Recognizing an Opportunity and Creating Alternative Options - Assignment Example

Peter aspires to brainchild an organization that would consolidate resources from donors and charitable institutions to be used in empowerment programs for individuals identified as living in abject poverty.
Poverty
The topic of discussion is poverty. Poverty refers to a condition where an individual is deficient in some material possession (Espejo, 2012). It is a situation where individuals cannot meet basic needs, that is, food, shelter and clothing. In general, poverty is comprised of two types:
• Absolute poverty is where individuals are unable to raise the bare minimum essential for the provision of their basic needs in a particular area (Espejo, 2012). It attempts to measure an individual’s ability to afford to live in a particular area. Those persons who cannot raise the bare minimum required to provide basic needs in a specific region are considered to be living in absolute poverty.
• Relative poverty refers to economic inequality in an area. It provides a measure of the difference between an individual’s resources and the average cost of living in a given area (Espejo, 2012).

The context of the problem is why cutting poverty is good for a country. Millions of adults and children in most countries around the world live in extreme poverty. They face economic hardship. Cutting on the overall rate of poverty is thereby a public good that will come as a benefit to citizens of a country at all income level. Reducing a nation’s poverty level will save a country economy billion dollars as it saves the government limited resources that would be channelled to poverty-related issues such as health care costs and criminal-justice expenditures (Sachs, 2005). The resources saved could be used to invest in areas that promote economic growth.
Possible stakeholders in the problem of poverty include:
• The government plays the roles of ensuring that its citizens are economically so as to cut on poverty hence ensure sustainable economic development of the country.
• Multinational companies-these companies have a role in addressing pressing social problems such as absolute poverty in host countries. Multinational corporations play a big role in eradicating poverty by providing employment to citizens, participating in community development projects and industrial training programmers to the youths.
• External development partners –majorly comprise of World Bank and International Monetary Fund (IMF). These institutions work to connect extensively their lending operations to the country strategies and measures for cutting poverty.IMF and World Bank also offer policy advice and necessary technical support in coming up with a macroeconomic framework linked to national budgets and strategies(Sachs,2005).
• Private sector-comprises of investors and business persons who invest in the economy. These stakeholders would participate in development projects as a way of eradicating poverty and building their corporate image.
Potential solutions to poverty problems are by taking drastic measures in cutting poverty. These solutions include:
• Creation of high-income jobs-unemployment is one of the primary drivers to poverty. Several public investments and reforms would grow the economy and this would see most citizens earn a good salary and lift their families up above the poverty line. It would also create hundreds of thousands of jobs for unemployed citizens(Sachs,2005).
• Increasing wages-raising of wages is one of the effective national strategy to radically cut poverty .increasing salaries of low-wage rate workers would increase the cost of living and create demand for goods and services in the economy as they would use their increased wages on local business. These workers would therefore uplift their families above the poverty line.
• Microfinance –ensuring there are easily available and affordable financial services to the citizens. Major financial services to be provided is easy access to credit and savings. Availability of credits would encourage individuals to invest in income-generating activities which would earn them revenue thus leading to a rise in their living standards (Sachs, 2005).
• Education-government to ensure availability of affordable education to all citizens. Illiteracy plays a primary role in driving individuals to poverty. Educated individuals with the necessary skills would play a crucial role in the production of goods and services for the economy. This would lead to economic growth for the country and the generation of revenue for individuals. Thus leading to rising in living standards in the economy.
Creation logic is where an action is taken first then analysis of that action is done later after implementing the action. It does not rely on the use of past data to predict the future. An example of creation logic is:
Taking a solution aimed at alleviating poverty based on the state of people living in poverty rather than researching actions other stakeholders had taken in the past in a bid to reduce poverty and improving on such actions that had already been taken.

Prediction logic involves relying on past data to predict the future. For example, in addressing poverty elimination, historical data-carrying is passed through SWOT analysis in finding out the success of projects that had been carried out in the past in an effort to reduce poverty. Projects found to have had positive results are implemented with the prediction of more success as strengths of past projects are maximized and weaknesses minimized (Sachs, 2005).

Conclusion
I have learnt that poverty is a major problem that needs to be addressed urgently by most countries in the world.