Brac Briefing - Tup

8/13/2019 Brac Briefing - Tup

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Can we end the worst forms of humanpoverty? Falling poverty rates are nowobserved in every region of the world. InApril, World Bank president Jim YongKim announced 2030 as the global targetdate to end extreme poverty, definedas living on or below the equivalent of$1.25 per day. Media have taken therhetoric seriously, pointing out thatthe percentage of people living at thatlevel has halved since 1990, from 43%(or 1.9 billion people) to 21% (1.2billion), and that if current trends hold,the global poverty rate may well fall tosingle digits in as soon as 10 years.1TeBrooking Institution and the World

Bank published separate reports in 2013analyzing the prospects of bringing therate close to zero by 2030.2

It would be a mistake, however, to treatthose below the $1.25-a-day thresholdas a homogeneous pool. A unique setof interventions is required for those inthe lower half of the group, the ultra-poor, who live on 60 to 70 cents a dayor less. rapped in the direst forms of

destitution, the ultra-poor often do notbenefit from market-based interventionslike microfinance. Development andgrowth tend to leave them behind; theyare unable to break free from povertysclutches despite their hardest efforts.Policymakers and development groups,

Media contacts:

Soraya Auer

BRAC

[email protected]

T: +88 02 9881265, ext. 3191

Scott MacMillan

BRAC USA

[email protected]

T: +1 212 808 5615

Katie Allen

BRAC UK

[email protected]

T: +44 (0)20 7922 7764

Brieng Note #1:

An end in sight for

ultra-povertyScaling up BRACs graduation

model for the poorest

Ending extreme poverty

f Even below $1.25 a day, thepoor are not a homogeneousgroup.

f The very poorest can graduatefrom ultra-poverty with a set ofcarefully sequenced, tailoredinterventions. Adaptations ofBRACs methodology haveseen 75-98% graduation rates.

f BRAC is ready to leverage itsexperience by working withothers in a global strategy toend the worst forms of human

poverty.

Summary

November 2013


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Ending extreme poverty 2

including microfinance institutions,need to put extra effort into this hard-to-reach demographic. Te ultra-poor havebeen left behind by economic growthand most development interventions,and poverty will not be eradicatedwithout giving them the opportunity tolift themselves out of the trap. BRACs

experience suggests a way to do this.

Policymakers and development groups,including microfinance institutions,need to put extra effort into reachingthe ultra-poor, for poverty will not beeradicated without giving them theopportunity to lift themselves out ofthe trap. BRACs experience points to away to graduate people out of ultra-poverty using an intensive, household-

to-household methodology that givesthem the confidence, skills and assetsthey need to reach the bottom rung of

the economic ladder. o be sure, othersolutions are needed in tandem: osucceed, such graduation programmeswill require macroeconomic growth andstability, employment opportunities,infrastructure, functioning markets,safety net programmes and otherconditions. Te approach describedhere is but one important part of theequation.

Targeting the ultra-poor

Founded in Bangladesh in 1972,BRAC creates opportunities at scalefor those living in poverty, using toolsthat include microfinance, education,healthcare, legal rights and womensempowerment. But it has found thatthese interventions often fail to reach theultra-poor and uproot the worst forms ofpoverty. Even as it grew to become thelargest nongovernmental organizationin Bangladesh and indeed, by mostmeasures the largest in the world theorganization found there were peopleso poor, so weighed down by ignorance,ill health, and fear, that they were unableto join a BRAC group or any other,according to author Ian Smillie.6Afterdecades of trial and error, starting in2002 BRAC began deploying a set of

carefully sequenced measures tailored tothe unique set of challenges faced by theultra-poor.

Te results have been astonishing. Usingintensive training and support deployedover 24 months, the ultra-poor cangraduate from ultra-poverty. Researchfrom BRACs Research and EvaluationDivision has shown they remain onan upward economic trajectory even

f Denitions of ultra-poor include those who are livingat less than half the $1.25-a-day poverty line, andthose who eat below 80% of their energy requirementsdespite spending at least 80% of their income on food. 3

f The majority tends to be landless rural women. Theyare the most vulnerable, lacking the skills, condence,and future-orientation needed to lift themselves to thebottom rung of the economic ladder.

f In Bangladesh, BRAC uses 10 indicators to determinewhether a household has graduated from ultra-poverty.

These include having three to four income sources, anability to eat two meals a day, a kitchen garden, short-and medium-term income generating assets such aslivestock or poultry, a sanitary latrine, a solid roof, andschool-going children.4

f According to a 2007 report from International FoodPolicy Research Institute based on 2004 data, about162 million people live in ultra-poverty, dened as livingon less than 50 cents a day, with an additional 323million living in medial poverty, dened as living onbetween 50 and 75 cents a day.5

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Who is ultra-poor?


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Ending extreme poverty3

four years after the programme ends.More than 95% of participants leavea rigorously defined category of ultra-

poverty (see box, Who is ultra-poor?).More importantly, they sustain theirsuccess four years later, long after theystop receiving direct support.7Most goon to become microfinance clients.

BRAC has found that basicentrepreneurship, when introducedtogether with other measures, cantransform the economic lives of thepoorest. From 2007 to 2011, scholars

from London School of Economics,University College London, andBocconi University in Milan joinedresearchers from BRAC to test thisthesis using a randomised controltrial. Te findings reveal a dramaticshift toward self-employment amongprogramme participants. Four yearsafter the intervention period began andtwo years after it ended, the portion ofparticipants entirely self-employed hadrisen from 30% to 47%, a number thatchanged little for a control group of non-participants; the percentage relying solelyon wage labour dropped from 26% to6% during the same time period, whilenon-participants again saw little change.8

Moreover, thanks to the participation ofothers in the community, including localelites, those who were once completely

marginalised are now part of the socialfabric of village life. One participantin Mymensingh, Bangladesh, told aninterviewer: People invite me to theirhouses, because they see that things havechanged for me.9

Te evidence suggests that theseinterventions may have finally beguncracking the nut of ultra-poverty. Teprogramme costs $320 per participant

for the two-year cycle in Bangladesh,while the cost of pilots in othercountries ranges from about $330 (in

parts of India) to $1,900 (in Haiti) perparticipant.10

The BRAC approach: social networks and

economic opportunity

Te methodology is a set of interventionsthat builds an inclusive social networkfor the ultra-poor while introducing basicentrepreneurship training. Details varyfrom one context to another, but research

and practice have shown the following tobe the building blocks of the approach:11

Proper targeting.Te process ofdeciding who to include in theprogramme requires constant monitoringand supervision, including rigoroustraining of field staff involved intargeting, frequent field visits by seniormanagers, and weekly reporting.12Otherwise, the programme will leaveout those it intends to reach. BRACstargeting process begins by identifyinggeographic locations with a highconcentration of ultra-poor households.A crucial next step involves participatorywealth ranking, wherein groups of 40to 50 villagers are asked to discuss andrank the wealth of every household in thevillage.13Programme staff follows up withdoor-to-door visits, using questionnaires

to determine who qualifies. More seniormanagers are then required to verify thefinal selection.

Groups of 40 to 50 villagers are

asked to discuss and rank the wealth

of every household in the village.


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Grants of productive assets. In a one-time transfer, participants are givena productive asset, such as livestock,

agricultural inputs or in-kind seed capitalfor small trading.

Weekly stipends.In order to graduatefrom ultra-poverty, participants needbreathing room to offset the opportunitycost of not engaging in menial wagelabour or begging while they learn newlivelihoods. Tis can come partially inthe form of food support.

Savings. Participants are encouraged tosave. During the programme period, theymaintain a formal savings account withBRACs help.

Intensive hands-on training.Participants receive training on how touse their new asset. A unique featureof the approach is coaching or hand-holding in the form of weekly visitsfrom programme staff to overcomechallenges and uncertainties.

Health care.Te programme seeks toincrease health-seeking behaviour byteaching the importance of preventativehealth. In cases of illness, staff may guidethem to a nearby clinic or communityhealth promoter for treatment.

Social integration.Te programme

mobilises the community to integratethe ultra-poor, in part by setting upvillage poverty reduction committees toprovide support. Te wider community,including local elites such as villageelders, are also mobilised where needed,giving participants a much neededconfidence boost.

Research and practice have shown theseto be the key components of the ultra-

Measuring impactResults from a randomised control trial14


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poor methodology. Details may varyfrom one context to another. In somecases, for instance, clients at the upper

end of the ultra-poor bracket mayalso receive soft loans with favourableconditions for repayment. rainingfor the ultra-poor must be simple andrelevant, focusing only on the keymessages that participants can retain andapply in their everyday lives, which willvary in different cultural and geographiccontexts. Constant monitoring ensuresnew practices are adopted and lead toimproved living standards.15

Results of adaptations

Te question arises whether such anapproach can work outside its nativeBangladesh. Evidence from a numberof pilot adaptations inspired by BRACsmethodology shows that it can. Studieson 10 pilots in eight countries, under thecoordination of the Consultantive Groupto Assist the Poor (CGAP) and the FordFoundation, report that after 18 to 36months, 75% to 98% of participants metgraduation criteria.16

BRAC itself has provided technicalassistance on CGAP-Ford Foundationpilots in Haiti, India and Yemen, whileseparately, BRAC Development Instituteof BRAC University in Dhaka hasconducted qualitative research in India,

Pakistan, Ethiopia and Yemen. Otheracademic institutions have conductedquantitative research, includingrandomised control trials, on these pilots.BRAC, meanwhile, is operating its ownultra-poor programmes in Pakistan andAfghanistan.

Studies record positive results that ripplebeyond purely economic measuresof poverty. Preliminary results of a


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randomised control trial of a graduationpilot in the state of West Bengal, India,showed participants consuming, on

average, 25 percent more per monththan those in a control group, the largestincreases occurring with more nutritiousfoods such as fruit, nuts, dairy, eggs, andmeat. Women were less likely to reportsymptoms of mental distress, showing amore positive outlook on the future.17

For households with children, thestudy showed no negative impact on

school attendance despite the additionaldemand for labour to tend to livestockand crops. In fact, there were indicationsthat children actually spent an additional30 to 40 minutes per day studying, onaverage. Esther Duflo, an economist atMassachusetts Institute of echnology,cited the addition of hope into peopleslives as an intangible X-factor with longlasting economic repercussions.18

o be sure, there have been pitfalls.Results from Pakistan, for instance,indicated slower than expected progress.Research pointed to the introductionof a new breed of goats that turned outto be unsuitable for the arid climate ofSindh province. Programme staff werewrongly advised not to allow the newgoats to breed with local goats, and theyin turn passed that training onto theparticipants. Many of these goats starved,although those participants who ignoredthe projects advice and allowed breedingwith Sindhi goats managed to increasetheir livestock holdings. Researchershighlighted the need for stringentmechanisms for participant feedback,with constant monitoring to ensure staffcan respond in a timely way to problemson the ground.


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Conclusion

o defeat poverty, global policymakers

and development professionals mustrecognise the distinction betweenpoor and ultra-poor. Te ultra-poorrequire a tailored approach if they areto break free from the poverty trap.Research has demonstrated the successof a scalable, household-to-householdapproach to graduating the poorestfrom ultra-poverty. Moreover, evidencesuggests the approach can workoutside BRACs native Bangladesh,

provided the methodology is adaptedto local conditions and applied bothcarefully and systematically. o helpdo this, BRAC is ready to leverage itsexperience by working with others,including microfinance organizationslooking to extend their reach, wholesalemicrofinance funds, and governmentsafety net programmes. Such an approachshould be one component of a globalstrategy to defeat the scourge of extremepoverty once and for all.


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