Observations

Poverty. Poverty is one of the major challenges facing the globe. In 1998, 1.2 billion people were in dire poverty throughout the world. They are concentrated in Africa, Asia and ex-Soviet countries.

Poverty is a crucial issue for rich countries, and not only from a human viewpoint. It is an issue that impacts peace, because the poor are swarming rich countries and creating imbalances and strains.

Why is a country poorer than others? There are also issues of poverty within a country. Why is income inequality increasing between rich and poor?

I firmly believe the level of wealth in a country depends on the distribution of political and economic power between its groups. A large number of power groups (democracy) is typical of wealthier countries. It is in the interest of all the power groups to expand the economic pie so that all can share a bigger piece.

Countries with very few power groups (dictatorships) are poorer than average. In this instance there is no need to have a big economic pie because wealth has to be shared only by a few people. The problem with poor countries is that the power groups in control do not allow other power groups to become visible, to become politically active. It would imply a loss of wealth. This is one of the main reasons poor countries remain poor.

Then there is the issue of the growing gap between rich and poor within a country. Access to high quality knowledge is a major issue. Only the rich can afford it, thus perpetuating the gap. Social programs may help. But money alone does not solve the problem. Raising the civic standards of the poor and their educational level are major requirements to close the gap.

Others suggest poverty should be solved at the level where people are employed. Corporations should raise wages of the lower paid employee and try to reduce the gap between management and the rest of the employees. It sounds crazy. But it may not be.

The solutions are difficult to find. But something has to be done. Why? Social unrest and political instability are the price to pay for ignoring the problem. In the US we have seen groups attacking other groups based on the issue of rich and poor. Immigrants are flooding the rich countries, creating imbalances, unrest and increase in crime (see my commentary on the issues raised by immigrants into the rich European countries).

I am convinced the problem cannot be solved by throwing money at it. The real challenge is

• to allow an increase in the number of power groups in the poor countries,

• to raise the accessibility to high level education, and

• to raise the cultural standards of the poor.

The failure to solve this enormous and pervasive problem will lead to political and social unrest.

(This Observations appeared in the 8/28/2000 of The Peter Dag Portfolio).

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest

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