Posts tagged under Pro-poor issues
Saving strategies of Jakarta’s poor
The Asian Trends Monitoring team conducted a survey among Jakarta’s slum dwellers between February 24 and March 2nd 2012. We collected a total of 348 responses from seven different neighbourhoods in Jakarta with the help of 15 research assistants from the University of Indonesia. The survey had a “perception of difficulties” section comprising ten categories, each to be rated on a 5-point scale (from “easy” to “impossible/unable to do”). These ten categories were then compiled into a “life difficulty” index through direct summation.
One of the items required respondents to rate their difficulty of “Saving Money”. More than a third of respondents answered that they were unable to save, while another third said that it was very difficult for them (see below). Together with finding work opportunities and having enough living space, saving money was the most difficult aspect of the respondents in our sample.
The ability to save money is highly correlated to other important aspects of surviving in the city. We found a significant difference in perceived life difficulty between those who save and those who don’t save regularly. The first group had an average score of 21.6 on the life difficulty index (10 Points indicates Ease, while 50 points indicates inability in all 10 items) compared to 31.3 points for the respondents unable to make weekly savings (see t-test below).
Jakarta’s water: the gap between perceptions and reality
Our latest issue on water governance has some figures that show massive deficiencies in the provision of water services to major ASEAN cities. In Jakarta, for example, it is reported that only 1% of the city’s inhabitants have access to a piped water connection.
In our recent visit to Jakarta, we conducted a survey in the slums of the city that sought to confirm this data. We wanted to see whether the water coverage in Jakarta is really as poor as the secondary data suggest. More importantly, we wanted to see whether the lack of piped water connections were a serious impediment to clean water access for Jakarta’s poor.
(The survey itself was administered to 345 poor households across seven different slums in Jakarta.)
The results of the survey were interesting, to say the least. Almost half of our respondents reported private water vendors as their primary source of clean water. As written in Bulletin 15 on water governance, obtaining water from private water vendors can cost up to 15 times more than having a piped water connection. As for the piped connections themselves, a large number of people still rely on communal connections, which can cause difficulties in terms of cost-sharing, queuing, as well as rationing in times of shortage.
Inside a BRAC school
One of the more striking statistics associated with BRAC is that in Bangladesh alone they run over 24,000 primary schools and over 13,000 pre-primary schools. Five million children have graduated from these schools at a cost of only US$32 per child annually.
One of the main reasons that BRAC has been able to set and run more schools than many countries have, stems from their focus on keeping things simple. Faced with the realization that millions of children across Bangladesh were not receiving any formal education at all, BRAC has worked to provide a basic education to as many as possible.
Inside the classroom. Almost no furniture is used, but everything is clean, orderly, and focused on student learning
BRAC primary schools only run from grades one to five. After graduating from BRAC schools fortunate students are able to shift into government-run schools and continue their education. Those who are not so fortunate have still learned valuable basic skills in reading, writing, and math. In many cases even this education is much more than anyone else in their family has received previously.
What drives remittance costs? Hope in sight for millions of migrants?
It’s crunch time for the Master of Public Policy Candidates at the Lee Kuan Yew School of Public Policy. Last week they had to present their preliminary findings of their thesis equivalent called the Policy Analysis Exercise (PAE). Second year MPP Student, Jan De Graaf, is working on the fascinating question of “what drives remittance transaction costs?”
Last year alone, more than 350 billion USD were transferred to developing countries in the form of remittances. Big business for banks and money transfer operators such as Western Union who charge significant transaction fees for each transaction. Jan realised that given the high volume of remittances the transaction costs incurred by migrants seem high, and so he set out to identify determinants for these costs in his PAE research.
His research question focuses on “What policies can help reduce the global average remittance transaction costs?”
The main focus of his analysis is on a World Bank dataset with data for 31 major sending countries, 91 receiving countries and thus data for a total of 213 ‘remittance corridors’. He conceptualizes total transaction costs as the sum of the fee paid by the sender and the exchange rate margin set by the provider.
BRAC and Microfinance
One of the most high profile, and controversial, poverty alleviation tools in BRAC’s toolbox is microfinance. Simply put, proponents of this method argue that without access to capital, poor communities will never be able to break out of the poverty trap. Since the standard commercial bank will not lend to anyone who cannot produce adequate collateral, and their nearest branch is often hundreds of kilometres away anyway, the only solution is to bring the bank to impoverished rural communities. Detractors argue that the high interest rates charged by microfinance lenders (BRAC says theirs are between 18 and 60) are exploiting those who can least afford to be exploited and the often uneducated lendees have no idea what they getting themselves into. In extreme cases people who are unable to pay back their loans might resort to suicide.
A typical BRAC field office. Not as flashy as the main headquarters in Dhaka, but cost effective and functional.
The slum problem: not as easy as it seems
Slums are a huge issue that cities all over the world continue to struggle with. Even the rapidly growing economies in Asia are struggling to deal with what seems to be an inevitable consequence of that growth. People are rapidly migrating to cities in search of better lives and livelihoods, causing a great strain on the supply of housing. As housing prices rise and available supply falls, the poor are forced to build makeshift settlements which are often lacking in basic necessities such as water, electricity and sanitation, and are usually illegal.
A slum in East Jakarta. Photo credit: Jonathan McIntosh
One might wonder why it has been so difficult to deal with the problem. After all, if the problem is poor living conditions, isn’t it enough for governments, housing developers or charitable organizations to build more homes with living conditions that are deemed acceptable? Shouldn’t mass public housing projects be an effective way to solve the slum problem once and for all?
Unfortunately, it’s not that simple. There are several layers of complexity that have caused these solutions to fail and the slums to persist.
1. Misunderstood priorities
Modern day slavery in Southeast Asia: an uncomfortable reality
Daniel offering his insight to LKY students on working with and for migrant workers
Last week we had an inspiring visit from Daniel Lo, the Country Manager for the Malaysian arm of the Coalition to Abolish Modern Day Slavery in Asia (CAMSA). CAMSA is a relatively young organization, formed in February 2008 through the joint efforts of BPSOS (formerly known as Boat People SOS), and the International Society for Human Rights (ISHR) in Frankfurt Germany. CAMSA international members now consist of BPSOS, ISHR, the Vietnamese Canadian Federation and Tenaganita in Malaysia. CAMSA’s mission is to rescue and protect trafficking victims, punish traffickers through economic and legal measures, and engage in advocacy with the governments of source and destination countries to enact and enforce anti-trafficking laws and policies. They now count four bases in Southeast Asia and Taiwan, focusing on labor trafficking elimination and refugee protection. Daniel is a partner at his law firm and he also takes care of the operations and management of CAMSA – the only anti-trafficking coalition working in Malaysia.
Mega-trend urbanization: how will the urban poor slog through?
A slum in Manila during flooding, courtesy of Jörg Dietze
Rapid growth for the past twenty years has pushed Asian urbanisation to unprecedented levels. While this growth lifted hundreds of millions out of poverty, it did not create livable cities. Urban centers in Asia are often home to millions of poor migrants who sought a better life in the city and now live under precarious conditions in urban slums.
Asia’s urban population has grown from 31.5 per cent of the total in 1990 to 42.2 per cent in 2010. While China’s urban population recently outnumbered its rural population, the 50 % mark for all of Asia will likely be exceeded in the year 2026. Estimates predict that Asia’s urban population is increasing by 44 million people every year. One of the mega challenges for the so-called “Asian century” is intra-country inequity according to a book by the Asian Development Bank with the pompous title: Asia 2050 Realizing the Asian Century. By 2050, the report states, “Asia will be transformed as its urban population doubles from 1.6 billion to 3.1″. This massive urbanisation trend will impose unbeknownst pressures on local governments and create enormous governance challenges. Already today, growing inequality is taking a toll and creating a divide between Asia’s rich and privileged and its poor populations.
