10. SPSF 2022-5: Ending Extreme Poverty

A widely used definition of extreme poverty is the World Bank's poverty line, where extreme poverty lies at or below an income of $1.25 per day. The WB's definition is surely too narrow. It would be better to define the extreme poverty line according to the ability of individuals to meet basic material needs (SDSN 2012b), which are food, clean water, sanitation, shelter, clothing, access to health care, access to basic education, and access to essential services such as transport, energy, and connectivity. These are the minimum needed for survival and human dignity (p.138).

Africa: electricity & population control

The absence of electrification has been a huge chronic barrier to Africa's development and another aspect of Africa's poverty trap (SE4All 2012). Without electricity, productivity is very low. Low productivity means very low output per person, which in turn means low income and thus poverty. Poverty means low tax collections by government, and therefore the inability of the government to invest in the electricity needed to lift the region out of poverty.
The Internet grid and mobile telephony are spreading without the need for public financing due to variable profitability and lower fixed costs than power generation. ICTs have already given a huge boost to Africa's development, and will continue to do so as they facilitate access to health care, education, banking, and other services.
A final challenge that Africa must surmount is the very high fertility rate.

South Asia: food & women

The first Green Revolution called for a massive increase in fertilizer use and some of that fertilizer has polluted India's rivers and coastlines. The first Green Revolution did not pay heed to long-term climate change, which was not yet recognized. The second Green Revolution (or Evergreen Revolution) will need to develop crop varieties that are resilient to heat waves, droughts, floods, and other shocks that will rise in the future as part of the consequences of human-induced climate change (p.168).
One of the noteworthy ways that rural women have been empowered in recent decades has been through microfinance institutions, a new method of small-scale lending that is well adapted to the needs of impoverished rural women...One of the notable features of female empowerment, sometimes in the context of the self-help groups, is that it has given young women that incentive to marry later and reduce their total fertility. A mother in the labor force who earns her own income knows through experience and thorough knowledge from her peers that having fewer children will not only enable her to spend more time at work to earn a higher income but will also enable the household to invest more in each of her children so that he or she will have a chance for a better life (pp.167-169).

Official Development Assistance (ODA)

The problem with the poverty trap, however, is that a country may be too poor to get on the ladder by itself... Yet they simply lack the cash flow (p.170)
Two main ways to break a poverty trap (i.e. government's critical investments & ODA from donor countries)
ODA became a basic pillar of the global community around 1970 (OECD 2010). Only five countries among the donors typically reach the targeted threshold of 0.7 percent of national income: Sweden, Norway, Denmark, Luxembourg, and the Netherlands. cf. Top DAC are: US, UK, Germany, France, and Japan.
The most effective kinds of development assistance build capital - such as paved roads, an expanded power grid, and more clinics and schools - or capacity, such as training and salaries for teachers and health workers, or social investments such as health care delivery (p.174).

A. Official Development Assistance (Group)
Use the World Bank Indicator database (https://data.worldbank.org/indicator/) to answer the following questions.

In 2019, what 3 countries received the highest amount of net ODA in constant 2019 US$?
What percent of their GNI did that represent for each of these 3 countries in 2018?

B. What are positive and negative sides of ODA? (Group & Class)