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Poor are no 'lifeless bricks'

Jun 24, 2009

Studies have demonstrated that given the right opportunities, the poor in India are very much capable of helping themselves in order to move out of the vicious cycle of poverty. They have shown surprising sophistication when dealing with finances, writes Niranjan Rajadhyaksha.

The tribal revolt at Lalgarh in West Bengal has helped focus attention on both the growing threat to internal security posed by Maoists and the hopeless deprivation in so many parts of India.

The battle for Lalgarh takes place even as the new United Progressive Alliance government puts the finishing touches to a budget that is expected to offer some relief to the poorest.

The poor are either ignored or patronised, crushed or pitied. Few seem to believe that these people are capable of helping themselves if they are given the right opportunities. It reminds me of the critique of development economics by Peter Thomas Bauer where people were treated as “lifeless bricks to be moved around by some master builder”. That attitude has not changed.

Two research projects

I recently came across two research projects where the poor are not treated as lifeless bricks; in fact, they come across as people who are quite capable of thinking deeply about their poverty and acting on it despite the obvious constraints they face.

The first of these is a book titled Portfolios of the Poor. The four authors of this book maintained financial diaries of slum dwellers and villagers in India, South Africa and Bangladesh. The families for whom these diaries were maintained typically earned less than $2 a day.

We usually assume that such desperately poor people are helpless in the face of rock-bottom incomes. But Daryl Collins, Jonathan Morduch, Stuart Rutherford and Orlanda Ruthven show in their book that the poor families whose finances they tracked make ends meet.

They actually buy food, send children to school, pay medical costs, etc. They do so by using financial tools that help them borrow, save, deal with risks and smoothen cash flows.

"They actually buy food, send children to school, pay medical costs, etc. They do so by using financial tools that help them borrow, save, deal with risks and smoothen cash flows"

The poor show surprising sophistication when dealing with finances. “…we came to understand that money management is, for the poor, a fundamental and well understood part of everyday life,” the four authors say in the introduction.

The other example of a research venture that does not treat the poor as lifeless bricks to be moved around is the World Bank’s Moving Out of Poverty project. I have read only the Indian part of the findings, written by Deepa Narayan, Binayak Sen and Katy Hall.

They have studied cases of families from four Indian states – Andhra Pradesh, Assam, Uttar Pradesh and West Bengal – which have moved out of poverty between 1995 and 2005.

The researchers collected the life stories of 30,000 women and men in 300 villages. The 50,000 pages of notes have been used along with the standard statistical tools used in development research. While the overall findings of this research cannot be encapsulated in a few lines here, one important thing that comes across is that the poor are hard- working, show initiative and aspire to a better life.

For example, 77% of the people spoken to say their children would lead better lives. Or there are other ground-level insights that need attention: Most people fall back into poverty because of health-related expenses or social shocks such as family breakdown.

Other researchers have shown that the cost of funerals in AIDS-afflicted countries such as Angola is a huge burden on the poor.

One of the authors of this study, Narayan, even told The Times of India in an interview: “People want a free-market economy. But they need the skills to connect with it. The government machinery needs to treat the poor with dignity and respect. This is something that they value a lot. The people also desired free and fair elections and honest leaders as it helps in empowering them.”

Ridden with cliches

The problem with most debates about poverty is that they are ridden with clichés and do not take the real experiences of the poor on board. So, on the one hand, we see the state trample over the rights of the poor and, on the other, you have governments handing out doles to protect their images as protectors of the poor.

But what both Portfolios of the Poor and Moving Out of Poverty in India show is that the poor need neither contempt not pity. They have a remarkable understanding of their problems and are also quite comfortable with modern finance.

"But what both Portfolios of the Poor and Moving Out of Poverty in India show is that the poor need neither contempt not pity"

Bauer himself was a great believer in direct observation. His studies on the rise of cash crops in countries such as Malaysia and Ghana involved a lot of field work. He showed that farmers in these countries were quite able to take the long view and plant cash crops that took years before they yielded any revenues; they responded to price signals; they had an instinctive understanding of risk.

These are simple truths that are too often forgotten by development economists and policymakers because of their enduring fascination with statistical neatness.
The poor in places such as Lalgarh and elsewhere need a patient hearing rather than hasty responses.

Source : Mint
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