s2fieldsofstudy: Economics Engineering

text:
Poverty, richness, and inequality: evidence for Portugal using a housing comfort index

With data for Portugal we propose an index of housing comfort based on the Household Budget Survey. This index covers housing and durable goods grouped in two dimensions: basic comfort and complementary comfort. Taking this index as starting point we make two contributions. First we quantify the phenomena of poverty, richness, and inequality in housing comfort. Second, using an ordered probit model, we evaluate the determinants of housing comfort in Portugal. The results show significant rates of poverty (12.41%) and richness (22.03%). The evidence sustains that the differences between households derive mainly from complementary comfort and to a lesser extent from basic comfort items. Inequality in housing comfort, measured by the Gini coefficient, stands at 0.1263. The econometric study reveals that the region of residence of the household and the educational level and labor market state of the household reference person are among the most critical determinant factors of housing comfort.

Introduction
Theoretical and empirical attention to inequality, poverty, and more recently, richness has been a dynamic research field in the economic literature [1,2]. Critical to this emphasis is, obviously, the social importance of these phenomena and the consequent impact on policy agenda. The quality of the policy decisions critically depends on the correct evaluation and quantification of the phenomena [3]. This is usually grounded on well-established indicators of inequality and poverty (with the last ones also adapted for the case of richness).
Measuring these phenomena implies a vast range of methodological options. One of the most critical in this regard is the selection of the indicator of resources. In developed countries, where the majority of the empirical studies have been carried out, income and expenditure are the variables traditionally considered. However, this is due mainly to data restrictions as it is widely recognized that they are second-best proxies for measuring these critical social dimensions. As suggested by Cowell [1], wealth, lifetime income, and income are, in that order, the most adequate ones. Interestingly, this question arises with different contours in low-and middle-income countries, where income and expenditure data are in many cases unavailable, hard and expensive to collect, unreliable, or incomplete, thereby limiting the ability to adequately capture welfare trends.
Taking the considerations above into account, Montgomery et al. [4], Sahn et al. [5] and Filmer et al. [6] proposed the consideration of an asset based-approach. To that end, they create asset indices capturing dwelling infrastructures, building materials, and durable assets. These indices, extensively used since these pioneering contributions, can be seen as proxies for a household's welfare, long-run wealth, long-run economic status, permanent income, capabilities, and living conditions [7][8][9][10][11][12]. 1 One important reason for the recent popularity of this approach derives from the fact that, contrary to income or expenditure data, there are large databases for several years and countries regarding asset ownership (e.g., USAID-sponsored Demographic and Health Surveys). In addition, in several developed countries, the national household budget surveys include questions about this topic.
Of course, the consideration of asset indices as proxies for wealth is not immune to criticism. Two aspects are especially noteworthy. First, the data usually give us information only on the presence of goods and not on the ownership, except for the incurred expenditure in the reference period of the survey. Using the presence of goods as a proxy for asset ownership has the underlying assumption that the amortization of debts arising from consumption credit is achieved in the short-term. Second, the family's preferences regarding, for instance, the quality of the goods or the use of credit are not available in the surveys and therefore are not taken into account.
Even if we accept the gravity of these limitations, a measurement of poverty, richness, and inequality in terms of critical assets is still a valuable contribution to our knowledge of well-being. In this context, special attention is usually given to housing conditions since, as expressed by Navarro et al. [13], 'housing is undoubtedly one of the main components of material well-being' [p.597]. The idea that inequality, poverty, and richness depend on many dimensions of human life, including income, but also other aspects goes back to the seminal works by Townsend [14], Streeten [15], and Sen [16] and has recently received a great deal of attention. The list of areas already studied is long, covering dimensions such as health, education, time use, water, and food, among 1 For additional discussion on the roots of the asset-based approaches, see for instance Filmer et al. [9] and Ward [12]. others. Housing conditions can be considered through an analysis of this aspect and its multiple facets alone or through its inclusion in composite measures of well-being.
The present paper belongs to the asset based approach and, more specifically, assumes that access to house-related assets is a critical dimension of well-being. 2 More specifically, we consider a new concept, which we designate as "housing comfort". In this case the focus is put on house related variables, meaning that we try to capture, with the highest possible level of detail, the characteristics and quality of the house in which a household lives (both housing conditions and durables are taken into consideration).
As occurs in the dominant literature, we derive an index to measure this concept. In comparison to other asset indices, our indicator has two main differences. First, it is built from a much larger set of housing features (see McKenzie [8] for a proposal with the highest degree of similarity to the one we present here). On the other hand, it excludes assets that are related to the house.
This study uses microdata from the Household Budget Survey for Portugal (2005/2006) and proposes an index of housing comfort that covers housing and durable goods grouped in two dimensions: basic comfort and complementary comfort. Based on this index we establish two additional goals. First we characterize housing comfort in Portugal through measures of poverty, richness, and inequality based on a wealth measure. Second, we identify the main determinant factors of housing comfort. 2 The literature analysing the level of deprivation suffered by households also gives this level of attention to housing attributes [21][22][23]. Nevertheless, in this case, the analysis is concerned with the lack of access to basic conditions. Portugal is a very interesting case study because it is among the European countries with the highest levels of income inequality and poverty. According to the European Union Statistics on Income and Living Conditions (EU-SILC), in 2013 Portugal was the second country in the EU-15 with the highest level of inequality 3 (5th in the EU-28) and the fourth country in the EU-15 with the highest level of poverty 4 (9th in the EU-28).
Despite its importance and specificities, the Portuguese case has received little attention to date. Some studies have characterized poverty using income or expenditure, such as Rodrigues [24], Ferreira [25], Alves [26], Peichl et al. [27], Rodrigues et al. [28], and Crespo et al. [29]. Nevertheless, knowledge about the Portuguese case would benefit from studies capturing other features of wealth.
The remainder of the paper is structured as follows. Section 2 presents the index that supports the empirical analysis developed in the study. Section 3 discusses the measures of poverty, richness, and inequality in housing comfort. Section 4 presents the econometric model, and Section 5 performs a sensitivity analysis. Section 6 has some final remarks. 3 Gini coefficient of equivalised disposable income. 4 People at risk of poverty after social transfers(cut-off point: 60% of median equivalised income after social transfers).

Microdata from the Household Budget Survey (Inquérito às Despesas das Famílias
-HBS) carried out in 2005/2006 by Statistics Portugal has been used in this study. The HBS is a large survey focusing on gathering information from the Portuguese households on income and expenditure as well as detailed data about the characteristics of the housing, the households, and the individuals.
The Household Budget Surveys are among the most comprehensive household surveys applied in all Member States of the EU. The particular version adopted in each country contains some specific elements regarding the structure and the group of topics covered but is based on common methodological guidelines provided by Eurostat. For a more detailed discussion of this survey see, for instance, the Methodological Manual [30] or the Quality Report [31].
Concerning the Portuguese case, the HBS sample is composed of 10,403 households and 28,359 individuals. The survey is associated to a questionnaire including a log-book to be fulfilled by the selected private household. The information includes the whole set of collective and individual expenditures during two weeks.
Additionally, it is also collected (through interview) demographic data, income data and data on non-frequent consumed goods and services. In the sampling process, representativeness of monetary expenditure by region and product class was assured, through a strengthening of the sample in areas where non-response rates are more frequent.
Initial data management and file creation was completed using Microsoft Excel 2010 from Microsoft Office Professional Plus 2010. All software used in this paper were run on a Toshiba Qosmio F750 laptop equipped with an Intel ® Core TM i7-2630QM CPU, running at 2.00GHz with 8GB of memory, with Windows 7 32-bit Enterprise operating system.
In this study, the demographic unit is the household. The corresponding extrapolation coefficients are used as the weighting structure in determining the average housing comfort for all the households based on the sampling results. The use of simple averages based on sample observations would not be correct to make inferences about the population given the characteristics of the sample [32] and the calibration process associated with extrapolators [33].

The index
We start the empirical analysis by constructing an index of housing comfort for each household (hereinafter designated as  Table 1 presents the scores given to each element. In our baseline scenario we attribute a maximum score of 65 points to basic comfort and 35 to complementary comfort, for a total of 100 points (the best possible situation).
[Insert Table 1] sensitivity analysis in order to check the robustness of the conclusions. A preliminary exercise in this direction will be conducted in Section 5. Table 2 presents the effective (average) scores for the several items of housing comfort (disaggregation levels 1 -4). Additionally, with the aim of facilitating the interpretation of the results, column (3) shows the ratios between these effective scores and their potential maximum values (column (2), which corresponds of course, for each level of disaggregation, to the values already presented in Table 1). 5 [Insert Table 2] The evidence shown in Table 2  In order to get a more comprehensive perspective on this topic it is also interesting to explore the distribution of the housing comfort index (Figure 1). 5 The individual indices of housing comfort were calculated through Microsoft Office Excel 2007.
The distribution of the housing comfort index presented in Figure 1 was also obtained using this software.
[Insert Figure 1] The housing comfort index leads to a distribution whose minimum value lies at 2.25 and the maximum at 94.83, with a mean of 58.04 (as we saw in Table 2) and a standard deviation of 13.00. Approximately 20.0% of households show a comfort index less than 50.0 while about 20.0% show comfort indices above 70.0.

Measures
To measure poverty and richness, we first need to define poverty and richness lines.
A poverty line separates the poor from the non-poor, while a richness line sets the limit above which individuals are classified as rich. The key methodological option here is between absolute or relative lines. In the first case the thresholds are defined without reference to the pattern prevailing in the society. In the second case that reference is taken into account and thus the poverty and richness lines correspond to a given percentage of the average or median level of housing comfort in society. Following the most common option, we adopt a relative poverty line ( ) defining as poor a household with a housing comfort index below a given proportion ( ) of the median of . The richness line (δ) is obtained in a symmetric way, a rich household being one with a value for above that threshold.
We evaluate the incidence, intensity, and severity of poverty through the wellknown proposed by Foster et al. [34]. For α = 0, the poverty incidence is measured by the headcount index, applied to households, which gives us the percentage of poor households compared to the total number of households. With α = 1, the intensity of poverty is obtained, measuring the amount of housing comfort necessary to bring poor households up to the poverty line, divided by the total number of households. For α = 2, a greater weight is assigned to larger deviations in order to evaluate the inequality among the poor, capturing the concept of poverty severity. Therefore, we have: in which is the number of poor households and is the overall number of households.
Households at risk of poverty ( ) are obtained through the difference between the poverty incidences calculated for two different poverty lines: (i) z = ρ × median; and Regarding the evaluation of richness, we can conceive, with the appropriate adaptations, indicators similar to those used in the analysis of poverty to measure the corresponding richness dimensions (which we will designate as " , , and & ). The richness line (') is defined as: In conclusion, households are classified as having one of three possible housing comfort states (/ ): Finally, inequality is measured through alternative indicators: the Theil measures and the Gini index.

Evidence
The measures presented in Section 3.1 were applied to Portuguese data and the results are shown in the first column of Table 3. 6 [Insert Table 3] In this analysis, the following values were considered for the parameters: In order to provide a more detailed perspective, Table 3 also shows, in columns (2) and (3), the inequality, poverty, and richness measures applied to and . The most remarkable result that emerges from this evidence is the greater levels of inequality and poverty associated with . For example, it is possible to see that the incidence of poverty corresponds to 36.57% when we consider and only 4.78% when is taken into account. Considering this evidence together with the results for inequality measures makes clear the existence of a much more homogeneous distribution in the case of basic comfort.

Model and results
In order to complement the descriptive analysis conducted in Section 3, we now investigate the most important determinant factors of housing comfort states (/ ). Since this variable is classified into discrete categories that have an ordinal nature (1,2,3), the ordered probit model is a fairly used framework [36]. This model is based on a latent measure of housing comfort (/ * ) -a continuous and unobserved variable -which can be defined as a linear function of the observed explanatory variables (I) and a random error term (J) normally distributed with zero mean and unit variance: The value observed in / is determined by the value of / * : in which O and O & are thresholds to be estimated.
The probabilities associated with the possible values assumed by / are: where Φ is the standard normal cumulative distribution function. The parameters of the ordered probit model are estimated by the method of maximum likelihood.
The vector of explanatory variables (I) includes two groups of factors that are likely to affect housing comfort: household related variables (region of residence and household type) and household's reference person related variables (gender, age, education, and labor market state). The household's reference person is the individual with the largest proportion of the annual net total income of the household. Table 4 presents the definition of the explanatory variables and shows the estimation results.
These estimations were obtained using Stata/SE version 12. No special packages or code modules were used.
The final size of the sample used in this econometric exercise dropped to 10,396 due to the need to exclude households that did not respond to the questions supporting the explanatory variables.
[Insert Table 4] The changes in the probability levels of the dependent variable are also estimated, providing an interpretation of the impact of the independent variables (Table 5). These are measured relative to a reference case in which all the dummy variables are set equal to 0, allowing us to interpret changes in the probability of the housing comfort states for a change in a given parameter relative to the reference case. Since all the independent variables are dummy variables, the marginal effects correspond to a discrete change from 0 to 1 in the dummy variable. In the reference case the estimated probabilities of being poor, middle class, and rich in terms of housing comfort are 5.29%, 75.38%, and 19.33%, respectively.

Some further analysis
In the above sections we quantified the phenomena of poverty, richness, and inequality in terms of housing comfort in Portugal and analyzed their determinant factors. This was done through the consideration of a baseline scenario, which implies the assumption of specific values in order to obtain the poverty and richness lines as well as the weight given to basic and complementary comfort in the overall index.
However, obviously this is a subjective exercise that should be submitted to sensitivity analysis to test the robustness of the conclusions. This is the goal of the present section. Columns (4) to (7) from Table 3  Regarding the influence on the determinants of housing comfort, we now estimate the model presented in Section 4 to each of the four new scenarios. Tables 6 and 7 show the evidence.
[Insert Table 6] [Insert Table 7] Focusing on the major conclusions that can be drawn from a comparative analysis of these tables, there are four findings to highlight. Furthermore, the evidence sustains that the differences between households derive mainly from complementary comfort and to a lesser extent from basic comfort items.
To further understand which factors are most important in determining the probability of a household being poor, middle class, or rich in living conditions, an ordered probit model was estimated using two groups of explanatory variables: household related variables and household's reference person related variables.
Concerning the first group of variables, we conclude that: (1) there are important regional differences; and (2) households with children have higher probability of richness and lower of poverty. As for the impact of the characteristics of the reference person, the worst housing conditions occur when this person belongs to extreme age groups, has a low level of education, and is unemployed.
In order to assess the sensitivity of our conclusions to the methodological options concerning the definition of the poverty/richness lines and to the weights given to complementary comfort, we constructed four alternative scenarios and repeated the empirical analysis. The evidence obtained in this exercise points to two key points.
First, in qualitative terms the main conclusions remain valid in the four scenarios.
Second, there seems to be more sensitivity to changes in the lines than in the weights given to basic and complementary comfort.
The empirical results suggest the existence of a wide space for intervention in terms of regional, labor market, and education policies seeking to improve the welfare for the Portuguese population. Let us consider some of the most important potential actions.
First, the Portuguese population has for many years been below the European average levels in educational attainment, with a clear deficit in terms of secondary and tertiary education. Several governments have prioritized this issue and significant convergence has been achieved. However, the crisis that started to affect the country in 2008/2009, which culminated in the sovereign debt crisis and bailout program, helped to mitigate these efforts, prioritizing fiscal consolidation instead. Putting education back at the center of the economic policy is crucial to promote social cohesion. Second, the regional differences are in large part explained by specialization patterns. Living conditions seem to be better in regions more diversified in terms of economic activities.
A long-term strategy should be defined in order to explore the comparative advantages of these less developed areas, so that these populations can also seek and achieve higher levels of welfare. Third, another important action could be the promotion of


Sequential Model of Economic System and Constrained Pareto Optimality

Received October 11, 2016 Received in revised from December 02, 2016 Accepted February 14, 2017 Available online 15 March 2017 The concept of general economic equilibrium of sequential structures of economic system involves development of the general economic equilibrium model that includes the structure of asset markets. The assets are instruments of income redistribution through the different states of nature of economic system. General economic equilibrium model with the asset markets should provide, on the one hand, an explanation of the relative prices of commodities and, on the other hand, the possibility of analyzing income transfers through the different states of nature and the process of asset prices formation. After defining the appropriate general economic equilibrium model which involves asset markets in the absence of arbitrage process, further analysis is focused on the examination of Pareto optimality of economic system. The existence of imperfect market conditions in the form of incomplete asset markets reduces possibility of income transfers through the different states of nature of economic system, which results that equilibrium allocation is not Pareto optimal allocation. Therefore, in this paper focus is on a constrained form of Pareto optimality in a sequential model of economic system. JEL classification: D50, D52, D61 DOI: 10.14254/1800-5845/2017.13-1.10

of market exchange are based on the concept of general equilibrium of sequential structure of economic system 1 .
The sequential models should in a more realistic way describe economic reality, since in these models economic system is viewed through both time and space dimensions as the possible states of the economic system. Model defined in this paper is a model of sequential market structure consisting of spot commodity markets and asset markets, where assets provide consumers (agents) ability to redistribute income through different periods of time. Unlike a perfectly competitive equilibrium determined at the initial point in time that remains the same for all future periods, in the model developed in this work it will be considered a series of equilibrium states of economic system. General economic equilibrium models with the asset markets should provide the possibility of analyzing income transfers between time periods, and the process of asset prices formation. After defining the appropriate general economic equilibrium model which involves asset markets in the absence of arbitrage process, further analysis is focused on the examination of Pareto optimality of economic system.
With the aim of making our model more realistic, in our analysis of economic system we assume that certain level of uncertainty in the economic processes exists.
In our analysis, we look at two points in time, where at the initial point in time ( 0  t ), consumers (agents) are not sure which of the states will be realized in the following period of time ( 1  t ). The uncertainty that exists for consumers at time Depending on how dividends are paid, assets are divided into two classes -nominal assets, for which dividends are paid in units of account, and real assets, for which dividends are paid in the form of commodity bundle. Nominal assets are defined as a contract that promises delivery of a nominal value, which we present in the form of dividend vectors in each state is a set of assets. Based on defined set of assets and particular dividend vector, dividend value matrix could be defined in the following way: where dividend vectors are represented in the columns of the matrix which describes the asset structure. If we extend dividend value matrix, given by the expression (1), with the price vector at time 0 t  we get extended dividend value matrix W : Matrix   V s generates subspace of income transfers   V s 1 In the context of general equilibrium, sequential structure of the economic system was analyzed by Hicks (1939) and later by Stigum (1969), Grandmont (1974Grandmont ( , 1977 and Drèze (2009).
Consumer portfolio  is determined by net income vector r for all expected states of nature 0 S s  as a linear combination of columns of extended dividend value matrix W : The linear subspace that crosses over columns of extended dividend value matrix represents subspace of income transfers Since the rank of matrix   With this definition we set up the basics of the asset market structure. If market structure is complete, consumer can achieve any net income vector for each state of nature of the economic system. Conversely, if asset market structure is incomplete, then at least one net income vector will be always unavailable to consumer. Since we introduced the assets in economic system in order to give agents (consumers) ability to transfer income through time using dividends earned by a specific portfolio, we also assume that there is an asset market at the initial point in time 0  t . However, we have not analyzed the problem of equilibrium prices formation on asset markets. The necessary condition for the existence of equilibrium of asset markets, and indirectly of commodity markets, is absence of arbitrage process. In other words, we have to show that absence of arbitrage implies the existence of the discount factors at time 0  t such that the asset prices at time 0  t equal to their discounted values, both for complete and incomplete asset market structure.
Suppose that the asset structure is given by dividend value matrix   V s (expression (1) Suppose that there is a dividend value matrix   V s and a vector of asset prices q so that a pair of     , V s q is no-arbitrage process. Furthermore, if we choose any discount factor vec- , then for each asset S j  we have that the price of the asset j is given with the following expression: With next theorem the above -mentioned statements are presented.
Theorem 3. (Fischer (1972), Ross (1976) If you continue to analyze the first row of extended dividend value matrix W at time 0  t , we see that for each asset S j  asset price q j represents the discounted value of dividend at time , V s q represents no -arbitrage process. If there is a complete asset market structure such that rankW S  , then: (i) there is a unique discount factor vector

Collection of discount factor vectors
is orthogonal to each column vector of the matrix W and represents orthogonal subspace of space W . It follows that The orthogonal subspace if asset market structure is incomplete, in which no -arbitrage portfolio  is given by Definition 2. Following theorem provides a description of subspace of income transfers in absence of arbitrage when asset market structure is incomplete.
Theorem 5. (Magill and Quinzii (2001) This theorem asserts the existence of the income transfers subspace in absence of arbitrage when asset market structure is incomplete. If the rank of the extended dividend value matrix rankW J  , then exist H linearly independent vectors that form a basis of vector subspace which is orthogonal to the subspace M . Based on specified orthogonal vector subspace We can now introduce the basic assumptions concerning the consumption set, the vector of initial consumer wealth and consumer utility function.
Basic assumptions 3 : is a set of functions with domain C taking values from the set R and have twice differentiable property; represents the Hessian function of u in point c .
Since we introduced the basic assumptions, we can now formulate a mathematical concept of consumer that satisfies the established assumptions and of economic system with the asset structure in case that uncertainty exists. Definition 6. Consumer is defined as ordered triplet is utility function of consumer.
Definition 7. Economic system with the asset structure under uncertainty is determined with ordered triplet ( , , ) is consumer, and with the dividend value matrix specified by expression (1). It could be represented in the following form: In further analysis, it is necessary to determine the portfolio selection that ensures consumer expenditure plan. Next theorem gives conditions that must be fulfilled by economic system  if portfolio selection could be able to ensure consumption plan.
Theorem 8 (Magill and Quinzio (2002)). Let   be economic system with the asset structure and let a pair represents the spot market equilibrium of economic system  , where the subspace of income transfers is equal to the extended dividend value matrix, (Sum of consumer portfolio selections in economic system is equal to zero), and for the consumer is a solution of consumer portfolio selection problem, which has the following form: represents solution of consumer portfolio selection problem on spot -markets, which is given in the following form: The conditions of Theorem 8 imply that when the economic system is in equilibrium, where the set of net income vectors is generated by the assets, the ordered pair represents an equilibrium solution of consumer problem with the following form: and, , Theorem 8 claims that a collection of net income vectors , as a subspace of income transfers, is generated by the assets in economic system.

THE EXISTENCE OF SOLUTION IN THE SEQUENTIAL MODEL OF ECONOMIC SYSTEM
Having defined the economic system with asset structure under uncertainty, our further analysis will be focused on the study of the existence of general economic equilibrium of incomplete market structure with the dividend payment in the nominal value. With Theorem 8 we decompose consumer problem in the real and financial flows of economic system. We will now explore the existence of equilibrium of the financial system and the existence of no -arbitrage equilibrium of economic system.
Consumer as the owner of the portfolio Consumer i chooses the pair of vectors -the consumption vector i c and portfolio vector i Therefore, portfolio vector i  shows a method of financing the consumption vector i c . Equilibrium of financial system is given by the following definition.
Definition 9. The equilibrium of the financial system and vector of asset prices  q , such that the following relations are satisfied: Thus, market equilibrium equations   Having defined the equilibrium of the financial system and the equilibrium of no -arbitrage economic system, the next theorem gives the relationship between these two equilibriums.
Theorem 11 (Magill and Quinzio (2002) Theorem 11 claims that there is interdependence between equilibrium model of the financial system and the equilibrium model of no-arbitrage economic system. Our further analysis is focused on the application of direct access to the proof of existence of equilibrium solution in the model of the financial system. Furthermore, in the proof of existence of equilibrium in the model of the financial system we limit our analysis to the case of no -arbitrage market exchange processes. The importance of introducing restrictive assumptions about the absence of arbitrage in the process of asset prices formation is clearly evident in the following well -known theorem.
Theorem 12 (Magill and Quinzio (2002) Theorem 12, as a fundamental theorem of asset pricing, claims that for consumer (agent) with a monotone utility function there is solution of the problem of maximum if and only if no -arbitrage condition is satisfied on the financial markets. Specifically, for each financial instrument j , discount factor vector   defines profit from purchasing one unit of asset j by price j q at time ) occurs. Consequently, the previous theorem states that the existence of arbitrage process is equivalent to the existence of a positive discount factor vector.
In the rest of the paper, we will limit our analysis on a set of asset prices formed in the absence of arbitrage. The set of no -arbitrage prices is defined in the following way: In order to prove the existence of an equilibrium of the financial system, we define a demand function for financial instruments: Now, on the basis of established basic assumptions (A3) -(A5) of the utility function of consumers i and of Berge theorem of maximum (Border (1985)), and since the budgetary corre- is half -continuous from above and below, we have that the demand function   Based on established basic assumptions (A1) -(A5) for utility function, and on the assumption that rank of the dividend value matrix is equal to the number of assets, i.e.

   
To prove the existence of equilibrium of financial system we use statements that are contained in the proof of existence of equilibrium solutions given by Talman and Thijssen (2004).
Theorem 13 (Talman and Thijssen (2004)). Suppose that we have a linear problem, whereby F q  represents a solution to the linear programming problem, whose primary form is . We can conclude that the aggregate excess demand function, for the equilibrium price vector as a certain fixed point, is equal to zero, i.e.   0 , which is supposed to be proved.
Thus, we have shown that there is equilibrium of the financial system with a normalized vector of no -arbitrage prices. Furthermore, since we perform decomposition of consumer problem into the real and financial flows (Theorem 8), and since we found that there is interdependence between equilibrium model of the financial system and no-arbitrage equilibrium model of the economic system (Theorem 11), and that there is an equilibrium solution of no -arbitrage equilibrium model, we deduce that there is an equilibrium in general economic equilibrium model with incomplete market structure.

Extended sequential model of economic system
Now we consider a more complex model of the economic system, where we introduce the assumption that there is central authority in the economic system through which money is put into the economic system. In the previous part, we observe market processes of economic system through two periods of time. Now, each of these time periods is divided into three periods in which we observe market processes of economic system. In the first period at time . In the second period at time 0  t consumers buy and sell assets and in the third period consumers buy commodities using money they received in previous period. At time 1  t , for each state of nature of economic system, the same processes occur, expect in the second period, when consumers receive dividends from their assets. Now we can define consumer problem in which money is involved: If we compare the consumer problem defined by the expression (11) with the consumer problem given by the expression (18), we can notice that latter one contained additional system of constraints related to the amount of money generated by the sale of consumer initial wealth. The total amount of money in economic system for each state of nature is   represents an equilibrium solution of consumer problem given by the expression (18); (ii) commodity market equilibrium for all states of nature of economic system Further, based on theorem of existence of the discount factor (Theorem 3), there is a discount factor . Since for no -arbitrage process In Theorem 8 we performed a decomposition of consumer problem into the real and financial flows of the economic system. Based on this decomposition, we formed no -arbitrage equilibrium model of the economic system, and the equilibrium model of the financial system. Furthermore, consumer problem which includes money, using theorem of the existence of the discount factor, has been transformed into a no -arbitrage equilibrium model. Now, using statements about the relationship between no -arbitrage equilibrium model of economic system and model of the financial system (Theorem 11), as well as the theorem that there is an equilibrium solution of financial system model (Theorem 13), we can conclude that there is monetary equilibrium in the model of economic system with the asset structure and money under uncertainty, which has the form of ordered n -tuple of vectors

CONSTRAINED PARETO OPTIMALITY OF SEQUENTIAL MODEL OF ECONOMIC SYSTEM
The assets offer consumers the ability to transfer income through the different states of nature of economic system. However, in the case of incomplete asset market structure, i.e. when there is a reduced ability to transfer income through the different states of nature of the economic system, the question is whether the equilibrium allocation are Pareto optimal allocation. For example, Borch (1962) in his work "Equilibrium and reinsurance market," claimed that in case of incomplete asset market structure the existence of Pareto optimal allocation can not be guaranteed. Diamond (1967), in his paper "The role of a stock market and a general equilibrium model with technological uncertainty", showed that in the case of incomplete market structure with one product in each state of economic space competitive equilibrium is constrained Pareto optimal allocation. Introduced assumption is restrictive and does not represent real processes of economic system. However, in order to facilitate evidence and understanding of a particular form of Pareto optimality, we are forced to introduce some restrictions that differ from the actual processes in the economic system.
Constrained Pareto optimality consists in seeking ways of redistribution (reallocation) of assets by adjustments of prices and consumption allocation on spot markets that would lead to Pareto improvement 6 . Geanakoplos and Polemarchakis (1986), in their work "Existence, Regularity, and Constrained Suboptimality of Competitive Asset Allocations when the Market is Incomplete", showed that the equilibrium of economic system with incomplete market structure is constrained suboptimal. In doing so, they presented that certain Pareto improvements can be achieved by an appropriate redistribution of initial consumers wealth, and then introduced some restrictions on asset markets. So, instead of asking, "Is some equilibrium of economic system optimal?" it could be questioned "whether a particular consumption allocation is optimal when we imposed restrictions due to market imperfections?". Geanakoplos and Polemarchakis (1986), and later, Geankoplos, Magill, Quinzio and Dreze (1990), see economic policy measures of government (as centralized body) as a way for achieving Pareto improvements. However, the question is whether the government in the role of central planning authority with the measures of their economic policy can anticipate all the resulting adjustments on the spot markets as well as all individual utility effects.
Our further analysis is focused on simplified version of the general economic equilibrium with incomplete market structure that is presented by Magill and Quinzio in their first version of the work in 1996 (Magill and Quinzio (2002)). The aim is to investigate the possibility of existence of constrained Pareto optimality in imperfect market conditions. We start from the assumption that there are two period of time - (future), finitely large number of possible states of nature of economic system, finitely number of assets, where the structure of the dividend value matrix   V s is fixed, i.e. is exogenously given, and that there is only one consumption good in each state of nature in the spot markets of economic system. Also, we assume that the distribution of goods to consumers at time 1  t is realized on the basis of the selected portfolio. Financial instruments represent a fundamental mechanism for redistribution of risk at time 1  t . The set of feasible consumption allocations with constraints is given by the next definition.
Definition 16. The consumption allocation Namely, after discounting all spot values using the discount factor vector solution to the general economic equilibrium model of real flows if and only if there is an equilibrium solution to the asset markets equilibrium model. Evidence of the existence of equilibrium solutions have been carried out under the assumption of the absence of arbitrage in asset markets. The importance of introducing restrictive assumptions about the absence of arbitrage in asset markets is evident from the Fundamental Theorem of Asset Pricing.
Given the assumption that the structure of assets is exogenously determined, the research in this paper was primarily concentrated on inquiry into Pareto optimality of the defined general economic equilibrium model with incomplete asset markets. The space of income transfers is defined by the number of linearly independent vectors of dividend value matrix. In addition, the vector of income transfers belongs to the area of dividend value matrix, while the gradient of indirect utility function of consumers, which is the vector of marginal utility of income, belongs to the orthogonal subspace of space dividend value matrix. In the general economic equilibrium model with incomplete asset markets gradients of indirect consumers utility function are not proportional, i.e. there is no compatibility between present value vectors (there is no singular normalized discount factor vector). Thus, the equilibrium consumption allocation is not Pareto optimal allocation. The existence of imperfect market conditions in the form of incomplete asset market reduces possibility of income transfers throughout different states of nature of observed economic system, which results that equilibrium allocations are not Pareto optimal allocations.
The absence of Pareto optimal allocations in defined models required the examination of the allocation of consumption, which is Pareto optimal with the additional restrictions imposed, i.e. research has been focused on finding a limited form of Pareto's optimum in conditions of incomplete asset market. The set of feasible allocations of consumption has been redefined into the set of feasible allocations of consumption in the space of dividend value matrix. Thus defined set of achievable allocations of consumption, relative to space of dividend value matrix, we have defined limited Pareto optimal allocation of consumption and further proven that equilibrium solution to defined model of equilibrium on asset markets represent a limited Pareto optimal allocation relative to space of dividend value matrix. Furthermore, we have proven that equilibrium allocation of consumption is limited Pareto optimal allocation with equilibrium assets price vector if and only if the gradients of indirect utility function of all consumers are proportional as a normalized portfolio, i.e. normalized portfolio gradients represent marginal rate of substitution between investments in assets and consumption.
Based on these results, it can be concluded that development of asset market and adequate redistribution of consumers' wealth is necessary for every economic system that has a goal to obtain Pareto optimality. Additional research in this field should focus on more detailed analysis of influence of various economic policy measures on redistribution of consumer wealth, as well as development of asset markets and development and implementation of new forms of assets into economic system. Adequate implementation of economic policy measures would reduce influence of imperfect market conditions, with obtaining the goal of Pareto optimality of the observed economic system.


A Comparative Study on Poverty Alleviation Between Moslem and Non Moslem Populated Countries

The paper attempts to explore the problems and roots of poverty, the poverty alleviation progress, programs and policies between selected Moslem populated-countries in Asia and selected non-Moslem populated-countries in Latin America. By conducting comparative analysis on statistical data, literature surveys, several journals, official reports and reliable research findings, all sources have been examined to construct comprehensive findings in the present article. Three important aspects are concluded. Firstly, by definition, a person who earns below 2,00 USD per day is considered “poor” according to the World Bank, and they are mostly living in rural areas and suburban slums. Second, poverty alleviation efforts in both particular groups of countries have resulted in a better outcome, whereby the number of poor decreased gradually according to statistical data reported by the World Bank. Other economic indicators such as GNI per capita and income inequality graphic have shown better patterns. Third, there have been different strategic policies and programs implemented between the two groups of countries. Islamic economic notions such as zakah, infaq, and sadaqah play a very significant role in Moslem populated countries, on the other hand, non Moslem populated countries tend to create more radical and creative strategies such as agendas of land reform and tourism industry development. DOI: 10.15408/aiqv9i1.3222

Introduction
Combating poverty and improving the well being of mankind has been one of the most challenging economic development agendas of the 21 st century (Adnan & Ajija, 2015). Rampant poverty, famine, illiteracy and social problems are among the global issues emerging into the picture of today's economy. Meanwhile, several countries grouped as the developed countries around the world have declared their economic achievements as the most leading economy. Ironically, when many countries are competing to double their GDP per capita as one of the prominent economic indicators, in contrast the remaining world population is still living under the poverty line whereby they have to survive with 2,00 USD per day (World Bank, 1993;Todaro & Smith, 2006;and Whitman, 2008).
An uncountable number of policies and incentives have been addressed to alleviate and reduce poverty, so far it has been difficult to solve due to several surrounding problems. Every county has its own poverty problem and each country comes up with different solutions with respect to their unique poverty criteria and root issues. Thus, it is very interesting to study the way forward every country undertakes along with the poverty alleviation strategy and policy being undertaken (Wratten, 1995). This paper aims to provide a comparative study on poverty alleviation in several countries, especially those who have problems with rampant poverty and undertook successful methods of alleviating it. By classifying those counties into two groups, which are Moslem populated-countries and western countries, the paper is expected to be able to analyze very specific distinctions and policies. Features of poverty alleviation program between Moslem populated countries and western countries have varied according to local potency and resource, poverty problems, and cultural condition (Otsuka & Hayami, 1988). The Moslem populated countries are represented by Indonesia, Malaysia and Bangladesh; on the other hand, Venezuela, Brazil and Bolivia are countries in the western society depicting successful poverty reduction program. Such countries are considered to be able to halve poverty gradually. In addition, six countries are selected because of unique policy approach and society participation.
The study about poverty has been receiving plenty attention from worldwide as the key fundamental topics benefiting policy recommendation. In the area of distinctive aspects the majority of study focuses on geography and country case. The poverty reduction and alleviation are very fertile area of research examined from different perspective and objective. The comprehensive study aims to identify and develop poverty alleviation program compatible with local wisdom, religious based, and culture, is definitely needed. The comparative 145 http://journal.uinjkt.ac.id/index.php/iqtishad DOI: 10.15408/aiq.v9i1.3222

Ahmad Hudaifah: A Comparative Study on Poverty
poverty study considers the society belief of a country between Moslem-populated and western. The paper attempts to deliberate comparative issues from several points of view such as poverty condition between two characteristics, society participation, government priority program, and the presence of micro-credit and microfinance.
The organizational structure of the paper consists of three chapters of discussion. First, it begins with introductory parts, deliberating background of the study, which explains why the paper is written and what the motivation triggers. Second, it continues to the literature review, dealing with the connection between the present study and the previous researches done on related matters. Third, methodology is explained, by describing how the paper is produced and formulated. Fourth, analysis and discussion is primarily the main concern of the present paper, in which the findings of the study are being conducted. Last but not least, the conclusion, whereby it summarizes prior chapters into a cogent and brief paragraph.

Literature Review
The call of the Millenium Development Goals (MDGs) to end poverty by 2015 has become one of the main themes in today's economic development agendas worldwide. It was the year 2000 historical milestone in human civilization when leaders from around the world met and agreed to declare poverty as a common enemy and addressed eight agendas that have prioritized alleviating poverty as the first target. The collective efforts and the made-promises to remain on the track of the poverty alleviation agenda across nations and regions are still being tested as of today. Many of the development targets such as free trade and economic growth orientation have already taken place. Their endeavor is to hold firmly to alleviating poverty as the main agenda toward 2015 MDGs. Extreme poverty is likely closer to extreme hunger because people without sufficient income cannot afford their basic needs. Extreme hunger and famine lead to the chaotic catastrophes of modern mankind. Currently, it is believed that 920 million people are living under the international poverty line, which means they survive on 1.25 USD per day (UNDP, 2002). Mostly, they are living in developing country regions like Southern Africa (51% of total population), Southern Asia (39 % of total population) and Latin America & Caribbean (8 % of total population). It has been the target of the MDGs 2015 is to halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day. The strategy to alleviate extreme hunger is two sides of an integrated-program together with poverty, by creating job opportunities in the long term and food aid in the short term, ultimately all people living under the poverty line can find the jobs or full and productive employment and decent work for all. Thus, food and basic needs are affordable for all people living in developing countries.
The program of the MDGs toward 2015 should be appreciated by all elements of the global community, no matter if they belong to Eastern or Western societies. All major role players have to work under the same platform: (1) Eradicating extreme poverty, (2) Achieving universal primary education, (3) Promoting gender equality and empower women, (4) Reducing child mortality, (5) Improving maternal health, (6) Combating HIV, Malaria & other diseases, (7) Ensuring environmental sustainability (UNDP, 2002).

Methods
The methodology employed is qualitative analysis by conducting literature survey, report analysis and data mapping. All sources referred will be secondary data issued by reliable institutions. Once data, articles-journals and official reports are completely collected, the analysis begins with mapping and analyzing the poverty problems, then proceed to strategies used by each country and ends up with solutions undertaken by each country. Technically, departing from the rarity of studies, particularly in comparative analysis of developing countries between Moslem populated countries and non Moslem populated countries, this article will focus on three major relatedliterature reviews in the area of poverty alleviation, which are (1) articles, journals and textbooks, (2) official reports and (3) reliable data. The periods of study are also restricted starting from 1990 until 2015. The countries taken as models are also specified into two main regions: Latin America and Asia. Later on, Latin America (Brazil, Bolivia and Venezuela) represents Western countries and in The process of data collection involves online searching and direct visiting to IIUM library to find relevant textbooks. This study has collected 23 relevant journals and articles, written by scholars, policy makers and economists in both groups of countries and downloaded from reliable providers. From World Bank websites, the statistical data on poverty indicators such as the number of poor people, earning 2 USD daily income, GNI per capita and inequality of income have been adopted and extracted (Chyper & Dietz, 2009). From library resources, this paper has utilized textbooks and official reports in the areas of economic developments, poverty alleviation studies, study of development process and handbook of poverty alleviation around the world.
After all information, sources, reports, articles-journals and statistical data were gathered and collected, classification and mapping were the next steps. All data classified into two categories: Moslem populated countries in Asia and Non Moslem populated countries in Latin America. Then, all are studied, examined and reformulated before writing the entire paper.

Result and Discussion
Based on statistical results of the poverty indicator issued by World Bank, the data briefly demonstrates the declining trend of the number of poor people in the selected countries below. The statistical data remains the number unless it is interpreted properly. And the reliability and validity of the data are still questionable for the public, whether it is the result of policy and strategy, or manipulation and politic propositions. Regardless, of the debatable of the data, the only source found officially reveals the fact aforementioned, that for 2 decades fighting poverty in developing countries, here classified into Moslem-populated countries and Western countries, indicate positive outcome. Except, several countries like Bangladesh depict worse indicators, where the number of poor people increased slowly. The three selected-Moslem populated-countries, which are Bangladesh, Indonesia and Malaysia, are striving to eradicate extreme poverty. Through statistical data output, it shows that Malaysia is the most successful country among selected Moslem countries in eradicating poverty remarkably from 9.64 % in 1984 to 2.03 % in 2008, with respect to total population. Indonesia as the biggest Moslem country in the world is still facing problems in addressing poverty programs because of density of population dominated by poor people in sub-urban and rural areas, but its achievements are incomparable to the other nations. By 2009 Indonesia was able to halve the number of poor people, from 42.83 % of total population in 1984 to just 15.43 %. Of course it has not been an easy task to alleviate poverty with the challenges of geographical locations and cultural conditions. Bangladesh is running behind the other countries because of several problems and limitations determined by a lot of policy implications and prescriptions (Dorosh, et.al, 2004).
To examine poverty alleviation by looking at the number of poor successfully reduced is not the broader way; rather several indicators must be incorporated such  (Jones & Nelson, 1999).
Source: World Bank (2015) Figure 4. Selected-GNI Per capita on US Dollar purchasing power parity The data from the World Bank roughly explains the result of policies addressed by respective countries. Basically, Non-Moslem populated countries in Latin America have started the development process with higher GNI per capita, but less unequal income per capita, meaning that the economic resources are not equally distributed. On the other hand, Moslem populated countries in Asia have primarily addressed the economic equality by focusing on income distribution. Source: OECD (2016) Figure 5. Income Comparison between 10 % Highest and 10 % Lowest According to Figure 4 and Figure 5, it can be asserted that between 1980 and 1990 the Non Moslem populated countries in Latin America have had a better GNI per capita while Moslem populated countries in Asia have had a better equality of income per capita, by looking at the distributional income gap between the income share held by the 10 % highest and 10 % lowest in each country. However, Malaysia succed to increase its GNI per capita sharply since 1995 until the end of 2015 and still performed in good equality income distribution. In addition, Indonesia also had tremendeous improvement in its GNI per capita since 2010. Therefore, it will be possible for Moslem populated countries such as Malaysia and Indonesia to reduce their poverty rate and increase their GNP per capita in the future faster.

Poverty Alleviation Condition
Poverty alleviation is a big agenda for the Indonesian government since declaring its independence in 1945 and as of today this policy has been a primary objective and concern set up by all administrations that have come into office over time. The poverty alleviation strategy and policy for the Indonesian government must address the roots of impoverishment itself such that they are rightly implemented. Eckholm (1979) and Tambunan (1998) reveals that there have been several poverty issues in Indonesia, which are: (1) average low level of income, (2) urban and rural disparities involving the backwardness of rural and suburban slums, (3) women, their poverty and their minimum participation in the development process, (4) income growth, poverty and the wider degree of inequality and (5) low level of human development. In addition, the low level of human development has worsened and discouraged the process of poverty alleviation and thus has been the first priority after general strategy. The origin of why the Indonesia human development index has been very low lies in six main factors, which are (1) deficiencies in planning, (2) system building and financing, (3) capital bias, (4) urban bias, (5) gender bias, (6) civil service organization weaknesses and corruption (Tambunan, 1998).
Malaysia is an IDB member country that has been successful in eradicating poverty by reducing the number of poor people surviving on 2 USD/day from 9.64 % of the total population in 1984 to 2.03% of the total population in 2008. Malaysia has continuously been making long-term attempts in improving its level of wealth and prosperity since declaring its independence and the beginning of the poverty alleviation program, which began in 1960 and continued until recently. For the Malaysian government, the primary concern of poverty alleviation is placed in the bigger picture of economic development which has focused on "socioeconomic planning, structural and trade adjustments and adoption of pragmatic policies that promoted agriculture as well as the manufacturing sub-sector to create higher productivities, incomes and standards of living" (Salih & Colyer, 2000). Since 1970, the new strategy was imposed by planning a new economic policy (NEP) and a new development policy (NDP), which was adopted in 1971 and 1991, respectively, as models to promote more rapid and equitable development.

Ahmad Hudaifah: A Comparative Study on Poverty
After fighting against hardcore poverty, the demographic of people receiving bellow 2 USD in Malaysia still exists, but has been rendered controllable through direct subsidies to the needy. In the case of financial and economic recessions, the number of poor might increase because of scarce job availability. The Malaysian government in 2000 also developed the bottom line of poverty alleviation by empowering the poor through small and micro businesses, whereby the poor were stimulated to be independent, creative and resilient. Unlike the first strategy which was initially implemented from 1960 until 1990, which emphasized on government initiatives. The micro-financing programs initiated also involved the private sector and voluntary organizations. This was designed not only to assist the poor people in running businesses but also to strengthen the economy in general. Those who are especially in need are small and medium enterprises, which are easily affected by the fluctuation of economic conditions, particularly when a recession hits. Therefore, such programs would stabilize the poverty line by assisting small business enterprises to operate regularly despite any economic crises.
Bangladesh, a country with huge environmental and climate change problems as well as hidden-potentials of human resources has been independent since 1971 (McCarthy, et.al, 2001). Bangladesh has a total area of about 145,000sq km and the population currently is approximately 125 million. This country suffers from severe floods, cyclones and poverty. Among the inherent problems are its rampant rate of poverty that is one of the worst among all the Moslem countries in specific, and the world in general. The majority of the poor is living in rural areas, which is basically subsistence agriculture with smallholdings and sharecropping (Khan, 1986;Khan, 2000a). Agriculture is the primary source of income and employment, but the labor forces in the rural areas do not have full time or remunerative occupations (Bardhan, 1984). According to Khan (2000b) more than 60 percent of the farmers are landless or have a tiny holding, with the population density being the highest in the world, about 80 percent of the population live in villages and the increase of population per capita in regards to cultivable land is gradually reducing and there is tremendous pressure on land. As a result of difficult economic conditions in rural areas, many workers and farmers move to urban areas and major cities like Dhaka, living as the urban dwellers in sub-urban slums surrounding cities and working in informal sectors with low levels of income (Khan, 2001).
Brazil is among the largest economies in the developing world; nevertheless it performs very badly in terms of social outcomes (Filho & Vasconcellos, 2004). While Brazil has the highest level of per capita GDP, it also is the most unequal. In terms of macroeconomics, it was one of the fastest growing economies between the 1960s and 1970s, embodied in the well known "miracle period", whereby per-capita GDP at that time jumped from U$2,000 to about U$6,000, thereafter followed a stagnation period, and the recovery observed after the successful stabilization through the Real plan in 1994 brought rather disappointing growth rates (Filho & Vasconcellos, 2004). Lately, GNI per capita in Brazil has reached 10,920 US Dollars in 2010, which is remarkable macroeconomic performance in the developing world. Brazil has much relied on its growth achievement to develop its economy as well as to alleviate poverty. Growth is strongly related to poverty reduction, initially there were 61 million people living under the poverty line in 1970, as compared to 33 million in 1999. According to (Filho & Vasconcellos, 2004), a comparison between per capita GDP and poverty over the last 30 years clearly exhibits that the two are highly inter-correlated over time, between 1970 and 1980, when Brazil almost doubled its per capita GDP, poverty at the national level fell from 70% to about 35%. On the other hand, Brazil suffered a recession between 1980 and 1983 and poverty increased about 5 percentage points, accordingly.
Unfortunately despite its wonderful culture and amazing traditional way of living, this country preserves the very fundamental problems in the millennium era: poverty, low rank of human development index and rampant inequality (Bautista, 1992). Indeed, among Latin America countries, Bolivia is the least developed or among the worst in the region (Sánchez & Franklin, 1996). Based on the data issued by UNDP (2002) and World Bank (2011), HDI at birth years (per 1000) is 0.648, its life expectancy is 62 years and its illiteracy rate under 5 is up to 83 % and its adult illiteracy rate is better, 15 %. From social-poverty indicators, 10.1 % of the total population is still living under the poverty line, whereby the poorest 64 % are mostly indigenous people living in rural areas.
Like some other Latin American countries, in 2007 the inequality rate on income in Bolivia reached an alarming rate. It was severe to the extent that income share of the highest 10% of the population reached 45.42 % of total income and in contrast the income share of the lowest 10% of the total population was only 0.99 % of total income (World Bank, 2015). In 1997, the Gini coefficient in Bolivia was 58.9, the worst compared with other Latin American countries, even like Brazil and Argentina. This situation has been worsened by Bolivia's external debt, which has created indebtedness among its citizens and influenced taxation and the social expenditure budget.
Being luckier than Brazil and Bolivia, its economy has benefited from the changing national policy and strategy of moving from agriculture-based economy to a petrol and oil-based economy without abandoning the strategic role of agriculture sector. At the beginning of 1980 and the end of 2004, the poverty in Venezuela was indeed getting worse and worse until reaching 14.64% of its population, albeit while the government was generating money from the oil and petrol industry. In addition, the inequality ratio was slightly higher at that time, in which until 2003, Ahmad Hudaifah: A Comparative Study on Poverty income share held by highest 10% was still above 35.42 %, and income share held by lowest 10% was below 0.96 %. Since Hugo Chavez was elected and took power, the most revolutionary policy at that time until today, was nationalizing oil and petrol companies and putting them under government control. That shift in policy became the turning point, not only for Venezuela's economy but also international relations of staying away from Western multinational corporation interventions. By utilizing the oil and petrol money, the Venezuelan government began to subsidize the poor, as a result from 2000 to 2006, the number of poor declined to 8.34 %, and then it dramatically decreased in 2007 to 2.76 %. The gap between the poor and the upper class at that time started to narrow, in 2006 income share held by the highest 10% became 32.95 %, and income share of the lowest 10% reached 1.85 %. Recently, Venezuela's income per capita reached 11.95 USD in 2010, which is among the middle-income countries in the world.

Government Priority Program
According to Tambunan (1998) poverty alleviation and empowerment programs in Indonesia have been launched to overcome recent issues. Since 1960 until the new order regime lead by President Suharto ended in 1998, the Indonesian government has focused on several policies. As of today some policies are still relevant and have prevailed, i.e. minimum wages, presidential instructions of the left villages, family welfare programs, agricultural development programs, Integrated Area Development Program (IADP), and transmigration second stage developments (Todaro & Smith, 2006).
After President Suharto was no longer in the office and passed on his administration to President B.J. Habibie, the reformation order began. Poverty alleviation was still the main concern of the elected-president but with a different form using a similar platform and continuing former programs. Recently, following the emergence of the banking and finance sector development, government programs are being synchronized with the innovative creation of banking products designed for the people who are considered poor or near the poverty line, such as microfinance. These products are embodied in the government institutions, private institutions or joint ventures between the private sector and the government. These programs are making use of the modern banking system, which is able to reach the remote areas and rural regions of Indonesia's territory. Microfinance in the 21st century for the Indonesian government is being considered as a powerful strategy in alleviating poverty like many other countries in the world. Regardless of the positives or negatives surrounding it, micro financing has begun to be offered by public and private banks in Indonesia with special requirements, terms and conditions addressed for the poor.
The special rights and privileges were given to Bumiputra or indigenous ethnics in Malaysia to be engaged in the economic development process, because "a large share of the poverty in Malaysia in 1970 was concentrated among the Bumiputra (indigenous Malaysians), who tended to be clustered in rural areas and therefore pursued farming occupations". The Malaysian government has also addressed stimulus and packages of programs under integrated-policies to assist the poor and improve their income per capita. As a result, poverty has declined and the household income has gradually increased. Both of these developments are attributed to a number of factors with rapid and sustained growth being an essential element as well as the active role of the government. Between 1960 and 1995, social development goals such as education, health care and nutrition became primary concerns as well, such that social well-being per capita supported the improvements of income. As of now, the integrated-programs have remarkably taken a place in many sectors of the Malaysian economy. Thus, it has been proven that higher income per capita among Malaysians is gradually achievable and inequality is gradually decreasing.
Bangladesh government has strived to tackle and fight poverty by allocating a social expenditure budget (Hofer & Messerli, 2006). Spending aggregates are allocated to overcome the social-poverty problem. As a matter of fact, Bangladesh ranks 67 th in the human poverty index, 12th from the bottom among 78 developing countries (Huq, 1998;and Hutton & Haque, 2004). The Human Development Index ranks Bangladesh 123 rd among 146 countries (UNDP, 2002). According to World Bank's new system of measuring the real wealth of nations, Bangladesh's ranking is 12th from the bottom among 192 countries and the wealth endowment of the country is estimated at only 3.6 per cent of the global average with 79 per cent of the country's wealth being attributed to human resources (Ullah & Routray, 2007). The effort of Bangladesh's government to tackle the social poverty problem more seriously is due to the World Bank's and world community's evaluation.
Despite the rampant poverty remaining 4.26 of income share held by lowest 10% in 2005 and 1800 USD income per capita in 2010, Bangladesh is one of the most inspiring countries in alleviating poverty, by involving outstanding microcredit institutions like Gramen bank. This successful story has spread out around the world and its concept has been reduplicated and modified in many countries. In reality, the presence of microcredit institutions is not alone, because there have been some non-government organization (NGO) also offering microcredit massively. Historically after the war of liberation in 1971 with the shattered economy caused by the war, other millions were left on the brink of starvation, then the NGOs came forward with the task of relief and rehabilitation, they are legally registered under the Voluntary Social Welfare Agencies, wishing to receive foreign funding.
Since all foreign donations came in this country for poverty alleviation, more than 20,000NGOs are involved in the development efforts undertaken in Bangladesh focusing on poverty alleviation. Thus, beside the microfinance institution, the NGO involvement in offering microcredit has begun.
Unfortunately, according to Khan (2000b) in spite of a lot of NGOs and micro-financing institutions in Bangladesh the small or marginal farmers are still difficult to access credits, although some NGOs have been providing credit but this hardly reaches the poorest section of the community. Moreover, the cost of credit such as interest rate and administration or service fee even for the poor is high enough, for example usually 20 percent charged for interest and 5 percent charged for service, such that it seems those NGOs providing the credit become richer. Therefore, microfinancing institutions and NGOs not only have brought about the successful story but also created hardship and misery for the rest of poor people in Bangladesh.
The growth strategy to eradicate poverty in Brazil is always selected by policy makers in the best way. By readjusting the policy implementations, growth is the most appropriate for them. Employing data from Brazil's Annual National Household Survey released by Instituto Brasileiro de Geografia e Estatística -IBGE, between 1981 and 2000, Filho & Vasconcellos ( 2004) evaluated and concluded that that headcount poverty declined substantially over our sample period, from 32% in 1981 to about 26% in 2001, but that most of the decline occurred between 1993 and 1997. However, inequality also increased between 1981 and 1989, but it declined between 1989 and 1997, which is probably due to the fall in inflation rates, then starting from 1998 the inequality indeed became wider and wider. Albeit growth-oriented sectors were performing well, it is widely known that Brazil's growth strategy has led it to becoming the most unequal country in the world (Childress & Murnoz, 2008). The inequality caused by the growth oriented-strategy has created other social-economic problems, such as regional disparity and inequality, health and education inequality over regions, gender disparity and ethnic discrimination.
Regardless of the wider inequality, it does not mean the Brazilian government does not address and come up with innovative policies for reducing poverty. Two very substantial policies, which are remarkably influencing poverty alleviation programs around the world are: (1) engaging the poor into Brazil's tourism industry and (2) land reform allowing the poor/ landless farmers to own the cultivation and farming fields freely. The first reason why Brazil chose tourism is because they have been afforded abundantly beautiful panorama and scenes with exotic geographical locations offering some of the best destinations for vacations and holidays. In addition, the effect of tourism into Brazil can create more job opportunities and also gradually increase the income of the poor that are working in tourism industry.
The endless rampant poverty and acute illiteracy rate does not indicate that the Bolivian government is not striving to bring about efficacious policies. In fact, a lot of policies have been formulated and implemented until today. The most common and feasible method chosen is allocating a portion of the national budget to social welfare, educational, healthcare and poverty alleviation programs and subsidies both in the rural and sub urban areas (Quang-Dao, 2004). In 1987 the Bolivian government launched the "Bolivia Emergency Social Fund" (BESF), whereby it covered: (1) service provision in nutrition, health and education, (2) infrastructure creation in nutrition, health, education, housing, urban development, road maintenance, irrigation, reforestation, water and sewage, (3) productive activities such as the capitalization of small rotating credit schemes, (4) institutional support for the requesting agencies and (5) administrative costs of the social funds (World bank, 1993). However, similar to other developing countries, in which corruption and mismanagement have generally remained unsolvable phenomena and even getting worse, the social expenditure in Bolivia is not effectively distributed. A World Bank reports in 1993 revealed, "the very poor have benefited little from public expenditures. They have little or no access to infrastructure or social services such as health care, education and training". Similar to any other countries in the world, the poverty alleviation program is the most prioritized planning in Venezuela. Benefiting from its oil and petrol pumping as well as its reserves, the Venezuelan government has continuously allocated high expenditures for social sectors. As a result, between 1999 and 2000 Human Development Index (HDI) at birth (per 1000) was 0.769; life expectancy was 73 and illiteracy rate under 5 was 23% and adult was 8%, in which those indicators were high among Latin American countries. Albeit the government has placed a focus on social expenditure, since 1980 Venezuela has not depended much on external debt compared to the other Latin America countries. Thus, its economic sovereignty against foreign interventions has prevailed and no dictations have come from foreign parties. Thus Venezuela has had the liberty to freely direct its own domestic policies including in selecting and maintaining social expenditure programs. However, like in any other developing countries, the social phenomena has also corrupted the poverty programs, whereby most of them are implemented on general food subsidies, and the middle to higher income families consume nearly 60% of the subsidized goods (World Bank, 1993). In addition, the problems of racism, discrimination and lack of needed policies have seemed to become greater and greater, especially among the black communities (Afro-America) living in suburban slums. They have remained behind the development process and become the poorest minorities in Venezuela, facing difficulties to access health care, education and job markets.

Society Participation
In Indonesia, poverty issues do not only involve government concern but also social concern as well. The Indonesian government has designed a lot of programs both long term and short term to alleviate poverty massively. In addition, government facilitates all citizens to participate by offering poverty programs in order to support and enhance the government's program. For instance in the business sector, the Indonesian government encourages private companies to spend their money in form of corporate social responsibility funds. Moreover, nongovernmental organizations, religious groups and voluntary sectors are engaged in reducing poverty, for example, as a Moslem majority populated-country, the Indonesian government promotes zakah, awqaf and Infaq to be an alternative fiscal tool in alleviating poverty recently. Indeed, the government officially institutionalized and enacted a special body to manage and distribute zakah, Infaq and sadaqah in alleviating poverty such that the government programs are effectively supported (Kholid, et.al, 2009). However, until today the poverty alleviation programs in Indonesia have been dominated by government policies and strategies rather than private and voluntary sectors, at least according to what has been recorded by official reports or academic researches.
Interestingly, the state and central government of Malaysia takes care of zakah, infaq, sadaqah and awqaf management and distribution, and all related matters are regulated under Malaysian legal jurisdictions and laws. Under the Department of Islamic Development Malaysia (JAKIM) is the Baitulmall division that is responsible for coordinating particular activities at the state level. Zakah, infaq, sadaqah and awqaf in Malaysia are managed, by individuals, zakah payments are deductible from actual tax, but there is no such tax rebate for businesses and companies paying zakah (Ahmed, 2004). Moreover, Islamic micro-financing services in Malaysia have developed breakthroughs and flexibilities in contracts and financing choices, which are friendlier to the society and more ethical. For instance according to (Rahman, 2010), the application of qardhul hasan, murabahah, and ijarah schemes are relatively easy to manage and will ensure the capital needs (qardhul hasan), purchase of equipments (murabahah) and leased equipments (ijarah) for potential microentrepreneurs and the poor. In addition, the partnership schemes of mudharabah and musyarakah hold great potential for microfinance purposes as these schemes can meet the risk sharing needs of the micro entrepreneurs.
For the Bangladesh, the most difficult is natural disasters and calamities compared to the other complicated and acute problems like rampant poverty, uncontrollable population growth, environmental degradation, poor agricultural and industrial production, rampant corruption, bureaucratic complexities, inadequate policies, ineffective democracy in the politics (Sapir, et.al, 2004). Almost all program-implemented including poverty alleviation and microcredit are gone when natural disaster (massive flood) hit rural areas and farming land entire Bangladesh (Shillabeer, 2008). Ever recorded, Bangladesh has been affected by 282 disasters between 1904 and 2004 with nearly two-thirds having occurred since the 1970s alone.
The land reform policy known as: Brazil Land-Based Poverty Alleviation Project, addresses the poor who do not have adequate access to land in the rural areas, particularly in the Northeast. Since 1995, the Government has legally redistributed land to about 372,500 families, using a combination of the traditional approaches through expropriations, settlement on government-owned lands, and direct negotiation of land sales by the government with landowners (Childress & Murnoz, 2008). The land reform policy has been very successful in alleviating poverty in Brazil. It is one of many examples in the initial pilot project joint venture with the World Bank. The pilot project operated between 1997 and 2002 and benefited 15,267 families who bought and settled on 398,732 hectares of farming and plantation land, acquired at a per hectare cost of about R$191 (US$183 at appraisal exchange rate, or US$ 54 at closing), or at about R$4,759 per beneficiary fam ily. Finally, this program could increase the beneficiary nominal incomes by an average 180% from 1998 to 2003, equivalent to a monthly per-capita income of R$122, significantly above the poverty line of R$70.

The Presence of Microfinance
The latest microfinance applications and programs in Indonesia are actually combining the existing-practices and the concept of Islamic economics, whereby promoting services free from interest, speculation, gambling and injustice (Sadeq & Hasan, 1997;Rahman, 2010). By introducing the new sources of funds, such as zakah, infaq, sadaqah purposed for the poor to start new businesses, Islamic microfinance has begun to support government alleviation programs in Indonesia. In 1992 when the Islamic economic system was no longer alien and several Islamic banks were established, the following phases contained the structuring of several Islamic micro-financing products. At the beginning of the year 2000, not only were products developed, but they also outnumbered Islamic micro-financing institutions (rural Islamic financing banks), reaching the rural areas and remote villages that were never served by commercial banks.
Compared to the existing microfinance products and any other applications in the world, rural Islamic financing banks in Indonesia offer two unique features. First, several Islamic micro-financing institutions both public and private have been able to cover financial services deep into the countryside, reaching many of the poor by involving a wide network of local community based participations. Second, the members of non-Ahmad Hudaifah: A Comparative Study on Poverty profit organizations and institutions offering such Islamic micro-financing services are dominated by cooperatives and zakah, infaq and sadaqah institutions which have some programs concerned with poverty alleviations (Obaidullah, 2008).
Historically, microfinance was introduced in 1986 by replicating the inspiring Gramen bank's successful story in Bangladesh. Specifically by eliminating long procedural processes and heavy collateral guarantees imposed by the existing banking system, at that time Gramen bank was able to deliver credit to the doorstep of the poor. Since this program was launched, being a part of the poverty alleviation strategy, it has been a very popular approach, particularly in approaching the poor who have been excluded from the formal credit sector. Currently, there are gigantic microfinance institutions that have been established to execute the Malaysian government's visions, namely Amanah Ikhtiar Malaysia (AIM), Yayasan Usaha Maju (YUM) and Koperasi Kredit Rakyat (KKR). Furthermore, each institution has gone forward to introduce several workable and viable microfinance services (Ahmed, 2004). Amanah Ikhtiar Malaysia firstly came up with Ikhtiar Loan Scheme (ILS), replicated from Gramen bank approaches. Yayasan Usaha Maju was established in June 1995 as a corporate entity. Moreover, KKR or People's Co-operative Credit is a co-operative credit scheme operating under the umbrella of the Credit Union, registered under the Society's Act.
Since Malaysia's declaring itself as the hub of Islamic financial services as well as Islamic economic training and education in the world, the innovation of financial products and Islamic fiscal-tools managed by a government are being prioritized, including Islamic micro-financing services. Like any other Moslem populatedcountries, the role of zakah, infaq and sadaqah and Islamic economic concepts are seemingly increasing, including in the process of structuring micro-financing products, whereby its sources are partially taken from the Islamic mechanisms mentioned above. Of course, the existing microfinance products have been modified into Islamic financial products, which comply with Sharia. The function of zakah, infaq and sadaqah actually is not only to bridge and narrow the gap between the rich and the poor in Islam by distributing directly, but also they can possibly be used to recreate funding sources for micro-financing, especially for the poor who are slightly above the poverty line, being able to fulfill minimum basic needs (Siwar & Basri, 2001).
The massive project in acquiring land for farmers by initiating the effective projects called Crédito Fundiário in 2001 also involved a micro-financing scheme for farmers, whereby the farmers are beneficiaries. Beneficiary community associations along with heavy collaboration implemented it by local, state, and national civil society organizations. One of the local organizations involved was the National Confederation of Agricultural Workers (CONTAG), representing close to 4,000 unions with a membership of nearly 20 million rural workers in all States of Brazil.
Its total project cost is € 340 million, of which the World Bank finances 50% (for investment subprojects and tech nical assistance), and the rest is financed by the Brazilian Federal Government (for land acquisition) and beneficiary contributions (which is approximately 10% of on farm investments). By December 2007, the Project had financed/contracted 2,366 land acquisition proposals benefiting 44,522 fami lies on approximately 835,000 hectares of land (Blake, et.al, 2008).
The breakthrough of poverty alleviation programs in Bolivia began with reforming the law which allows the poor to access microcredit easily. Since the law has been rectified, the positive side of microcredit not only has brought about broader access and opportunities for the poor, but also provided choices, because microcredit has been a very promising and profitable business. Thus, as the underpinning regulation is changed, the providers of microcredit increase significantly. The Bolivian government is now in collaboration with not only the Inter American Development Bank and commercial banks, but also many regulated and legal nongovernmental organizations (NGOs) that are heavily involved, albeit having limitations in funding sources and operations. As a result of these collaborations, the microcredit funds and institutions in Bolivia have scaled up drastically.
For instance, one microcredit institution in Bolivia, the Bolivian BancoSol, upgraded from microcredit NGO, "in less than a decade, BancoSol nearly doubled its client base (reaching 121,207 borrowers in 2007 compared to 76,216 in 1997), and more than quadrupled its loan portfolio ($209 million in 2007, up from $48 million in 1996)". Its negative side unfortunately must also be borne by the poor, since the microcredit institutions are rapidly privatized; the poor become the commodity of microcredit products and services, which seem to be profitable and promising businesses of financial channeling. Hence, the motive behind why many parties are voluntarily involved is no longer to assist the poor, but to gain profit. Basically, the negative side of privatized-microfinance institutions for the poor in Bolivia might begin with high interest rates, to attract more investment portfolios from institutional investors, the microcredit institutions however, are allowed to charge a higher interest up to 21 %, compared with normal loans of which are around 11.5 %.
The Venezuelan government has realized that an oil based-economy would not be strong enough and sustainable for its people and particularly in undertaking poverty alleviation programs, because most of its projects are based on direct subsidies without having socio-economic consequences in the long term nationally. Since 1989 the Venezuelan government has reformed its fiscal policy and national poverty strategy, moving from generalized subsidies funded by oil rents into productive activities facilitating fundamental exchange, trade and financial transactions. Thus through such initiatives greater job creation might be possible. Similar to Brazil, in Venezuela one of the most revolutionary policies in poverty alleviation is involving the poor in the tourism industry. This initiative does not require a very high level of training or education. Some jobs in the tourism sector are simpler than those in the manufacturing industry, but higher in value added. Regrettably, its developments also create the new drawbacks for Afro-American minorities instead of benefiting them.

Conclusion
Deliberating the topic of poverty must begin with the three terminologies: definition, profile and roots. World Bank defined poverty by quantifying the income of people with respect to their basic needs. People who earn an income or salary bellow 2 USD/day, according to World Bank's definition are considered as poor, and this definition prevails as the standard measurement worldwide. Like many other developing countries, the profiles of poor people living in both groups of countries highlighted in this research are of the ones who live in rural areas working as landless farmers and smallholder farmers, or the ones who is live in suburban slums surrounding the major cities working in informal sectors, moving from rural into urban areas, hoping for better jobs (Esman, 1978). The root of poverty problems is universal, no matter in which countries the poor are living in. First, "the poor" are being marginalized in the process of development, such that they are unable to participate and contribute significantly in the national economy; so far this has been among the most dominant cases. Second, systems of injustice are inherited from colonial masters and are still maintained by small groups of ruling-elites within countries generating economic benefit for themselves through modern slavery and legalizing minimum wages that are too low.
Through analysis of the statistical data and official reports released by reliable sources, the effort and programs fighting and addressing poverty both in Moslem and non-Moslem populated countries has resulted in better outcomes. However, Moslem populated countries in Asia have successfully narrowed the inequality gap between the poor and the rich, compared to non-Moslem populated countries in Latin America, in which the growth process tends to create an unequal distribution of income among their citizens. The policy and strategy comparisons in addressing poverty issues between Moslem populated countries and non-Moslem populated countries result in the common conclusions of similarities and differences. The general policies and strategies in the context of poverty alleviation between two groups of countries involve governments playing big roles and political willingness to do things like prioritize national budgets, allocation of funds to social expenditures in assisting the poor, such as direct food subsidies, healthcare packages, house subsidies, land distribution and so on. In both particular groups of countries, microcredit and micro financing have emerged as the common strategic solution of poverty alleviation, especially to help the poor who are starting new small businesses or improving and strengthening their existing business. In contrast, the most distinctive points between the two groups of countries are the involvement of religious teachings in poverty alleviation massively and the alternative strategic options. Obviously, in Moslem populated countries, the zakah, infaq and sadaqah play some roles in poverty alleviation and support the government programs. In non-Moslem populated countries, there are a few roles of religious practices in regards to social philanthropy supporting poverty alleviation, but their governments have proposed very significant changes and a more creative way out, such as the agenda of land reforms and developing a wider tourism industry.

Limitation of the study and suggestion for future research
There are some limitations of this research needed to be highlighted. In order to prove the significant role of each poverty alleviation tool, this research should be continued by quantitative research method. Therefore, it will be appropriate to measure the effectiveness of Moslem and Non Moslem populated countries' policies in eradicating their poverty.