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Graduation from Poverty versus Graduating from Social Protection

Fabio Veras Soares' (IPC-IG) presentation at the Transfer Project Workshop in Arusha, Tanzania on 2nd April 2019.

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Graduation from Poverty versus Graduating
from Social Protection – setting the scene
and discussing the evidence
Fabio Veras Soares – IPC-IG
What happened to extreme poverty in the past 25 years…
1
What happened in terms of the regional distribution of the extreme poor…
2
key messages from recent figures:
 Regional changes:
1990: East Asia and Pacific;
2000: South Asia
2010: Sub-Saharan Africa (SSA) demographic pattern (total number of poor increases, despite
fall in poverty rates)
 Extreme poverty has decreased: from 40% to 10% (1990-2015), but pace of the reduction
has slowed down… and so has growth.
 Extreme poverty has increased in some SSA countries – lack of links between growth and
income and consumption of the poorest - and in fragile contexts.
 SSA countries have grown less than South Asia and South East Asia and Pacific
 And the poverty elasticity of growth has been historically lower than these other two regions
and poverty still largely a rural phenomenon.
3
The SDG framework, agenda and ambition
Big challenge to achieve SDG 1:
Target 1.1: Eradicate extreme poverty in all its forms and everywhere, currently measured as
people living on less than $1.90 a day
Target 1.2: Reduce at least by half the proportion of men, women and children of all ages living
in poverty in all its dimensions according to national definitions
Target 1.3: Implement nationally appropriate social protection systems and measures for all,
including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable
Target 1.4: By 2030, ensure that all men and women, in particular the poor and the vulnerable,
have equal rights to economic resources, as well as access to basic services, ownership and
control over land and other forms of property, inheritance, natural resources, appropriate new
technology and financial services, including microfinance.
Target 1.5: By 2030, build the resilience of the poor and those in vulnerable situations and
reduce their exposure and vulnerability to climate-related extreme events and other economic,
social and environmental shocks and disasters
1A – domestic resources (fiscal space) and 1B – policy frameworks (coordination and
coherence)
4
What are the policies that will help the poor to “graduate” from poverty… and
achieve the SDG targets?
Pro-growth policies would be the obvious answers given the past experience…
But are the poor and the vulnerable well equipped to profit from (any) growth
process?
In SSA poverty response to growth has been lower than elsewhere, which may imply that
growth will not be enough.
Policy package:
 access to health care, nutrition, education and other basic services;
 support to small scale agriculture and smooth transitions to the labour market in urban
areas (training, job intermediation) , particularly for the youth,
 Expanding social protection (SDG 1.3.1) both non-contributory and contributory
All these public policies are important to equip and support the poor to benefit and
contribute from the growth process and then graduate from poverty.
5

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Graduation from Poverty versus Graduating from Social Protection

  • 1. 0 Graduation from Poverty versus Graduating from Social Protection – setting the scene and discussing the evidence Fabio Veras Soares – IPC-IG
  • 2. What happened to extreme poverty in the past 25 years… 1
  • 3. What happened in terms of the regional distribution of the extreme poor… 2
  • 4. key messages from recent figures:  Regional changes: 1990: East Asia and Pacific; 2000: South Asia 2010: Sub-Saharan Africa (SSA) demographic pattern (total number of poor increases, despite fall in poverty rates)  Extreme poverty has decreased: from 40% to 10% (1990-2015), but pace of the reduction has slowed down… and so has growth.  Extreme poverty has increased in some SSA countries – lack of links between growth and income and consumption of the poorest - and in fragile contexts.  SSA countries have grown less than South Asia and South East Asia and Pacific  And the poverty elasticity of growth has been historically lower than these other two regions and poverty still largely a rural phenomenon. 3
  • 5. The SDG framework, agenda and ambition Big challenge to achieve SDG 1: Target 1.1: Eradicate extreme poverty in all its forms and everywhere, currently measured as people living on less than $1.90 a day Target 1.2: Reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions Target 1.3: Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable Target 1.4: By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance. Target 1.5: By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters 1A – domestic resources (fiscal space) and 1B – policy frameworks (coordination and coherence) 4
  • 6. What are the policies that will help the poor to “graduate” from poverty… and achieve the SDG targets? Pro-growth policies would be the obvious answers given the past experience… But are the poor and the vulnerable well equipped to profit from (any) growth process? In SSA poverty response to growth has been lower than elsewhere, which may imply that growth will not be enough. Policy package:  access to health care, nutrition, education and other basic services;  support to small scale agriculture and smooth transitions to the labour market in urban areas (training, job intermediation) , particularly for the youth,  Expanding social protection (SDG 1.3.1) both non-contributory and contributory All these public policies are important to equip and support the poor to benefit and contribute from the growth process and then graduate from poverty. 5
  • 7. Isn’t there a magic bullet that encapsulates and fast-track all these elements? Doesn’t the graduation approach do this? What is the graduation approach/model? An integrated set of sequenced interventions over a pre-defined period of time offered to the poorest individuals in a community with the aim to engage them with a sustainable income generating activity (IGA) so that they can improve their livelihoods in a sustainable manner. Graduation interventions usually select their beneficiaries through participatory approaches and the use of wealth ranking applied at the community level. It also has a set of exclusion and inclusion criteria that vary according to the context. The set of interventions vary according to the context, but the usual package includes: 1) training on IGA, life skills and financial literacy; 2) consumption support; 3) asset transfers; 4) coaching; 5) savings groups and/or incentives to save. 6
  • 8. What do evaluations say? • Earlier impact evaluations of BRAC’s CFPR in Bangladesh have shown impacts on a series of dimensions: per capita income, food security, occupational shifts towards self-employment; asset holdings; savings, but little or no impact on school enrolment and women’s empowerment. • Similar findings were reported by the robust impact evaluations undertaken by Banerjee et al. (2015) for pilots in six different countries, including Ethiopia and Ghana in Africa. • But there were cases of failure of the implementation or lack of impacts: In two cases were positive impacts were not found, it was due to: (i) a focus on a single type of type of asset – a livestock disseminated by diseases (Honduras) and (ii) a tight labour market that made wage employment more attractive than the self- employment IGA (India). 7
  • 9. Everybody get out of poverty with a graduation project? • Impacts are usually reported as averages. Not everybody benefits and evolve on the same way: Banerjee et al. (2015) show that impacts on income, consumption, revenues are increasing with the quantiles, meaning that well-off participants in the baseline experience larger impacts than the worse off. • In addition, as also shown by Banerjee et al. (2015) impacts despite being “large” may not be necessarily what one has in mind as getting out of poverty: Beneficiaries graduate from ultra-poverty into poverty and still face some constraints (credit constraints). • Exclusion criteria leave many people or households out and spillover effects according to Banerjee et al. (2015) do not seem to be important. 8
  • 10. Are graduation model substitutes or complements for social assistance or non- contributory programmes?  Social protection instruments offer protection against risks and contingencies that can affect any person throughout her life which implies that… beneficiaries of social protection programmes shall graduate from programmes, but into other forms and levels of protection.  Graduation components if not temporary and offered as an permanent public policy do have a role in social protection systems and in eradicating extreme poverty: as they ensure long term access to services with a view to ensuring social and economic inclusion: training, asset transfer and/or investment grants, health care, counseling, etc. 9