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Understanding Poverty and Development

What is in this guide?

This guide is meant to provide a basic understanding of poverty and development. It has the following sections:

  1. Poverty

a) Poverty and Inequality in South Africa
b) Who are worst affected by poverty?
c) Development and Underdevelopment
d) Developed countries
e) Developing countries
f) What caused the difference between the developed and the developing world?

  1. Measuring poverty - statistics and indicators
  2. People-centred development and sustainable development

(Thanks to UNISA's ABET Department for allowing us to summarise some of their Development Studies materials).

  1. Poverty

Development deals with the alleviation (or the eradication) of poverty. Poverty is inter-related to other problems of underdevelopment. In rural and urban communities, poverty can be very different. In urban areas people often have access to health and education but many of the problems caused by poverty are made worse by things like overcrowding, unhygienic conditions, pollution, unsafe houses etc. In rural areas there is often poor access to education, health and many other services but people usually live in healthier and safer environments.

Since the alleviation of poverty is the most important aim of development work, we have to understand how to measure poverty. Development means that there has been some improvement and improvements must be measurable.

One of the most common ways of measuring poverty is to set a monthly average on which a family can survive - this is called the poverty line. If a family has an average income below this amount, the household and its members are said to be living in poverty. The poverty line is an amount that changes according to the size of the household, its age and composition.

Another way of measuring poverty is by measuring the poverty gap. The poverty gap shows how far a household falls below the poverty line, so in other words it shows the depth of, or degree of poverty. In some provinces many people may be below the poverty line but they may be just a little bit below it. In other provinces fewer people could be below the poverty line but they could be far below it. These two types of poverty distribution in your population obviously need a different response.

The weakness of these measures is that they only measure income and not any other state support or assets that families can use. For example in South Africa the poverty line in 2003 was about R1100 per average family per month in income. While a huge part of the population have less "income" than R1100 per month, the government also provided free or subsidised electricity, water, schooling, health care and housing to many poor people. These are things that they would otherwise have had to pay for out of their limited income. All the free or subsidised services also equals about R1100 per household per month.

People living below the poverty line(Based on income only)

PROVINCE Percentage of population living below poverty line
Eastern Cape 68.3
Free State 59.9
Gauteng 20.0
KZN 50.5
Limpopo 60.7
Mpumalanga 54.8
Northern Cape 54.4
North West 56.5
Western Cape 28.8
National 48.4

UNDP 2002

Government has developed a set of indicators (measurements) to measure development and improvements to people's lives. These indicators go far beyond measuring income and looks at things like access to basic services, improvements in the quality if life and changes in areas like crime, transport, etc. (See "Towards a Ten Year Review")

a) Poverty and Inequality in South Africa

South Africa has a small wealthy population and medium sized middle income and poor populations. The differences between the wealthy and the poor are very big and in some ways we have the developed world and the developing world living side by side in one country.

Some facts about South Africa are:

b) Who are worst affected by poverty?


Women form a greater percentage of poor people than men. The main reason for this is that women have historically had less access to education and paid jobs. Many women have always performed unpaid work as mothers, housewives etc. Many women are employed in poorly paid jobs such as domestic and farm labour.

Even within poor household women usually earn less than men and property and possessions are often in the name of a man. The UN has found that although women perform nearly two thirds of the world's work, they receive only one tenth of the world's income and they own only one hundredth of the world's property.


Poverty has a very severe effect on children. At the moment some of the poorest households in South Africa are those headed by children where parents are either ill or have died from AIDS or other causes. Even in families where parents are still present, children are very badly affected by malnutrition and it has its most severe effect on children between the ages of six months and two years. Malnutrition also means that the children can more easily get diseases and either die young or have poor physical and mental development as a result.

Poverty limits the access children have to educational opportunities, especially early childhood development. Many poor children also leave school before completing matric. In South Africa the provinces with the largest numbers of poor children are the Eastern Cape, where more than 70% of children live in poverty. Limpopo has less people, but 74% of children there live in poverty.


Poverty and lack of education limits employment opportunities for young people. In South Africa, with our high unemployment rate, many young people have no hope of finding work in the formal sector.

Urban youth are also very vulnerable to getting involved in crime, gangs and drug or alcohol abuse. These youth are often called "youth at risk" and government targets them for public works and other employment and training programmes.


About 5% of all people in South Africa suffer from some form of disability. In developed countries there are usually grants, support, special institutions and special jobs to help people live full lives in spite of their disability. In developing countries the responsibility of care and support falls on the family.

Poor disabled people live under the double burden of poverty and disability. Without support from the state it is very difficult for them to access education, special care and jobs. Public transport is often not accessible to people with certain disabilities and those with hearing or sight impediments are restricted from accessing information and communicating with others.

The elderly

Older people are usually not working anymore and have to be taken care of by the rest of society. In South Africa most poor older people survive on the monthly pensions paid by the state. They also have access to free health care. Because of high unemployment many families share the pensions meant for the elderly and it ends up being insufficient for their needs. Older people also often look after grandchildren and continue to perform unpaid domestic work for their families. This especially applies to older women.

Families living with AIDS

People who carry the heaviest burden as a result of HIV and AIDS are the poor. AIDS increases poverty and families are the first to feel the economic effects of HIV and AIDS. Families lose income if an earner is sick. Often another one of the family members stays at home to look after the sick person and further income is lost. Families also have increased costs as they have to spend on caring for the sick or paying for funerals. In most cases orphans are cared for by older female relatives who are already living in poverty - the additional burden they carry will deepen their poverty. At the moment South Africa has an overall HIV prevalence rate of 22% among pregnant women. This means that about 11% of the overall population is HIV positive.

c) Development and Underdevelopment

Inequality and poverty exist everywhere in the world. Inequality exists between classes of people within each country, between urban and rural areas and between different parts of the world. In each case poverty is caused by a lack of access to resources and power.

In most countries there are the following classes:

The shapes in the pyramid shows the relative size of classes. In South Africa the unemployed and the unskilled workers will be bigger than in developed countries. There the skilled workers and the management will be bigger.

In most countries there is some inequality between different regions - often between urban and rural areas. Rural areas tend to be involved in primary economic activities such as farming and mining. Secondary and tertiary sectors such as manufacturing and services are concentrated in the urban areas. The urban areas buy materials from rural areas, then add value and sell the goods for more. Household income in urban areas is always much higher than in rural areas. In South Africa the average household income in the mostly urban Gauteng is six times higher than the average in Limpopo which is mostly rural.

The same inequalities exist between different parts of the world. Poor countries are concentrated in the South and the East, while richer countries tend to be in the North and the West. In the next section we look at the differences between developed and developing countries.

d) Developed countries

Countries in Europe, North America and Asian countries like Japan are well developed countries. They used to be called first world countries. We now avoid that label and call them developed or industrialised societies. One of the most important characteristics of industrialised countries is that they have the capacity to produce a lot of material goods necessary for human survival. They usually engage in mass production and most people in these countries live in cities. The kind of farming that is practised in industrialised societies is usually mechanised and done on large commercial farms. Farms do not employ a large number of people and very few people live in rural areas in industrialised countries.

There used to be a whole lot of countries referred to as the second world. These were based on socialist principles where the state was heavily involved in planning of production and the economic system. Second world was used to refer to industrial countries of the former Soviet Union and Eastern Europe.

e) Developing countries

The less developed countries used to be called the third world. This term is no longer used because it is derogatory. These countries are now called developing countries. The most important characteristics of developing countries are that they are much poorer than the industrialised ones and they do not have large scale industrialisation. Most of the developing countries are still engaged in primary economic activities such as farming, harvesting of natural resources such as wood, minerals and fish rather than manufacturing. Most of these resources are used by people for their own survival or exported to developed countries where they are turned into more valuable consumer goods.

In developing countries most people usually live in rural areas and many of them are involved in subsistence farming, where they only produce enough to feed themselves and their families. They usually do not produce anything extra that can be sold to generate an income. When the community in a whole area is involved in subsistence farming, it has nothing to trade to bring in extra money. This means the community has no money to pay for roads, electricity and other services. Rural communities in developing countries often have high population numbers without any productive base, infrastructure or services. These are the issues the development programs have to address if they are serious about rural development.

Although most populations in the developing world still live in rural areas, many of these societies are experiencing rapid urbanisation. Countries where rapid urbanisation and industrialisation are taking place are generally called newly industrialised countries. Examples of such countries are Mexico, South Korea and Taiwan. South Africa can be classified as a newly industrialised country, although industrialisation started much earlier than in the other examples.

Nearly one quarter of the worlds' population are living in conditions of poverty in developing countries. About a third of the worlds' poor are living in Sub-Saharan Africa. In the past few years, conditions in the most impoverished areas have deteriorated rather than improved. This is partly because of diseases like HIV and AIDS, Malaria and TB but it is also as a result of relationship between the developed and the developing world and the impact of globalisation on issues like markets, trade and investment.

f) What caused the difference between the developed and the developing world?


Most countries in the developing world used to be colonies of European countries until the 1950's and 1960's. Colonies were used as suppliers of raw materials and food for the rapidly industrialising and fast growing Europe of the last few centuries. There was little infrastructure development in most colonies and almost no democratic government. The main aim of the colonisers was to establish control over the local people so that they could get resources out of the colonies as cheaply as possible. Little was done to develop value-adding manufacturing or the human resources of the colonies.

Africa is the continent that has the most natural resources. This made it a target for colonialism. At independence, most former colonies in Africa were left with little more than railways and harbours in terms of infrastructure that could be used for future economic development.

Economic growth and population

Many writers have argued that one of the reasons why the developing world lags behind is the rapid population growth found in these countries. Developing countries are unable to produce enough food to feed their large populations and they find it difficult to sustain economic growth. Economic growth takes place when the growth in production is bigger than the growth in population.

Adding value to raw materials

The fact that agricultural production and traditional methods of production and farming are still used means that there is very little manufacturing where value is added to raw material before being exported or sold on markets that bring extra money into the community. Developed countries tend to import cheap raw materials from the developing world and add value to it before selling it back as expensive finished products to the developing world.

  1. Measuring poverty - statistics and indicators

Figures and statistics have a very important role to play in development. If development is about alleviating or eradicating poverty, every government has to be able to measure whether their policies are making changes to poverty. Every five years the government conducts a census where thousands of officials go from door to door and interview all households about things like age of household members, income, education, access to water and sanitation, number of people in the family etc.

The collection of this kind of data is at the heart of development studies. Every government has to understand its population - this is called demography which is the statistical study of human population.

Government is responsible for spending the money that is collected through taxes on improving the lives and providing basic services to its citizens. Every ministry and government department needs statistics to be able to do this. For example, the minister of finance needs to draw up a budget every year based on projected income and expenditure. To do so s/he needs to know things like: how many people are working and form part of the taxable population, how many people live below the poverty line and how many qualify for social grants such as pensions, child grants, disability grants etc.

The minister of education has to know how many children there are of school-going age and how many of these will stay in school until matric, how many of these children are in rural and urban areas and how many of these children have special education needs. The minister of health has to understand the number of women who are of child bearing age and the average number of children that they have, this will help to plan for the future provision of health care to the population as a whole and will help to plan anti-natal clinics, nutritional services etc.

All ministries must know what percentage of the population live in rural and urban areas so that services such as water, electricity provision, the planning of roads, public works programs and so on can be correctly targeted. The government as a whole needs to put in place certain indicators to measure whether there are any improvements in people's lives. For example some indicators could be:

It is very important that the census uses consistent statistics and indicators so that comparisons can be made and improvements measured. Every census should ask more or less the same questions so that we can compare changes over five-year periods. For example the 2001 census showed very clearly that Gauteng and the Western Cape had a large growth or increase in population as more and more people became urbanised. People left the Eastern Cape to move to the Western Cape and moved from Limpopo and North West to Gauteng.

This population shift has an impact on service delivery and the housing situation in those provinces where there has been a big growth in informal settlements. For example the informal settlements put additional pressure on local municipalities to provide basic services and to develop new housing settlements.

In the next section we will look at some of the most important indicators or measures that are used to understand poverty and underdevelopment and to measure the level of well being and development that people experience.
Poverty measures

Some of the key poverty measures that are used are:

  1. Population growth
  2. Population structure
  3. Fertility
  4. Infant mortality and Life expectancy
  5. Per capita income

In this section we will look at each of these in more detail

a) Population Growth

Many of the problems associated with underdevelopment in the world are linked to high population growth rates. For every minute that passes 300 babies are born in the world and 132 people die. This means that in the last minute 168 new people were added to the world's population. When you work out his figure for days, months and years, you will find that an additional quarter of a million people are added to the world's population every day and about 90 million people are added to the world each year. (these figures were true for 1996, they will be higher now)

If the worlds' population continues to grow at this rate, it is unlikely that there will be enough food, water and living space for all of us in the future. Unmanaged population growth can lead to disaster for the world. Apart from food shortages, population growth also puts incredible additional pressure on the environment in the form of pollution, deforestation and the use of natural resources like water and coal. Population growth has been far higher in the developing world than in the developed world, so that countries that are already struggling to look after large percentages of poor people are having a rapid increase in population.

We can calculate the growth rate by saying birth rate minus death rate = growth rate. These rates are usually measured as the number per thousand of the population, so if your birth rate is 20 babies per 1 000 of the population every year, and the death rate is 10 people per 1 000 of the population every year, then your growth rate is 10 people per 1 000. That is the same as one per hundred so that we could say there has been a one percent population growth.

Emigration and immigration also have an effect on the population growth rate. The population grows when people move into your country and shrinks when people leave your country.

Most of the developed countries or industrialised countries have low growth rates. Some European countries even have negative growth rates - more people are dying every year than being born and their populations are getting smaller.

Countries in the developing world are those with the fastest growing populations. In most developing countries the death rates are falling because of improved medicine and improved hygiene but birth rates remain high. In these countries a high percentage of the population is below 15 years old.

b) Population Structure

Population structure deals with the different percentage of the population that falls in different age groups, so for example in many poor countries almost half the population is below 20 years old. When you have a large percentage of young people and a large group of old people it means that less than half the people fall in the middle group that can work and support the other two groups.

In developed countries, the biggest portion of the population often falls between the ages of 15 and 40. This is the healthier distribution because it means that most of the people are at an age where they are working or are able to look after others. One of the problems the developing countries are beginning to experience is that old people live longer and longer and in many countries there are now a large group of pensioners who depend on the state for support and are no longer productive in the economy. This means that the government in those countries have to take responsibility for children as well as old people and that these groups together may be bigger than the economically active groups in the middle sector.

The impact of HIV and AIDS on population structure will be felt in South Africa in the next few years as more and more people become ill and die. HIV and AIDS is most common among young adults - the people who are usually economically active and who care for children and older people. At present we have a growing elderly portion of the population, but this is expected to change over the next few decades as AIDS affects life expectancy. Most of the adults who are HIV positive will not reach old age.

In South Africa approximately 32% of the population are under the age of 15. We have a very youthful population as do most developing countries. Some developed countries have only 16% of people under the age of 15.

The three important age groups for population structure are:

Above 65 years:

Most older people are economically unproductive and they need more medical care, pensions, hospitals, old age homes and food support. In developing countries this group is smaller because people die younger. In developed countries this group is increasing fast because of longer life expectancy due to improved health care and life styles. In some countries in Europe retirement age may be changed in the near future to keep a bigger portion of the population economically active.

16 to 64 years

In most countries this group is usually economically productive. This is the working group that supports the other two groups. It is the biggest group in both developed and developing countries but tends to be a bigger percentage of the population in developed countries where birth rates are lower.

Under 15 - children

In most societies children are economically unproductive and the majority are still at school. They are dependent on the adult group for all their needs. In most of the developing countries this group represents 40 to 49 % of the population and in the developed countries this group is usually less than 30 percent of the population.

Population Doubling Time

Populations with a 1% growth rate can double very quickly. You may think that the growth rate of one percent will mean that the population doubles in 100 years. This is not so as population grows in the same way as money in a savings account that gets compound interest. So with 1% growth rate the population will double in 70 years in a developed country. Developing countries with higher growth rates often double their populations in 35 years. This usually does not give the country enough time to overcome shortages in resources and services. Population growth and population doubling time says a lot about poverty in a country.
What is the difference between over-population and densely populated?

Just because the population is growing fast does not mean that the country or area is over populated. It is important to understand at what point the population has grown too large. The main measure that should be used to judge is whether there are enough resources like food, water and services like health care, sanitation, education and transport to support and sustain that population.

So for example a place like New York is very small, but there is enough work, transport, health services, water, etc., for millions of inhabitants to live a very good life. When an area like New York can support and sustain the people who live there it is called densely populated, not over-populated.

However an informal settlement that may cover the same area and only have 20 000 people in it, may be over-populated when there are too few services and resources and economic activities to sustain the people - especially if people have to survive from keeping livestock and growing food and vegetables in that area.

In Gauteng there are about 520 people per square kilometer and in the Western Cape 35. In KZN there are about 100 and in Northern Cape there are only two people per square kilometer. The Northern Cape cannot sustain a denser population because much of the land is semi-desert and there is little water and very few jobs.

c) Fertility as an indicator of development

Fertility means the number of children the average woman has during her life. In general, developing countries have a much higher fertility rate and a much higher birth rate than industrialised countries. We measure the birth rate by the number of children born per thousand of the population every year. In order to work out the fertility rate and the birth rate, we first need to know how many women there are between the ages of 15 and 54, since these years are seen as the child bearing age of women.

There are many reasons for high fertility rates, and in most families the number of children goes up the further back you go in your family's history. So usually your mother or your grandparents would have had more children than you. There are many reasons for this. One of them is the traditional attitude to family size, where large families were seen as adding to wealth. Attitudes change as people become urbanised and as more women become educated and employed.

Accessible contraception is also relatively new and has only been around for about 50 years. In rural areas, people often lack access to family planning and also need more children to help with the labour intensive nature of their work. In more urban societies, people tend to have smaller families because often both parents are employed and bringing up children is more difficult without an extended family support system. If people are employed and have access to pensions, there is less dependence on children for future income. In urban areas food, water and other services are more costly and people often have to pay for childcare and transport for children.

In the rural area it is often cheaper to have children and it is more valuable for families to have a number of children. Some of them may die because of the high death rate among children in the rural areas, but the remaining ones can be used as labourers and a family with many children can rely on their children to look after them when they are old.

A general reduction in poverty is often seen as having a relationship to a general reduction in fertility. This is also often ascribed to the changing role of women as societies develop. There is a strong relationship between high fertility and low literacy among women. When women learn to read, new opportunities open for them in the job market and they tend to have fewer children. Therefore literacy and education are crucial for empowering and developing women.

In 1998 the fertility rate in South Africa was 2.9. As women get better access to education and economic opportunities, the fertility rate will continue to go down.

d) Infant mortality and life expectancy

There is a direct relationship between poverty and health and the two most common measures used are infant mortality and life expectancy. The more a country is able to provide good nutrition, immunisation, basic preventative healthcare and good living conditions, the better it will perform with these two indicators.

Infant mortality rate (IMR) is the number of children under the age of one who die each year. It is always measured as the number who die as a part of every thousand births. So if for every 1 000 children that are born in one year, 45 do not survive until their first birthday, the IMR is 45 in 1 000. The South African IMR is 45.4. In the Western Cape, which has less than the average percentage of poor people, the IMR is 26.9. (1998 figures)

Children born to poor mothers will have less chance of surviving because of the harsh conditions they live under. In developing countries the IMR is much higher than in developed countries with many babies dying from diarrhea, AIDS and malaria.

Life expectancy is the average years that a person can expect to live in a particular country. There is a difference of about 20 years in the life expectancy of someone living in the US and someone living in sub-Saharan Africa. In South Africa there are warnings from some researchers that our life expectancy of around 60 years may be reduced to just over 40 years in the next decade because of AIDS.

e) Per Capita Income

Per capita income means the income per head or per person of the population. This is a clear indicator of how rich or poor a particular group of people are. If you calculate the figure by taking the total income of a nation, an area or a sector of the population, and then divide it by the number of people in that group, you get the per capita income. As the per capita income of women increases, the fertility rate goes down. This means that the more women are employed in the labour market the less babies are born. Employment of women is therefore a key issue for addressing poverty and improving development.

  1. People-centred development and sustainable development

There are many different theories on how the developing world could develop to catch up with the developed world. Most theories focus on economic development and trade and the effect they have on poverty. Historically, conservatives tended to blame the developing world for their problems and progressives tended to blame colonialism and the exploitative practices of the developed world. Those views still inform the debates that rage around issues like democratization, world trade relations and poverty. (For more on economics, see guides on Understanding Basic Economics and Globalisation).

Through the efforts of the United Nations there is some agreement on at least two approaches to development - people-centred development and sustainable development.

People's centred development is a development model that does not just focus on the economy. It stresses the importance of developing people in a community and letting them participate actively in the development programmes. For these theorists plans for development have to be more than just trying to fix the economy in the hope that wealth will trickle down to the poor, if and when the economy grows.

It stresses that people themselves have to decide what action plan is best for them and have to actively participate in changing their lives. It starts with people defining their needs and empowering them to take action. The people's centred approaches are usually used for small-scale development programs such as the kind that may be undertaken in local communities by local governments or NGOs.

They are also suitable for large-scale development programs such as those organised in the Public Works program. People's centred development emphasises that development should not be top-down with an outside development agency telling the community what to do. It should also not be exclusively bottoms-up approach but must always involve the community as a partner to any development agency or facilitator. Some of the methods that we cover elsewhere on participatory rapid appraisal, community involvement and community consultation from part of the people-centred approach to development.

Sustainable development is the development approach that most countries now agree on. It deals with suing the world's resources to improve people's lives without compromising the ability of future generations to do the same. (See guide on Sustainable Development)

From "50 facts that should change the world" by Jessica Williams

  • The average Japanese woman can expect to live to 84. Her counterpart in Botswana will die at 39.
  • Black men in the US stand a 1 in 3 chance of going to jail. For white men the chances are 1 in 17.
  • 1/5 of the world's population is undernourished
  • Every cow in the European Union is subsidised by more than R50 a day - more than what 3 out of every 4 Africans have to live on in a month.
  • 1 in 5 people in the world live on less than R6.60 ($1) a day.
  • The US owes the United Nations $1 billion in unpaid fees. Yet it spends the same amount on its military program every 23 hours.
  • 82% of the world's smokers live in developing countries.
  • The world's oil reserves could be exhausted by 2040.
  • More than 70% of the world's population has never used a telephone. In Africa just 1 in 40 people has a telephone.
  • ¼ of the world's armed conflicts of recent years have involved a struggle for natural resources.
  • Almost 30 million Africans are HIV positive. By 2050 the disease may have claimed as many as 280 million lives.
  • In 2003 the US spent $680 billion on its military.
  • More than 12 000 women are killed in Russia annually as a result of domestic violence.
  • 120 000 women and girls are trafficked into Western Europe every year - mostly to work as sex slaves or illegal cheap labour.


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