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Income Generation and Poverty Reduction for Income Generation and Poverty Reduction for Development Development

22 February 2010 22 February 2010 Mekong InstituteMekong Institute

Khon Kaen, Thailand Khon Kaen, Thailand

Excerpted from Dr. Han-Dieter Bechstedt Presentation 2007Excerpted from Dr. Han-Dieter Bechstedt Presentation 2007

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Development and Poverty (1)Development and Poverty (1)

What is the What is the relationship relationship

between between development development and poverty?and poverty?

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Development and Poverty (2)Development and Poverty (2)

1.1. Poverty means lack of development Poverty means lack of development

2. Development means getting rid of poverty2. Development means getting rid of poverty

3. Development can occur without poverty 3. Development can occur without poverty alleviationalleviation

4.4. Development implies wealth creation for Development implies wealth creation for some, social dislocation for otherssome, social dislocation for others

5.5. It is the rich and powerful who decide It is the rich and powerful who decide about developmentabout development

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Development interventions are aimed at: Development interventions are aimed at: addressing the need of the target community, addressing the need of the target community,

improving the livelihood of target community,improving the livelihood of target community,

enhancing the quality of the environment (or benign to enhancing the quality of the environment (or benign to environment) environment)

…… These are well planned and implemented in accordance These are well planned and implemented in accordance

with the planwith the plan

BUT, why many development interventions turn out to BUT, why many development interventions turn out to be a failure?be a failure?

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Example 1:Example 1: Green Revolution Agriculture?Green Revolution Agriculture?

Green revolution was a movement to increase yields (rice, Green revolution was a movement to increase yields (rice, wheat, maize) by using:wheat, maize) by using:

New crop cultivars (HYV)New crop cultivars (HYV) IrrigationIrrigation FertilizersFertilizers PesticidesPesticides MechanizationMechanization

Increased food production by 1,000+%Increased food production by 1,000+% Common Assumption:Common Assumption: Increased food production would Increased food production would

improve food security situation in developing worldimprove food security situation in developing world

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Post green revolution problems:Post green revolution problems:

Not every farmer has access to:Not every farmer has access to: new varieties, fertilizers, new varieties, fertilizers, irrigation, equipment, and pesticides.irrigation, equipment, and pesticides.

If accessible, many farmers If accessible, many farmers can’t affordcan’t afford these these

Environmental issues:Environmental issues: Salinization, drying up of aquifers, Salinization, drying up of aquifers, top soil erosion, soil nutrient depletion, pesticide resistant top soil erosion, soil nutrient depletion, pesticide resistant varietiesvarieties

Distribution problem:Distribution problem: poor transportation in many poor transportation in many countriescountries

Obviously, green revolution could not address the Obviously, green revolution could not address the problems of: Complex Diverse and Risk Prone Agriculture problems of: Complex Diverse and Risk Prone Agriculture & Smallholders farming systems & Smallholders farming systems

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Example 2:Example 2:

Small-scale Aquaculture in ThailandSmall-scale Aquaculture in Thailand:: Small-scale integrated Small-scale integrated duck/fish system in system in

Thailand:Thailand: AIT Experience: AIT Experience: System functioned well during the project System functioned well during the project once project was withdrawn most units were abandoned once project was withdrawn most units were abandoned because of the constraints in input supply and marketing because of the constraints in input supply and marketing

eggseggs

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Poverty Analysis (1/1)

What is What is

povertypoverty ? ?

How can we How can we best define best define poverty?poverty?

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Poverty Analysis (1/2)

How best to define poverty?How best to define poverty?

Definitions given by official versus those by Definitions given by official versus those by the poor themselves (example from Lao the poor themselves (example from Lao PDR)PDR)

Poverty as a multidimensional conceptPoverty as a multidimensional concept

Poverty definitions that focus on Poverty definitions that focus on consumption, poverty linesconsumption, poverty lines

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Poverty Analysis (1/3)

Overall poverty situation, rural povertyOverall poverty situation, rural poverty

1.2 billion people in the world consume less than a 1.2 billion people in the world consume less than a ‘standard’ dollar a day (‘dollar poverty’)‘standard’ dollar a day (‘dollar poverty’)

Asia and the Pacific Region accounts for roughly two Asia and the Pacific Region accounts for roughly two thirds of the total poorthirds of the total poor

About 75% of the world’s dollar-poor work and live About 75% of the world’s dollar-poor work and live in rural areas in rural areas

Poverty is disproportionately concentrated in the rural Poverty is disproportionately concentrated in the rural areas, between 80 and 90% of the poor are rural in all areas, between 80 and 90% of the poor are rural in all the major countries of the region.the major countries of the region.

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Poverty Analysis (1/4)

What areWhat are

dimensions dimensions

of poverty?of poverty?

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Poverty Analysis (1/5)

Dimensions of povertyDimensions of poverty

Lack of opportunitiesLack of opportunities DisempowermentDisempowerment High level of risks High level of risks

and vulnerabilityand vulnerability

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Poverty Analysis (1/6)

Who are the poorWho are the poor ??

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Poverty Analysis (1/7)

Who are the poor?Who are the poor?

Women, often part of female-headed householdsWomen, often part of female-headed households Landless, or marginal farmers and tenantsLandless, or marginal farmers and tenants Various indigenous peoples and internally displaced Various indigenous peoples and internally displaced

persons (example from Lao PDR, Vietnam)persons (example from Lao PDR, Vietnam) Socially excluded people like the castes, victims of Socially excluded people like the castes, victims of

landmines, disabled, war veterans landmines, disabled, war veterans Pastoralists and coastal fishermenPastoralists and coastal fishermen

Those who live in the poorest places in the region with Those who live in the poorest places in the region with resource limitations:resource limitations:

Mountainous or hilly areasMountainous or hilly areas Marginal and degraded landsMarginal and degraded lands Rain-fed cropping areasRain-fed cropping areas Many coastal areasMany coastal areas

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Poverty Analysis (1/8)

What is the What is the difference difference between between

absolute and absolute and relative relative

povertypoverty??

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Poverty Analysis (1/9)

Extreme poverty: income less than US$ 1 Extreme poverty: income less than US$ 1 per dayper day

GNP per capita: average material living GNP per capita: average material living standard of a nation’s peoplestandard of a nation’s people

What are the weakness of GNP per capita What are the weakness of GNP per capita measurements? measurements?

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Poverty Analysis (1/10)

Weakness of GNP per capita measurements: Weakness of GNP per capita measurements:

says nothing about the distribution of wealth says nothing about the distribution of wealth between rich and poorbetween rich and poor

underestimates subsistence, entitlements and underestimates subsistence, entitlements and collective goodscollective goods

overestimates what is commercialized, overestimates what is commercialized, individualized, organizedindividualized, organized

inequalities within households remain invisibleinequalities within households remain invisible

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Poverty Analysis (1/11)

Relative poverty and relative deprivationRelative poverty and relative deprivation

‘‘Individuals, families and groups in the population can be said to Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of be in poverty when they lack the resources to obtain the types of diets, participate in the activities and have the living conditions diets, participate in the activities and have the living conditions and amenities which are customary, or at least widely accepted and amenities which are customary, or at least widely accepted and approved, in the society which they belong. Their resources and approved, in the society which they belong. Their resources are so seriously below those commanded by the average are so seriously below those commanded by the average individual or family that they are, in effect, excluded from individual or family that they are, in effect, excluded from ordinary living patterns, customs and activities.’ ordinary living patterns, customs and activities.’ (Townsend 1979)(Townsend 1979)

World Bank: US$ 14.40 per day (1985), official US income poverty line; World Bank: US$ 14.40 per day (1985), official US income poverty line; calculated in terms of the minimum required to obtain what is needed to calculated in terms of the minimum required to obtain what is needed to participate in the everyday life of US societyparticipate in the everyday life of US society

Amartya Sen: Poverty = inability to take full part in human society, Amartya Sen: Poverty = inability to take full part in human society, resulting from lack of choices and capabilities rather than simply material resulting from lack of choices and capabilities rather than simply material living standardsliving standards

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Poverty Analysis (1/12)

Note:Note:

What is poor is different in different societies What is poor is different in different societies and different cultures, depends on traditions, and different cultures, depends on traditions,

value system as well as economic factorsvalue system as well as economic factors

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Poverty Analysis (1/13)

Who are the poor in your country Who are the poor in your country and why are they poor?and why are they poor?

(Working Groups)(Working Groups)

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Poverty Analysis (2/12)

What factors What factors have lead to have lead to poverty and poverty and

marginalisationmarginalisation more recently?more recently?

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Factor that lead to poverty and Factor that lead to poverty and marginalisationmarginalisation more recently more recently

Major Major interacting factors contribute to the process of marginalization or interacting factors contribute to the process of marginalization or impoverishment: impoverishment:

Anti-poor national policies (policies that favor urban areas, lowlands, Anti-poor national policies (policies that favor urban areas, lowlands, export crops, industrial/manufactural development, taxation, weak export crops, industrial/manufactural development, taxation, weak social services; examples from Thailand, Lao PDR )social services; examples from Thailand, Lao PDR )

Land planning, land allocationLand planning, land allocation Conservation policiesConservation policies Discrimination against traditional ways of cultivation (subsistence Discrimination against traditional ways of cultivation (subsistence

production, swidden agriculture)production, swidden agriculture) Discrimination against ethnic minoritiesDiscrimination against ethnic minorities Lack of participation in decision-makingLack of participation in decision-making

Poverty is not endemicPoverty is not endemicPoverty is a discourse, a conceptPoverty is a discourse, a concept

Poverty Analysis (2/13)

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Poverty Analysis (2/14)

What means What means ‘Feminisation ‘Feminisation of poverty’?of poverty’?

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Women are making up an ever increasing share of Women are making up an ever increasing share of the world’s poor as a result of recession and cuts the world’s poor as a result of recession and cuts in public spending in public spending

More women than men are poorMore women than men are poor Poor women suffer more from capability Poor women suffer more from capability

deprivation than poor mendeprivation than poor men The severity of poverty is higher for womenThe severity of poverty is higher for women Women face greater hardship in lifting themselves Women face greater hardship in lifting themselves

and their children out of the poverty trapand their children out of the poverty trap There are poor women even within non-poor There are poor women even within non-poor

families.families.

Poverty Analysis (2/15)