Poverty

The GINI-coefficient was developed by an Italian statistician called Corrando Gini and serves as a measure of distribution. It takes values ranging from 0 to 1. A value of 0 means equal distribution, the higher the coefficient, the more unequal the distribution is. The GINI-coefficient is often used to describe the distribution of wealth and income in a country.

Of the countries listed, Chile has the largest difference in incomes. That means that there are people there who earn a great deal but also many who earn very little. The lowest differences in income are found in Slovenia, with a GINI-coefficient of 0.24. Spain has a value of 0.32 and the USA 0.38. All based on statistical data of 2008

Latin America is the continent with the most pronounced differences between rich and poor. Although the inequality has decreased in recent years, in many countries a few rich elites control more wealth than half of the population. The reasons for this have their origins as far back as the colonial period in which a few people amassed massive amounts of land. Additionally, neoliberal reforms led a few elites to massive wealth in the 1980s at the same time as large sections of the population became poorer.

Seen globally, the gap between rich and poor has increased in recent years, both in terms of comparing different states and within individual countries. On the one hand small upper classes are becoming richer; on the other hand a large proportion of population is becoming poorer. The financial crisis of 2008 compounded this development. Nowadays there are more millionaires than before the crisis and at the same time 1.2 billion people still live in extreme poverty (UN criteria: on less than 1$ per day).

Poverty cannot be determined purely from income and consumption. Therefore the UN has developed the so called Human Development Index (HDI) which takes into account life expectancy and standards of education alongside purchasing power. These three factors are combined for a country to give its HDI which forms a measure of its level of development.

Any country which demonstrates an especially low income per head, poor supply to the population and a weak economy, is dubbed a LDC. In total 48 states, in which 12% of the world’s population lives, are counted as the world’s poorest countries. Among them are 34 African states, 14 in Asia and the Pacific area and Haiti in the Caribbean. Based on statistical data of the UN 2013.

The average life expectancy in the least developed countries is 61 years (in 2011). Almost ¾ of all people in the LDCs die before they reach 50 years of age. The main causes of this low life expectancy are undernourishment, lack of medical help and unclean drinking water. HIV/AIDS is also among the main causes of death in the poorest regions of Africa. Globally the average life expectancy is 68 years (in 2011).

The money which people who live and work outside their home countries send to their families bring more than 300 billion dollars into the developing countries annually and help to alleviate poverty. These transfers are also called remittances.

The developing countries pay 154 billion dollars annually in interest alone (in 2010) – much more that they receive in public developmental aid (Official Development Assistance – ODA). Many countries utilise more than a quarter of their export earnings to pay back their debts and interest, although there are regional differences. For example, the level of debt in Africa and Asia is lower than in Latin America. As the majority of debts are calculated based on the dollar and many currencies have fallen against the dollar in recent years, the level of debt has increased.

According to Forbes, an English economic magazine which compiles a list of the world’s richest people, the richest person in the world in May 2013 was Carlos Slim Helu, a Mexican involved in the telecommunications sector. His assets are valued at an estimated 73 billion dollars. Those of Amancio Ortega, founder of the fashion chain Zara are estimated at 57 billion dollars and Liliane Bettencourt of L’Oreal, who is at number 6 on the list, has over 30 billion dollars.

The majority of illiterate people live in India, China, Bangladesh and Pakistan. Globally nearly 775 million people are unable to read and write (in 2011).

Women are more heavily affected by illiteracy than men. Around 2/3 of all people who cannot read and write are female.

“Hidden poverty” refers to a situation, in which people who have a right to social assistance do not take it up. Causes of this are, for example, ignorance or shame.

Although there have been great moves forward in terms of healthcare globally, medical coverage is very unevenly distributed. Around 5/6 of the world’s population lives in developing countries, but only about 1/7 of global healthcare finance reaches them.