the key cornerstone of
this publication, has led to a clear understanding on how excreta reuse
can be done safely.
Workshops and conferences
Initially, there were dedicated "ecosan conferences" to present and discuss research on ecosan projects:
A first workshop on ecological sanitation was held in
Balingsholm, Sweden in 1997, where all the then established ecosan
experts, such as Håkan Jönsson, Peter Morgan (winner of the 2013 Stockholm Water Prize), Ron Sawyer, George Anna Clark and Gunder Edström participated.
Workshop in Mexico in 1999 with the title "Closing the Loop - Ecological sanitation for food security"
Ecosan conference in Bonn, Germany in 2000
First international ecosan conference in Nanning, China in 2001
Second ecosan conference in Lübeck Germany in 2003
Third ecosan conference in Durban, South Africa in 2005
Ecosan conference in Fortaleza, Brazil called "International
Conference on Sustainable Sanitation - Water and Food Security for Latin
America" in 2007
Since then the ecosan theme has been integrated into other WASH conferences, and separate large ecosan conferences have no longer been organised.
Disputes amongst experts
During the 1990s, when the term ecosan was something new, discussions were heated and confrontational.
Supporters of ecosan claimed the corner on containment, treatment and
reuse. The proponents of conventional sanitation systems on the other
side defended pit latrines and waterborne sewage systems.
Ecosan supporters criticized conventional sanitation for contaminating
waterways with nutrients and pathogens. Since about 2007, the two
opposing sides have slowly found ways of dealing with each other, and
the formation of the Sustainable Sanitation Alliance
in that year has further helped to provide a space for all sanitation
actors to meet and push into the same direction of sustainable
sanitation.
Sweden is the leader in Europe to put ecosan into practice at a larger scale. For example, Tanum Municipality
in Sweden has introduced urine separation toilets due to their very
rocky and challenging terrain initially, and later also to recover
phosphorus.
Sweden has also made it possible in 2013 to certify safe and
sanitized blackwater (urine and human excreta) from blackwater systems
and for further use as a recognized fertilizer. Such blackwater systems
could be vacuum toilets or septic tanks. The criteria for the
certification have been developed by the Swedish Institute for
Agricultural and Environmental Engineering and may pave the way for
farmers to use human waste for agricultural production. The Federation
of Swedish Farmers have been active in this development. Furthermore,
the Swedish EPA in their last proposal in 2014 has downgraded the
hygiene risk associated with urine.
Stockholm Environment Institute (SEI) ran a large worldwide ecosan
research programme called "Ecosanres" from 2001 to 2011. One of the "dry
ecosan" pilot projects (i.e. with using dry toilets) of this programme was a large scale implementation of UDDTs in multi-story buildings together with other technologies to allow resource recovery from excreta.
This project was called the Erdos Eco-Town Project in a town called
Erdos in the Inner Mongolia Autonomous Region of China. It was a
collaboration between the Dongsheng District government in Erdos and the
Stockholm Environment Institute and aimed to save water and provide
sanitation services in this drought-stricken and rapidly urbanizing area
of northern China. For a variety of technical, social and institutional
reasons, the UDDTs were removed after only a few years and the project
failed to deliver in the area of nutrient recovery. This project is now
well documented and has raised more awareness of the challenges and
disadvantages of "urban ecosan".
The Rich Earth Institute in Brattleboro,
Vermont, USA, is an NGO dedicated to reclaiming human urine as
fertilizer. They have established the only community-scale urine
nutrient reclamation program in the United States and are researching
and developing treatment technologies to optimize the use of urine as
fertilizer.
SOIL in Haiti built what they call "ecosan toilets" (UDDTs) as part of the emergency relief effort following the 2010 Haiti earthquake. More than 20,000 Haitians are currently using SOIL ecological sanitation toilets and SOIL has produced over 400,000 liters of compost as a result. The compost is used for agricultural and reforestation projects. SOIL's composting process is effective in inactivating Ascaris eggs – an indicator for helminth eggs in general – in the excreta collected from the dry toilets within 16 weeks. The composting and monitoring methods used by SOIL in Haiti may serve as an example for other international settings.
Sanitation First, an NGO in the UK is building ecosan facilities (UDDTs) in various parts of the developing world. They predominantly work in Tamil Nadu
(India), where the Tamil Nadu State Government provides subsidies for
their work. They have also constructed ecosan in other parts of rural India, Kenya and Sierra Leone. According to their website, 58,000 people worldwide are using their ecosan toilets in 2021.
The NGO CREPA which was operating in the French-speaking West Africa
region (now called WSA – Water and Sanitation in Africa) was very
active in ecosan promotion from 2002–2010 with a strong focus on UDDTs
coupled with reuse in agriculture, especially in Burkina Faso.
Information and communication technologies for development help to fight poverty. A mobile phone being charged from a car battery in Uganda.
Graph
(based on data from the World Bank) showing the proportion of the
world's population (blue) and the absolute numbers of people (red)
living on <1, <1.25, and <2 US dollars a day (2005 equivalent
values) between 1981 and 2008
Poverty reduction, poverty relief, or poverty alleviation, is a set of measures, both economic and humanitarian, that are intended to permanently lift people out of poverty.
Measures, like those promoted by Henry George in his economics classic Progress and Poverty,
are those that raise, or are intended to raise, ways of enabling the
poor to create wealth for themselves as a conduit of ending poverty
forever. In modern times, various economists within the Georgism movement propose measures like the land value tax to enhance access to the natural world for all. Poverty occurs in both developing countries and developed countries. While poverty is much more widespread in developing countries, both types of countries undertake poverty reduction measures.
Poverty has been historically accepted in some parts of the world as
inevitable as non-industrialized economies produced very little, while
populations grew almost as fast, making wealth scarce. Geoffrey Parker wrote that:
In
Antwerp and Lyon, two of the largest cities in western Europe, by 1600
three-quarters of the total population were too poor to pay taxes, and
therefore likely to need relief in times of crisis.
Poverty reduction occurs largely as a result of overall economic growth. Food shortages were common before modern agricultural technology and in places that lack them today, such as nitrogen fertilizers, pesticides and irrigation methods. The dawn of the Industrial Revolution led to high economic growth, eliminating mass poverty in what is now considered the developed world. World GDP per person quintupled during the 20th century. In 1820, 75% of humanity lived on less than a dollar a day, while in 2001 only about 20% did.
Poverty alleviation also involves improving the living conditions
of people who are already poor. Aid, particularly in the medical and
scientific areas, is essential in providing better lives, such as the Green Revolution and the eradication of smallpox. Problems with today's development aid include the high proportion of tied aid, which mandates receiving nations to buy products, often more expensive, originating only from donor countries. Nevertheless, some believe (Peter Singer in his book The Life You Can Save) that small changes in the ways people in affluent nations live their lives could solve world poverty.
Economic Liberalization
Some commentators have claimed that, due to economic liberalization, poverty in the world is rising rather than declining, and the data provided by the World Bank, echoing that poverty is decreasing, is flawed.
They also argue that extending property rights protection to the poor
is one of the most important poverty reduction strategies a nation can
implement. Securing property rights to land, the largest asset for most societies, is vital to their economic freedom. The World Bank
concludes that increasing land rights is 'the key to reducing poverty'
citing that land rights greatly increase poor people's wealth, in some
cases doubling it.
It is estimated that state recognition of the property of the poor
would give them assets worth 40 times all the foreign aid since 1945.
Although approaches varied, the World Bank said the key issues were
security of tenure and ensuring land transactions were low cost. In China and India, noted reductions in poverty in recent decades have occurred mostly as a result of the abandonment of collective farming in China and the cutting of government red tape in India.
New enterprises and foreign investment can be driven away by the
results of inefficient institutions, corruption, the weak rule of law
and excessive bureaucratic burdens.
It takes two days, two bureaucratic procedures, and $280 to open a
business in Canada while an entrepreneur in Bolivia must pay $2,696 in
fees, wait 82 business days, and go through 20 procedures to do the
same. Such costly barriers favor big firms at the expense of small enterprises where most jobs are created.
In India before economic reforms, businesses had to bribe government
officials even for routine activities, which was in effect a tax on
business.
However, ending government sponsorship of social programs is sometimes advocated as a free market principle with tragic consequences. For example, the World Bank presses poor nations to eliminate subsidies for fertilizer that many farmers cannot afford at market prices. The reconfiguration of public financing in former Soviet states during their transition to a market economy called for reduced spending on health and education, sharply increasing poverty.
Trade liberalization increases total surplus of trading nations. Remittances sent to poor countries, such as India, are sometimes larger than foreign direct investment and total remittances are more than double aid flows from OECD countries. Foreign investment and export industries helped fuel the economic expansion of fast growing Asian nations.
However, trade rules are often unfair as they block access to richer
nations' markets and ban poorer nations from supporting their
industries. Processed products from poorer nations, in contrast to raw materials, get vastly higher tariffs at richer nations' ports. A University of Toronto study found the dropping of duty charges on thousands of products from African nations because of the African Growth and Opportunity Act was directly responsible for a "surprisingly large" increase in imports from Africa. Deals can sometimes be negotiated to favor the developing country
such as in China, where laws compel foreign multinationals to train
their future Chinese competitors in strategic industries and render
themselves redundant in the long term.
In Thailand, the 51 percent rule compels multinational corporations
starting operations in Thailand give 51 percent control to a Thai
company in a joint venture. Additionally, the United Nations Sustainable Development Goal 17 advocates respect for countries leadership to implement policies for poverty eradication and sustainable development.
Capital, infrastructure and technology
World GDP per capita (log scale)
World GDP per capita
Long run economic growth per person is achieved through increases in
capital (factors that increase productivity), both human and physical,
and technology. Improving human capital, in the form of health, is needed for economic growth. Nations do not necessarily need wealth to gain health. For example, Sri Lanka had a maternal mortality rate of 2% in the 1930s, higher than any nation today. It reduced it to 0.5–0.6% in the 1950s and to 0.06% today. However, it was spending less each year on maternal health because it learned what worked and what did not.
Knowledge on the cost effectiveness of healthcare interventions can be
elusive but educational measures to disseminate what works are
available, such as the disease control priorities project. Promoting hand washing is one of the most cost effective health intervention and can cut deaths from the major childhood diseases of diarrhea and pneumonia by half.
Human capital, in the form of education, is an even more important determinant of economic growth than physical capital. Deworming children costs about 50 cents per child per year and reduces non-attendance from anemia, illness and malnutrition and is only a twenty-fifth as expensive to increase school attendance as by constructing schools.
UN economists argue that good infrastructure, such as roads and information networks, helps market reforms to work.
China claims it is investing in railways, roads, ports and rural
telephones in African countries as part of its formula for economic
development. It was the technology of the steam engine
that originally began the dramatic decreases in poverty levels. Cell
phone technology brings the market to poor or rural sections. With necessary information, remote farmers can produce specific crops to sell to the buyers that brings the best price.
Such technology also helps bring economic freedom by making financial services accessible to the poor. Those in poverty place overwhelming importance on having a safe place to save money, much more so than receiving loans. Also, a large part of microfinance loans are spent on products that would usually be paid by a checking or savings account. Mobile banking addresses the problem of the heavy regulation and costly maintenance of saving accounts. Mobile financial services in the developing world, ahead of the developed world in this respect, could be worth $5 billion by 2012. Safaricom's M-Pesa launched one of the first systems where a network of agents of mostly shopkeepers, instead of bank branches, would take deposits
in cash and translate these onto a virtual account on customers'
phones. Cash transfers can be done between phones and issued back in
cash with a small commission, making remittances safer.
However, several academic studies have shown that mobile phones
have only limited effect on poverty reduction when not accompanied by
other basic infrastructure development.
Shiva Kumar – The importance of MDGs in redefining what are the poverty drivers
Economic growth has the indirect potential to alleviate poverty, as a
result of simultaneous increases in employment opportunities and labour productivity. A study by researchers at the Overseas Development Institute (ODI) of 24 countries that experienced growth found that in 18 cases, poverty was alleviated. However, employment is no guarantee of escaping poverty. The International Labour Organization
(ILO) estimates that as many as 40% of workers are poor, not earning
enough to keep their families above the $2 a day poverty line. For instance, in India most of the chronically poor are wage earners in formal employment owing to the fact that their jobs are insecure and low paid and offer no chance to accumulate wealth to avoid risks.
This appears to be the result of a negative relationship between
employment creation and increased productivity, when a simultaneous
positive increase is required to reduced poverty. According to the UNRISD,
increasing labour productivity appears to have a negative impact on job
creation: in the 1960s, a 1% increase in output per worker was
associated with a reduction in employment growth of 0.07%, by the first
decade of this century the same productivity increase implies reduced
employment growth by 0.54%.
Increases in employment without increases in productivity leads to a rise in the number of "working poor", which is why some experts are now promoting the creation of "quality" and not "quantity" in labour market policies.
This approach does highlight how higher productivity has helped reduce
poverty in East Asia, but the negative impact is beginning to show. In Vietnam, for example, employment growth has slowed while productivity growth has continued.
Furthermore, productivity increases do not always lead to increased
wages, as can be seen in the US, where the gap between productivity and
wages has been rising since the 1980s. The ODI study showed that other sectors were just as important in reducing unemployment, as manufacturing. The services sector
is most effective at translating productivity growth into employment
growth. Agriculture provides a safety net for jobs and economic buffer
when other sectors are struggling. This study suggests a more nuanced understanding of economic growth and quality of life and poverty alleviation.
Helping farmers
Helping insure farmers in Argentina and Chile
Raising farm incomes is described as the core of the antipoverty effort as three-quarters of the poor today are farmers.
Estimates show that growth in the agricultural productivity of small
farmers is, on average, at least twice as effective in benefiting the
poorest half of a country's population as growth generated in
non-agricultural sectors. For example, a 2012 study suggested that new varieties of chickpea
could benefit Ethiopian farmers in future. The study assessed the
potential economic and poverty impact of 11 improved chickpea varieties,
released by the national agricultural research organization of Ethiopia
in collaboration with the International Crops Research Institute for the Semi-Arid Tropics, (ICRISAT).
The researchers estimated that using the varieties would bring about a
total benefit of US$111 million for 30 years with consumers receiving
39% of the benefit and producers 61%. They expected the generated
benefit would lift more than 0.7 million people (both producers and
consumers) out of poverty. The authors concluded that further
investments in the chickpea and other legume research in Ethiopia were therefore justified as a means of poverty alleviation.
Improving water management is an effective way to help reduce
poverty among farmers. With better water management, they can improve
productivity and potentially move beyond subsistence-level farming.
During the Green Revolution of the 1960s and 1970s, for example,
irrigation was a key factor in unlocking Asia's agricultural potential
and reducing poverty. Between 1961 and 2002, the irrigated area almost
doubled, as governments sought to achieve food security, improve public
welfare and generate economic growth. In South Asia, cereal production
rose by 137% from 1970 to 2007. This was achieved with only 3% more
land.
The International Water Management Institute in Colombo, Sri Lanka,
aims to improve the management of land and water resources for food,
livelihoods and the environment. One project its scientists worked on
demonstrates the impact that improving water management in agriculture
can have. The study, funded by the Japan Bank for International
Cooperation, initially upgraded and irrigated the irrigation system on
the Walawe Left Bank, Sri Lanka, in 1997. In 2005, irrigation was
extended to a further area. An analysis of the whole area was carried
out in 2007 and 2008. This study found that access to irrigation
provided families with opportunities to diversify their livelihood
activities and potentially increase their incomes. For example, people
with land could reliably grow rice or vegetables instead of working as
labourers or relying on rainfall to water their crops. Those without
land could benefit by working within new inland fisheries. Within the
project's control area, 57% of households were below the poverty line in
2002 compared with 43% in 2007.
Building opportunities for self-sufficiency
Making employment opportunities available is just as important as increasing income and access to basic needs. Poverty activist Paul Polak
has based his career around doing both at once, creating companies that
employ the poor while creating "radically" affordable goods. In his
book Out of Poverty he argues that traditional poverty
eradication strategies have been misguided and fail to address
underlying problems. He lists "Three Great Poverty Eradication Myths":
that we can donate people out of poverty, that national economic growth
will end poverty, and that Big Business, operating as it does now, will
end poverty.
Economic models which lead to national growth and more big business
will not necessarily lead to more opportunities for self-sufficiency.
However, businesses designed with a social goal in mind, such as micro
finance banks, may be able to make a difference.
Growth vs. state intervention: comparative perspective in China, India, Brazil
A 2012 World Bank research article, "A Comparative Perspective on
Poverty Reduction in Brazil, China, and India", looked at the three
nations' strategies and their relative challenges and successes. During
their reform periods, all three have reduced their poverty rates, but
through a different mix of approaches. The report used a common poverty
line of $1.25 per person, per day, at purchasing parity power for
consumption in 2008. Using that metric and evaluating the period between
1981 and 2005, the poverty rate in China dropped from 84% to 16%; India
from 60% to 42%; and Brazil from 17% to 8%. The report sketches an
overall scorecard of the countries on the two basic dimensions of
pro-poor growth and pro-poor policy intervention: "China clearly scores
well on the pro-poor growth side of the card, but neither Brazil nor
India do; in Brazil's case for lack of growth and in India's case for
lack of poverty-reducing growth. Brazil scores well on the social
policies side, but China and India do not; in China's case progress has
been slow in implementing new social policies more relevant to the new
market economy (despite historical advantages in this area, inherited
from the past regime) and in India's case the bigger problems are the
extent of capture of the many existing policies by non-poor groups and
the weak capabilities of the state for delivering better basic public
services."
Aid in its simplest form is a basic income grant, a form of social security periodically providing citizens with money. In pilot projects in Namibia,
where such a program pays just $13 a month, people were able to pay
tuition fees, raising the proportion of children going to school by 92%,
child malnutrition rates fell from 42% to 10% and economic activity grew 10%. Aid could also be rewarded based on doing certain requirements. Conditional Cash Transfers, widely credited as a successful anti-poverty program, is based on actions such as enrolling children in school or receiving vaccinations.
In Mexico, for example, the country with the largest such program,
dropout rates of 16- to 19-year-olds in rural area dropped by 20% and
children gained half an inch in height.
Initial fears that the program would encourage families to stay at home
rather than work to collect benefits have proven to be unfounded.
Instead, there is less excuse for neglectful behavior as, for example,
children are prevented from begging on the streets instead of going to
school because it could result in suspension from the program.
Welfare states
have an effect on poverty reduction. Currently modern, expansive
welfare states that ensure economic opportunity, independence and
security in a near universal manner are still the exclusive domain of
the developed nations. commonly constituting at least 20% of GDP, with the largest Scandinavian welfare states constituting over 40% of GDP.
These modern welfare states, which largely arose in the late 19th and
early 20th centuries, seeing their greatest expansion in the mid 20th
century, and have proven themselves highly effective in reducing
relative as well as absolute poverty in all analyzed high-income OECD
countries.
A major proportion of aid from donor nations is 'tied', mandating
that a receiving nation buy products originating only from the donor
country. This can be harmful economically. For example, Eritrea
is forced to spend aid money on foreign goods and services to build a
network of railways even though it is cheaper to use local expertise and
resources.
Money from the United States to fight AIDS requires it be spent on U.S
brand name drugs that can cost up to $15,000 a year compared to $350 a
year for generics from other countries. Only Norway, Denmark, Netherlands and Britain have stopped tying their aid.
Some people disagree with aid when looking at where the
development aid money from NGOs and other funding is going. Funding
tends to be used in a selective manner where the highest ranked health
problem is the only thing treated, rather than funding basic health care
development. This can occur due to a foundation's underlying political
aspects to their development plan, where the politics outweigh the
science of disease. The diseases then treated are ranked by their
prevalence, morbidity, risk of mortality, and the feasibility of
control.
Through this ranking system, the disease that cause the most mortality
and are most easily treated are given the funding. The argument occurs
because once these people are treated, they are sent back to the
conditions that led to the disease in the first place. By doing this,
money and resources from aid can be wasted when people are re-infected.
This was seen in the Rockefeller Foundation's Hookworm campaign in
Mexico in the 1920s, where people were treated for hookworm and then
contracted the disease again once back in the conditions from which they
came. To prevent this, money could be spent on teaching citizens of the
developing countries health education, basic sanitation, and providing
adequate access to prevention methods and medical infrastructure. Not
only would NGO money be better spent, but it would be more sustainable.
These arguments suggest that the NGO development aid should be used for
prevention and determining root causes rather acting upon political
endeavours and treating for the sake of saying they helped.
Some think tanks
and NGOs have argued that Western monetary aid often only serves to
increase poverty and social inequality, either because it is conditioned
with the implementation of harmful economic policies in the recipient
countries, or because it is tied to the importing of products from the donor country over cheaper alternatives. Sometimes foreign aid is seen to be serving the interests of the donor more than the recipient,
and critics also argue that some of the foreign aid is stolen by
corrupt governments and officials, and that higher aid levels erode the
quality of governance. Policy becomes much more oriented toward what
will get more aid money than it does towards meeting the needs of the
people.
Problems with the aid system and not aid itself are that the aid is
excessively directed towards the salaries of consultants from donor
countries, the aid is not spread properly, neglecting vital, less
publicized area such as agriculture, and the aid is not properly
coordinated among donors, leading to a plethora of disconnected projects
rather than unified strategies.
Supporters of aid argue that these problems may be solved with better auditing of how the aid is used. Immunization campaigns for children, such as against polio, diphtheria and measles have saved millions of lives.
Aid from non-governmental organizations may be more effective than
governmental aid; this may be because it is better at reaching the poor
and better controlled at the grassroots level. As a point of comparison, the annual world military spending is over $1 trillion.
One of the proposed ways to help poor countries that emerged during the 1980s has been debt relief.
Given that many less developed nations have gotten themselves into
extensive debt to banks and governments from the rich nations, and given
that the interest payments on these debts are often more than a country
can generate per year in profits from exports, cancelling part or all
of these debts may allow poor nations "to get out of the hole".
If poor countries do not have to spend so much on debt payments, they
can use the money instead for priorities which help reduce poverty such
as basic health-care and education.
Many nations began offering services, such as free health care even
while overwhelming the health care infrastructure, because of savings
that resulted from the rounds of debt relief in 2005.
The role of education and skill-building as precursors to economic development
Universal public education has some role in preparing youth for basic
academic skills and perhaps many trade skills, as well. Apprenticeships
clearly build needed trade skills. If modest amounts of cash and land
can be combined with a modicum of agricultural skills in a temperate
climate, subsistence can give way toward modest societal wealth. As has
been mentioned, education for women will allow for reduced family
size—an important poverty reduction event in its own right. While all
components mentioned above are necessary, the portion of education
pertaining to the variety of skills needed to build and maintain the
infrastructure of a developing (moving out of poverty) society: building
trades; plumbing; electrician; well-drilling; farm and transport
mechanical skills (and others) are clearly needed in large numbers of
individuals, if the society is to move out of poverty or subsistence.
Yet, many well-developed western economies are moving strongly away from
the essential apprenticeships and skill training which affords a clear
vocational path out of modern urban poverty.
Microloans
One
of the most popular of the new technical tools for economic development
and poverty reduction are microloans made famous in 1976 by the Grameen Bank
in Bangladesh. The idea is to loan small amounts of money to farmers or
villages so these people can obtain the things they need to increase
their economic rewards. A small pump costing only $50 could make a very
big difference in a village without the means of irrigation.
A specific example is the Thai government's People's Bank which is
making loans of $100 to $300 to help farmers buy equipment or seeds,
help street vendors acquire an inventory to sell, or help others set up
small shops. The International Fund for Agricultural Development(IFAD) Vietnam
country programme supports operations in 11 poor provinces. Between
2002 and 2010 around 1,000 saving and credit groups (SCGs) were formed,
with over 17,000 members; these SCGs increased their access to microcredit for taking up small-scale farm activities.
Empowering women
Empowering Women - Panel discussion on the occasion of the International Women's Day
The empowerment
of women has relatively recently become a significant area of
discussion with respect to development and economics; however it is
often regarded as a topic that only addresses and primarily deals with gender inequality.
Because women and men experience poverty differently, they hold
dissimilar poverty reduction priorities and are affected differently by
development interventions and poverty reduction strategies. In response to the socialized phenomenon known as the feminization of poverty, policies aimed to reduce poverty have begun to address poor women separately from poor men.
In addition to engendering poverty and poverty interventions, a
correlation between greater gender equality and greater poverty
reduction and economic growth has been illustrated by research through
the World Bank, suggesting that promoting gender equality through empowerment of women is a qualitatively significant poverty reduction strategy.
Gender equality
Addressing gender equality
and empowering women are necessary steps in overcoming poverty and
furthering development as supported by the human development and capabilities approach and the Millennium Development Goals. Disparities in the areas of education, mortality rates,
health and other social and economic indicators impose large costs on
well-being and health of the poor, which diminishes productivity and the
potential to reduce poverty.
The limited opportunities of women in most societies restrict their
aptitude to improve economic conditions and access services to enhance
their well-being.
Mainstreaming gender
Gender mainstreaming,
the concept of placing gender issues into the mainstream of society,
was established by the United Nations Fourth World Conference on Women
as a global strategy for promoting gender equality; the UN conference
emphasized the necessity to ensure that gender equality is a primary
goal in all areas of social and economic development, which includes the
discussion of poverty and its reduction. Correspondingly, the World Bank also created objectives to address poverty with respect to the different effects on women.
One important goal was the revision of laws and administrative
practices to ensure women's equal rights and access to economic
resources. Mainstreaming strengthens women's active involvement in poverty
alleviation by linking women's capabilities and contributions with
macro-economic issues.
The underlying purpose of both the UN and World Bank policies speaks to
the use of discussion of gender issues in the promotion of gender
equality and reduction of poverty.
Strategies to empower women
Several
platforms have been adopted and reiterated across many organizations in
support of the empowerment of women with the specific aim of reducing
poverty. Encouraging more economic and political participation by women
increases financial independence from and social investment in the
government, both of which are critical to pulling society out of
poverty.
Economic participation
Women's economic empowerment,
or ensuring that women and men have equal opportunities to generate and
manage income, is an important step to enhancing their development
within the household and in society. Additionally, women play an important economic role in addressing poverty experienced by children. By increasing female participation in the labor force, women are able to contribute more effectively to economic growth and income distribution since having a source of income elevates their financial and social status.
However, women's entry into the paid labor force does not necessarily
equate to reduction of poverty; the creation of decent employment
opportunities and movement of women from the informal work sector to the
formal labor market are key to poverty reduction.
Other ways to encourage female participation in the workforce to
promote decline of poverty include providing childcare services,
increasing educational quality and opportunities, and furthering entrepreneurship for women.
Protection of property rights
is a key element in economically empowering women and fostering
economic growth overall for both genders. With legitimate claims to
land, women gain bargaining power, which can be applied to their lives
outside of and within the household.
The ability and opportunity for women to lawfully own land also
decreases the asset gap that exists between women and men, which
promotes gender equality.
Political participation
Political participation is supported by organizations such as IFAD as one pillar of gender equality and women's empowerment. Sustainable economic growth requires poor people to have influence on the decisions that affect their lives;
specifically strengthening women's voices in the political process
builds social independence and greater consideration of gender issues in
policy. In order to promote women's political empowerment, the United Nations Development Programme
advocated for several efforts: increase women in public office;
strengthen advocacy of women's organizations; ensure fair legal
protection; and provide equivalent health and education. Fair political representation and participation enable women to lobby for more female-specific poverty reduction policies and programs.
Efficient institutions that are not corrupt and obey the rule of law
make and enforce good laws that provide security to property and
businesses. Efficient and fair governments would work to invest in the
long-term interests of the nation rather than plunder resources through
corruption. Researchers at UC Berkeley developed what they called a "Weberianness scale" which measures aspects of bureaucracies and governments which Max Weber described as most important for rational-legal
and efficient government over 100 years ago. Comparative research has
found that the scale is correlated with higher rates of economic
development. With their related concept of good governance World Bank researchers have found much the same: Data from 150 nations have shown several measures of good governance (such as accountability, effectiveness, rule of law, low corruption) to be related to higher rates of economic development.
Funds from aid and natural resources are often diverted into private hands and then sent to banks overseas as a result of graft. If Western banks rejected stolen money, says a report by Global Witness, ordinary people would benefit "in a way that aid flows will never achieve". The report asked for more regulation of banks as they have proved capable of stanching the flow of funds linked to terrorism, money-laundering or tax evasion.
Some, like Thomas Pogge, call for a global organization that can manage some form of Global Resources Dividend, which could evolve in complexity with time.
Examples of good governance leading to economic development and poverty reduction include Thailand, Taiwan, Malaysia, South Korea, and Vietnam, which tend to have a strong government, called a hard state or development state.
These "hard states" have the will and authority to create and maintain
policies that lead to long-term development that helps all their
citizens, not just the wealthy.
Multinational corporations are regulated
so that they follow reasonable standards for pay
and labor conditions, pay reasonable taxes to help develop the country,
and keep some of the profits in the country, reinvesting them to
provide further development.
The United Nations Development Program
published a report in April 2000 which focused on good governance in
poor countries as a key to economic development and overcoming the
selfish interests of wealthy elites often behind state actions in
developing nations. The report concludes that "Without good governance, reliance on trickle-down economic development and a host of other strategies will not work."
Despite the promise of such research several questions remain, such as
where good governance comes from and how it can be achieved. The
comparative analysis of one sociologist
suggests that broad historical forces have shaped the likelihood of
good governance. Ancient civilizations with more developed government
organization before colonialism,
as well as elite responsibility, have helped create strong states with
the means and efficiency to carry out development policies today. On the
other hand, strong states are not always the form of political
organization most conducive to economic development. Other historical
factors, especially the experiences of colonialism for each country,
have intervened to make a strong state and/or good governance less
likely for some countries, especially in Africa. Another important
factor that has been found to affect the quality of institutions and
governance was the pattern of colonization (how it took place) and even
the identity of colonizing power. International agencies may be able to
promote good governance through various policies of intervention in
developing nations as indicated in a few African countries, but
comparative analysis suggests it may be much more difficult to achieve
in most poor nations around the world.
Other approaches
Another approach that has been proposed for alleviating poverty is Fair Trade
which advocates the payment of an above market price as well as social
and environmental standards in areas related to the production of goods.
The efficacy of this approach to poverty reduction is controversial.
The Toronto Dollar is an example of a local currency
oriented towards reducing poverty. Toronto Dollars are sold and
redeemed in such a way that raise funds which are then given as grants
to local charities, primarily ones oriented towards reducing poverty. Toronto Dollars also provide a means to create an incentive
for welfare recipients to work: Toronto dollars can be given as gifts
to welfare recipients who perform volunteer work for charitable and
non-profit organizations, and these gifts do not affect welfare
benefits.
Some have argued for radical economic change in the system. There
are several fundamental proposals for restructuring existing economic
relations, and many of their supporters argue that their ideas would
reduce or even eliminate poverty entirely if they were implemented. Such
proposals have been put forward by both left-wing and right-wing
groups: socialism, communism, anarchism, libertarianism, binary economics and participatory economics, among others.
In his book The End of Poverty, prominent economist Jeffrey Sachs
laid out a plan to eradicate global poverty by 2025. Following his
recommendations, international organizations such as the Global
Solidarity Network
are working to help eradicate poverty worldwide with intervention in
the areas of housing, food, education, basic health, agricultural
inputs, safe drinking water, transportation and communications.
The Poor People's Economic Human Rights Campaign
is an organization in the United States working to secure freedom from
poverty for all by organizing the poor themselves. The Campaign believes
that a human rights framework, based on the value of inherent dignity
and worth of all persons, offers the best means by which to organize for
a political solution to poverty.
The increase in extreme weather events, linked to climate change, and
resulting disasters is expected to continue. Disasters are a major
cause of impoverishment and can reverse progress towards poverty
reduction. A report by the world bank shows that poor persons are most prone to climate disasters.
It is predicted that by 2030, 325 million (plus) extremely poor
people will be living in the 49 most hazard prone countries. Most of
these are located in South Asia and Sub-Saharan Africa.
A researcher at a leading global think-tank, the Overseas Development Institute, suggests that far more effort should be done to better coordinate and integrate poverty reduction strategies with climate change adaptation. The two issues are argued to be currently only dealt with in parallel as most poverty reduction strategy papers ignore climate change adaptation
altogether, while National Adaptation Programmes of Action (NAPAs)
likewise do not deal directly with poverty reduction. Adaptation-poverty
linkages were found to be strongest in NAPAs from sub-Saharan Africa LDCs.
Experiments done in Africa (Uganda and Tanzania) and Sri Lanka on
hundreds of households have shown that a bicycle can increase the income
of a poor family by as much as 35%. Transport, if analyzed for the cost-benefit analysis for rural poverty
alleviation, has given one of the best returns in this regard. For
example, road investments in India were a staggering 3–10 times more
effective than almost all other investments and subsidies in rural
economy in the decade of the 1990s. What a road does at a macro level to
increase transport, the bicycle supports at the micro level. The
bicycle, in that sense, can be one of the best means to eradicate
poverty in poor nations.
Millennium Development Goals
Eradication of extreme poverty and hunger by 2015 is one of the Millennium Development Goals (MDGs). In addition to broader approaches, the Sachs Report (for the UN Millennium Project)
proposes a series of "quick wins", approaches identified by development
experts which would cost relatively little but could have a major
constructive effect on world poverty. The quick wins are:
The first of the 17 Sustainable Development Goals (SDGs) calls for an end to poverty by 2030 and seeks to ensure social protection for the poor and supporting people affected by climate-related extreme events.
As the decade that began in 2002, the percentage of the world's
population living under the poverty line reduced by half, from 26 per
cent to 13 per cent. If the growth rate during those 10 years had
prevailed over the next 15 years,
it would be possible to decrease the rate of extreme poverty in the
world to 4 per cent by 2030, assuming the growth will benefit all income
groups of the population on an equal footing. However, if the growth
rate was over a longer period of 20 years, the rate of prevalent global
poverty is likely to be about 6 per cent. In other words, the
eradication of extreme poverty will require a significant change from
its historical growth rates.
Poverty targeting
Sustainable Development Goal 1
Poverty reduction requires governments to identify and reach out to
extremely poor and help them out of poverty through sustainable
measures. One such approach supported by many international donors is of
targeted poverty reduction programmes.
There are several poverty targeting methods through which poor
communities are identified and tracked for poverty reduction programmes.
For instance, one common method of poverty targeting is 'means testing'
that uses a certain income or expenditure threshold for an individual
or the a household to be considered as poor and eligible for support.
Global initiatives to end hunger and undernutrition
An important part of the fight against poverty are efforts to end hunger and achieve food security. In April 2012, the Food Assistance Convention was signed, the world's first legally binding international agreement on food aid. The May 2012 Copenhagen Consensus
recommended that efforts to combat hunger and malnutrition should be
the first priority for politicians and private sector philanthropists
looking to maximize the effectiveness of aid spending. They put this
ahead of other priorities, like the fight against malaria and AIDS.
The main global policy to reduce hunger and poverty are the recently approved Sustainable Development Goals. In particular Goal 2: Zero Hunger sets globally agreed targets to end hunger, achieve food security and improved nutrition and promote sustainable agriculture.
In 2013 Caritas International started a Caritas-wide initiative
aimed at ending systemic hunger by 2025. The One human family, food for
all campaign focuses on awareness raising, improving the impact of
Caritas programs and advocating the implementation of the right to food.
The partnership Compact2025, led by IFPRI with the involvement of UN organisations, NGOs and private foundations
develops and disseminates evidence-based advice to politicians and
other decision-makers aimed at ending hunger and undernutrition in the
coming 10 years, by 2025.
The EndingHunger
campaign is an online communication campaign aimed at raising awareness
of the hunger problem. It has many worked through viral videos
depicting celebrities voicing their anger about the large number of
hungry people in the world.
Another initiative focused on improving the hunger situation by
improving nutrition is the Scaling up Nutrition movement (SUN). Started
in 2010, this movement of people from governments, civil society, the
United Nations, donors, businesses and researchers publishes a yearly
progress report on the changes in their 57 partner countries.
Poverty reduction in Taiwan
In spite of the intensive reduction strategies deployed in the previous two decades, poverty levels in several countries of the world has not been reduced.
Recent research has demonstrated that the low wage levels of the needy
families have risen gradually, although in some scenarios they have
declined.
While wage level is the main median pointer of welfare, such results
suggest that past poverty reduction procedures have not been precise.
Unless suitable reduction procedures are formulated and implemented in
the near future, rustic poverty will probably be a real issue for quite
some long time. Families are determined to be low-pay if their monthly
income does not surpass the evaluated monthly minimum set by every city
or region. To meet the family's essential needs (shelter, food,
clothing, and education) in Taipei,
one would need to have $337 every month. This sum changes relying upon
the city's way of life; for instance, one would just need to have $171
every month to live in Kinmen County.
Sustained economic growth is noted as the main propelling agent for Poverty Reduction in Taiwan. While internal FDI has no noteworthy effect on the mean wage of poor people, outward FDI
from Taiwan in the previous two decades appears to have adversely
affected the poorest 20% of the populace. Poverty in Taiwan has nearly
been eliminated, with under 1 percent of the populace considered as poor
or earning the low-level pay. This implies more than 99 percent of the
populace appreciates the advantages of Taiwan's economic flourishing and
extraordinarily enhanced personal satisfaction.
Beside lowly-paid families, the government offers support to other
individuals, for example, the elderly and the incapacitated, who cannot
work. During 1980 to 1999 Taiwanese government developed a program
called National Health Insurance program. NHI mainly provides economically disadvantaged people with quality healthcare at an affordable price.
July 1993, the government of Taiwan started giving a monthly
sponsorship to elderly people. People beyond 65 years old whose normal
family salary is not exactly, or equivalent to, 1.5 times the base
monthly costs are fit to get a monthly sponsorship of $174.
Private transfers also play an important role in Taiwan for antipoverty
according to the date Taiwan provided to the Luxembourg Income Studies,
the results indicates the private transfer has greater impact than
public transfers in terms of proving welfare state.
In 1999, the government of Taiwan spent US$5.08 billion on social
welfare projects and offered numerous sorts of assistance to people and
families from low-pay sets.
Notwithstanding money, assistance to get employment is given to the
breadwinners in families, alongside educational guide for school-age
children and well-being programs for women and children. In addition,
there are additionally community associations, scholastic organizations,
and private establishments arranged by government offices to help needy
people. In principle, Taiwan is currently a liberal and elections based
society. Hence social versatility ought to be the standard. Notably, as per an investigation of extra cash in Taiwan by the Directorate General of Budget, Accounting and Statistics,
families with the most astounding dispensable salaries number 2.6
people, while families with the least discretionary cash flow number 4.7
people.
With rising costs of simple commodities and privatization of the
training market, economically distraught families will end up in an
undeniably hard position to educate their own children. However, this
type of social welfare will significantly lower the Taiwan's revenue.
Due to the slow economic development in the past years, this method will
no longer close the income inequality or reduce the unemployment rate
effectively in the future.
The concept of business serving the world's poorest four billion or
so people has been popular since CK Prahalad introduced the idea through
his book Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits in 2004, among many business corporations and business schools.Kash Rangan, John Quelch, and other faculty members at the Global Poverty Project at Harvard Business School
"believe that in pursuing its own self-interest in opening and
expanding the BoP market, business can make a profit while serving the
poorest of consumers and contributing to development."
According to Rangan "For business, the bulk of emerging markets
worldwide is at the bottom of the pyramid so it makes good business
sense – not a sense of do-gooding – to go after it."
In their 2013 book, The Business Solution to Poverty, Paul Polak and Mal Warwick directly addressed the criticism leveled against Prahalad's concept.
They noted that big business often failed to create products that
actually met the needs and desires of the customers who lived at the
bottom-of-the-pyramid. Their answer was that a business that wanted to
succeed in that market had to spend time talking to and understanding
those customers. Polak had previously promoted this approach in his
previous book, Out of Poverty, that described the work of International Development Enterprises (iDE), which he had formed in 1982.
Polak and Warwick provided practical advice: a product needed to affect
at least a billion people (i.e., have universal appeal), it had to be
able to be delivered to customers living where there was not a FedEx
office or even a road, and it had to be "radically affordable" to
attract someone who earned less than $2 a day.
Rather than encouraging multinational businesses to meet the needs of the poor, some organizations such as iDE, the World Resources Institute, and the United Nations Development Programme began to focus on working directly with helping bottom-of-the-pyramid populations become local, small-scale entrepreneurs.
Since so much of this population is engaged in agriculture, these NGOs
have addressed market gaps that enable small-scale (i.e., plots less
than 2 hectares) farmers to increase their production and find markets
for their harvests. This is done by increasing the availability of
farming equipment (e.g., pumps, tillers, seeders) and better quality
seed and fertilizer, as well as expanding access for training in farming
best practices (e.g., crop rotation).
Creating entrepreneurs through microfinance can produce
unintended outcomes: Some entrepreneurial borrowers become informal
intermediaries between microfinance initiatives and poorer
micro-entrepreneurs. Those who more easily qualify for microfinance
split loans into smaller credit to even poorer borrowers. Informal
intermediation ranges from casual intermediaries at the good or benign
end of the spectrum to 'loan sharks' at the professional and sometimes
criminal end of the spectrum.
Milton Friedman argues that the social responsibility of business is to increase its profits only; thus, it needs to be examined whether business in BoP markets is capable of achieving the dual objective of making a profit while serving the poorest of consumers and contributing to development? Erik Simanis has reported that the model has a fatal flaw. According to Simanis:
Despite
achieving healthy penetration rates of 5% to 10% in four test markets,
for instance, Procter & Gamble couldn't generate a competitive
return on its Pur water-purification powder after launching the product
on a large scale in 2001... DuPont ran into similar problems with a
venture piloted from 2006 to 2008 in Andhra Pradesh, India, by its
subsidiary Solae, a global manufacturer of soy protein ... Because the
high costs of doing business among the very poor demand a high
contribution per transaction, companies must embrace the reality that
high margins and price points aren't just a top-of-the-pyramid
phenomenon; they're also a necessity for ensuring sustainable businesses
at the bottom of the pyramid.
Marc Gunther states
that "The bottom-of-the-pyramid (BOP) market leader, arguably, is
Unilever ... Its signature BOP product is Pureit, a countertop
water-purification system sold in India, Africa and Latin America. It's
saving lives, but it's not making money for shareholders." This leaves the ideal of eradicating poverty through profits or with a good business sense – not a sense of do-gooding rather questionable.
Others have noted that relying on BoP consumers to choose to
purchase items that increase their incomes is naive. Poor consumers may
spend their income disproportionately on events or goods and services
that offer short-term benefits rather than invest in things that could
change their lives in the long-term.
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