Livelihood Development Projects

Livelihood Development

Almost half the world — over three billion people — live on less than $2.50 a day , without access to many of the social services basic to a decent human life. Their plight requires a global, comprehensive and urgent response to provide them with the tools they need to overcome poverty and attain sustainable livelihoods.

The Need for More and More Productive Livelihoods

The economies of developing countries are frequently characterized by large informal sectors, where labor has very low productivity and, therefore, marginal profitability. Such economies also frequently suffer from high under-employment or unemployment. Lack of gainful economic activity is a major cause for poverty, which feeds a large number of social ills such as poor education, diminished health and social unrest.

In this context, enhancing livelihoods becomes imperative to advance human development. Livelihoods are improved through multiple processes:

• By enhancing the skills and knowledge of individuals, so that they can better engage in self-subsistence and/or entrepreneurial activities making them more efficient, productive or profitable. Such efforts involve not only imparting training and skills development, but also facilitating access to appropriate technologies and methods, and to broader financing options for the poor. In many developing countries, enterprise development centers have been successful at assisting the development of start-up enterprises by providing skills development workshop, entrepreneurship skills and training, product design and marketing advice and other related activities.

• By aiding the construction of commercial networks and partnerships, particularly for product marketing and commercialization. Sometimes, developing linkages among small enterprises and large domestic or multinational companies can help nurture the smaller companies. Particularly since linkages between different types of firms in developing countries provide an effective channel for local companies to gain access to markets, financing, skills and know-how.

• By generating of alternative economic opportunities in order to provide new sources of employment in communities particularly affected by poverty. This entails the identification of untapped areas with potential for growth, the removal of barriers to the establishment of businesses in those economic segments, and assistance to enterprise development. Frequently, business opportunities exist in bottom-of-pyramid markets. However, it is a prerequisite for businesses to be able to operate to ensure basic community infrastructure, such as sustainable delivery of energy, water and sanitation to the underprivileged neighborhoods where such business would operate. In additions, market facilities or access and transport roads might need to meet basic standards.

• By reducing livelihood vulnerability, through diversification of income sources, and through improved sustainability of natural resources as economic inputs.

Some Best Practices in Livelihood Development

• Incubate and support the development of income generating activities through small business formation and operation services, micro-credit, training and building of marketing channels.

• Enhance or restore traditionally productive sectors, such as agriculture, livestock, fisheries and small industry.

• Improve family or community owned enterprises’ access to productive inputs and to value added components in the production and distribution processes.

• Introduce productivity enhancing technologies, such as irrigation systems, machinery for agricultural production, or fish farming technologies.

• Create stronger production and marketing linkages through training and skills development, through creation or strengthening of local organizations such as cooperatives, and through seed capital contributions.

• Promote alternative income sources by identifying economic areas which have unexploited potential and devising strategies for making them accessible to the working poor.

• Construct community infrastructure related to livelihood development and overall well being, including market facilities, access and transport roads, and water and sanitation systems, etc.