Amid Covid-19, economic resilience and poverty alleviation are more important than ever

May 8, 2020
WORTH members in Tanzania try out the myWORTH app before Covid-19. (Photo: Brian Clark/Pact)

Pact has been working to alleviate poverty for almost five decades. During this time, the world has seen significant progress. Over the past 40 years, the percentage of people living in extreme poverty has fallen from about 40 percent globally to less than 10 percent.

Key to this achievement has been strengthening capacity in impoverished communities to generate income and withstand economic shocks. Pact’s WORTH model brings women together in groups of about 25 to start their own microbanks. WORTH members make small savings deposits at weekly meetings, and when group funds grow large enough, members can take out low-interest loans to start small businesses. Concurrent to this, Pact provides trainings in literacy, numeracy and entrepreneurship. More than 1 million women from Nepal to Tanzania have participated in the WORTH program since its inception 21 years ago. 

Mines to Markets is another Pact program that reaches tens of thousands of vulnerable people each year. The program helps artisanal and small-scale miners work more safely, increase their income, and save. These are laborers who dig tin, tantalum, tungsten, gemstones and more from sites using basic tools and their own hands. They are some of the most vulnerable workers on the planet, their labor a significant economic driver of development in communities from Asia to Africa.

Covid-19 demonstrates the value of livelihoods programming as well as tests it. Recently the World Bank projected that the pandemic will increase global poverty for the first time since 1998 and push 50 million additional people into extreme poverty, mostly in Sub-Saharan Africa. The World Food Programme is warning that an additional 265 million people could be pushed into acute food insecurity by Covid-19, almost doubling last year’s total.

Like much of the world, communities where Pact works are feeling the strain. The pandemic is limiting movement, upending livelihoods, breaking supply chains and fracturing markets. In Liberia,  entrepreneurs who Pact has supported have closed their shops. In Kenya, police are shuttering mine sites and gold prices are decreasing. 

A small-scale miner at work in Ethiopia. (Photo: Eddie Byrd/Pact)

Already we are seeing communities fall back on options we helped them gain. For example, many WORTH members are taking payouts, using savings they never had before the program to help their families meet basic needs. Last year alone, more than 1 million people raised their income with Pact’s help – most of them women. This means many more families have resources to draw upon. Across Pact’s livelihoods programming, we focus on building economic resilience to unforeseen shocks exactly such as this one, especially among informal and rural workers.

This will not be enough for the most vulnerable, many of whom were already struggling with food insecurity, limited options for earning income, difficulty affording medical care and more. For this reason, like many of our peer organizations, Pact is working to quickly adapt our programming to help the people we serve meet their economic needs without putting their health at risk.

In the immediate term, we are exploring the possibility of connecting vulnerable households and microenterprises we already serve with unconditional cash transfers. In Ukraine, our partners are delivering food and supplies to reduce stress in households at high risk for family violence. In Colombia, where our programs have reduced child labor in mining, we are exploring ways to ensure those gains are not lost because of new economic hardship. In Cambodia, where we support women entrepreneurs, we are moving business trainings online and providing airtime credit where needed to help microenterprises survive. We are quickly working to scale up myWORTH, a digital version of our savings group program, so that groups can continue to function until they can safely meet in person.  

For the longer term, we are generating plans for recovery so that we can more thoroughly assess and respond to communities’ needs as soon as health threats decrease and it is safe to do so. This could include market assessments to understand and address broken supply chains, community roundtables to co-design new programs to meet changed market needs, vocational and business training for those who lost employment, and the establishment of business development centers and grant competitions for new and green businesses.

Especially now, we are proud of the work that Pact has done over the years with our many partners and local communities to build economic resilience and lay strong foundations for navigating shocks such as Covid-19. Yet we also know this pandemic is shaking those foundations as never before. Around the world, we will continue working hand in hand with communities to overcome whatever challenges we must and fulfill Pact’s promise of creating communities that are thriving and resilient, where all people are heard, capable and vibrant.