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International Day for the Eradication of Poverty

Creative solutions to poverty
Shameran Abed, Senior Director of the Brac Microfinance and Ultra-Poor Graduation programmes, talks to Naznin Tithi of The Daily Star about Bangladesh’s progress in reducing extreme poverty and the challenges ahead, how Brac’s Ultra-Poor Graduation (UPG) programme has fundamentally changed how we look at the ultra-poor, the importance of innovation, women as agents of change, and what the Covid-19 crisis has taught us.
The goal of SDG 1 is to end poverty in all its forms. What are the biggest challenges we are facing in this fight?
Bangladesh has made remarkable progress in reducing extreme poverty over the last few decades. Between 2000 and 2018, the proportion of the population living below the international poverty line, currently measured at a purchasing power parity (PPP) adjusted rate of USD 1.9 a day, dropped from 34.5 percent to 11.3 percent.
Much of this success can be attributed to sustained macroeconomic growth, increased government investments in public services, a thriving private sector and a vibrant civil society—all doing their part. Having said that, it is important to understand that the people who are below the poverty line are not homogeneous. There is great heterogeneity in terms of their vulnerability. Take the ultra-poor for example. The people in this subset of extreme poverty are not only living below the poverty line, but they have multiple additional vulnerabilities that make their poverty and deprivation more entrenched and therefore more difficult to address. In our joint efforts to end extreme poverty in our country by 2030 (goal of SDG 1), it is this group that deserves special attention.
Also, given this particular point in time when we are in the midst of a global pandemic, I must also mention that we are seeing a major setback in terms of some of our hard-fought gains of the last couple of decades. Many people living just above the poverty line threshold have fallen below due to a loss of livelihoods, and are now referred to as the “new poor”. For some, this setback will be temporary and we are already seeing recovery in certain sectors. For others, it will be more long-term. The impact of Covid-19 that we are seeing has exposed the fact that even after all these decades of development progress, the lives and livelihoods of poor people are still fragile. Therefore, we not only need to improve existing social safety nets to be more inclusive, adaptive, and comprehensive, we also need to invest much more on building resilient livelihoods that are better able to withstand future shocks that will inevitably come.
Brac has been working for a long time to alleviate extreme poverty in the country as well as in other parts of the world. Tell us about Brac’s Ultra-Poor Graduation (UPG) programme which has been recognised worldwide? What are the criteria for graduation?
Brac designed the ultra-poor graduation programme 20 years ago because we saw that the poorest households required an approach that went beyond single-focus interventions like health, education, or microfinance. An ultra-poor family typically has no assets, no education, no skills, irregular income that they cannot depend on, and limited access to clean water, health and public services. Furthermore, they are marginalised within their own communities and therefore have no one to turn to for support.
For these households, their level of vulnerability means that they need support to address all of these factors in one go.Brac’s ultra-poor graduation programme combines elements of social protection, livelihoods, financial inclusion and social inclusion in order to address the multiple vulnerabilities faced by the ultra-poor.We don’t only provide the assets and the training, but a suite of wrap-around services that together helps to address the multiple layers of vulnerability of the ultra-poor. To us “graduation” means reaching that point of self-reliance and resilience where they are able to sustainably increase their income, consumption, assets, and savings. It means going from despair to hope.
The programme—which costs about USD 500 per household—only lasts two years, but the impact goes well beyond that. Researchers from the London School of Economics found that seven years after entering the programme, 92 percent of participants had maintained or increased their income, assets and consumption. Abhijit Banerjee and Esther Duflo, the MIT economists who won the Nobel Prize last year, led multi-country evaluations that identified graduation as one of the most effective ways to break the poverty trap.
Approximately 20 million people are still trapped in poverty in Bangladesh. What types of assistance are needed to ensure that the ultra-poor people can break out from poverty and move towards sustainable livelihoods?
I think we can take heart from the fact that Bangladesh has been able to make tremendous gains on poverty reduction since independence. We have shown that between government, development partners and civil society actors, we have the commitment, resources and the know-how to lift massive numbers of people out of poverty.
Of course, there are evolving phenomena such as the increasing urbanisation of poverty and the havoc on lives and livelihoods wreaked by the adverse impacts of climate change, that will continue to throw up difficult and stubborn challenges. What we need now is a commitment to work together, to make bold investments on human capital and to leverage the comparative strengths of the development organisations and the government to make a sustained push to end extreme poverty by 2030. We are among the few large countries in the world that has the ability to achieve the SDG 1 target. We should not let this opportunity slip away by not effectively leveraging our knowledge and resources.
According to the Planning Commission (PC), the recent nationwide closure of all economic activities for two-and-a-half months doubled extreme poverty in Bangladesh, raising the number of the country’s ultra-poor from 10.5 percent of the population to 20.5 percent as of June. How would you evaluate this finding?
It is clear from what we are seeing on the ground and hearing from our research partners that Covid-19 has had a dramatic and systems-wide impact. According to a recent study by Brac Institute of Governance and Development (BIGD) and Power and Participation Research Centre (PPRC), three indicators of vulnerability underscore the impact seen: i) a steep drop in income; ii) extreme uncertainty of livelihoods; and iii) a contraction in consumption. Our research and field experience suggest that the urban poor have been more severely impacted. This is of particular concern because social protection programmes in Bangladesh have mainly focused on the rural poor. The study also suggests that the economic shock has caused 77 percent of vulnerable non-poor from the informal sector to fall below the income poverty line.
There are several lessons that we must take away from this crisis, but two I would like to mention in particular. First, we need robust urban social protection programmes that can be quickly and efficiently deployed; and second, we need a stronger focus on building sustainable and resilient livelihoods for people in poverty. The amount of money the government already allocates each year for social security programmes can be much better spent through more effective targeting and better programme design that build resilience instead of dependence.
How important is innovation in eradicating extreme poverty from the country? Can you give us some examples of innovative approaches to fighting poverty?
Poverty cannot be addressed without approaching solutions creatively and from different angles. Every major success we’ve had can be traced back to a culture of innovation and learning. These range from going door-to-door to teach mothers how to make oral rehydration saline themselves during the 1980s, to teaching digitally illiterate women to save more securely and conveniently using bKash.
The graduation approach, for example, is considered to be one of the most exciting innovations in development in the last 20 years. For a long-time people thought that the ultra-poor were too weak and vulnerable to be economically active, so they were treated as passive recipients of aid. But simply being in a cash transfer programme does little to build agency or improve poor people’s participation in more sustainable development activities. The graduation approach has fundamentally changed how we look at the ultra-poor, from passive recipients of aid to active participants in their own development.
How important is agency and security of women and ending violence against women to achieve SDG 1?
Promoting gender equality is at the core of everything we do. Our founder used to continuously remind us that we cannot talk about real development until we can change a culture that systemically subjugates 50 percent of its people. He would tell us in the last years of his life that gender equality remained the unfinished agenda of his life’s work. Ending violence against women and building agency are extremely important, but not enough. We have to tear down the many economic, social and cultural barriers that have been artificially erected by patriarchal societies everywhere, which prevent women from utilising their full talent and reaching their full potential. At Brac, we believe that women have to be at the very centre of development, as agents of change of their own lives, in their families and in their communities.
The full text of the interview has been published in the online version.