How to transform the lives of the ultra-poor

How to transform the lives of the ultra-poor

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BRACBRAC’s ‘Targeting Ultra Poor Programme’ assists the ultra poor population to graduate from extreme poverty, get access to mainstream development programmes and establish sustainable livelihood improvement.  Photo: BRAC

Last week I had the opportunity to attend some fascinating talks at the International Growth Centre’s annual ‘Growth Week’ conference. In one session that really struck me, development economists Robin Burgess, Abhajit Banerjee and Dean Karlan discussed great results from several innovative, poverty-busting programmes.

These talks tackled a tough question, how can we transform the economic lives of the ultra-poor? This will probably be the most important question in global development efforts in the coming years. I’ll explain why, but first let me share with you just a few of the exciting results from Bangladesh.

BRAC is a poverty alleviation organisation famous for its early pioneering of microfinance, providing small loans so that people can set up microenterprises and generate more income for themselves. However, people at the very bottom of the ladder are often too disadvantaged to be able to benefit from microfinance, so in 2002 BRAC established a new programme called ‘Targeting the Ultra Poor’.

It’s designed to reach the poorest and most marginalised women who have no land, very little or no education, and are typically scraping by on extremely low and unreliable seasonal wages, making them and their families highly vulnerable in famine and other shocks. BRAC gives them productive assets (such as cows, poultry or land), which they can use to create income, as well as skills training, healthcare and home visits.

Two features are key: the programme involves whole communities, not just individuals, to address problems of exclusion, and structured support is in place for a sustained period of two years. The programme doesn’t aim to give short-term relief; it’s about permanently changing people’s lives.

So what impact is it having?

  • After four years, most of the women in the research trial had maintained or even increased their assets, and many had diversified into new lines of business.
  • They had a 38% increase in their earnings and in land ownership.
  • They could spread their labour out more evenly across the year (rather than relying on seasonal agricultural jobs) and became much more productive.
  • Life satisfaction was higher, food security was better, and infant mortality was down. They caught up to the living standards of more middle-class villagers.

Perhaps most importantly of all, the results didn’t drop off, they kept getting better over time. The ultra-poor were on a new life trajectory out of poverty.

If you saw yesterday’s blog post, you’ll know that the world has already halved extreme poverty (from 43% to 21%) and if we continue at this rate, we can virtually end it by 2030. But that’s one big if. Getting to zero will be much harder, and it cannot be achieved through economic growth alone.

That remaining 21% are disproportionately ultra-poor. Not only do they live below the $1.25 line; many of them live way below – on just 60, 70 or 80 cents a day. That means they could near double their income and still be in extreme poverty.

Sub-Saharan Africa has the greatest proportion of these ultra-poor. Like with BRAC’s participants in Bangladesh, a crushing lack of access to opportunities and resources means that they are the most vulnerable and the least likely to be included in economic growth. That’s why reaching these people, and keeping that downward trajectory going at the same rate, will require a profound and renewed focus on those trapped deepest in poverty. The more we can learn from organisations like BRAC doing just that, the closer we can bend that arc of history towards zero.

You can watch the lecture I attended, or find out more about BRAC’s work.

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