WHAT IS POVERTY TRAP AND ITS EFFECT ON THE PERI-NATION

WHAT IS POVERTY TRAP AND ITS EFFECT ON THE PERI-NATION

In the developing world, many factors can contribute to a poverty trap, including: limited access to credit and capital markets, extreme environmental degradation (which depletes agricultural production potential), corrupt governance, capital flight, poor education systems, disease ecology, lack of public health care, war and poor infrastructure.

What Is a Poverty Trap?

Do the effects of poverty lead to even more poverty? The simple answer is yes. This is especially true for people or economies that are caught in a poverty trap. A poverty trap is a situation that creates a cyclical pattern of poverty. Unless something is done to change the situation, the cycle cannot be broken, leaving generation after generation ‘trapped’ in a constant state of poverty.

Effects of the Poverty Trap on Peri-Nation

• Poverty traps create a cycle within an area that becomes almost impossible to fix without some sort of aid. The problem is, without people earning a living wage, they cannot invest in products within an area. Without money spent in businesses, then businesses go belly up, people lose work and money, the area becomes even more downtrodden than before.
• In the United States, cities like Detroit, are good examples of how poverty can turn into a poverty trap. When Detroit lost manufacturing jobs, people with resources moved out of the city, leaving behind poor neighborhoods. More businesses closed, public services experienced cutbacks, and poverty increased. In 13 years alone, the number of high poverty neighborhoods grew from 51 to 184. People in this city are still struggling to break what is becoming a pattern of poverty.

Poverty traps have other effects as well:

• Environmental issues: In areas where poverty is high, the population is usually also dense, leading to precious resources being depleted faster as well as the tainting of the current resources like water.
• Degradation of education: In areas that are extremely poor, education is a luxury. This means that kids do not finish standard school years, because students need to work instead. This can lead to an uneducated population with limited economic opportunities.
• Increase in violence: Impoverished areas often experience an increase in crime and violence. This is dangerous to the residents. It also impacts how public funds are used in communication.

CONCLUSION

More than one-third of the rural population in developing countries lives on less-favored agricultural land, according to global spatial datasets from 2000. How, then, does this distribution influence the incidence of poverty in these countries?

Alleviating poverty can be difficult, particularly in economies that suffer from poverty traps. social mobilization is a large part of finding solutions for these issues. to do this, communities and states have to raise awareness and communicate how people can volunteer and get involved to help these needs. Poverty trap can be broken by planned investments in the economy and providing people the means to earn and be employed. A series of poverty alleviation programs can be enforced to raise individuals out of poverty by providing monetary aid for a period of time.

REFERENCES

Edward Barbier (2015) Professor, University of Wyoming: How to end poverty traps in rural areas.

Costas Azariadis and John Stachurski, “Poverty Traps,” Handbook of Economic Growth, 2005, 326.

Jump up ^ Bonds, M.H., D.C. Keenan, P. Rohani, and J. D. Sachs. 2010. “Poverty trap formed by the ecology of infectious diseases,” Proceedings of the Royal Society of London, Series B, 277:1185–92. doi:10.1098/rspb.2009.1778