Three main points to think about issues of poverty in the future Poverty is a complex problem that is easily understood but hard to solve. We understand that on the global scale, poverty rate is on a decline as a result of economic development that lifts millions of people out of the poverty trap. In fact, the World Bank estimated that people living on less than $1. 25 a day dropped by from 1. 8 billion to 1. 4 billion between 1995 and 2005. Although this is a remarkable gain, it shall not understate that more than 1 billion people are still living in extreme poverty.
So, there remains much work to be done to solve poverty and it helps to think of the issue in terms of the following frameworks. First, business can help solve poverty conditions. For the longest time, people view business as a profit-making organization with the goal of creating wealth for the shareholders. But increasingly, the business community has developed a greater awareness of the plight of underprivileged people that need attention and aids.
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Some businesses incorporate social objectives into their mission, while some others take social responsibility as the main goal. Regardless of the orientation, society has gained significant benefit from businesses’ greater investment in socially responsible causes. These benefits include greater market accessibility to the poor, better environmental protection, and more employment opportunities among many others. Second, actions to alleviate poverty should focus on local needs and be sustainable to maximize its positive impact.
We have witnessed the remarkable success of microfinance ??? a social business that focuses on making financial services accessible to the rural poor. Microfinance fills the gap where large commercial banks are unable to provide due to the cost constraint. Microfinance provides the avenue for the poor to take out small loans to grow their domestic business as well as a relatively safe platform for saving and investment. It has many branches throughout the rural community, staying close to the customers and making the service very accessible.
In addition, thanks to low-cost structure, they can generate revenue that sustains the business in the long term. Although we do not have the exact figure on how many people microfinance has lifted from poverty, we are sure it has a longer-lasting impact than the short-term projects of non-governmental organizations. Third, religion plays a role in poverty alleviation. Religion is at the spiritual influencer in the societal value and economic system.
It helps shape the society in ways that affect personal ethics and behaviors. For example, major religions such as Christianity, Buddhism and Islam influence people to share their prosperity with others because not only will such act make the followers happier, but it will also earn them good deeds that bring them closer to god. In addition, some religions play a more direct role to reduce poverty. Christianity, for instance, has historically been the champion for charitable organizations both large and small.
On the other hand, Islam directly intervenes in the business community through Islamic laws governing banking and insurance (Takaful insurance), hence making the services more accessible to the poor. Poverty is a complex issue that requires not only our understanding but also the actions that most effectively helps alleviate poverty conditions. While the frameworks as mentioned above are merely a tip of the poverty iceberg, they serve as a base for our thinking of this issue in the future.