Putting Poverty Alleviation in the Hands of the Impoverished
Located in the middle of South America, landlocked Paraguay has been experiencing dramatic economic growth as well as significant reduction in poverty levels. The government recently reported that in the past three years, the percentage of people living below the poverty line has been reduced from 32 to 24 percent.
Fueled by exports in soybean, beef and hydroelectricity, the economy grew at more than 14 percent last year. Although all are impressive numbers, the fact remains that one out of every four Paraguayans are still living in poverty and that economic growth has not “trickled down” to the poorest members of the society.
With a population of only 6.5 million, problems do not seem as insurmountable as they do in other parts of the development world. The good news is that the government, private sector and civil society have all publicly stated that reducing poverty is a primordial objective.
At Fundación Paraguaya, a local nonprofit dedicated to promoting economic self-reliance, a new vision is taking form. Rather than trying to reduce or alleviate poverty, the organization has a more ambitious goal: to completely eliminate poverty. For each of the 50 poverty indicators identified across six dimensions — and working with its microfinance clients in urban slums and rural villages — we have defined what it means not to be labeled “poor” in Paraguay.
With this information, our organization has constructed what it calls a Poverty Stoplight, which consists of a visual survey with photos to help impoverished families understand and take stock of their reality. Like a traditional stoplight, we use the colors red, yellow and green to indicate a family’s given situation at any time. Together, we then develop a customized plan to overcome multidimensional poverty.
Over the past three years, more 18,000 people who have worked with Fundación Paraguaya overcome poverty.
Inspired by psychologist Albert Bandura and the “Influencer” strategy developed by Joseph Grenny, Fundación Paraguaya helps poor families ask two questions when analyzing poverty traps:
Is it worth it? Can I do it?
These questions translate into the motivation and skills needed to overcome poverty. In addition to promoting positive peer pressure, group support and understanding vital behaviors, Fundación Paraguaya uses prizes, rewards and incentives to eliminate poverty.
This is where our work with TOMS comes in. Working with the One for One company, Fundación Paraguaya distributes free, new TOMS Shoes to poor families as a positive reinforcement for overcoming poverty.
Instead freely giving out shoes as traditional charities may do, Fundación Paraguaya has a quid pro quo arrangement with its 50,000 microfinance clients: show me your children’s vaccination card or how you have improved your latrine, and your children will get new shoes.
At Fundación Paraguaya, we have found that when TOMS Shoes are integrated into programs with larger community development goals, they have empowered children and their families to continue to get the care and support they need.
This year, we’ll be joining TOMS on One Day Without Shoes — the company’s annual day to raise global awareness for children’s health and education.
Written by Martin Burt; Founder and CEO of Poverty Stoplight.