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What can governments do to end poverty in their countries? Is a solution possible under capitalism?

Hello, I come from Argentina, and in my country, poverty is an issue we still can't eradicate, even though extreme poverty has been around for many decades now.

What still baffles me is the fact that although the Government gives away money to those with reduced incomes, poverty is as bad as always. Poor people can now (at least) fulfill their basic needs, but they have now become dependant on the Govt to give them the necessary resources for life (and politicians do not care about this, since this way they can keep on "buying" their votes with cash). They don't have jobs (and some do not even bother to find one) and most still live in slums under really poor conditions. So, it's obvious this solution is only benefitial in the short run... eventually the Government is going to run out of money and we'll still have the same number of people in the streets.

Moreover, I read yesterday how India is going to start doing the same thing, but I guess that probably won't go anywhere either.

Now, what do you think is the solution to stop this vicious circle of poverty? What is your Government doing about it?

Bear in mind that Latin America has just extreme poverty levels (not as much as Africa), but still much more than the First World countries. At least in my country there is a surprisingly high number of slums (check some photos in wikipedia: http://es.wikipedia.org/wiki/Villa_miseria )

In my opinion, emphasis should be made on giving labour to these people outside-the-system. But for that, we need to offer public AND quality education. Yet I'm conscious that a malnourished child is not going to be able to be properly educated, is he?. So what can we do to ensure that child will have a better future? It's difficult to come up with a solution, but we're in the 21st Century now, it's about time we stopped poverty.


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  • Jan 2 2013: Argentina's real GDP is growing and it's gini coefficient is decreasing, so the people are getting less poor, though it's possible, in theory, the gains go to the middle class and not the poor. The same trend exists throughout Latin America. If Argentina wants to grow faster it needs to attract more foreign investment and tackle corruption, but if the current trend continues things should already be looking a lot better 10 years from now.

    Social democracy is a variant of capitalism that has reduced poverty greatly in the countries where this system is practiced (continental Europe, Latin America), but it's a tightrope walk : one second of not paying attention causes a return to capitalism's natural tendency to concentrate wealth in ever fewer hands.
    • Jan 2 2013: Well, I see your point, but that doesn't mean much. Especially because the State is not being entirely transparent. As you probably know, the country's been lying about its Inflation rate. According to the National Statistics Center (controlled by the Govt.), the country's inflation rate in 2012 was 9.7%. According to private entities, the real inflation rate was about 25% for 2012. (If you don't believe me, here's the source of a renowned media group: http://www.infobae.com/notas/689154-Argentina-cierra-2012-como-el-pais-con-mayor-inflacion-de-America-del-Sur.html). So, that's something to take into account. Both Nominal & Real GDP are overestimated. Furthermore, most of Argentina's GDP is based on consumption (and helped by soy's exports). Again, if you want to check, here's a recent article (http://www.lanacion.com.ar/1420635-la-industria-local-es-mas-ensamble-que-fabricacion) which shows how there's practically no national industry, it's mainly about mounting and assembly different imported products in the country.

      Now, another reason why I believe poor people aren't getting out of this soon, is because education is a mess. While the Govt. rejoices that it's being "more social inclusive" and that it's getting "more and more kids educated", the overall quality of the public education system is a mess. Some children are in secondary schools and they don't know how to read or write. (Take this report from the IDB: http://www.iadb.org/res/laresnetwork/files/pr294finaldraft.pdf). Teachers go on strike many times during a year, which results in many school-days lost...

      I agree we HAVE TO tackle corruption... but anyway, we're maybe getting a bit out of topic here.

      The thing is, what can we do to stop poverty? Economic growth alone is not enough... China is doing very well, but they still have lots to do on social issues
      • Jan 2 2013: It's possible Argentina is cooking the books, like Greece did, but nevertheless their GDP is growing and that means people could at least use foreign currencies to increase their spending power. In general though, South America is on the right track by following the continental European model that has produced more equal, happy and stable societies than the American system where people go bankrupt and become homeless from medical bills if they git hit by a car.

        Education is key to future economic growth as is diversification of the economy through foreign investment.


        Now that you mention it, I did read about that dollar embargo, can you still get euros or Brazilian reals? Anyway, Brazil seems to be on the righ track and they came from a deeper hole too, maybe Kirchner should ask Rousseff for advice when it comes to foreign investment.
        • Jan 2 2013: Yeah, I agree. But we're definitely not going that way: we're lacking foreign investment (after YPF's nationalization, who would invest here?) AND quality education. In fact, I don't know if you knew, but funnily enough, people are not able to exchange argentine currency for dollars (to keep as savings) since 2011 (only the ones travelling can do so) which is the most stable international currency. So they actually can't increase their spending power.

          Source - Check it out: http://www.economist.com/node/21556273

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