Four Ways to Strengthen Economic Recovery in Urban Areas

By Jasveen Bindra, Technical Officer, BRAC UPGI

In the past months, we have seen cities at the forefront of coping with COVID-19 and its lasting impacts. A recent assessment by BRAC’s Institute of Governance and Development (BIGD) found that urban poor communities in Bangladesh have been more severely impacted by the COVID-19 crisis than any other population. The estimated one billion people living in slums and informal settlements around the world are particularly vulnerable, as they often live in overcrowded areas where physical distancing is impossible and lack access to basic services like clean drinking water, sanitation, waste disposal, and primary healthcare. Given the insecurity of livelihoods in urban areas with lockdowns further complicating matters, many governments are now focused on expanding social safety nets and public works programs to soften the impact.

The Graduation approach, when adapted to an urban context, can serve as a holistic, economic inclusion intervention for governments moving from the immediate relief to the early recovery phase. Graduation works to restore access to viable livelihood opportunities and build resilience to economic shocks in urban areas, placing households on a sustainable, upward trajectory from extreme poverty.

A typical scene in one of Dhaka’s many crowded slums.

Although the Graduation approach was first developed to alleviate rural poverty, the Urban Ultra-Poor Graduation pilot (Urban UPG) was launched by BRAC in 2010 to address the growing number of people in extreme poverty in urban areas in Dhaka, Bangladesh — where it is estimated that over a quarter of the city’s population lives in slums. Since then, Graduation programs have been implemented in other peri-urban contexts, including Uganda and the Philippines, and BRAC has partnered with the Asian Development Bank and the Government of Tamil Nadu to adapt Graduation for resettled populations in urban areas in the state. The project aims to integrate Graduation into the Urban Inclusive, Resilient, and Sustainable Housing for Urban Poor (IRSHUP) program, which relocates and rehabilitates households living in extremely vulnerable and high-risk urban areas.

Below we share our insights with the hope to create a framework to properly adapt Graduation to an urban and resettlement context.

A Focus on Livelihoods

In Tamil Nadu, vulnerability assessments of the resettled population and resource mapping found that livelihoods are heavily reliant upon daily wage labor within city limits. A majority of working age adults were found to be employed mostly in unskilled or low skilled labor, including domestic service by women. Youth, many with at least a secondary education, seek higher paths to professional employment and are seen as a beacon of hope for future prosperity for many households.

Given that urban populations tend to exhibit greater willingness to take risks on businesses (e.g. taking loans), and find creative ways to market their products, an assessment of micro-enterprise options suited to the local areas is crucial, particularly given that affordable housing locations will not easily facilitate livestock rearing.

In Uganda, the Graduation pilot focused on youth recommended skill-based vocational training on electrical work, mobile repair, motorcycle repair, and a greater focus on vocational employment linkages, while in the Philippines many participants selected ambulatory food carts and meat processing — all of which also appear relevant for the participants in Tamil Nadu.

Financial Access

Broadly speaking, many households struggle with high rates of debt. While access to formal or informal savings mechanisms may exist, they are often not utilized. This is often due to performance issues with women’s self-help groups (SHG), local savings and loans groups for women, that dissolve into conflict or create distrust due to poor repayment rates. Given greater familiarity with loan-taking behavior and access to formal financial mechanisms in urban areas, Graduation interventions focus on helping people save and providing access to reliable lending instruments.

A woman in Tamil Nadu prepares ceremonial flower garlands to sell.

The Importance of Social Messaging

Social and health messaging is provided by coaches during life skills training on topics most pertinent for urban slum populations in the project sites. This includes joint household decision-making, water, sanitation and hygiene (WASH), maternal and child health, waterborne diseases, debt management, alcohol and drug abuse, and crime and safety. In the absence of strong, self-governing local community organizations, coaches foster linkages with local power structures, government agencies, and local municipal administrations to empower extreme poor households within their communities.

Access to Basic Services

Unlike in rural areas, the provision of social assistance and services available in urban areas is quite strong. Access to health services and education is considerably better, although sanitation and hygiene facilities remain underutilized. Graduation coaches plan to help households leverage the subsistence allowance provided by the IRSHUP program in Tamil Nadu to better access these services.

While COVID-19 has exposed and worsened pre-existing issues in urban and rural contexts alike, it has also forced us to re-think the economic recovery systems we already have in place. To truly address urban poverty in all its forms, BRAC UPGI can offer lessons from the adaption of our Graduation interventions to meet the unique and multidimensional challenges of urban populations in extreme poverty.

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