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1.18 Building bridges: Working Out of Poverty

Written by: International Labour Organization

Article Overview: The majority of people in developing countries live and work in the back alleys of the marketplace, the informal economy, the rural subsistence economy and the care economy.This presents a major challenge.

1.18 Building bridges: Working Out of Poverty

The majority of people in developing countries live and work in the
back alleys of the marketplace, the informal economy, the rural subsistence
economy and the care economy.This presents a major challenge.

As many as 4 billion people – two-thirds of the world’s population – live
largely outside formal legal systems, mainly in developing and transition
countries where poverty is most severe. The most fundamental elements of
a market economy, such as respect for contracts and recognition of titles to
property, are often not available to wage workers, self-employed workers or
micro and small businesses in this huge and growing informal economy.

How can we make the most of improved efforts to reduce poverty if
only the tip of the iceberg – the formal economy – is under the influence of
public policy? Likewise, global markets do not respond to the needs of the
poor because with only US$2 a day, they have little influence on markets.

We need to develop appropriate bridging mechanisms, rules and systems.
Decent work is a common framework for a progressive process of upgrading.
The main point is not to impose unattainable standards or
unrealistic goals, but to recognize that decent work has a moving threshold.
It is possible to respect basic standards at all levels of development. Societies
can agree on new goals as circumstances change and put in place a process
to reach them over time. Above all, this calls for new thinking.

A new approach must be based on the reality that most people live and
work in the informal economy not by choice but out of a need to survive.
Wage workers, own-account workers and small businesses in the informal
economy face similar problems of insecurity and vulnerability. Unable to
find other jobs or start businesses in the formal economy, they lack protection,
rights and representation, and often remain trapped in poverty. Especially
in circumstances of high unemployment, underemployment and
poverty where opportunities in the formal economy are scarce, the informal
economy is the only source of income-generating work. Although many
business people operating in the informal economy display extraordinary
creativity, dynamism and innovation, they rarely have the means to cross the
threshold into formal recognition and obtain the security it can provide for
further investment and the creation of more and better jobs.

A sound poverty reduction strategy must place great emphasis on the
participation of working people living in poverty in policies to improve their
lives. The ILO has always stood for the transformative power of organizing:
whether it is used to organize governments, employers or workers, the freedom
for people to band together and develop common strategies and solutions
is fundamental to social progress. How can our tripartite experience be
helpful to facilitate organizing to end poverty in the rural and urban informal
economy?

In addition, just as the property assets of the poorest are too often untitled
and therefore not “bankable” or able to be used as collateral for loans
at regular banks, the knowledge and skills of the poor are not recognized in
the formal market or educational systems. What are the best ways to certify
or accredit the skills of people in the informal economy?

Related Articles
  1.9 Building local development through cooperatives: Working Out of Poverty
  1.5 Skills development for sustainable livelihoods: Working Out of Poverty
  Are You Building Bridges of Influences?
  Bridges and Boundaries
  1.19 Building trust: Working Out of Poverty

Article Tags: back alleys, decent work, developing countries, formal economy, fundamental elements, global markets, informal economy, insecurity, market economy, new approach, new goals, poverty, public policy, small businesses, subsistence economy, tip of the iceberg, transition countries, underemployment, unrealistic goals, vulnerability



Related Forum Posts
Re: Burn all your bridges inorder to succeed?? - [quote="BuzzAroundBooks":x11o039o] Some people are very self motivated, while others are lazy and need to create a sense of urgency to get themselves moving toward their goal. For instance, I was just watching a television interview on a mixed martial arts fighter who admitted to being lazy and burned all of his bridges in order to succeed. He sold all of his possessions, got in his car and left his family and friends behind to pursue his dream until he eventually made it into the UFC (Ultimate Fighting Championships). When you have literally nothing to go home to, it can drive a person to do great things. At times, burning all of your bridges is what it takes since "bonds" between you and others can actually be a distraction.[/quote:x11o039o] As my fraternity brothers and I said in college, "there is nothing that motivates us so much as the imminence of failure." For my personal fitness I definitely have to burn bridges; I need to be left alone for months in order to reach my fitness goals.
Type of business with building - If you owned a building and Wal-Mart was opening its doors across the street in a previously unoccupied area (along with 12-14 small shops), what type of business would you start? Here are the considerations: 1. Money is a non-factor 2. Building is fairly large (10,000) square feet 3. Building is on the corner of a busy intersection (about to get much busier)
Re: What is Your Favorite Thing About Owning A Business? - [quote="freddyb45":1t3lpfi8]For me it's the fact that all the time and effort you put in is worth a lot more, due to it making you "business" more profitable. Working for yourself is also a positive, although employing people you can trust is quite different.[/quote:1t3lpfi8] I like this idea. Working for yourself means you are investing in your own future, not someone else's, although there is value in working for someone else first to gain experience and confidence. Working for yourself does not automatically mean success, fame and fortune. For most entrepreneurs, it takes much work and dedication to get to the point of financial success and comfort - sometimes years. But the benefit is, again, you know you are investing in yourself and building equity for your own future. GT :-]
Re: What or Who Sparks Your Business Interest - this might be surprise to you, but poverty spark my business interest. Poverty is prevalent in Africa. And I discovered early in life that people that own their businesses are richer than anypne else. I decided to get out of the poverty level and business provided a way of escape.
Is having a single minded goal good or bad? - Well I think this topic begs the question if having a single minded goal is good or bad. I mean, what happens if you burned all your bridges and still couldn't succeed? What then? Do you keep on trying (and hope the next time it works out) or do you simply look for a new path?


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