Poverty and Development: Our World’s Reality and Solution

There are always different circumstances each of us faces everyday. Some of us may live
comfortably, being able to eat 3 times a day or more, and could not care less about our everyday
expenses. While others, wake up to a very uncomfortable place, having to go through the day with just a
meal or two or nothing at all, and work hours after hours but still has not enough money on their hands.
The latter is what makes up about majority of the 7 billion people in our world. Different parts of the world
experience different kinds of life. Rich countries have a reasonably good life. They have the chance to
attend the university they dream, have a lot of opportunities awaiting and might be able to live up to 78
years old. These privileges are just dreams and aspirations of those that belong to the developing, poor,
underdeveloped countries who could not even finish basic primary education or are not expected to
proceed beyond.

It is just so unfortunate to know that the other half live so differently. It’s like their living in
darkness and literally in darkness because they have no electricity. They are somehow being deprived of
their right to basic necessities such as medical care because doctors are stationed in the cities, far away
from the vulnerable places. There is just so much sharp contrast for us to just ignore. The presence of
absolute poverty, the reality that some places like the remote rural area in the eastern part of Africa have
a subsistence economy in which little money can be generated because the production of goods is mainly
for personal consumption. The development process may be set in motion which is good news because
there will be construction of roads that will improve the medical care issue however this may cause
frustration as people would come to realize how left behind they are, how deprived they were which would
take a toll on them psychologically.

As I read some testimonies from the poor people regarding what poverty is like, I felt like it made
me understand poverty more than just reading descriptions of it. What struck me the most was what the
poor man from Kenya said, “Don’t ask me what poverty is because you have met it outside my house.
Look at the house and count the number of holes. Look at the utensils and the clothes I am wearing. Look
at everything and write what you see. What you see is poverty.” I personally think that it is sad to see a
person look at himself and see the epitome of poverty in him. It makes us think what could we have done
to help them, to alleviate their lives. For us to be able to understand how we could develop our economy,
we should first pay attention to the plight of the people living below and in the poverty line. Developing
nations including Brazil, Russia, India, China and South Africa (BRICS) were examples of how economic
development process were uneven and uncertain because they have experienced economical growth in
certain year and a downfall of that growth after a year or two. It was in India where for the first time their
growth is at 10% in 2010 but it fell to barely a third in 2012 which tells us that economic development is a
process of many decades.

Traditional economics is an approach which is concerned primarily with the efficient, least-cost
allocation of scarce productive resources and emphasizes utility, profit maximation and determination of
equilibrium. Basically, it is economic rationality where we direct ourselves to making economic decisions.
On the other hand, Political economy combines economic analysis and practical applications to view an
economic activity in its political context. As we all know, some people in power especially in our country,
the Philippines, make economic decisions for political gain. It is evident with how our president decides
the fate of our country with regards to its relationship with China. This is an example of Political economy
where we see the role of power in economic decision making. We should take in consideration the
economic, social, political and institutional mechanisms together with our efforts of efficiently allocating
our scarce productive resources to bring rapid and large-scale improvements, and this is Development
economics. It is a fact that political and social priorities heavily influence economic decisions or
calculations like unifying the nation and preserving religious and cultural traditions. This is because every
action has a deliberate result or consequence. And favorably, the results should efficiently bring economic
progress to the broadest segment of the population. It is through Development economics that we
understand the developing countries in ways where we could improve the lives of the majority of the
global population.

We all have needs and wants and this is what economics is about. It is concerned with how we,
the human beings, satisfy our needs such as food, shelter and nonmaterial wants like education and
spiritual fulfillment. What we think is desirable or not desirable is fueled by what Mahatma Gandhi once
called the “realization of human potential”. Economic and social equality, elimination of poverty, universal
education, national independence, rule of law and etc. are subjective value judgments about what is good
or desirable are central features of the economic discipline and of development economics. It is important
to make sure that one’s value premise is clear because often these are subjective to what we think it
should be but it cannot be avoided that some decision makers don’t see it the way we do. Economics also
is concerned with social systems — the interdependent relationship between economic and noneconomic
factors. However, social systems vary widely from one region of the world to another, from one culture
setting to another. It is Soedjatmoko, former rector of the United Nations University in Tokyo, who said
that development theorists have paid insufficient attention to institutional and structural problems and to
the power of historical, cultural, and religious forces in the development process. They often mistake
these variables to be nonquantifiable and of less importance but no, these noneconomic variables play
critical role in the success or failure of the development effort.

Development traditionally means achieving sustained rates of growth of income per capita that
allows a nation to enhance its output at a rate faster than the growth rate of its population. Income per
capita refers to the total gross national income of a country divided by its total population. Gross National
Income, on the other hand, is the total domestic and foreign output claimed by residents of the country.
GNI per capita minus the rate of inflation are measures where we know the overall economic well being of
a population. Gross Domestic Product (GDP) measures the total final output of goods and services
produced by the country’s economy, basically this focuses on the increased output. Growth in GNI per
capita is often felt by the masses in the form of jobs and other economic opportunities making the issue of
poverty, discrimination, unemployment of second importance to “getting the job done”.

One misconception of “development” that lead to the redefinition of the word ‘development’ was
when many developing nations reached their economic growth targets but the living levels of its
constituents remained for the most parts unchanged. This has signaled that something was not right with
the definition of development. The elimination of poverty, inequality and reduction of unemployment
became the criterion for development. As the slogan says, “Retribution from growth”. Dudley seers
asserted that it would be strange for the per capita income to double if poverty, inequality and
unemployment rates remain unchanged. It is only when the rates of the poverty, unemployment and
inequality would decline that we can, without doubt, say that there has been a period of development.
However, sometimes despite the development, people are ignorant that they grope to understand the
change. They have this emotion, that culture of poverty that leads to underdevelopment. But we can also
say that underdevelopment is reflected by the many individual market failures. The government is
supposed to be holding the key role in moving the economy to a better equilibrium but often, the
government is part and parcel of the bad equilibrium. Development is must represent the whole gamut of
change where the entire social system moves away from a condition that is unsatisfactory.

It is in Amartya Sen’s approach that we realize that “functioning” is the proper measure of
poverty. It is not just about the availability of a certain commodity is but it’s use or value to the person.
Let’s say a book, it has a little value to an illiterate person, though it contains knowledge but it’s useless if
someone can’t possess that knowledge because they don’t know how to read in the first place. Therefore,
functioning is a valued “being or doing” where people have a reason to value things. One may have a lot
of commodities, but if those were not what the consumers desire then it’s of little value. You may be rich
but if something you need for you well-being like nutritious food, is not available then what’s the point?
Functioning of a person is an achievement and is different from having a good and having utility. An
example would be bicycling where bicycling is not about possessing a bike nor about the pleasure or
happiness you get from bicycling. Sen also defines “capabilities” as the freedom a person has in terms of
the choice of functionings, given his personal features and his command over commodities. People in
poverty are often deprived of capabilities to take action or make a choice that is why they behave the way
they do. When we are well, we are happy. Accordingly, our happiness is often related to the increase of
our country’s average income because financial security is a factor affecting happiness.

Sustenance, Self-esteem and Freedom — the three core values of development. These serve to
be the basis and guideline for understanding the inner meaning of development. Sustenance — the
realization of human potential would not be possible without sustained and continuous economic progress
because one has to be enough, meaning being able to have the basic goods at the bare minimum level of
living, to be more. Self-esteem — most developed countries have had a profound sense of their own
worth as national prosperity has become an almost universal measure of worth. Therefore, development
is important because it is a way of gaining esteem. Freedom — development is freedom in a way that the
advantage of economic growth is not whether wealth increases but when we have variety of alternatives
at our disposal. Women are almost always been responsible for just child-rearing but with this comes the
power to transmit values to the next generation which plays a central role in development. Women
empowerment is a need to effect change, to make the biggest impact on development.

Let’s keep in mind the eight goals of the Millennium Development Goals because if these goals
are achieved, it would be a milestone in the pursuit of sustainability and development. In conclusion, the
world we live in is as good as its living parts. If one part suffers, the rest can feel it; if the many parts
suffer, the whole suffers as well. Development is a concern of every nation. The success of one is the
success of all because there can no longer be two futures. “There will only be one future — or none at all.