A condition of life where people are unable to afford basic human needs such as food, clothing and shelter is referred to poverty. But poverty can also be relative when compared to other existing standards of living or incomes. When economies produce little, then poverty conditions are high. It has also been observed that countries which have high population level also have high levels of poverty. The most industrialized nations in the world have better economies and therefore, the poverty levels faced by its people are also low. These nations are classified as the developed countries. But developing countries whose economies are developing, least developed and in transition have a large population that is poor leading to more vulnerability and marginalization.

Poverty as a root cause has several negative effects on people suffering from it. Foremost among the effects is the health. The poor are known to suffer from various diseases including conditions arising from hunger and starvation. The life expectancy of the poor is also very low. The health impact of poverty is most seen on women and children, the most vulnerable of the groups and they often suffer death and diseases arising out of little or no access to healthcare, hygiene, clean water, good clothing and sufficient food. Other effects of poverty are visible in education, livelihood development, migration, violence etc.

While relative poverty is one where income levels are compared between people and countries to determine the standards of living, the absolute poverty is a definition set to understand and respond to such a condition. In absolute poverty, a person earns less than a dollar a day. There is also moderate poverty where a person may be earning more than a dollar a day but it will be less than two dollars a day. According the latest statistics, there are more than a billion populations living under absolute poverty around the world.

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