Economic strengthening

April 15, 2016

Household Economic strengthening (HES) comprises a portfolio of interventions to reduce the economic vulnerability of families and empower them to provide for the essential needs of the children they care for, rather than relying on external assistance (PEPFAR working definition, 2011). Livelihoods are wider than economic strengthening and includes food security which is considered under the technical area of nutrition and food security.

Recent reviews of household economic strengthening programs identified 3 complementary and/or competing approaches (PEPFAR, 2011)

  1. Household Economic Strengthening:Project interventions that target the family as the beneficiary and are led by projects or NGO’s that do not prioritize long-term sustainability and aim for sustainable impact on shorter-term outcomes (how families get and spend money). Examples of these interventions include: savings, credit, income-generating activities (IGAs) and jobs.Household economic strengthening programs should consider a family’s level of readiness and capacity to succeed when determining whether a particular economic strengthening activity is appropriate.
  2. Social Protection:Systemic interventions targeting the family as beneficiary, led by governmentsthat prioritize sustainable interventions and aim for a sustainable impact on longer-term outcomes such as behavior change or human capital outcomes. Examples include cash transfers and access to services.
  3. Other Economic Approaches:Interventions targeting entities other than families as direct beneficiaries (e.g., older children, service providers, CBOs and NGOs that aim for various sustainability strategies. Examples include youth livelihoods, school financing and CBO financing.

Why is economic strengthening support important?

Poverty fuels the HIV and AIDS epidemic, and HIV and AIDS can lead to increased poverty at both the micro and macro level. The economic impact of HIV can be seen at multiple levels, including the National/Government level, the community level and the family level:

  • National and regional – HIV and AIDS increases poverty at national level. This is seen in falling gross domestic product (GDP) and slower rises in human development index (HDI).
  • Community – HIV and AIDS fuels community poverty and severely strains community safety nets and community coping mechanisms.
  • Family and household- Households affected by HIV and AIDS may have increased expenses for health care, caring for the sick, and caring for additional orphaned and vulnerable children. Increased expenses and reduced time for economic activities, such as farming and trading, may deplete the family’s income and assets.
  • Private sector – HIV and AIDS can affect private companies by affecting the most productive workers and reducing the workforce. Health insurance, increased rates of absenteeism, and costs of training new staff all increase private sector costs.
  • Savings schemes may be one of the most critical elements of helping families out of poverty and empowering them to care for their own needs through diverse livelihood strategies.
  • Savings and credit schemes can strengthen financial safety nets and help families with issues of cash flow, supporting families to develop more profitable or diverse income sources to better cope with the loss of an income earner.
  • Training and capacity building may help families develop skills such as money management, savings self-reliance, improved self-esteem and increased status in the community.
  • Economic strengthening activities generate money that helps families care for their children by increasing food security, access to school and access to essential health services.

How should economic strengthening support be delivered?

Economic Strengthening Support should:

  • Use a multi-sectoral integrated approach. A range of different skills and sectoral expertise is required for sustainable economic strengthening. Engage partners with economic strengthening expertise from the beginning of a program.
  • Weigh benefits and risks of targeting. Activities may focus on specific populations or vulnerable households. Groups formed for one purpose, such as a self-help HIV support group, may not be the best groups for a loan scheme. Some of the most successful targeted programs depend on members of communities identifying beneficiaries.
  • Base program design on sound market analysis. Projects are sometimes set up without conducting a market assessment and without clear evidence that specific training will lead to employment. In the past, carpentry and hair-braiding were typical training activities, though they offered minimal opportunities for future employment or poverty reduction. Programs should aim to form partnerships with employers who have indicated a clear need to employ certain skilled professionals in areas such as computer programming, mobile technology and other market-driven sectors.
  • Use a child lens. While economic strengthening activities often focus on caregivers, it is important not to overlook the ability and need for older children and youth to have access to economic activities. Youth are often not included in economic strengthening activities that could help protect them from increased risk for HIV/AIDS, increase their access to education and allow them to stay in school.
  • Ensure gender mainstreaming in strategies and program approaches. Girls and women are at greater risk for HIV and AIDS and activities should target the specific vulnerabilities, risks and needs of girls and women, including mothers with children.
  • Develop strong indicators and map the impact of interventions, particularly on children and households affected by HIV.

Key Economic Strengthening Activities and Messages

  1. Social Protection programs are key for successful economic strengthening. Ideally, programs should be government-led, systemic interventions that target families as beneficiaries and prioritize sustainable interventions, aiming for a sustainable impact on longer-term outcomes.
  2. Invest in understanding economic vulnerabilities, livelihoods and coping strategies of target populations and segment target groups, as appropriate.
  3. Emphasize a family-centered approach to HES that supports the family to progress through the vulnerability cycle. It is critical to assess family readiness and be clear about when and for whom IGA promotion is appropriate.
  4. Empower families to provide for the essential needs of children by: 1. Promoting money-management interventions for savings, access to consumer credit, and encouraging improved family financial management 2. Integrating HES activities with parenting skills training and other supportive programs 3. Using low-risk HES activities to diversify and stimulate household income growth.
  5. Include Food Security when planning HES activities.
  6. Mobilize local communities. Successful economic strengthening depends on factors influenced by the community, such as market links (looking beyond the local market), community skills, and levels of family readiness or capacity. Donors and NGOs can play a key role in advocating and mobilizing community support and resources and in strengthening networking opportunities. Community savings and loans should be promoted, as appropriate.
  7. Engage partners with expertise in economic strengthening and strong skills in business, enterprise development or other key areas. Partnerships with specialist microfinance institutions are more likely to be effective, and linkages with government systems are crucial for longer term sustainability.
  8. Collaborate across sectors at all levels, and across donors, where feasible. Integrated programming is critical for success.
  9. Address stigma as a possible barrier to success for HIV/AIDS-affected families. Addressing stigma, discrimination and the rights of people living with HIV are crucial to supporting program success and to ensuring that the most vulnerable benefit from economic strengthening.
  10. Develop HIV-sensitive programs, recognizing that people living with HIV may require additional resources and support such as time for health appointments and access to psychosocial support. Support flexible initiatives that allow for rapidly changing circumstances, due to illness or medication access, and accommodate changes in individual and family context.
  11. Develop gender-sensitive programs and include a strong gender perspective, targeting adolescent girls and women who are particularly vulnerable to HIV/AIDS and the economic impact of HIV/AIDS.
  12. Conduct market assessments to guide vocational training opportunities for youth and ensure that opportunities show evidence of a clear pathway to employment. Link youth and families to microcredit or other Host Government initiatives to receive loans or equipment to start up IGAs.
  13. Use a child lens and a rights-based approach, recognizing that activities do not automatically benefit children and may put them at greater risk for exploitation and abuse or cause them to withdraw from education to focus on work. Programs must be child-sensitive when engaging vulnerable children and families in economic strengthening activities.
  14. Document, evaluate and cost interventions.