The Hindu Business Line : Beyond poverty lines

Don’t pay any attention to what they write about you, advises a helpful quote of Andy Warhol addressed to those worried about news stories. “Just measure it in inches,” he adds.

By that handy measure, ‘poverty’ as a theme has been richly written about. But, do we measure poverty right when drawing a monetary line and then counting all those below it, as accountants are wont to do? Alas, income is just one of the m any dimensions of poverty, says Louis-Marie Asselin in Analysis of Multidimensional Poverty: Theory and case studies ( www.idrc.ca ).

Poverty involves any form of inequity, which is a source of social exclusion, in the distribution of the living conditions essential to human dignity, he says. “These living conditions correspond to the capabilities of individuals, households, and communities to meet their basic needs in the following dimensions: income, education, health, food/nutrition, safe water/sanitation, labour/employment, housing (living environment), access to productive assets, access to markets, and community participation/social peace.”

While the unidimensional income measurement of poverty has a great technical advantage of allowing for a complete ordering of households according to income level, and then targeting policies and programmes for welfare mapping, it is still necessary to look at poverty at an individual level, the author urges.

In the multidimensional case, the content of the vector of indicators chosen to measure poverty is crucial to determine the poverty concept, and fixing a poverty line or indicator-specific poverty lines is not a first requirement to grasp the concept of poverty, he explains.

Recommended study.

Universal appeal

Has the reincarnation of DFIs (development financial institutions) into universal banks affected the resource requirement of industry and services? No, argues an essay by A. Karunagaran included in Dynamics of Indian Banking: Views and vistas, edited by Manoranjan Sharma ( www.atlanticbooks.com )

The author mentions how most of the developing countries that resorted to a calibrated process of financial reforms to foster efficiency and profitability found it difficult to sustain DFIs. For starters, he explains ‘universal banking’ as ‘the one-stop shop’ where banks provide all financial services along with the commercial banking, that is, investment banking including selling of insurance products, and so on.

While universal banks continue to play an active role both in working capital requirement and term finance based on the commercial viability of the projects, it is necessary to develop the equity and corporate debt market needs, and put them into the shoes of DFIs, Karunagaran recommends.

Interestingly for M&A watchers, the recent acquisition of Laser Soft by Polaris Software has as its subtext the coming together of core banking solutions of the former and the Global Universal Banking (GUB) of the latter under one umbrella.

Useful read.

D. MURALI

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