Engaging the Extreme Poor People with Private Sector for Livelihood Resilience

M. Mizanur Rahman^1,

¹NOHA Mundus Scholar at the Uppsala University, Sweden and Post Graduate Fellow, Stephen Zuellig Graduate School of Development Management, Asian Institute of Management, Philippines

Cite this paper:
M. Mizanur Rahman. Engaging the Extreme Poor People with Private Sector for Livelihood Resilience. American Journal of Rural Development. 2014; 2(4):59-67. doi: 10.12691/ajrd-2-4-1

Abstract

Bangladesh made significant improvement in reducing poverty since its independence in 1971 however, diverse developmental challenges remain. The role of public, private and non-governmental actors in poverty reduction has been widely recognized in the literature. Numerous private sector initiatives are proliferating within NGOs’ project portfolios as an opportunity for an innovative approach to poverty reduction. Despite this progress, studies have shown that the degree to which households above the poverty remain highly vulnerable and could slide back into poverty when faced with an economic shock such as loss of working opportunity, food price inflation, illness, natural disasters and other crises. Therefore, beyond attention to poverty alleviation, addressing households’ resilience is crucial to make this progress sustainable. Using a case study approach, this study investigates how a private sector intervention undertaken by NGOs effectively helps the extreme poor households build their livelihood resilience. The case study considered in this research is based on the Social and Economic Transformation of the Ultra-poor (SETU) project of CARE Bangladesh regarding its collaboration with Classical Handmade Products-BD (CHP-BD), an export oriented rug-manufacturing company. Under this collaboration in SETU (phase-1), nearly 270 females from extremely poor households (i.e. SETU project beneficiaries) engaged in rug production of CHP-BD who could create resilient livelihoods and moved them from lower productivity housemaid works to higher productivity rug factory working though they had to face income shock due to a sudden closure of the factories for a couple of months. The study analyses the coping strategies adopted by the workers during the closure. It explores the ways in which workers learnt from this event and changed their behaviour in terms of savings, income diversification and strengthening social connections. The author also analyses how this change in behaviour helps them build livelihood resilience towards potential shocks.

Keywords:
resilience livelihood private sector poverty rug factory income diversification productive asset

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