Poverty
A unit for post-16
General RE
Suitable for use with
NOCN framework
and Extended Project
Unit: Poverty
…including issues surrounding economic development
and fair trade
Section One:
Nature and causes of poverty, nationally and globally
Section Two:
Religious, political, social and cultural perspectives related
to fair trade
Section Three:
Case studies of poverty, including possible solutions
Section Four:
Conclusions
Section One
© Depaul Trust
The nature and causes of poverty,
nationally and globally
What is poverty?
Think about some of the signs that might alert you to the
presence of poverty, whether in the UK or overseas…
Poor education
Low status
Vulnerability
Inadequate nourishment
Inadequate clothing
Lack of power
No access to clean
drinking water
…and try to define poverty in a
sentence.
Poor sanitation
Insufficient food
Poor housing
Unemployment
Poverty is:
Poor health
The European Union’s working definition of poverty is:
“Persons, families and groups of persons
whose resources (material, cultural and
social) are so limited as to exclude them from
the minimum acceptable way of life in the
Member State to which they belong”.
Definitions change with time, but this is now the most commonly used
definition of poverty in the industrialised world.
It recognises that poverty is not just about income but about the
effective exclusion of people living in poverty from ordinary living
patterns, customs and activities.
How is poverty measured?
Absolute poverty is measured by comparing a person’s total income against
the total cost of a specific ‘basket’ of essential goods and services. People with
inadequate income to purchase this basket of items are considered to be living
in absolute poverty.
Relative poverty compares a person’s total income and spending patterns with
those of the general population. People with lower income who spend a larger
portion of their income on a basket of goods and services, compared with a
threshold typical of the general population, are considered to be living in
relative poverty.
Source: http://www.poverty.org.uk/summary/social%20exclusion.shtml
The World Bank defines absolute (or extreme) poverty as living on
below US$1.25 a day, and moderate poverty as living on US$1.25 US$2 a day. Based on these figures, half the world’s population –
about three billion people - are considered poor, with one in six living
in extreme poverty.
Pause for reflection
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•
•
•
•
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What are your own experiences of poverty?
Have you suffered absolute poverty or relative poverty?
What are your attitudes towards poverty and poor people?
How image-conscious are you?
How do you define “successful”?
What is your reaction when you see this picture?
• Jot down the first words that come
into your head
• Describe how the picture makes
you feel
© Depaul Trust
On what are your attitudes based?
As most of those living in absolute
poverty are in developing countries,
this is the main focus of this
resource.
What does the Catholic Church say about poverty?
You will have studied the above question at GCSE.
What can you remember?
Recall three Bible passages that have informed Catholic Social
Teaching on poverty.
Give three arguments for and three against the statement: “There
should be no rich Christians in the world while poverty exists.”
In this unit you will consider in particular what Catholic Social Teaching
has to say about trade with relation to poverty.
What does Catholic Social Teaching say about poverty?
Populorum Progressio (“On the development of peoples”) was an
encyclical written by Pope Paul VI in 1967.
It addressed many of the global issues of his day, including poverty and
hunger, the arms race, and unfair trade.
Read the following paragraphs about poverty from Populorum Progressio:
19-20, 32, 34, 42-44, 47, 49, 53, 75-76.
Name three contemporary issues for which Pope Paul’s
teaching on poverty is still relevant.
What did Pope Paul consider far more important in the fight
against poverty than the redistribution of money? Why?
(See paragraphs 19-20, 42, 47)
Is there anything about the language or tone of the writing that
reveals something of the attitudes of the time?
The Causes of Poverty
There is enough in the world to supply the
needs of every person,
so why does poverty exist?
Why do YOU think poverty exists?
Jot down your ideas
This is what some other people said…
“No drug, not even alcohol, causes the fundamental ills of society. If we're looking for the source of our troubles,
we shouldn't test people for drugs, we should test them for stupidity, ignorance, greed and love of power.”
P. J. O'Rourke, American political commentator, journalist, writer and humorist, b.1947
The poverty of our century is unlike that of any other. It is not, as poverty was before, the result of natural scarcity,
but of a set of priorities imposed upon the rest of the world by the rich.”
John Berger, novelist, painter and art historian, b.1926.
“Earth provides enough to satisfy every man's need, but not every man's greed.”
Mahatma Gandhi, Indian philosopher internationally esteemed for his doctrine of non-violent protest, 1869-1948
“… the quest for profit at any cost and the lack of effective responsible concern for the common good have
concentrated immense resources in the hands of a few while the rest of humanity suffers in poverty and neglect.”
Pope John Paul II, Lenten message 2003
Poverty is caused by a huge number of factors,
often affecting those who are already the poorest and most vulnerable.
This happens to individuals and to social groups;
It happens nationally and internationally.
Some causes of poverty in the UK are:
•
Accidents and natural disasters, with inadequate insurance
•
Family breakdown
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Changes in government policy
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Employment-related problems eg. short-term job contracts, low pay,
decline in local traditional industries, unemployment
•
Social exclusion and no access to benefits or inadequate benefits
•
Drink and drugs dependency
•
Poor health (clinical, medical and emotional)
•
Inadequate pensions
•
Personal debt
What is it like to be poor in the UK?
Personal experiences of poverty in the UK:
Go to: http://www.youtube.com/watch?v=cgH4zV2UQeE and watch
“How the other half live” or another of the films on homelessness
Every poor person experiences poverty in their own way, and their
suffering is sometimes all-consuming, e.g. personal debt may greatly
afflict the life of a single person or family.
Social poverty occurs when poverty is experienced by groups of people,
eg. a workforce made redundant when a factory closes. Lower
spending in the area may mean that local shops close, house values
fall, health problems increase, family relationships break down,
personal debt increases, crime levels increase, and house values fall
again. This can create virtual “no-go” areas where private companies
will not invest.
Click the icon to view data and reports on Poverty in the UK
poverty.org.uk/summary/uk.htm
• Income – Click ‘overall’ in the first column
• Housing – Click ‘homelessness’
• Housing – Click ‘overcrowding’
In 2008/09, how many people in the UK lived in low income households?
Are trends in homelessness rising or falling?
What proportion of people live in overcrowded conditions?
In cases of social poverty, whose responsibility is it to create change?
Some causes of poverty in developing countries are:
• Unfair trade
• HIV and AIDS
• Debt
• Conflict
• Unfair land distribution
• Natural disasters
• Lack of access to education
What is it like to be poor in Mexico?
Click the icons for one person’s experience of poverty in Mexico:
What has caused
the current crisis?
How is Daniel’s
family affected?
Daniel’s was not the only family affected by the crisis. Poor farmers all over
Mexico suffered. In other developing countries around the world there are
similar stories, affecting whole populations.
Click the icon to view a fascinating interactive animation that
shows global poverty and wealth changing over 200 years.
http://www.gapminder.org/world
Name one of the main changes that has taken place.
Poverty is complex; many aspects are interconnected.
Some of its causes and effects make a cycle:
Poor education
Low paid job/ no job
Poor farming methods
Less money for:
Erosion
Health care
Food
Education
Poor crop
Housing
Now try your
own mind map
starting with
“HIV & AIDS” in
the top box *
Less to sell
Hunger
Poverty
* Find clues in
Play Fair 3: AIDS –
a development
issue, available in
your school or
from CAFOD.
Unfair trade is one of the main causes of poverty
in developing countries
• According to a UN study, sub-Saharan Africa is worse off
by US$1.2 billion due to the terms of trade effects
generated by the Uruguay Round (a series of
international trade negotiations from 1986-94)
• The average EU farmer receives the equivalent of
US$16,000 per year in agricultural support, a hundred
times more than the average annual earnings of the rural
poor in sub-Saharan Africa
• Poor countries are paid low prices because of
oversupply, rich country subsidies and rich country tariff
barriers. You will hear more about this when we look at
the WTO – World Trade Organisation.
What does the Catholic Church say about fair trade?
Click the icon to find out what Catholic
Social Teaching tells us about trade.
http://www.cafod.org.uk/content/download/612/5806/file/Prayer_CST_on-trade_extracts.pdf
What might be “three golden rules for traders” based on the this?
1.
2.
3.
What does Catholic Social Teaching say about fair trade?
Read these quotations from Pope Paul VI:
“…trade relations can no longer be based
solely on the principle of free, unchecked
competition, for it very often creates an
economic dictatorship. Free trade can be
called just only when it conforms to the
demands of social justice.”
(Populorum Progressio, 59)
“What applies to national economies and to
highly developed nations must also apply to
trade relations between rich and poor nations.
Indeed, competition should not be eliminated
from trade transactions; but it must be kept
within limits so that it operates justly and
fairly, and thus becomes a truly human
endeavour.”
(Populorum Progressio, 61)
“ ‘God intended the earth and everything in it for the
use of all human beings and peoples. Thus, under
the leadership of justice and in the company of
charity, created goods should flow fairly to all.’ All
other rights, whatever they may be, including the
rights of property and free trade, are to be
subordinated to this principle.”
(Populorum Progressio, 22)
Would you say that Catholic Social
Teaching regards fair trade as a
matter of charity, or of justice?
On the Vatican website, look at Populorum Progressio.
Read the following paragraphs about trade:
8, 22, 48, 56, 57, 58, 59, 61.
Relate each quotation to at least one biblical passage.
How would you summarise Populorum Progressio’s teaching on trade?
Section Two
Religious, political, social and cultural
perspectives related to fair trade
Globalisation: good or bad?
Globalisation is a fact of life:
Coca Cola in Angola, Nike trainers in the Philippines, Nestlé milk
products in Russia, McDonalds restaurants in Slovenia, Manchester
United football kits in Sierra Leone, Caribbean bananas in the UK, TV
images from every part of the planet…
Does this represent a breakdown in traditional cultures?
Or a global sharing of advantages?
Globalisation is a result of international trade
How world trade developed
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From 3000 BC the first extensive trade routes were up and down the great
rivers - the Nile, the Tigris and Euphrates, the Indus and the Yellow River.
Maritime trade developed between Egypt and Minoan Crete and then
westwards along the north African coast.
•
From the 1st century AD, Roman roads and the Pax Romana gave
merchants vast new scope within Europe. At the same time a maritime link
opened up between India and China.
•
During the 13th century guilds of merchants made use of safer travel to
increase Europe’s prosperity, with some merchants like Marco Polo and his
family travelling as far as Persia and China.
•
From the 15th century maritime exploration led to trade in such goods as
spices, silver, sugar and, horrifically, slaves. Powerful trading companies
emerged, like the East India Company (granted a monopoly in 1600 on all
English trade east of the Cape of Good Hope).
Goods circled the globe, traders benefited, but the colonies became
sources of raw materials that were made into finished products by the
“mother country”.
Colonies became the plantations and mines of the rich countries;
any industry that might compete there was suppressed.
Some developing countries have never recovered from the effects of
colonialism.
“Colonising nations were sometimes concerned with nothing save their
own interests, their own power and their own prestige; their departure left
the economy of these countries in precarious imbalance – the one-crop
economy, for example, which is at the mercy of sudden, wide-ranging
fluctuations in market prices.”
(Populorum Progressio, 7)
• A capitalist view: “The global economy should rely chiefly on
competition in a free market to determine prices, production
and distribution of goods.”
• A socialist view: “The global economy should be based on
collective or governmental ownership and administration of
the means of production and distribution of goods ”
What are the benefits and shortfalls of these two
viewpoints?
Which one most reflects your own viewpoint?
Which model do you think world trade most closely
followed as it developed?
Gradually, through the centuries, some trading companies grew into multinational
corporations (or ‘MNCs’) as they moved into resource extraction, then into
manufacturing, services and financial services. Major food chains also grew, as faster
transport facilitated transportation of perishable goods between countries.
DEFINITION:
MNCs are firms that control income-generating assets in more
than one country at a time.
FACT:
Of the world’s top 200 economic players in 2001, 56 were
countries and 144 were corporations.
FACT:
General Motors, Wal-Mart, Exxon Mobil, and Daimler Chrysler
all have revenues greater than the combined economic output
(GDP) of the 48 least developed countries.
As world trade developed, world governments started to talk to each other about
what could be done and to make trade agreements with each other…
Who makes the rules?
Today international trade rules are decided by the
World Trade Organisation (WTO).
Q: When was it founded?
A: The WTO was founded in 1995
Q: What was it based on?
A: It grew out of a series of trade negotiations after the Second
World War called GATT (General Agreement on Tariffs and
Trade).
Q: Why was it founded?
A: To help trade flow smoothly, freely and predictably by agreeing
international rules between countries.
Q: How big is it?
A: It has nearly 150 members and about 600 permanent staff based
in Geneva.
How does the WTO work?
The Ministerial Conference is
responsible for making policies.
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•
It meets every two years.
The General Council is below the
Ministerial Conference in authority.
It discusses issues and agrees
common approaches with other
countries.
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It meets in Geneva several times
a year.
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It is made up of ambassadors
from any member states that have
delegations in Geneva.
It is made up of government
ministers from member states.
So, now that we have an international organisation discussing and agreeing
trade rules, all should be well? Not necessarily!
Only if:
a) there is fair representation on the bodies that influence the decisions, and
b) the rules and policies are designed to be fair to the least advantaged.
Rich member governments have many
permanent delegates in Geneva continually
attending meetings. They fly in experts to
help with particular issues.
Nearly half of the least-developed country
members of the WTO have no delegates in
Geneva. Those that do, have only one or
two people to cover the WTO and other
international bodies based there.
The Ministerial Conference
At one Ministerial in Doha there were
about 500 people in the EU
delegation but only two from the
Maldives, one from St. Vincent and
no delegate at all from Haiti, the
poorest Western nation.
The General Council
Voting is based on one vote per
member country. But in practice, all
decisions are reached by consensus
without a vote. So countries with
fewer delegates, less money and less
influence are vulnerable to armtwisting by the big powers.
WTO policies: Trade liberalisation
The WTO encourages “trade liberalisation” or “free trade”.
This means countries opening to trade from other countries without demanding
the payment of “tariffs” on imports.
Advantages: Free trade allows competition, meaning that the most efficient will gain the
greatest share of the market, leading to goods and services being supplied at the
lowest prices. It enables a country to specialise in production of those commodities in
which it has a comparative advantage, and to further increase productivity.
Source: Based on info found at http://hsc.csu.edu.au/economics/global_economy/tut7/Tutorial7.html#content
Disadvantages: Over-specialisation in one product can mean that a country’s economy
is threatened when global market prices for that product fall e.g. in two years Ethiopia
lost almost US$300 million, half its annual export revenues, due to the fall in world
coffee prices. Free trade also leads to floods of cheap food imports in developing
countries, which can wipe out the livelihoods of small-scale farmers e.g. maize prices
received by poor Mexican farmers have halved since Mexico opened its borders to
cheap US maize, causing havoc in the countryside.
Source for coffee fact: Oxfam report Sep 2002 http://www.oxfam.org/sites/www.oxfam.org/files/coffee_0.pdf
“If you have a really open economy like ours, it's
impossible to protect your farmers with WTO rules.”
A Latin American negotiator in Geneva
WTO policies: Subsidies
Rich country agricultural subsidies allow rich countries to produce food at below
the costs of production. This drives down prices and damages the
livelihoods of farmers elsewhere.
Yet the WTO allows rich governments to carry on supporting their farmers with
billions of dollars a year, e.g. the average European cow receives support of
US$2.2 per day, more than the income of half the world's people. This gives
northern agriculture a massive advantage over developing country farmers.
Watch “The Luckiest Nut in the World” video about world trade:
http://www.youtube.com/watch?v=jtlYyuJjACw
“Cheap imports are coming in, destroying jobs.
We are becoming beggars in our own country.”
One African ambassador
International trade rules
Subsidies to producers in
North
Cheap goods flood markets in
developing countries
Prices of Southern goods fall
Tariffs on imports of goods
from South
Producers in the South
cannot afford to export
Stored crops rot
Southern producers earn less to pay for:
Health care
Food
Education
Housing
Hunger
Poverty for many Southern producers and their families
CAFOD will often issue a press release when there have been
recent developments on trade, for example:
http://www.cafod.org.uk/News/Campaigning-news/Trade-white-paper-2011-02-09
Find out why CAFOD is campaigning for justice in the global food
system, including empowering aid for small-scale farmers:
http://www.cafod.org.uk/Campaign/Get-clued-up/Food
Pause for reflection
Compare what you have learned about international trade with the previous
slides on what the Catholic Church says about fair trade.
In what ways does international trade conform to and differ from the
ideals of the Bible and of Catholic Social Teaching?
If you were a WTO delegate for the day, with a chance to address the
General Council, what changes to international trade rules would you
recommend in your speech?
Is it possible to make trade fair?:
Case studies of poverty,
including possible solutions
© Fairtrade Foundation
Section Three
The Fairtrade Foundation in Pakistan
The Fairtrade Foundation helps disadvantaged
producers in developing countries. It licenses the
Fairtrade Mark, an independent guarantee that a
product meets standards set by Fairtrade
Labelling Organisations International.
These standards stipulate that traders must:
•
pay a price to producers that covers the costs of sustainable
production and living
•
pay a 'premium' that producers can invest in development
•
make partial advance payments when requested by producers
•
sign contracts that allow for long-term planning and sustainable
production practices.
Click the icon to watch an interview
with Sher Ghazi, CEO of Mountain
Fruits in Pakistan.
Video can also be found at http://youtu.be/Nb_bhZ9luQg
© Fairtrade Foundation
Sher Ghazi explains Fairtrade to pupils during a visit to the UK
What financial difference has Fairtrade made to Mountain Fruits?
What non-financial differences has Fairtrade made?
CAFOD in the Philippines
The Philippines is made up of a collection of islands.
Mindanao is its second-largest island.
CAFOD works in the poor central, north and western parts of the island.
Key challenges include:
• Conflict and peace
300,000 people were displaced in the Mindanao region
in 2000
• Economic exploitation
Agricultural land being reclassified for commercial,
residential or industrial use; mining in particular.
Click the icon to investigate further our work in the Philippines.
http://www.cafod.org.uk/About-Us/Where-we-work/Philippines
Fact file
•
In rural areas of the Philippines, half the population lives below the
poverty line.
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The poorest rely heavily on agriculture, particularly rice growing.
•
Farmers find it hard to make a living, as they are forced to compete
with cheap, subsidised imported rice.
•
If the WTO succeeds in forcing the Philippines government to further
open its market to imported rice, the country will be flooded with cheap
rice imports. The poorest farmers will be hit the hardest.
•
The Philippines, and other developing countries, propose that they be
allowed to protect those crops which are particularly important to poor
farmers.
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This plan is being resisted by rich countries within the WTO.
Rice farmers call for trade justice
© Annie Bungeroth/CAFOD
Rodrigo Costanilla, a father of seven, farms one hectare, rented from a
land-owning family. Two-thirds of the land is used to grow rice, the rest for
fruit trees, vegetables, pigs and fish ponds.
Rodrigo says, “There is foreign
rice in all the local markets and
it’s not helping small farmers to
increase their income. It’s
cheaper and people are not
buying our rice, which is higher
quality and healthier. The good
thing about small farms like mine
is that the produce and income
from the land is divided between
lots of people, not just taken by
one owner.”
“Rice is my livelihood, and if it were taken away from me it is really the
equivalent of death.”
Rice farmers call for trade justice
Elizabeth Moteza is a director of a Social Action Centre in Zamboanga del
Sur, Mindanao, which is supported by CAFOD.
© Annie Bungeroth/CAFOD
Elizabeth says, “The WTO is a big enemy
for us, as WTO policies do not benefit poor
people here. Because of liberalisation
there is an influx of products from
countries like Vietnam and the US to the
Philippines. This is driving the price down
and making it impossible for small farmers
to compete. Most consumers will choose
cheap foreign rice over high quality local
rice.”
The Social Action Centre works with small-scale rice farmers like Rodrigo,
assisting them with low interest loans, technology and training. Elizabeth
also campaigns to encourage more small-scale and chemical-free
processes, for the good of the economy, the community and the
environment.
Rodrigo has been assisted by the Social Action Centre through training,
low-interest loans and equipment, but his livelihood could be safeguarded
if unfair international trade rules were changed. Therefore CAFOD, as well
as supporting partners like the Social Action Centre in Mindanao, also
tries to help poor farmers by campaigning for trade justice.
Click the icon to read an interview with Rodrigo Costanilla
about the impact of trade rules on his work and life.
http://www.cafod.org.uk/News/Campaigning-news/Rice-farmers
Changing of unfair international trade rules would have a far greater
impact on poverty in developing countries than aid payments, debt
cancellation or the Fairtrade Mark.
These changes can be achieved if the political will exists.
Section Four
© Annie Bungeroth/CAFOD
Conclusions
Tackling global poverty
During the Make Poverty History campaign in 2005, developing
countries were promised debt cancellation and better aid, but much
more remains to be done.
Debt cancellation
Because of the promises made in July 2005, 18 countries are eligible to
share cancellation of up to US$1bn per year.
This compares to a minimum US$10bn needed to help poor countries meet
the Millennium Development Goals.
Major issues remain around which countries and debts are eligible for relief,
conditions attached to the policies and the lack of an independent arbitration
mechanism.
“A dialogue between those who contribute aid and those who receive it
will permit a well-balanced assessment of the support to be provided…
Developing countries will thus no longer risk being overwhelmed by
debts whose repayment swallows up the greater part of their gains.”
(Populorum Progressio, 54)
Better aid
The 2005 G8 leaders committed to provide an extra US$48 billion a year by
2010, including between US$15 - US$20 billion of new commitments. If this
promise had been kept and delivered without imposing economic
conditions, millions of lives could be saved.
However, these aid pledges were not on the scale needed to make poverty
history, and the rate of progress towards the target of each rich country
giving 0.7% of their GDP in aid is still far too slow.
Secondly, debt-cancellation was offered to the poorest 40 countries on
condition that they engage in economic reforms that would remove barriers
to private investment by richer countries. In effect, the poorest countries
faced being coerced into implementing more of the same economic policies
which the Make Poverty History campaign cited as problems, and which
allow rich countries to profit from poverty.
Sources http://www.open.ac.uk/technology/mozambique/pics/d135461.pdf http://www.makepovertyhistory.org/response.shtml
“While it is proper that a nation be the first to enjoy the God-given fruits of its
own labour, no nation may dare to hoard its riches for its own use alone.”
(Populorum Progressio, 48)
Fairer trade
The 2005 G8 failed to take decisive action on trade. Yet reforming
international trade rules can make a far greater difference to
developing countries than either debt cancellation or aid payments.
FACT: It has been estimated that developing countries lose £475
billion a year due to unfair trade rules.
(Source: CAFOD MPH quiz, Secondary MPH Pack)
Agencies like the Trade Justice Movement and CAFOD have asked
rich country governments to:
–allow developing countries to shape trade policies that protect
vulnerable farm sectors and promote national industries, e.g.
charge tariffs to stop the flood of agricultural products and
industrial goods which can destroy local businesses.
–allow countries to choose the best policies for poor people and
the environment in services such as water, health and education,
e.g. take measures to disallow unfair competition from
multinational corporations in developing countries.
In July 2006, world trade talks were suspended due to the failure of
rich countries to agree to meet developing countries’ demands on
agricultural reform.
At the time, CAFOD’s trade analyst, Matt Griffith said:
"The fear is that this collapse will give added momentum to
bilateral talks in which poor countries have less chance of
ensuring their development needs are put first.
The WTO allows developing countries the opportunity to stand
together for a deal that works for them. In smaller groups they
will have less power to stand up to rich countries."
Research the current state of world trade talks (known as ‘the
Doha Round’) and cotton trading in four African countries.
http://www.fairtrade.org.uk/includes/documents/cm_docs/2010/f/2_ft_cotton_policy_report_2010_loresv2.pdf
Make a difference
Find out how you can help to make trade fairer at:
• www.cafod.org.uk
• www.fairtrade.org.uk
• http://tjm.org.uk/
Find out about homelessness in the UK at:
• www.depaultrust.org
Find out about Populorum Progressio and livesimply at:
• www.catholicsocialteaching.org.uk
Assignment titles
1. Write an essay: “How can trade be both a cause of and a solution to
extreme poverty?”
Hints!
– Recommended length 1,500-2,000 words
– Show that you have weighed up both sides of the argument
– Include relevant quotations from scripture and from Catholic Social
Teaching
2. Prepare a presentation, explaining fair and unfair trade.
3. Design a display board to promote Fairtrade in your school.
Credits
CAFOD is not responsible for the content of external websites
Picture credits:
Annie Bungeroth
John Zammit/Fairtrade Foundation
and Depaul Trust
Illustration: Claire Bogue
CAFOD is a member of Caritas International
Registered Charity No. 285776
Second edition: Summer 2008