By Christina Chang
The idea that having a decent income would be a priority for someone living in poverty might seem screamingly obvious rather than revolutionary. But the shift in approach to economic development strategies that this would require is, in fact, rather radical.
The need to help poor men and women to help themselves by supporting their livelihoods was a key finding of the Compass project, which asked 1420 poor men and women across four countries, what was their agenda for a new global deal to fight poverty.
“The first thing that anyone needs is a job. We all need to be employed to fight poverty” Mrs Bhebhe, 58, Bulawayo, Zimbabwe
Over recent decades, economic development strategies have focused on getting the macro-economic conditions right, putting in place a good regulatory framework and helping countries to attract foreign firms and develop export industries that can help to transform their economies.
Helping local small businesses has at best come a sorry second to these efforts. Sometimes these “livelihoods” interventions have been seen as more social endeavours to help people out but not really relevant to economic development. Sometimes they have been criticised as counter-productive – distracting from the real business of economic development or locking people (and countries) into low-grade jobs. Sometimes policy makers have argued that the best thing to help small businesses is to focus on those more glamorous, big win economic development outcomes –having bigger GDP growth or export figures than your neighbours.
Getting the big stuff right is still important, but evidence is mounting that this is not enough to ensure that jobs are created or poverty reduced.
Compass research points to another economic development strategy proposed by poor men and women to help them get themselves out of poverty and contribute to their local, national and, yes, global economy, rather than wait for benefits to “trickle down” to them.
The first element of this strategy is unsurprising – many poor men and women still lack the basics to participate in economic life. These range from a lack of land to farm to a lack of access to health and education services that enable you to be fit and skilled enough to earn living.
“Those who live well have more land” Wage worker, Charagua, Bolivia
“..when you have gone to school and got a job, you will be getting a regular salary” Uganda farmer, 25
Getting the basics right is something governments have committed to do and making progress on – notably over 180 governments committed to a “social protection floor” giving all citizens the right to a basic income and access to essential services. Our job now is to make sure that these promises are realised in a way that supports poor people’s livelihoods.
Perhaps more surprising is the emphasis that Compass participants put on addressing issues of power and risk as critical to successful livelihoods.
Just having access to land is not enough, if you then don’t have enough power to ensure a profit from what you grow there. Farmers often had to share their income with landowners and to sell to middlemen on unfavourable terms so that:
“no matter how we work hard in the farm, our standard of living still remains low.” Ricardo, 45, farmer, Philippines
Risk, and the measures that people need to take to deal with it, undermines livelihoods. Risks were described as multiple and increasing – risks of ill health, poor labour conditions, volatility in global markets and also due to climate change.
“When the price of nuts drops, it affects us all, us, the traders, the pickers. All the village is affected when the nut price drops because the entire economy works around this.”
Poor communities are ill-equipped to deal with such risks, which can have devastating and long-term impacts as a result. To cope, some take on several jobs and extra work (or over-exploit themselves, as one participant explained it), undermining their longer-term earnings or even their health. Others migrate, which can provide much needed income, but which can also increase the vulnerability of the migrant, as well as create new problems for those they leave behind.
The views of the men and women participating in the Compass research, chime with the findings of CAFOD’s Thinking Small work with hundreds of poor, small-scale entrepreneurs. This research found that traditional donor priorities and approaches did not match well with the needs and priorities of poor entrepreneurs. For example, initiatives often helped them to become better at producing things – such as handicrafts or honey – but they didn’t succeed because didn’t pay enough attention to demand, as one Compass participant put it: “There is not much selling, there is no money”.
With initiatives such as Compass and Thinking Small, we begin to hope that the era of assuming that overall economic development will benefit poor men and women and of assuming that others know best what they need and what works for them, is beginning to come to a close. It’s a slow revolution, but it’s a start.