The Economics of Empowerment - Part #1 (Why we have Poverty)

India is growing at an incredible pace. If India's former president Dr. Abdul Kalam's prediction comes true, India will be a superpower by the end of this decade. It's voracious appetite for goods and services will impact the world economy in a big way.

I feel that for all of this to happen, India needs a solid middle class. All big corporations realize that fortune is at the bottom of the pyramid. To unlock that fortune, however, something needs to be done to eliminate or at least reduce poverty in a lasting manner. In this two-part blog, I look at empowerment as a means of eliminating poverty. My views might seem overtly simple and even naive. So feel free to share you feedback and corrections.

I think the three main causes of poverty are:

Fatalism

Many poor people accept poverty as fate and do little to come out of it. I'm not sure if this is true only of India and other Asian countries where Karma is ingrained in our conscience. Some of the poor people I've met attribute their misfortune to bad karma!

Lack of Awareness

Many poor people fail to explore career options as they are too busy making ends meet. This is true for most middle-class people as well. Once trapped in the vicious loop of making ends meet, people begin spending incredible amounts of time, money, and energy on their jobs - their livelihoods. Some of these jobs are so physically taxing that these people seldom have energy enough to contemplate their futures. The few who do manage to figure out their options realize that they are too poor to take risks. The next time you see middle-aged people engaged in a menial jobs, remember - they're in it not because they don't have options, they're in it because they cannot afford to risk trying alternatives. Imagine their frustration - must be intense.

Lack of Opportunities

Some poor people genuinely lack opportunities. These are people, who, if guided in the right direction can actually make a huge difference in their lives. Most of these people are young and independent - the best combination for taking risks.

So where does all of this leave us? What can we do to reduce poverty, quickly?