Let’s Rid the Globe of Ultra-Poverty

7 December, 2017

Original source: CFI

When you hear the word “ultra-poverty”, what does it mean to you? Here’s how one woman described it, after she was able to make her way out of it:

“When you live in ultra-poverty, you are a person who has fallen into a hole with no light. No one recognizes you. You are humiliated. You endure all your pain by yourself. Society has forgotten you. If you don’t find someone to take your hand and help you out of that hole, that is where you will stay.”

Ultra-poverty is not the same thing as “extreme poverty” as defined by the World Bank, which includes anyone living under $1.90/day purchasing power parity. Rather, according to most of us who work on ultra-poverty, it looks like this: in ultra-poor families, everyone goes without food for days at a time, children aren’t in school and have no access to health care, and the family has no productive assets to make a living – no land, no livestock, no job, no small commerce.

Around the globe, 193 nations have committed to Sustainable Development Goal #1: ending poverty in all its forms by the year 2030. That means ending ultra-poverty too. Can we do it? There is a lot of evidence to suggest that we know how to do it. The evidence can be found in the Science magazine issue published 15 May 2015 or in the Policy in Focus issue of July 2017. The programs described in these documents, usually referred to as graduation programs for the ultra-poor, have been proven to work, especially when integrated into a country’s social protection strategy. Graduation programs are characterized by their: (1) time-bound nature, usually 24-36 months of direct assistance to a family; (2) carefully sequenced, holistic programming combining social assistance, livelihoods training and financial services; (3) the “big push” they provide the family, often in the form of a transfer of productive assets; and (4) the mentoring and staff accompaniment participants receive.

This approach to eliminating ultra-poverty was originally developed by BRAC, but it has now been tested in more than a dozen countries with differing cultures, economies and implementers. The conclusion of a series of randomized trials in six countries, as described in the Science article, was that “graduation causes broad and lasting economic impacts,” including significant increases in household consumption, self-employment income, food security, asset holdings and savings. And these improvements continued 3 years after the program had ended. These effects were consistent across multiple contexts and implementers. Finally, it was concluded that the long-run benefits for the ultra-poor outweighed the costs of the program.

There may be other poverty eradication programs that can work as well (such as conditional or non-conditional cash transfer programs or universal basic income schemes) though the evidence is not yet in on them, especially in terms of their impact on ultra-poverty. I have my doubts that they are sufficient for many of those living in ultra-poverty. There is, however, evidence that when the components of graduation – such as the mentoring and the consumption assistance for a brief period of time – are added to other programs, such as subsidized loan programs or apprenticeship-type programs for young people with limited education, the results can be powerful.

Another reason that I think the goal is achievable is that the concentration of ultra-poverty is in just a few countries. RESULTS and Uplift have discovered that 80 percent of the world’s 394 million people living in ultra-poverty are concentrated in just 14 countries: Bangladesh, Burkina Faso, Chad, Democratic Republic of Congo, Ethiopia, Guinea, India, Niger, Nigeria, Pakistan, Somalia, South Sudan, Tanzania, and Uganda. Those countries represent all the countries that have more than 8 million people living in ultra-poverty and/or more than 49 percent of their population living in ultra-poverty. This concentration means that targeted intervention and resource allocation directed towards those countries confronting the highest burden could yield extremely high impact.

Unfortunately, most of the high-burden countries earn less than half of the average earnings for all countries with ultra-poverty. In addition, official development assistance (ODA) provided to these countries is less than 1/5 of the world’s ODA. The rest of the world, home to only 22 percent of world’s ultra-poor households, receives 80 percent of the donor community’s assistance. Clearly, this must change . . . drastically. By signing on to the Sustainable Development Goals, donor countries agreed to align their aid policies with the fight against poverty. The challenge will be to hold them accountable for doing just that.

Most of this information and even more can be found in the Global State of Ultra-Poverty (GSUP), recently released by RESULTS and Uplift. The inaugural GSUP was developed as a web-based public good in order to: (1) concretely define the deprivations that constitute ultra-poverty; (2) identify where ultra-poverty is concentrated; (3) identify those countries with the best and worst prospects for ending ultra-poverty; and (4) recommend the most promising multi-sector actions that will be required to end it. The GSUP platform provides an interactive index of the 56 countries where 1 percent or more of the population face ultra-poverty, an in-depth report and expert insights examining current evidence-backed interventions, and specific calls to action for the global community. In its analysis, the GSUP borrows from the methodology that the Oxford Poverty and Human Development Institute use for their Multidimensional Poverty Index (MPI).

Like the authors of the GSUP, I too want to issue a crucial warning that the global community must act urgently across sectors to place ultra-poverty at the head of poverty eradication efforts, not an afterthought. Failing to do so will risk failure in meeting the goal to end poverty. Ending ultra-poverty by 2030 requires that we focus on the most difficult challenges now. As Nelson Mandela observed, “(O)vercoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right; the right to dignity and a decent life. While poverty persists, there is no true freedom.”

The nice thing about the GSUP is that it outlines the pathway to overcoming those challenges through a series of recommendations for each stakeholder group. It calls for:

  • The 14 high-burden countries to identify families that comprise the ultra-poor population and develop new – or amend existing – national-level plans to address their needs;
  • Donor countries and bilateral agencies to prioritize funding for countries with the highest burden of ultra-poverty;
  • The Secretariat of the United Nations to explicitly highlight the need to address the challenges of ultra-poverty, including in its SDG Report, and other U.N. agencies to advocate for proven solutions;
  • The World Bank to specifically address ultra-poverty within country strategies and proactively encourage countries to seek World Bank financing for programs to reach persons in the deepest poverty;
  • Philanthropists to support pilots, innovations, and scale-ups of evidence-backed interventions for the ultra-poor, with emphasis on the 14 high-burden countries identified in this report; and
  • Investors to provide investment capital for the implementation of financing innovations such as impact bonds to accelerate the scaling of ultra-poverty programming, with special prioritization on the 14 high-burden countries identified in this report.

As the GSUP concludes, “For the first time in human history, we stand within sight of ending the worst forms of suffering on the planet. That we must do so is therefore not just a matter of collective economic and social progress, it is our shared moral imperative.”

Back to News