Causes of Poverty

 1.      History. Many of the poorest nations in the world were former colonies, slave-exporting areas and territories from which resources had been systematically extracted for the benefit of colonizing countries. Although there are notable exceptions (Australia, Canada and the U.S. being perhaps the most prominent), for most of these former colonies, colonialism and its legacies have helped create the conditions that prevent many people from accessing land, capital, education and other resources that allow people to support themselves adequately. In these nations, poverty is one legacy of a troubled history involving conquest.

2.      War & political instability. Both of these factors have often been tied to histories of colonialism, but whatever the causes of war and political upheaval, it is clear that safety, stability and security are essential for subsistence and, beyond that, economic prosperity and growth. Without these basics, natural resources cannot be harnessed individually or collectively, and no amount of education, talent or technological know-how will allow people to work and reap the benefits of the fruits of their labor. Likewise, laws are needed to protect rights, property and investments, and without legal protections, farmers, would-be entrepreneurs and business owners cannot safely invest in a country’s economy. It is a telling sign that the poorest countries in the world have all experienced civil war and serious political upheaval at some point in the 20th century, and many of them have weak governments that cannot or do not protect people against violence.

3.      National Debt. Many poor countries carry significant debt loads due to loans from wealthier nations and international financial institutions. Poorer nations pay an average of $2.30 in debt service for every $1 received in grant aid. In addition, structural adjustment policies by organizations like the World Bank and the International Monetary Fund often require poorer nations to open their markets to outside business and investors, thereby increasing competition with local businesses and, many argue, undermining the potential development of local economies. In recent years, calls for debt reduction and forgiveness have been increasing, as activists see this too as a key means of reducing poverty. The United Nations has also made it a priority to examine how economic structural adjustment policies can be designed to place less pressure on vulnerable populations.

4.      Discrimination and social inequality. Poverty and inequality are two different things, but inequality can feed widespread poverty by barring groups with lower social status from accessing the tools and resources to support themselves. According to the United Nations Social Policy and Development Division, “inequalities in income distribution and access to productive resources, basic social services, opportunities, markets, and information have been on the rise worldwide, often causing and exacerbating poverty.” The U.N. and many aid groups also point out that gender discrimination has been a significant factor in holding many women and children around the world in poverty.

5.      Vulnerability to natural disasters. In regions of the world that are already less wealthy, recurrent or occasional catastrophic natural disasters can pose a significant obstacle to eradicating poverty. The effects of flooding in Bangladesh, the drought in the Horn of Africa and the 2005 earthquake in Haiti are all examples of the ways that vulnerability to natural disasters can prove to be devastating to large portions of affected countries. In each of these cases, already impoverished people became refugees within their own countries, losing whatever little they had, being forced out of their living spaces and becoming almost completely dependent on others for survival. According to the World Bank, two years after cyclone Nargis hit Myanmar in 2008, the debt loads of local fishermen had doubled. The Solomon Islands experienced an earthquake and tsunami in 2007 and the losses from that disaster equaled 95 percent of the national budget. Without foreign aid assistance, governments in these countries would have been unable to meet the needs of their people.

These are only five causes of poverty. They are both external and internal causes; both man-made and natural. Just as there is no single cause of poverty, there is no single solution. Nevertheless, understanding the ways that complex forces like these interact to create and sustain the conditions of widespread global poverty is an important first step in formulating comprehensive and effective responses to combat poverty around the world.