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This Land is My Land: How Property Rights Reduce Poverty

Property Rights Reduce PovertyGranting formal property rights to the world’s poor, especially in developing countries, may be the key to reducing global poverty. Peruvian economist, Hernando de Soto, believes property rights reduce poverty by empowering the disadvantaged with valuable assets which could add up to an estimated $9.3 trillion in currently “dead capital.”

Promoting property rights is particularly important throughout Africa where more than 90 percent of the land remains outside the legal system. People living in developing countries would benefit from stable, long-term property rights as they are more likely to invest time and energy into cultivating their land or exchange it with someone who would make better use of it.

Stable land ownership would also increase revenue for local governments through property taxes, but land taxes are currently non-existent in the developing world. With an increased demand for land and public investment in roads and other infrastructure, revenue from property taxes would help decentralize and empower previously impoverished residents in developing regions.

In Uganda, land constitutes 50-60 percent of asset endowment and is a valuable asset that may be the key to household wealth. As a primary vehicle for investing, cultivating and transferring between generations, secure property rights help to generate livelihoods centered on local investment. Lack of property rights disproportionately affects women in developing countries.

Traditionally, women are disadvantaged when it comes to land access, but they also have the most to gain from secure property rights. According to the OECD, increasing property rights has been shown to positively affect spending on girls’ education.

Studies also show that promoting equitable access to education could increase GDP growth by an estimated 0.2 percent each year in developing countries. If executed correctly, providing property rights would also increase the purchasing power of the world’s poor and stimulate economic growth in developing countries.

Slate magazine critiques de Soto’s theory that property rights reduce poverty by pointing out, “titling is more useful to the elite and middle-income groups who can afford to bother with financial leverage, risk, and the real estate market.” Increasing property rights in Turkey, Mexico, South Africa and Columbia have not created a healthy housing market and “wealthy land-grubbers” may be to blame.

De Soto believes that the wealthy, who don’t realize that it’s in their best interest to allow the productive power of the poor brought into the economy, are an obstacle to realizing the full impact that property rights can have on the world’s poor. For those who have doubts, property rights reduce poverty, which bolsters economic development when the poor can contribute to the economy.

Rampant socioeconomic inequality weakens economies by increasing the burden on taxpayers to cover the costs of poverty-related illnesses, which can cost billions per year, perpetuates a cycle of low academic achievement and negatively impacts the demand for a skilled labor force.

Securing property rights in the developing world is one step in the right direction toward reducing global poverty, but educating the public on why uplifting the world’s poor is beneficial for everyone is even more crucial.

– Daniela Sarabia

Photo: Flickr

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“Schools for Africa” Fosters Academic Growth

Schools for Africa
Schools for Africa is a UNICEF campaign dedicated to fostering education in developing countries during post-crisis and transition periods.

Shortly following their 2004 launch, Schools for Africa was able to raise over $11 million to invest in education in Angola, Malawi, Mozambique, Rwanda, South Africa and Zimbabwe. By 2008, the campaign had been initiated in over nine countries, including the United States, and over five million children had been able to receive a better education as a result of the program’s work.

At present, Schools for Africa offers support for education in 13 countries for over 30 million children. One such child is Usher, who, due to a disability, did not learn to walk until he was five. His family believed he’d never get an education. The creation of a UNICEF-supported school, however, allowed him to go to class like all the other children in his village, where he now hopes to learn how to read, write and count.

The Stanford Social Innovation Review cites a lack of education as one of the reasons for poor life quality and expectancy in developing countries. For example, only 50 percent of children in Ghana complete grade five, with fewer than half of those being able to read at the proper level.

The lack of adequate education also leads a great number of students that drop out at an early age. In one report, the Review explains, “[i]t is not surprising that when education investments do not result in adequate learning, or even basic literacy and numeracy, parents do not keep their children in school.”

Moreover, offering support for education in developing countries does not only enable children to have access to a basic rights. According to Canadian Feed the Children, at least a 40 percent literacy rate is necessary to achieve significant economic growth. Therefore, access to education can also reduce food insecurity for poor children by as much as 25 percent.

The benefits of education are profound. With a stronger economy and greater access to food, impoverished countries become less of a security risk and they also open themselves up to trading opportunities with other states. Education in developing countries is a vital force in the quest to end poverty, and UNICEF’s Schools for Africa is at the helm in such efforts. Schools for Africa betters countless young lives as it pursues academic growth and poverty reduction.

– Sabrina Santos

Photo: Pixabay

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Top 3 Ways to Prevent Hunger

Agriculture_Effective_Poverty_Reduction
According to the Word Food Programme, around 795 million people globally do not have enough food to lead active lives. Lack of nutrition leads to a number of other health problems among the world’s poor such as disease, stunted growth and even death. Here are three methods that can help prevent hunger:

1. Invest in Agriculture

Agricultural investment prevents hunger in the long and short term because it allows the poor to become more independent. Most of the world’s poor live in rural areas where agriculture is the source of income and food.

More investment is needed for programs that provide farmers with land incentives, train them on how to maximize their produce and teach them when and what to plant throughout the year.

Through such programs, farmers will not only be able to feed their family but also sell their harvests for profits.

In turn, parents can invest in their children’s education and end the generational cycle of poverty. This financial stability could also mean less pressure on parents to force their daughters into early marriage.

2. Financial Planning

With unpredictable climate and political changes in developing countries, financial planning acts as a safety net in case of drought, famine or war.

Financial security gives families a head start when they are displaced due to conflict and also helps prevent hunger during times of drought.

Training farmers on how to save and invest their money also allows them to invest in machinery and livestock to maximize their productivity and prevent malnutrition.

3. Focus on Women

Empowering women by educating them on agriculture and giving them the resources to provide for their families will make households mores sustainable. The tradition of gender inequality is what makes hunger inheritable in developing countries.

Each year, around 19 million children are born underweight because their mothers were not adequately nourished during pregnancy. More often than not, malnutrition continues through infancy because their mother’s breast milk does not provide enough nutrients.

In addition, weak immune systems due to malnutrition allow the transmission of HIV/AIDS from mother to child. HIV/AIDS treatments and prenatal health care ensure the birth of healthy babies.

A program combining these three methods to prevent hunger would ensure impoverished communities are able to sustain healthy lives and break the cycle of poverty and hunger.

– Marie Helene Ngom

Sources: WFP, AIDSInfo
Picture: Google Images

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China’s War on Poverty

China's_War_On_Poverty
The rhetorical phrase “War on Poverty” is commonly used to describe programs and policies aimed at reducing or eliminating poverty. It has been used in the context of United States politics but is now also being applied by the media to Chinese efforts to reduce poverty, especially in rural areas. China has experienced a meteoric rise to economic prominence in a few decades, yet much of the country lies in the past, still experiencing economic hardship without the benefits of the recent successes. What is China doing to fight poverty?

Hundreds of millions of people have been salvaged from poverty since China’s rise to prominence, however, in 2012, China’s GDP per capita was less than other developing countries, including Iraq and Colombia. Part of this statistic lies with the fact that the Chinese economy has to sustain a huge number of people, but another reason for this surprising statistic is that economic growth in China has benefited some more than others. Specifically, those in urban areas have tended to gain more from recent economic advances than those in rural China.

In the past, the millions lifted out of poverty in China were a result in part of strong economic growth. Additionally, less people are working in agriculture and moving into other businesses and improving human capital systems. Anti-poverty actions by the government also played a role but perhaps have not been enough.

In the 1990s, China changed its definition of poverty to a level that was about two-thirds of the international standard, artificially lowering its poverty statistics. However, China has also thrown billions of dollars at the problem in the form of subsidized loans, grants and programs such as “Food For Work,” which aimed to stimulate the economic situation of the poor while at the same time improving infrastructure for water systems and roads.

Whether poverty reduction government programs like Food For Work were strong factors behind China’s first burst of poverty reduction between the 1970s and the late 1990s is hard to determine. Some believe that China’s staggering growth in those decades was the biggest driver for poverty reduction. If that is the case, then a slowdown in the Chinese economy (still at 7% growth approximately) could hurt the reduction in poverty unless new government programs can pick up the slack.

As previously mentioned, many of the poor in China have already benefited from economic growth, but many more are still impoverished. In the past month, President Xi Jinping reaffirmed the government’s responsibility to fight poverty in rural areas while at a conference about China’s 13th Five-Year Plan. A rash of suicides among children in a rural area of China and the death of five homeless children in 2012 (carbon monoxide poisoning from lighting a fire in a trash container where they were taking shelter) has caused hard questions to be asked and for government officials to talk about action. Recognition of the continuing problem by the Chinese government is a positive sign. The additional fact that the Chinese economy is becoming more dependent on a consumer class sheds light on the need for the Chinese economy to pull more out of poverty and into the consumption class. China’s war on poverty — the incentive to work towards ending poverty — is apparent, from both a public relations standpoint and an economic one.

– Martin Yim

Sources: Reuters, The Diplomat, Journal of Chinese Economic and Business Studies, IMF, Asia Society
Photo: Yibada

Large Strides Away from Poverty in Nepal

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In the past, Nepal has been regarded as one of the poorest countries in the world. Poverty in Nepal is caused by poor infrastructure, health, education and economy. The country is also susceptible to natural disasters due to its location. However, thanks to the people who have been dedicated to improving conditions in Nepal, there is good news: extreme poverty have been reduced by 50 percent in the last 20 years.

How did this happen? Innovative developments are being introduced to the country, and Nepal is already benefiting from them.  The newborn mortality rate has already dropped 34 percent since a disinfectant gel to rub on the umbilical cord—rather than the traditional usage of oil, ash and even animal droppings—was presented to Nepalese mothers.

Other strides are being made by implementing different programs for the Nepalese people, like a nutrition program called “Suaahara” that educates families on proper farming and hygiene. Another program prioritizes improving the literacy rate of children. If the population of Nepal becomes 10 percent more literate, this can boost their economy by 0.3 percent.

Important changes are being made in Nepal’s legal system and government, too.  Organ selling has only recently become illegal and efforts are being made to help and protect a large number of human trafficking victims. According to USAID, 15,000 Nepali women and girls are trafficked out of the country per year, while 7,500 are trafficked domestically for sexual exploitation.

One of these efforts is the Combating Trafficking in Persons Project, carried out in Nepal to prevent, protect and provide justice for human trafficking victims. Now that the victims are a focus, traffickers are beginning to face legal consequences.

Nepal is also still working on becoming a democracy after having been a monarchy for so many years. This means that citizens of Nepal will get the chance to vote for the first time in 16 years.  At this rate, the country is expected to be rid of extreme poverty by 2030. What was once a country full of people living on one dollar a day is now a country with a bright future.

– Melissa Binns

Sources: U.S. Department of State,  USAID 1,  USAID 2

Photo: Flickr

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The Power of 12 Dollars

12 dollars
Before the 1990s, many people disapproved of giving unregulated cash to the poor. People feared that handing out checks would lead to corruption, waste and an increase in drug and alcohol abuse among the impoverished.

However, the increasingly popular cash grant programs that have appeared in countries such as Brazil and Mexico are disproving these stigmas. Those in extreme poverty receive invaluable benefits from cash grants of as little as 12 dollars per month. When desperately needy individuals get small monthly cash transfers, research shows that better health, education and smarter overall life decisions will follow.

Michelle Adato has studied the impact of cash transfers for many years. She reveals, “Cash grants are now being seen as a part of a comprehensive development strategy as opposed to just a safety net.” What was previously thought of as a short-term solution is proving to have longer, more sustainable results.

When individuals and families receive grants, such as South African child support grants and those from The Transfer Project led by UNICEF, they can buy things they really need such as food, clothes and an education for their children. Extended grants to adolescents have proven to decrease risky sexual behavior, thereby reducing the chances of teen pregnancy and HIV, by 63 percent.

John Hoddinott, a deputy director at the Washington-based International Food Policy Research Unit, argues that cash grants not only give the poor a means to buy necessary survival items, but they “give beneficiaries a base from which to make longer term investments.”

“The research shows that in the vast majority of cases, poor people use their money well — the evidence is unambiguous.”

The Transfer Project, which runs programs across Sub-Saharan Africa, operates on the premise that income poverty has highly damaging impacts on human development, and that cash empowers people living in poverty to make their own decisions on how to improve their lives.

Those receiving grants from The Transfer Project in Zambia, Ghana and Malawi “all reported being happier with their lives, and research showed that recipients in these countries were eating better too.”

The child support grant in South Africa has expanded to include 17-year-olds, and now reaches 11 million children. The U.N. reports that a total of 20 African countries have social protection programs like these and both the number of countries and size of the programs are growing, with Kenya, Zambia, Lesotho, Mauritania, Mali, Niger and Zimbabwe all expanding their programs.

In many ways, the initial skepticism of cash grant programs have only served to increase scrutiny and research, in turn strengthening them. Handing out cash rather than food and supplies empowers the impoverished to make their own choices and invest the stipends wisely. The widespread success of programs like The Transfer Project and the South African child support grants is a testament to the power of a small amount of money on lifting the poorest of the poor out of dire living conditions and into a brighter future.

– Grace Flaherty

Sources: CPC, IRIN News
Photo: Poke