Posts Tagged ‘extreme poverty’

The time for making poverty history is now

12 May, 2010

In rich countries a handful of dollars does not go very far, indeed most people in the UK wouldn’t think twice about spending this on a cup of coffee.  But one in five people in the world today has no choice but to survive on less than US$2 a day, and 1.5 billion people struggle to live on less than US$1. The vast majority of those affected are children, each an individual story of unfulfilled hope and potential.

Few would dispute that ‘a world free from poverty’ is the overwhelming challenge of the 21st century. The crucial issue is how to achieve this. In Just Give Money to the Poor:  The Development Revolution from the Global South (Kumarian Press, 2010), Hanlon, Barrientos and Hulme discuss a wave of new thinking on development that is sweeping across the South. Instead of relying on a large and expensive aid industry to find ways to ‘help the poor’, it is better to transfer money and resources directly to the households in poverty so that they are able to find effective the most effective ways to escape from poverty.

This is the premise behind social transfer programmes such as Mexico’s Oportunidades, Brazil’s Bolsa Familia, South Africa’s Child Support Grant, and India’s National Rural Employment Guarantee Scheme. They all provide regular transfers of money to households in poverty with the aim of improving their nutrition, making sure children go to school, and ensuring that expectant mothers have regular check-ups.

This does not rule out the need for investment in economic growth and basic services. Small transfers to very poor households help provide access to new economic opportunities and vital health and education services. Without such transfers, the costs of transport, school uniforms, medicines, and job search could well be prohibitive.

Social transfer programmes do not throw money from helicopters. They carefully select and monitor recipients, ensure they are well informed about objectives, and track outcomes. In Latin America, transfers are paid directly to mothers thus strengthening their voice within the household. The responsibilities of the government and the households are carefully discussed at registration.

Despite attempts by the aid industry to take credit for these initiatives, social transfer programmes are most often national responses to local problems. Brazil’s Bolsa Familia began as a municipal programme in Campinas in 1994/5 and is built on domestic learning and experience of what works to reduce poverty. India’s National Employment Guarantee Scheme, which guarantees one hundred days labour on demand to unemployed rural heads of household, also builds on a careful assessment of similar programmes in Maharashtra and elsewhere.  . Social transfer programmes have high set up costs and for this reason international assistance is important in low income countries. Nonetheless, sustainability and legitimacy requires domestic political support and finance in the medium term. Giving money to households in poverty is a ‘Southern project’, as the considerable diversity of programmes around the developing world demonstrates.

Important challenges remain, especially in low income countries lacking the capacity to design, deliver, and finance social transfer programmes. In many countries their institutionalisation is precarious. The existing social transfer programmes need to be seen as a first stage in the development of  strong and stable institutions,  able to protect poor and vulnerable populations in the South from the volatility and crisis of the global economy on. Acknowledging these challenges, the book makes the important point that knowledge on how to eradicate poverty is already freely available if only we care to learn from the South.

Armando Barrientos – Professor and Research Director, Brooks World Poverty Institute

Gateway to Microfinance

17 September, 2008

If you have never visited the microfinance gateway, visit it here. It has the latest news in the microfinance area. Recent headlines include:

  • African Union urges politicians to stay away from microfinance (i.e. don’t engage in political meddling)
  • Record Bank expansion in Kenya ( the number of Kenyans with bank and savings accounts tripled last year, from 3.3 million to 10.1 million)
  • The Asian Development Bank has set a new poverty line (the new estimates show a fall in poverty across the region).

There is also an interview with Fazle Abed, founder and chair of BRAC. He describes BRAC’s approach as not just ‘microfinance-plus’, but ‘microfinance multiplied’. Abed sums up this approach as:

“At the heart of BRAC’s approach to development is organizing the poor. Organizing the poor into microfinance groups builds community and enables them to address the constraints they face. BRAC’s “multiplied” approach leverages the power within these groups to develop a sustainable, social entrepreneurial approach to deliver essential services to the poor. BRAC helps the group build essential linkages that integrate members into the society and market while ensuring they receive fair treatment, prices and practices”.

The micro-financiers amongst you should also check out the latest BWPI working papers, including Farhad Hossain and Tonya Knight on ‘Financing the Poor: Can Microcredit Make a Difference’, which takes an in depth look at Bangladesh. We have papers on microfinance in Barbados and India, as well.

“The Other Half” of Global Hunger and Poverty

24 October, 2007

The International Food Policy Research Institute (IFPRI) with the support of IDRC and other collaborators, brought together stakeholders from around the world to Beijing from October 17–19 for the conference “Taking Action for the World’s Poor and Hungry People.”

The three-day discussion focused on whether the people who are poorest and most afflicted by hunger today face different social and economic challenges than those who have emerged from poverty in recent decades.

Critical questions included:

What are the key pathways out of extreme poverty and hunger?
Which strategies, policies, and interventions have been successful in eradicating extreme poverty and hunger?
How can existing actions to eradicate extreme poverty and hunger be accelerated or scaled up, and how can innovative solutions be designed and implemented for and with the poorest and hungry?

See more here