Q&A: A private sector 'productivity tool' to eliminate poverty is catching on around the world

Martin Burt, founder of Fundación Paraguaya. Photo by: Sikarin Fon Thanachaiary / World Economic Forum / CC BY-NC-SA

More than eight years ago, nongovernmental organization Fundación Paraguaya founder Martin Burt set out to prove his bottom-up theory of eliminating multidimensional poverty.

“The paradigm before was that policymakers were the ones who needed to measure poverty,” he told Devex. “But now we have technology that makes it very easy to ask local people to define what it means to be poor in that country.”

His idea of allowing the poor to define their own poverty has taken shape with the “Poverty Stoplight,” a visual, 20-minute, Hewlett Packard-powered survey that uses a series of photographs for families to self-assess their level of poverty on a cell phone or tablet.

The focus on family is perhaps the most important component of the tool, Burt stressed: “Poverty cannot be measured in terms of individuals,” he said. “People are united by a household or a family.”

“Think of fair trade … think of CSR, and think of how obsolete they become when you’re talking about a company’s own workers eliminating poverty in income, in housing …”

— Martin Burt, founder, Fundación Paraguaya

Rather than zero in on insufficient income, the Stoplight consists of 50 indicators grouped into six dimensions of poverty: Income and employment; health and environment; housing and infrastructure; education and culture; organization and participation; and interiority and motivational. Each indicator is defined simply as red for extreme poverty, yellow for poverty or green for not poverty.

The Foundation implements the Poverty Stoplight primarily through its microfinance village banks, where microfinance agents then work with clients to design a Family Development Plan.

“The families themselves identify ways to move these indicators from red and yellow to green,” Burt said, adding that agents support the process by noting opportunities for families to draw upon training, technical assistance or small loans.

Now, Stoplight has been rolled out in more than 25 countries — with partnerships in Tanzania, the United Kingdom, the United States, Argentina and South Africa — and the private sector has taken notice. More than 70 private companies in Paraguay are using the tool to allow their employees to self-assess their own poverty, then offering feasible training, education or banking solutions.

In the past three years, Poverty Spotlight has leveraged support from the private sector on top of $1.9 million from nine donors to help improve the welfare of 27,000 families, according to Burt.

Devex caught up with Burt, a Paraguayan who has dedicated his professional career to “cracking the code” on how to eliminate poverty, to find out where he sees Poverty Stoplight fitting into to the wider global development conversation of poverty measurement, and why he thinks many institutions aren’t yet ready to use the word “eliminate.” The conversation has been edited for length and clarity.

Tell me about Poverty Stoplight’s increasing work with the private sector

We have 70 companies now in Paraguay, and several lined up in Mexico, that want to go beyond corporate social responsibility to help all their workers eliminate poverty. In Paraguay, we have a supermarket — just one of more than 70 companies using the tool — with 7,000 workers committed to that. Think of fair trade, think of shared value and think of CSR, and think of how obsolete they become when you’re talking about a company’s own workers eliminating poverty in income, in housing, in education, in health.

What has feedback back been from the private sector engaged with the tool?

Ecstatic. Because the poverty still belongs to the worker and not to the company. The company just leverages its resources to help its workers, but it’s not burdened with having to solve everybody’s problem. The workers do their own self-diagnosis. They come up with their own priorities, and it’s up to the worker to solve his or her unique problems.

If it’s not the company’s problem, then what does the company offer? And at what benefit to them?

It breaks the dilemma of the factory owner. How can the factory owner help its workers help themselves? Without him or her having to absorb all of the responsibility?

It is for the company to understand how it can use its resources. Maybe the workers don’t know that there is a housing subsidy, for example. So the owner of the company will bring in the government official from the housing authority to give a talk on how to apply for a housing subsidy. It might call the ministry of health and have a day of vaccinations against influenza one day at the factory. Maybe it starts offering counseling services to understand what can be done about violence against women. In one particular case, when many workers did not have savings accounts, a company worked with a bank to open up savings account for every worker and started offering financial literacy courses. Think if one day Wal-Mart, if one day Nestlé did this. The possibilities are endless. It really is powerful because it is a productivity tool and not a charity.

Apart from improvement in poverty indicators, participating managers and business owners have reported several benefits, like higher employee satisfaction and savings: A supermarket has told us that every percentage point of turnover costs them $28,000, and many of them have already reported a very significant decrease in employee turnover.

You speak passionately about recognizing multidimensional poverty, and about defining poverty at a family level. Why?

Not everyone is poor in the same way. You go to a poor village, and there are women who go to the clinic for prenatal care, and others who don’t, and for different reasons. It is not that nobody does. The whole idea is to raise awareness by the poor of their own unique poverty.

“It is a matter of listening to the voices of the poor and not coming up with solutions from the people who don’t know.”

— Martin Burt, founder, Fundación Paraguaya

The World Bank and the U.N. are, in my opinion, counting the poor poorly. They count individuals and not family households. The reason is because you cannot work on child poverty and not work with a child’s mother. You cannot get a factory worker out of poverty while his or her child isn’t receiving vaccinations. People are united by a household or a family. A lot of institutions keep measuring poverty as if it were income. Yet there are 49 other indications, and the solutions to income are outside income. You can double everyone’s salary, but that’s not going to get them out of poverty in other areas.

The tool is unique in that it enables the poor themselves to become aware of and measure their poverty in all its dimensions. How does it fit in with the wider effort to take development from “wholesale to retail,” or from a population focus to a family focus?

We know how to eliminate poverty. We know it can be eliminated in this generation. It is a matter of doing it. It is a matter of listening to the voices of the poor and not coming up with solutions from the people who don’t know. The world has changed. Tech today allows for everyone, particularly the poor, to be protagonists in the fight against poverty. They were the big elephant in the room before.

Through the development of Poverty Stoplight, you said you “realized that we, like most governments and nonprofits around the world, had been caught up in a false dilemma when it came to poverty issues.” Does it feel like the development community has come to a similar realization and adopted a more personal approach to eliminating poverty?

No. Not yet. That is our big challenge. To show them that as crazy as it sounds, you need to activate families to take ownership and take stock of their poverty. That is key. It has to do with a self awareness that is a precondition for agency and self efficacy. Many people think that poverty is created by the system, and is only a structure problem that needs structure solutions. We know that you can have a health system in place and many pregnant women will not go to do their checkups. Why does that happen? It’s because women in that particular example are not aware of the worthiness of the endeavor. You need to have a supply of solutions but you also need to have an activated demand.

What’s next for Poverty Stoplight?

The big frontier now is in reaching the millions. We are searching for solutions so that we can make this available for the millions. We know how to do it on a customized basis, but now we want to create a digital platform so that anybody can self-assess from their cell phones. We are looking for incentives so that people will self diagnose their level of poverty and take up solutions, and then show the rest of the world how they overcame their problems.

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About the author

  • Kelli Rogers

    Kelli Rogers is an Associate Editor for Devex. Based on the U.S. West Coast, she works with Devex's team of correspondents and editors around the world, with a particular focus on gender. She previously worked as Devex’s Southeast Asia correspondent based in Bangkok, covering disaster and crisis response, resilience, women’s rights, and climate change throughout the region. Prior to that, she reported on social and environmental issues from Nairobi, Kenya. Kelli holds a bachelor’s degree in journalism from the University of Missouri, and has since reported from more than 20 countries.