Opinion: How governments can reach people in extreme poverty and build resilient livelihoods during COVID-19

Let’s begin with the good news: The international community has taken unprecedented measures to respond to the humanitarian crises triggered by COVID-19.

woman in Graduation program in Philippines works at her food stand

By Lindsay Coates

 

This piece was originally published here in NextBillion. It has been reposted below.

Since March 2020, 212 countries and territories have enacted over 1,100 social protection measures to mitigate harm from the pandemic for the most vulnerable people. Most governments recognize the urgency of an effective response and have taken proportionate fiscal measures, now estimated to total almost $12 trillion worldwide.

However, even these massive efforts may come up short. With the number of people suffering acute hunger set to double to 265 million people by year’s end, and confirmed COVID-19 cases now exceeding 40 million, the scale of current responses is still not enough. And though the political will and finances to fund social safety nets exist at a global level, individual low- and middle-income countries face resource constraints. What’s more, most of these recent social protection programs are reactive and short-term, and current international development assistance is insufficient. Many programs do not reach those most in need of support, nor do they address the long-term needs of people in extreme poverty.

What we need now is not a disconnected series of COVID-19 response measures, but instead comprehensive, universal social protection systems. Governments must invest in a robust emergency response, but approaches must be adaptable and inclusive – and they must prepare the most vulnerable populations for future economic, health or environmental shocks. Below, we’ll discuss how the Graduation approach to poverty alleviation can play a role in helping these communities and their broader economies recover from the pandemic.

 

Improving targeting of people in extreme poverty through the Graduation approach

People in the most extreme states of poverty are both the most in need of social services and among the hardest groups to reach. Many low-income populations in the Global South are employed in the informal economy – including around 86% of workers in Africa and 68% in Asia. During COVID-19, governments have struggled to provide assistance to poor households without permanent addresses or national IDs.

Low-quality data on national poverty in many low-income countries makes identifying and targeting extremely poor people with government programs even more challenging. International Growth Centre research on social assistance programs in 123 countries found that even before the chaos of the pandemic struck, only 15% of the total population of low-income countries was protected by at least one social assistance program. And these programs do not target the poorest people: Only 21% of the poorest quintile within low-income countries are covered by social assistance at all.

For the first time since 1998, global poverty rates are rising. With almost 700 million people in extreme poverty worldwide and up to 150 million more predicted to fall back into extreme poverty by the end of 2021, it is urgent that governments adapt their social protection systems to target the most economically vulnerable populations. The Graduation approach, pioneered by BRAC in Bangladesh in 2002, is a viable pathway to improve these systems. Graduation is a sequenced set of interventions that addresses the needs of people in extreme poverty holistically by supporting participants with a productive asset transfer, skills training, consumption support, coaching and linkages to government services. By specifically targeting people in extreme poverty with a multi-step process tailored to local data, needs and capacity, Graduation helps bring previously unreachable populations into government safety nets.

The explicit focus of Graduation on the poorest segment of a country’s population and its emphasis on localized, adaptive targeting makes it possible for governments to reach more people in dire need. This targeting process can involve the combined use of national registries (depending on data quality), proxy means testing and participatory community wealth ranking, with targeted verification surveys to minimize errors.

By leveraging data governments already have and combining it with self-identification, community participation and survey verification, the Graduation approach makes it possible to find those in extreme poverty. It is then possible to connect these extremely poor households to government services, improving the targeting of existing social protection programs. By collecting data on vulnerable populations through Graduation programming, governments can strengthen their emergency responses as well. For instance, in Bihar, India, the state government’s Satat Jeevikoparjan Yojana Graduation program, supported by J-PAL South Asia, provided data on extremely poor households which has allowed the government to reach 39,000 people with phone surveys and cash transfers during the pandemic.

For an inclusive recovery from COVID-19, governments will need to identify and reach the most vulnerable – or we risk leaving millions more behind. Integrating the Graduation approach into existing social protection systems facilitates this effort, and uses delivery of emergency aid to build toward longer-term solutions. But this is only half the battle. To truly build back better, governments must also help people in extreme poverty prepare themselves for severe shocks before they happen.

 

Building resilient livelihoods during COVID-19: A case study from the Philippines

This pandemic has made the need to help the most vulnerable build resilient, sustainable, long-term livelihoods painfully clear. Market closures and lockdowns have brought much of the economic activity low-income households rely on for survival to a jarring halt. Shutdowns have led to lost income on a shocking scale, with nearly half of the 3.3 billion workers worldwide at risk of losing their livelihoods. In the third quarter of 2020 alone, the International Labour Organization projects a 12.1% loss in global working hours – the equivalent of 345 million full-time jobs.

This loss of livelihoods – combined with social safety nets which often exclude the poorest people – has sent millions to the brink of starvation. The UN World Food Programme has warned that nearly 265 million people are at risk of facing severe food shortages and starvation by the end of the year, almost twice the number of people suffering from food insecurity before the pandemic, because of income and remittance losses. Economic inclusion for extremely poor people which builds shock-resistant livelihoods and resilience is more than a matter of finances – it is a matter of survival.

The Graduation approach includes several unique mechanisms which prepare participants to better weather crises on all scales, from personal disasters to global catastrophes. We can see how Graduation has increased resilience through the case study of how the Philippines Department of Labor and Employment’s Graduation program, in partnership with the Asian Development Bank and with technical assistance from BRAC’s Ultra-Poor Graduation Initiative, has adapted and supported participants during COVID-19.

Crucially, Graduation strengthens extremely poor households’ economic resilience by providing training on asset diversification. Rather than relying on low-wage informal labor, participants are guided through the process of setting up multiple streams of income from diverse agricultural and commercial activities. When one income source fails, they have others to fall back on. As of July 2020, 76% of participants in the Philippines were able to continue earning an income even during lockdown through multiple means, including agricultural labor, selling fruits and vegetables, and producing and selling charcoal.

In addition to helping participants develop varied income streams, Graduation helps them create a buffer against shocks by increasing savings. Graduation coaches link them to local financial service providers and offer financial literacy training, encouraging saving and long-term planning. During COVID-19 lockdowns in the Philippines, 75% of participants used their savings to support their households, while only 20% took out loans. (For comparison purposes, at the start of the program, only 29% of participants reported having savings.)

Self-sufficiency in income and savings ensures that people in extreme poverty can provide for themselves to some extent, even during a crisis like COVID-19. Graduation also increases the effectiveness of existing social assistance programs by connecting previously excluded households to government services. In the Philippines, 96% of Graduation pilot participants received cash assistance from the national government. Graduation coaches are serving as an important linkage between participants and their local governments. If participants receive aid in the form of financial support from the government, the coaches record and track this information in order to build on the saving practices taught throughout the program. On average, cash assistance programs in lower-middle income countries reach less than 70% of the poorest quintile of the population, making this level of coverage particularly encouraging.

 

The path to a resilient recovery

The government-led Graduation program in the Philippines demonstrates the impact of correctly identifying people in severe need, connecting them to social protection systems, and helping them build shock-resistant livelihoods. The approach does more than improve access to emergency aid and provide for basic health and nutritional needs. It empowers participants to escape the poverty trap and become agents of change in their households and communities.

To mitigate economic disasters of this magnitude and prevent them from harming millions of the world’s most vulnerable people, governments must strengthen existing social protection systems. Even the most generous programs are missing the people who need help the most. As a result, hundreds of millions of people globally are being left behind, and those that receive support often only get it after disaster has struck. Policymakers and the development community need to design better-targeted poverty eradication programs with a long-term focus that enable marginalized groups to become more resilient and self-sufficient. The Graduation approach provides a path to do that.

 

Lindsay Coates is Managing Director at BRAC’s Ultra-Poor Graduation Initiative.

Webinar: Driving systems change to end extreme poverty

Explore how governments can use Graduation approaches to fight extreme poverty

In conjunction with End Poverty Day, BRAC and J-PAL hosted a discussion featuring panelists from BRAC, the United Nations Development Program, the Institute of Peruvian Studies, and Nobel-winning economist Abhijit Banerjee of J-PAL.

Video: BRAC Ultra-Poor Graduation Initiative – Audacious announcement 2020

An Audacious plan to lift millions out of extreme poverty

Today, BRAC was named a 2020 winner of the Audacious Project. BRAC’s Ultra-Poor Graduation Initiative will receive more than $60 million to scale our proven Graduation approach through governments and help 21 million people lift themselves out of extreme poverty.

BRAC receives $60 million for Audacious plans to lift 21 million people from extreme poverty

As a selected Audacious Project for 2020, BRAC’s Ultra-Poor Graduation Initiative will work alongside governments to scale the Graduation approach and help 21 million more people to lift themselves from extreme poverty

Women in a Graduation program

NEW YORK, NEW YORK — Today, BRAC was announced as one of this year’s Audacious Project grantees. The Ultra-Poor Graduation Initiative, an initiative of BRAC, will receive more than $60 million to apply toward its goal of helping another 21 million people lift themselves from extreme poverty by 2026.

BRAC is the founder and largest scaled implementer of the Ultra-Poor Graduation approach, having reached more than 2 million households in Bangladesh and developed and implemented adaptations of the approach in 14 countries across a range of different contexts.

“The need to combat extreme poverty and drive systemic change has never been more urgent,” said Shameran Abed, Senior Director of BRAC’s Microfinance and Ultra-Poor Graduation programs.

The announcement comes at a critical time when Graduation is needed more than ever. In the past few months, the COVID-19 pandemic has shed a light on, and exacerbated, pre-existing, systemic inequalities that permeate societies around the world. The impact of COVID-19 and economic lockdowns to prevent further spread of the virus have created a humanitarian crisis of catastrophic proportions. The pandemic threatens to unravel decades of progress toward poverty alleviation. By the end of 2020, more than 70 million people could slip into extreme poverty.

“We must act swiftly and design programs that meet the increasing and evolving needs of those living in extreme poverty — programs that are comprehensive, adaptive, and immediate but also support long-term needs — to build resilience and support sustainable recovery,” said Abed.

Our Audacious Project will support efforts to scale and implement BRAC’s Graduation approach, a multifaceted intervention that helps the poorest escape extreme poverty and continue to improve their lives years after the program ends.

Through training in life skills, finance, and business skills, along with consumption stipends, an asset transfer, and regular coaching and monitoring, the Graduation approach addresses participants’ complex needs and helps them create sustainable livelihoods to lift themselves out of extreme poverty.

But to scale globally, a systems-level approach with governments at the forefront is required.

“Governments have billions of dollars allocated to poverty programs already, but many are not reaching the most marginalized, nor are they fully equipped to integrate Graduation into their systems,” said Abed.

BRAC will leverage $5.8 billion dollars in existing government and donor funding and channel those toward well-executed, government-led Graduation programs in countries in Africa and Asia with the greatest potential for impact and scale — lifting 21 million people out of ultra-poverty by 2026 — and setting millions more on the same path.

“The level of effort, programming, resources, and tenacity required to eradicate extreme poverty vastly exceeds the capabilities of a single organization or the Audacious investment,” said Lindsay Coates, Managing Director of BRAC’s Ultra-Poor Graduation Initiative. “To truly eliminate poverty in all its forms, BRAC urges governments, multilateral institutions, donors, NGOs, and policymakers to work together more effectively and commit significantly more resources.

“At BRAC, we believe in standing with those most affected by pervasive inequality and most at risk of being left behind. This is an act of justice — not of charity.

 

Notes to the editor

About BRAC

BRAC is a global leader in developing and implementing cost-effective, evidence-based programs to assist the most marginalized people in extremely poor, conflict-prone, and post-disaster settings. These include initiatives in education, healthcare, microfinance, women and girls’ empowerment, agriculture, human and legal rights, and more. BRAC’s vision is a world free from all forms of exploitation and discrimination where everyone has the opportunity to realize their potential. In 2020, BRAC was named the number one NGO in the world by NGO Advisor for the fifth consecutive year. Founded in Bangladesh in 1972, BRAC currently operates in 11 countries in Asia and Africa, touching the lives of over 100 million people.

About BRAC USA

Based in New York, BRAC USA is the North American affiliate of BRAC. BRAC USA provides comprehensive support to BRAC around the world by raising awareness about its work to empower people living in poverty and mobilizing resources to support its programs. BRAC USA also works closely with its international counterparts to design and implement cost-effective and evidence-based poverty innovations worldwide. BRAC USA is an independent 501(c)(3) organization.

 

Media contact

BRAC USA

Sarah Allen
[email protected]

“My children are my greatest joy”

Scholastica, a mother and Graduation participant in Kitui, Kenya, forges a better life for her family.

Scholastica and her family
By Sarah Allen

 

There was a time when Scholastica used to plead with her neighbors for a little salt to add to her family’s meals.

But, with ten children – four biological and six adopted from her community – the requests started to add up, and she felt ashamed. Eventually, she stopped asking.

But, like all mothers, Scholastica was determined to provide for her children.

“My children are my top priority,” she told us. “They are my greatest joy.”

Today, Scholastica participates in an Ultra-Poor Graduation pilot program in Kitui, Kenya, run by CARE International with technical support from BRAC.

Graduation programs use a holistic approach to poverty alleviation that targets the most disadvantaged subset of the extreme poor, who live on less than $1.90 per day. Through a comprehensive, time-bound, and sequenced set of interventions, women like Scholastica gain the skills and self-confidence to “graduate” from ultra-poverty into sustainable livelihoods.

Scholastica eats with her children

The Graduation approach creates the opportunity for women like Scholastica to develop their financial literacy, start budgeting and grow their savings, improve their family’s nutrition and health, learn how to start and sustain a business, and much more.

Dristy Shrestha, a member of the Graduation team at BRAC USA, frequently travels to help governments and nonprofits design and run their own Graduation-style programs. Dristy first met Scholastica at the Gai market in Kitui, Kenya, where Scholastica runs a small grocery business.

“When I first met Scholastica, six months into her Graduation program, she was very shy and soft spoken, but she wore a big smile,” Dristy said. “When the field staff introduced us, they mentioned she was excelling in the program.”

After joining the program, Scholastica leveraged her aptitude for entrepreneurship and started a vegetable stand. She had noticed a lack of vegetable vendors in the area and, seeing a business opportunity, she chose to start a small grocery shop.

“I asked Scholastica if she had felt any changes in her life,” said Dristy.

“She told me that, while she had endured many hardships, what made her most sad was the feeling of helplessness at being unable to provide for her children. Before joining the Graduation program, her family could not afford to consistently eat one meal a day.

When we spoke, she was proud to be earning enough to feed her children well and send them to school.

Nearly a year into the two-year program, things have already improved for Scholastica.

With an expanding grocery business and a growing selection of livestock, Scholastica is now able to ensure that none of her children go to bed hungry. She is also putting away savings through her Village Savings and Loan Association, and has joined a group that conducts community service projects around town.

She says her children motivated her success.

As her grocery business begins to expand to more local markets, Scholastica and her children are increasingly better integrated in her community.

“It has been incredibly inspiring to see the changes in Scholastica — in her energy, in her self-confidence, and in the power in her voice,” said Dristy.

Today, she is making a living for herself, providing for her family, and lifting up her community.

Reflecting on her journey, Scholastica grinned and told us, “Now people ask me for salt.”

Scholastica is a member of the PROFIT Financial Graduation Program, funded by the International Fund for Agricultural Development (IFAD) and the Government of Kenya.

 

Sarah Allen is Communications Officer at BRAC USA.