Ideas on eradicating poverty

[yogi]

With almost one fifth of humanity living in the Indian subcontinent, poverty eradication is the biggest challenge in front of governments and social institutions. While government standards claim that only about a third of population is below poverty line, looking at income levels it can be safely assumed that half of the region's population can be termed poor.

Poverty is a disgrace on the face of any civilization. The economic system that has been developed over the years, systematically deprive millions of poor people from getting loans and credit, and suppress their entrepreneurial capabilities, thus closing any possible doors that can lead them out of poverty.

Nobel Peace Prize winner Mohammad Yunus of Gramin Bank delivered this fantastic lecture. There are so many amazing points that he mentions. It is a must watch for everybody. If time permits, I'll try to write down some notes from his lecture.

Muhammad Yunus: Creating a World Without Poverty

[gshankar]

Mehmood Khan's Rural Dreams

The stories of a village boy studying under the streetlight to a highflier with his own fleet of cars are overdone; however, none of them returned to the same village from where they once started. Khan did.

Related Video

[yogi]

Just watched a fantastic documentary on PBS.

The Power of the Poor - by Hernando De Soto (Institute for liberty and democracy (ILD))

Below are the notes from that series. A must watch. Some great ideas on how to eradicate poverty, by showing a real life example of the progress achieved by the Peruvian society, which in 80s struggled with terrorism, but averted the crisis by focusing on bringing the impoverished and the poor "in the system". Below are some notes:

• One of the reasons, large number of rural population in developing world is poor, is because the system not only not work for them, but work against them. To cope with this situation, these poor but hard working and entrepreneurial people create their own extra-judicial system to survive out of the system.
• Its not illegal, but "extra-legal".
• One of the major reason is that people who live and survive on a piece of land, do not hold the title to that land/property. Hence they do not get the usual benefit like loans and registration of their business. In order to survive, they are forced to create their own rules, and live within their own system. They have their own system on how to manage licenses, how to get married, how to raise a family, how to enforce their contracts.
• In most developing countries, the extra-legal society represents the majority of the country.
• 98% of all business were extra-legal, in Peru. They constructed 7/10 buildings, managed almost all of public transportation.
• Extra-legals lack the most fundamental thing available in the western society - a legal identity.
• Lack of an identity has long isolated the rural Peruvians from society. They hold no legal title to the land on which their livelihood depends.
• They can't prove who they are to people who don't know them. They can't buy or sell beyond their friends and family, can't export goods outside the country. In case of a national disaster, they will loose everything.
• How to help the extra-legals to enter the formal legal society?
• For an extra-legal society to go legal, the incentives of being legal has to exceed the other way round, and better than being illegal.
• In 1800s Switzerland was one of the poorest countries in Europe. In 100 years, it became one of the richest. In late 19th century, Switzerland was a loose confederation of tribes. It lacked a way to integrate the Swiss, the French, the Germans in their society.
• Eugen Huber created a single legal system in Switzerland. He made the law simple enough for common people to understand. He went to grassroots to find out what people understood to be the truth, what they believed in. He created a bottom up process.
• The wealth owned collectively by poor people is huge, but its very fragmented.
• Solution is to change the laws from inside, and to make the elites understand that changing this situation will reduce terrorism, will create and open up vast markets within the country itself.
• Property rights, access to capital, and capability to reach external markets will allow poor people to generate wealth.

Reference: Swiss Civil Code