This is an OPINION page. Every week, a different intellectual writes a FOCUS on a pertinent issue! Poverty: Causes and Possible Cures [Archives:1997/44/Focus]

November 3 1997

Marking the international Day to Eradicate Poverty, a seminar was held in Sanaa on October, 19 organized by the UNDP, in cooperation with the College of Trade and Economy, Sanaa University. Several research papers on the subject of poverty alleviation in Yemen were presented by Yemeni and foreign academics. The following is a summary of a paper entitled “The Possible Eradication of Poverty” presented by Dr. Abdulbari Al-Sharjabi*
Definition Poverty is the state of the person being unable to get enough income to provide his or her essential livelihood needs – food, clothing, decent housing, basic health care, an appropriate level of education, and decent means of transportation. A poor person, therefore, has an income which can only provide a small or a modest part of the above mentioned essential needs. Thus, the overall low standard of living experienced by the poor cannot generally be improved, even if the prices of basic commodities remain the same. A fixed low income and increasing prices would, of course, lead to more hardships and may even cause abject poverty and destitution.
Causes of Poverty in Yemen The causes of poverty vary from one nation to another, according to the available economic and natural resources and the means of exploiting them. However, there is a certain degree of overlapping of various causes of poverty such as the political, economic and social backwardness of a given country. The most important causes of poverty in Yemen can be summed up as follows. 1- Economic backwardness and structural deficiencies lead to a decrease in domestic income, especially in the agricultural sector. Since the majority of the population live in the countryside, many people work in agriculture, compared to other sectors. 2- The degradation of the average per capita real income and its annual rate of growth are due mainly to the high annual population growth which well exceeds the growth of the real per capita income . 3- Rising unemployment and large families have led to a high rate of economic dependency. 4- The high rate of inflation re-distributes the income for the benefit of those with ownership revenue rather than labor revenue such as big merchants, industrialists, etc. This increases the inequality in income distribution within the economy and society in general. 5- Privatization, which enlarges the scope of private ownership and its revenue at the expense of the labor revenue, also increases the inequality in income distribution within the economy and society in general. 6- Neglecting the development of the countryside and failing to provide it with basic services and new job opportunities increases unemployment and migration to urban centers thereby haphazardly urbanizing poverty. 7- With a high rate of illiteracy and lack of proper health care, woman are marginalized and are denied their appropriate role in the economy.
Possible Cures Since poverty is relative, it depends on circumstances. Wherever there are rich, there are the relatively poor. God in his divine wisdom has dictated the that there should be poor and rich people. There are many citations in the Holy Koran to this effect. So it may not be wholly possible to eradicate poverty altogether, but it can be reduced and limited as much as possible.
Generally speaking, the problem of poverty in Yemen can be tackled by the three following methods: A) A strategy of economic development in particular and comprehensive development in general must be adopted. This method addresses structural inequalities in the economy and the weakness of economic structure. Therefore, the industrial sector will become the pioneer sector in employing a big proportion of the available workforce. If the industrial sector starts to grow, other closely related sectors such as the services sector can grow too. This method will lead to an increase in the average annual per capita real income.
B) To alleviate poverty, the economic reform program must be accompanied by the establishment of a social safety net to protect vulnerable groups from the short-term effects of reform policies. The most important components of a social safety net are: 1) the direct distribution of subsidized wheat and flour to poor people in urban areas; 2) providing “food assistance” at an amount of YR 2,500 each time for every family in the urban areas; 3) providing general services (particularly health and education) to be financed by donor aid and from the big revenue resulting from the lifting of wheat and flour subsidies; 4) a civil works program to employ unskilled workers with lower wages than the common labor market; 5) developing a national or foreign non-governmental sector to develop a non-profit private sector providing general services to the poor people; and 6) increasing the resources of the Social Security Fund and the Social Development Fund as much as possible. These basic elements of the social security net were specified in a May, 1995 report by the World Bank on the economic reform program in Yemen. They were also specified by the Yemeni government’s general program announced in May /June, 1997. ý
C) The third method is an Islamic one, as stated in the Holy Koran. Islam tackles the poverty problem through three ways: 1- Holy tax (Zakat) is one of the pillars of Islam. The rich must pay the Zakat – 5% of their annual income – to the poor people. Paying alms is also encouraged by the Holy Koran. 2) The Holy Koran forbids the monopolization of resources by a group of rich people so as to prevent the spreading of poverty. 3) The third Islamic method is an indirect one. The harmful population growth can be treated by birth control. A controlled population growth can develop the people’s general standard of living. Controlled population growth can take place by the control of pregnancy and the period of breast feeding. As stated in the Holy Koran, pregnancy and breast feeding should take three years – nine months’ pregnancy period and two years for breast feeding. In this case, a nursing mother should avoid pregnancy by using an appropriate contraceptive. Therefore, the period between two consecutive pregnancies will be three years. Considering that the safe pregnancy period is between the ages of 18 and 35 years, a woman’s average rate of fertility of is, therefore, four to five children. This accurate birth control will lead to a controlled annual population growth rate of 2%, way below the current 3.4%.
Conclusion Yemen has tried to adopt a combination of the three above mentioned methods. Economic development plans and comprehensive development are supposed to adopt a development strategy in order to treat structural deficiencies in the economy. The defect of this method as related to Yemen is that elements of strategy are not clear and complete as well as economic policies related to it. As to the second method, it is known that the economic reform program includes a social security net to protect the poor from the short-term effects of reform policies. This method is insufficient. For example, the program tackles inflation by using the access issued money to finance budget deficit. But it creates another source of inflation through the state-decreed increase in prices of services and basic commodities. The program also tries to alleviate poverty mainly in urban areas. Rural areas are neglected. The Islamic method is not clearly and completely implemented. There is no full practical application of its major elements: Zakat, alms, preventing the monopolization of resources by the rich, and birth control. There are no mechanisms, procedures nor policies such as the progressive tax to prevent the monopolization of resources by a group of rich people . In fact, the opposite is happening. The privatization policy will lead to the centralization of resources in the hands of a group of capitalists and industrialists. Zakat in its current form is not wholly effective. This can be concluded from the government’s general program which stipulated the enactment of law of Zakat as part of the social safety net in May, 1997. Birth control is not possible in most parts of Yemen, especially in countryside where illiteracy is widespread and the correct religious awareness is nonexistent. Finally, to tackle poverty in Yemen by any of the above three methods, cooperation and coordination are necessary among three main parties: the government, NGOs and the general public.
* Dr. Abdulbari Ahmed Noman Al-Sharjabi is an Associate Professor at the College of Trade and Economy, Sanaa University. He wrote extensively about Yemen’s economic conditions and social problems.