Vicious circle of poverty is a kind of curse which is feared by all the countries because it is said to be that a country is poor because it is poor.
1: Low income
2: Low saving
3: Low investment
4: Low productivity
Modern economics are of opinion that there are different caused of vicious of poverty. These are under utilization, higher growth rate of population, employment opportunities are limited, excessive dependence in indirect tax, feudal lords and tribal heads, misuse of limited resources.
Natural resources are available in poor countries for development. But the government of these countries are not capable of properly utilize the resources. Peoples live in poor conditions. The population in poor countries is increasing rapidly. The increased population nullifies the growth of the economy. There is no significant improvement in living standard. The rate of investments in public and private sectors is very low. There is no expansion in industrial sector. Labor force remains unemployed. The limited resources are misused by the rulers and civil administration. The allocated funds are not properly used for the welfare of people.
The governments in developing countries mainly get revenue from indirect taxes. The income of the government is not adequate to undertake development projects. Rich peoples evade taxes. The feudal and tribal heads enjoy social status in these countries. They do not like to change the traditional society. Poor people are more obedient and serve properly.
A circular flow of forces tending to act and react upon one another in such a as to keep a country in a state of perpetual poverty
Poverty removes hope for those affected therefore without hope there is no ambition or ability to progress as poverty removes opportunity such as educations. Those in poverty without hope and opportunity perpetuate the condition by having more children than they can afford and thereby increase the poverty pervasiveness and is transposed on the children which repeat the mindset and lifestyle.
Causes of vicious circle of poverty in form of headings
Poor learn to go without and this means boredom from lack of money, lack of work and lack of activity. Since a person cannot stay bored they instead seek out something that occupies their time especially if they are young. This is usually sexual activity which then results in pregnancy and obligations from child birth and parenthood. Since this also requires money which is not in abundance it worsens the situation and since most of these people are young or used to going without it makes what little there is even less and thus perpetuates the cycle of poverty. You rarely see wealthy people with 10 children. You often see the poor with multiple children.
Poverty- when your first ambition is NOT money...