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 a person or organization that puts money into financial

schemes, property, etc. with the expectation of

achieving a profit.
 In economics, capital goods, real capital,
or capital assets are already-produced, durable goods
or any non-financial asset that is used in production of
goods or services. Adam Smith definescapital as "That
part of a man's stock which he expects to afford him
 Capital refers to financial assets or the financial value of
assets, such as cash and funds held in deposit
accounts, as well as the tangible machinery and
production equipment used in environments such as
factories and other manufacturing facilities.
 is the amount of money that a company actually
receives during a specific period, including discounts
and deductions for returned merchandise. It is the "top
line" or "gross income" figure from which costs are
subtracted to determine net income.

 is shown usually as the top item in an income (profit and

loss) statement from which all charges, costs, and
expenses are subtracted to arrive at net income. Also
called sales, or (in the UK) turnover.
 Poverty alleviation involves the strategic use of tools
such as education, economic development, health
and income redistribution to improve the livelihoods of
the worlds poorest by governments and internationally
approved organizations.
The lesson on poverty is a complex one because there is
no easy way, or standard definition of who is poor and
who is not, although we look at the living conditions of
people to get an idea of their situation. Typically, it is when
someone experiences a fundamental deprivation in well-
 Each time you see images on TV and on the internet
with hungry people with no food, running water, often
in tattered clothing and no shoes, living in mud houses
in run-down communities (slums), you begin to have a
sense of what poverty looks like. This lowest condition is
called Absolute poverty.
 Sometimes, a researcher can look at an individual,
family or community in comparison to the living
standards of the broader community, and classify them
as poor, if the researcher finds that their needs are way
below that of everyone else in the community. In this
case, the researcher does the classification, and it is
very relative in nature. Experts call this ‘Relative Poverty’
 People and families are allowed to make their own
judgments into their living conditions, in relation to the
general living standards of the communities in which
they live. You can see a family who owns a bicycle
considering themselves as being among the well-to-do
in the community. In another scenario, they can
consider themselves at being among the poorest in the
community, if they compare themselves to other
members of the community. This is subjective poverty.
 ‘Individuals, families and groups in the population can
be said to be in poverty when they lack resources to
obtain the type of diet, participate in the activities and
have the living conditions and amenities which are
customary, or at least widely encouraged and
approved, in the societies in which they belong.’ —
Peter Townsend
 Absolute Poverty
It is the extreme kind of poverty involving the chronic
lack of basic food, clean water, health and housing.
People in absolute poverty tend to struggle to live and
experience a lot of child deaths from preventable
diseases like malaria, cholera and water-contamination
related diseases. This type is usually long term in nature,
and often handed to them by generations before
them. This kind of poverty is usually not common in the
developed world.
 This kind is usually in relation to other members and
families in the society. For example, a family can be
considered poor if it cannot afford vacations, or cannot
buy presents for children at Christmas, or cannot send
its young to the university. Even though they have
access to government support for food, water,
medicine and free housing, they are considered poor
because the rest of the community have access to
superior services and amenities.
 People or families can be poor because of some
adversities like earthquakes, floods or a serious illness.
Sometimes, people can help themselves out of this
situation quickly if they are given a bit of assistance, as
the cause of their situations was just one unfortunate
This is a more complicated type and we will see a
detailed example here. This is when poverty is handed
over to individuals and families from generations before
them. In this type, there is usually no escape from it, as
people are trapped in its causes and have no access to
tools that will help them get out of it.
 Sub-Saharan Africa
This region is the poorest in the world. In West and
Central Africa, one in every 6 people is severely poor. It
is estimated that: Between 28% and 38% of the absolute
poor population in sub-Saharan Africa is estimated to
be chronically poor, totaling between 90 and 120
million people.
 Here are some more facts on the region:
1. Of the 22 countries in the region, 310million people
live in its 12 worst countries.
2. 150 million live on less than 1USD a day.
3. Countries in this region include Angola, Guinea,
Liberia, Mali, Somalia, Sudan and Zambia
 In many parts of this region, particularly Bolivia, Peru,
Ecuador and Colombia, there has been impressive
improvement in economic growth. Haiti and Bolivia are
exceptions, as many of them are still in extreme
poverty. Inequality levels are extreme and among the
worst places in the world. It is estimated that between
30% and 40% of the extreme poor population in Latin
America and the Caribbean is chronically poor:
between 16 and 22 million people.
 Particularly Southern and Western India, Bangladesh
has been among the world's chronically poor, although
the headcount ratio has declined significantly. This
region has extremely high populations with estimated
135 to190 million people – including 110 to 160 million
Indians, 9 to 13 million Bangladeshis, 10 to 15 million
Pakistanis, perhaps 5 million Afghans, and 2 to 3 million
Who are the worlds poorest, in terms of their gender,
where they live, what they do for a living, how old they
are and so on?

The worlds absolute poor often live in rural areas, and

often earn an income in agricultures. Rural households are
more likely to be poorer than urban households.
 People in this group tend to be the elderly, especially
widows with no assets. They also include the disabled,
who are usually not empowered to come into public.
They fall in the category of the absolute and chronically
Poor. They are also dependents because of adverse
health condition of some condition that does not allow
them to help themselves.
 Poor households have more members, living together in
single rooms or small houses, a greater share of
dependents (non-working age), less education, less
land, and less access to running water and electricity.
Poor households have significantly fewer years of
education whether one looks at the household-level
average or at the years of schooling of household
People in this group move in and out of poverty, usually
vulnerable to spells of personal shocks such as illness,
family deaths, or job losses. General shocks such as floods,
fires, droughts, conflicts or earthquakes can also cause this
kind of poverty. People in this group tend to be in their
working life, but largely live in rural areas, working on small
subsistence farms. About 60% of Africans who are poor
tend to be in this group. They usually lack assets and
access to services that can enhance their economic
development. Households with many children or
 1. Income inequality
Research shows that when a country grows
economically, overall poverty reduces. If the national
income is not equally distributed among all
communities in the country, there is a risk that poorer
communities will end up poorer, and individuals will feel
it most.
About 33% of communities in absolute poverty live in
places of conflict. In the past, countries like Rwanda and
Sri-Lanka have suffered poverty as a result of years of tribal
and civil wars. In recent years, Afghanistan, Iraq and the
like are all going through difficult times and poverty is rife
in these areas. Unrests result in massive loss of human live,
diseases, hunger and violence, destruction of property
and infrastructure, economic investments and quality
labour. It is also a put-off for foreign investments. Wealth
can never be created in such an environment.
 Location of countries, as well as communities within the
country can make people poor. Geographic and
ecological factors such as mountains, swamps, deserts
and the like have also made life conditions unbearable
in many places. This is why some rural areas are poorer
than others, even in the same country. For example,
poverty in the Andes, Peru is six times higher than
communities in the Amazonian region.
 In other instances, some communities are cut off from
the main economic centers of the country. They find
themselves located so far from roads, markets, health
services, schools and economic facilities. This makes it
just impossible for the locals to access support and
assistance, and also makes it discouraging for
economic investors to consider investing there. In
Bangladesh for example, poverty is severe in areas of
physical remoteness, as indicated by the fact that
seven rural districts are home to half of the country’s
Droughts, floods, hurricanes and other unexpected
natural events cause deaths, illness and loss of income. In
Ethiopia alone, there were 15 droughts (and famines)
between 1978 and 1998 that led to the displacement,
injury, or death of more than 1 million people. In better
connected communities, families are able to come out of
poverty and get on with their lives, but other remote and
less accessible communities suffer for longer periods.
 Poverty can also get worse if communities are affected
with diseases such as Malaria and HIV aids. Diseases
cause many deaths and children are left with no
parents or care givers. Household wealth can also drain
quickly with disable members. In many communities,
disabled members are looked down upon and not
allowed to inherit assets. They are considered a stigma
and excluded from public events and exposure. This
mentality can adversely affect the well-being of
families. For example, the incidence of poverty is 15-44%
 Families that have had a lifetime of poverty tend to
pass on the situation to their children. They cannot
afford education for their children and children grow
with no skills. Children work on the same family farms,
and marry into families with similar conditions as they
turn adults. They in turn pass on the tradition to their
 People who are educated or had some training or skills
are in a better position to apply ideas and knowledge
into fixing basic problems and enhancing their
livelihoods. They are able to plan, follow instructions and
get reach out to access information, tools and support
that can improve their livelihoods. In the absence of
training, skills or education, people cannot help
themselves. They cannot prevent diseases, and cannot
apply new ways of doing things. The result is that their
poverty situation is worse of and are even more
 In many African communities, girls were not allowed to
be in school. Families preferred to invest in boys’
education than in girls. Women were also not allowed
to do major economic activity and had less ownership
of lands and assets. This idea negatively impacts on the
well-being of women, and the development of their
children is also impacted negatively.
 Hunger, Health and Deaths.
Absolute poverty results in extreme hunger, starvation
and malnutrition. People (and children) become
vulnerable to preventable diseases such as cholera,
dysentery and tuberculosis, with no access to health
services and medications. Death rates rise. Relative
poverty on the other hand, forces people to engage in
behaviors that expose them to diseases such as HIV
Aids. Whiles they may not starve to death, they may be
living on unhealthy foods, which ultimately weaken their
 Relative poverty may cause people to indulge in social
vices such as drugs, prostitution and petty crimes as a
means to meet their immediate needs. In many
developing countries, political leaders and rebel
leaders take advantage and recruit young people,
(especially those in relative poverty) to fight for their
interests, in return for food and basic needs. These
young folks feel vulnerable if they do not comply, as
they have no other way out of their situation.
 People in absolute poverty simply cannot afford food,
water and shelter. They are not healthy enough to
undertake any economic activity. They cannot send
their young to school and the youth cannot get any
skills. This results in economic breakdown of the
community, which directly affects the larger region
where they are. Further to that, those in relative poverty,
who have a bit of training or education, are forced to
move out (migrate) in search of better lives in the cities.
This deprives the rural areas of the man-power and
 This is a phenomenon used often by economic
scientists. It simply means poverty begets poverty. It is a
concept that illustrates how poverty causes poverty
and traps people in poverty unless an external
intervention is applied to break the cycle.
 A very poor family with children have very little to
eat, and have and access to health facilities. As a
result, the children are malnourished and unhealthy
and have many health complications. They are
therefore unable to go to school (even if there is a
school in the next village). They grow up with no
education or skill and cannot do any economic
activity. Their parent die from preventable diseases
as a result of lack of health facilities, and their fate is
in their hands. As the children turn adults, they find
wives who are just on the same level of poverty as
them, and they have their own children. They hand
over this condition to their children, who will also grow
up in similar conditions.
 It takes an intervention from governments, charity
organizations or family members who are better off to
step in and provide some kind of assistance (health,
feeding, shelter and basic education) to get the youth
to do some kind of economic activity to bring in some
income. Without that, this cycle will continue for
generations and it’s a trap that is extremely difficult to
get out of.
 Poverty cannot be completely eradicated, as it largely
caused by human factors. Over the past years there
has been a lot of Poverty Alleviation Programs designed
to break the cycle of poverty in many households and
communities in the world. The result is remarkable, but
there is still a lot to be done.
 Poverty alleviation involves the strategic use of tools
such as education, economic development, health
and income redistribution to improve the livelihoods of
the worlds poorest by governments and internationally
approved organizations. They also aim at removing
social and legal barriers to income growth among the
poor. Why are these tools important?
 Quality education empowers people to take
advantage of opportunities around them. It helps
children get knowledge, information and life skills they
need to realize their potential. Training teachers,
building schools, providing education materials and
breaking down that prevent children from accessing
education are important features of poverty alleviation
 Many programs aim at feeding kids at school and
providing health services as well. This encourages
parents to send the children to school and keep them
there. If children have food to eat, and are healthy,
they can learn and respond to the needs of the
 The youth and able-to-work in the communities are
provided skills to help with farm work or other economic
activity, which helps them earn money to make a living
and take care of their families.
 It is important that the government extends its
development programs such as roads, bridges, and
other economic facilities to rural areas, to make it easy
for goods and services and farm produce to move to
and from the farming communities.
 With a bit of effort in the areas mentioned above, it
won’t take long to see real improvements in the living
conditions of the community.
 SECTION 17. Basic Services and Facilities. (a) Local
government units shall endeavor to be self-reliant and
shall continue exercising the powers and discharging
the duties and functions currently vested upon them.
They shall also discharge the functions and
responsibilities of national agencies and offices
devolved to them pursuant to this Code. Local
government units shall likewise exercise such other
powers and discharge such other functions and
responsibilities as are necessary, appropriate, or
Basic services such as electricity
and energy, water and
sanitation, refuse and waste
removal are critical services to
improve the lives of people. In
South Africa government has
committed to providing
a basic amount of free water
and electricity to poor people.
 Housing,
 Education,
 Health care,
 Social welfare,
 Transport,
 Electricity and energy,
 Water,
 Sanitation and Refuse and waste removal.
 a house and its occupants regarded as a unit
 A household includes all the persons who occupy a
housing unit. A housing unit is a house, an apartment, a
mobile home, a group of rooms, or a single room that is
occupied (or if vacant, is intended for occupancy) as
separate living quarters.
 a measure of the combined incomes of all people
sharing a particular household or place of residence. It
includes every form of income, e.g., salaries and wages,
retirement income, near cash government transfers like
food stamps, and investment gains.
In effect, the economy exists to
satisfy the wants and needs of
the household sector. Members of
the household sector also own all of
the factors of production, all
resources. Every resource, every
worker, every factory, every acre of
land, every risk-taking entrepreneur
is owned by someone in
 Typically the annual household income is calculated as
a gross amount rather than net, which
means before any taxes or withholdings are deducted.
 A standard of living is the level of wealth, comfort,
material goods and necessities available to a certain
socioeconomic class or a certain geographic area. The
standard of living includes factors such as income, gross
domestic product, national economic growth,
economic and political stability, political and religious
freedom, environmental quality, climate, and safety.
The standard of living is closely related to quality of life.
 is a measure of the amount of money
earned per person in a certain area. It
can apply to the average per-person
income for a city, region or country, and
is used as a means of evaluating the
living conditions and quality of life in
different areas. It can be calculated for a
country by dividing the country's national