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A Tool to Measure Poverty

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A Tool to Measure Poverty IN THIS ISSUE: A SPECIAL FEATURE PAGE 3 B NEWS FROM AROUND THE WORLD PAGE 4 C SPOTLIGHT ON OUR SUPPORTERS PAGE 5 D VOICES FROM THE FIELD PAGE 6 FALL-WINTER // 2013-14 Income and Health and Housing and Happy Employment Environment Infrastructure Families 69 18 20 PERCENT PERCENT PERCENT A TOOL TO MEASURE POVERTY IN PARAGUAY IS ALSO HELPING Reported to be below Reported having access Reported having no the poverty threshold to drinking water in access to electricity TO ELIMINATE IT their homes BY JORDAN CORIZA Education and Organization and Interiority and Culture Participation Motivation 29 56 39 PERCENT PERCENT PERCENT Reported being unable Reported having some Reported having complete to read or write Spanish or full capacity to solve autonomy and ability to problems and conflicts make decisions Scorecard for Curuguaty, a town in eastern Paraguay, where Fundación Paraguaya is working with indigenous groups, rural residents and local business leaders to assess and eliminate poverty uruguaty is a Paraguayan town in the eastern department of Canindeyú. income, strengthen existing jobs and create new ones. The idea worked. But If you’ve heard of it – which you almost certainly haven’t – it’s probably like similar programs in Latin America, Fundación Paraguaya dedicated its early C because its population, which is poor and mostly rural, has been surveyed years to achieving financial self-sufficiency. Doing so required the adoption of and plotted on a map using Fundación Paraguaya’s color-coded ‘Poverty Stoplight,’ what some refer to as a minimalist strategy: focusing solely on providing access an innovative poverty measurement tool that has helped nearly 18,000 families to credit rather than the integrated strategy of urban and rural development overcome economic poverty since the program began in 2010. programs that were complex, costly and time-consuming. The underlying assumption was that financial services would help clients increase their incomes But is it a measurement tool or a poverty-elimination strategy? It is both. In a and that they, in turn, would take care of the rest. As long as clients were Huffington Postarticle titled “Measure? Alleviate? No, Eliminate Poverty,” Elisabeth repaying their loans, Fundación Paraguaya considered their knowledge and Rhyne writes, “The beauty of Fundación Paraguaya’s concept, christened Ikatú skills sufficient to manage their microbusinesses. (“Yes we can” in Guaraní), is that although it starts out like a poverty measurement program, it turns into a much more important poverty reduction program.” But Burt wasn’t happy with his institution’s minimalist approach. “We are one of the very few Latin American microfinance institutions that has not become The man behind it all is Fundación Paraguaya’s founder Martín Burt. He regulated financial institutions. And that is because Fundación Paraguaya is contends that new methodologies and technologies are needed to address dedicated to social innovation and social entrepreneurship. We believe our role seemingly intractable poverty issues. The Poverty Stoplight is such a tool. is to develop and disseminate new methodologies to eliminate poverty.” In Burt’s words, it uses cheap, easily available technology to help people understand complex poverty problems, to simplify previously cumbersome THE IDEA IS BORN AT SCHOOL processes and to implement effective poverty elimination strategies. Burt was convinced that if Fundación Paraguaya invested in education, he Assisted by a group of local business and civil society leaders and by Accion’s very might be able to help the next generation of Paraguayans overcome poverty. own Steve Gross and Bill Burrus, Burt started Fundación Paraguaya in 1985. It was So in 1995 he brought nonprofit Junior Achievement’s model of deploying Paraguay’s first microenterprise development program. The organization provided trained volunteers to elementary and high school classrooms to deliver an loans and training to help the poor in the informal sector increase their family entrepreneurship-focused, hands-on curriculum. The program proved to be PAGE 2 ACCION VENTURES // FALL-WINTER 2013-14 ACCION VENTURES // FALL-WINTER 2013-14 PAGE 3 SPECIAL FEATURE Happy Families CONTINUED extremely popular. Burt partnered with business leaders to sponsor and expand the program to some “Weknewthatmicrofinanceworked, Bruce Tippett: of the poorest schools throughout the country, many attended by the notjustbecauseofitsfinancial children of Fundación Paraguaya’s The Father of clients. Thousands of poor students strategiesandstrengths,butalso learned to write business plans and becauseittappedintopoorclients’ set up for-profit microbusinesses. Microfinance And when, a few years later, Burt dignity,self-respectandself-reliance.” was approached by a group of La WHEN ACCION MADE ITS FIRST MICROLOAN 40 YEARS AGO, Salle Christian Brothers asking MARTÍN BURT Fundación Paraguaya to take over FOUNDER, FUNDACIÓN PARAGUAYA NOBODY THOUGHT IT WOULD BE SUCH A BIG DEAL their bankrupt 60-hectare agricultural high school for poor rural youth – San Francisco Agricultural School – Burt A LESSON FROM TOLSTOY than insufficient income. Second, and over-the-counter pharmaceutical If, after having heard Bruce Tippett’s account of his work with Accion in its early days, saw an opportunity to combine Anna Karenina’s opening line reads, poverty doesn’t affect families products, that Fundación Paraguaya you were to ask us who invented microfinance, we would most certainly say he did. Fundación Paraguaya’s two skill sets, “Happy families are all alike; every uniformly; each family has a different is working to turn into client Today, 40 years after that momentous endeavor, he explains the genesis of a movement financial inclusion for the poor and unhappy family is unhappy in its set of poverty-related problems to microfranchise opportunities. that has left an indelible mark on the course of economic development and touched the entrepreneurship training, and apply own way.” Burt realized that the same resolve in order to overcome poverty. lives of hundreds of millions of people. The data from the survey also provide them to the field of education. could be said for poverty: every poor Third, the main protagonists in the baseline against which to measure WHEN AND HOW DID YOU COME TO ACCION? family is poor in its own way. The eliminating poverty must be the poor In a case study that appears in each client’s progress in overcoming Another Accion fellow, Bill Cloherty, and I worked for People to People tricky part would be to understand themselves. Institutions, however far- the Massachusetts Institute of poverty. Finally, the data are geo- International in the mid-sixties. Accion came to us and asked if we could the ways in which each family is poor, sighted or well funded, do not have Technology’s innovations magazine, referenced on a Google map and made do some recruiting for them. We did, and we ended up recruiting ourselves! A TRUE PIONEER Now in his seventies, Bruce Tippett helped Accion lay define what it means to be not poor, sufficient insight into the poverty- Burt writes, “We knew that available to NGOs and government I joined Accion in 1965 and went to Venezuela, which was the only place down roots in Brazil and make its first microloan in 1973, helping to create quantify all of that, qualify it and then related problems of individual microfinance worked, not just agencies to implement interventions where Accion worked at that time. an industry that would touch the lives of millions of people worldwide come up with an exit strategy. families or sufficient resources to because of its financial strategies such as vaccination events, blood HOW DID YOU END UP IN BRAZIL? permanently eliminate poverty on and strengths, but also because it Burt and his team organized 50 pressure screenings or getting a free I spent a year and a half in Venezuela working half-time in the office fundraising their behalf. Fourth, a poverty- of years. But when we started to do something else, there was a good deal of tapped into poor clients’ dignity, poverty indicators, such as jobs and wheelchair to a person in need. and half-time in a local Caracas barrio in community development. I was then elimination strategy must be scalable, jealousy on the part of those local organizations. So when it came time for us self-respect and self-reliance.” access to water, into six dimensions: drafted by the head of Accion, Joe Blatchford, to go to Brazil to start a local which means that it must cost very This level of coordination happened to think about experimenting with microlending, neither Ação Comunitária 1) income and employment, 2) health community-development program. I went there in November of 1966 and He applied what he knew worked little to implement and, ultimately, in Curuguaty. in Rio nor in São Paulo was willing to take the risk to try it out under their and environment, 3) housing and was part of a four-man team that helped set up Ação Comunitária do Brasil in microfinance to the high school. must be financially self-sustaining. umbrella. Most people thought we were completely nuts to try to loan money infrastructure, 4) education and culture, PUTTING CURUGUATY ON THE MAP Guanabara in Rio de Janeiro. After being there for about four to five months, Joe Not only did the new curriculum and to poor souls in favelas. So we decided to go to Recife, which was high-profile 5) organization and participation and After completing the 20-minute, Tablets in hand, Fundación asked me to go to set up another organization, this time in São Paulo. I spent products sold by the 15 school-based in the international-development community. 6) interiority and motivation. They 50-question pictorial survey on a Paraguaya loan officers canvassed a couple of years between Rio and São Paulo, and those are both successful microenterprises run by teachers and also identified three conditions for touch-screen device (developed pro the outskirts of Curuguaty to community-development operations, similar to Venezuela.
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