The Poverty Stoplight, from Paraguay to the world

Written by Luis Fernando Sanabria, COO at Fundación Paraguaya*

To learn more about the revolutionary program known as the Poverty Stoplight, which was born in Paraguay and is now used in different parts of the world, we asked the COO at Fundación Paraguaya, Luis Fernando Sanabria, to talk about this social innovation.

He explained that this tool allows each family to evaluate their quality of life in 50 different indicators. By knowing what is a lack of poverty (green), poverty (yellow) or extreme poverty (red), each family can prioritize their needs and develop a plan (life map) to solve their shortcomings step by step, he said.

It is a self-assessment, he stressed, that is done with a platform that uses pictures to reflect the different situations and facilitate participant understanding. “Once the family has their own life map,” he stressed. “The next step is to find solutions to the indicators that they have prioritized.”

He added that most of the solutions already exist in our country: there are hundreds of services (some free, some with minimum payment) provided by the State, NGO, churches, development agencies and private companies, among others. However, once the family is activated — that is, when the family understands their problem and is motivated to solve it proactively — they will seek to find the solution corresponding to each indicator.

From Paraguay to the world

Sanabria explained that this new tool originated in our country and has proved to be adaptable to different types of organizations and geographical regions. It has been implemented in 26 countries and 210 organizations around the world. The first replicas of the model were carried out in Africa, he said, where the Poverty Stoplight is used by many different organizations in places like Tanzania, Uganda, South Africa, Sierra Leone and Nigeria. In Latin America, there are microfinance, rural development and community development organizations that are using it in Argentina, Colombia, Ecuador, El Salvador and Mexico. In addition, pilot programs have been developed in China, Vietnam and Taiwan.

The program has also reached developed countries. Transmit Enterprise in Newcastle (England), and the Stockton Reconstruction Coalition in California (USA), are some examples. In the U.S., the Poverty Stoplight also has a presence in Elmira (Chemung County, New York State), New Orleans and Pittsburgh.

Sanabria also mentioned that recently the Poverty Stoplight has been implemented in Papua New Guinea (Oceania), Singapore, Indonesia, the Philippines and Nigeria. “Paraguayan technicians went there to train local organizations in the use of this social technology developed in Paraguay,” he said with satisfaction.

More than 140 private companies

Programs that fight against poverty do not often consider the poor as protagonists, but rather as beneficiaries of their actions. The Poverty Stoplight, on the contrary, puts the family at the center of its methodology, he explained, adding that the family is not the only “non-traditional” protagonist in this approach. The Poverty Stoplight is being used not only by NGOs, development programs, grassroots community organizations and local and regional governments, but also interested private companies who seek to improve the social benefits they offer their employees, he said.

More than 140 companies in our country, Mexico, Ecuador and South Africa have been using this system for the past four years. “The reason is very simple: by improving the quality of life of workers, absenteeism is reduced, employee turnover rates are lowered, and productivity is increased,” he emphasized.

The Poverty Stoplight also equips companies with a comprehensive and measurable approach while allowing them to better organize their employee benefit programs and focus on the needs of their workers. In Paraguay, the Association of Christian Entrepreneurs (ADEC) has been a great ally in promoting this program. Sanabria indicated that the methodology is simple because the Human Resources department or the Corporate Social Responsibility department in a company receives training in the methodology and access to the software. Companies can select the name of the program, and adapt the self-evaluation to their participants. With the information gathered regarding the 50 indicators, the company can adjust its benefits plan to align it with the priorities of its employees. At the same time, each employee will have their own “life map” and look for solutions inside and outside the company.

If the company dedicates its business capacity to the service of its employees, he added, as well as its contacts and innovation potential, it does not need to invest extensive financial resources to implement this tool. “We have seen companies pick up the phone and call their financing bank to implement savings and financial education programs for their employees; or negotiate with the National Vocational Promotion Service or with the Ministry of Urban Planning special services; or create microfranchises of their own products so that the relatives of their employees can increase their income,” he said.

Supermarkets, banks, hotels, cleaning service companies, cattle ranches — no matter what field they work in, everyone can use the program, he said. For example, Las Tacuaras (Nutrihuevos) has used the tool ove the last 5 years, managing to reduce the red indicators that affect its employees by 45% and increase their green indicators by 21%.

Families without poverty

The Poverty Stoplight is a program that focuses on families, he said. He then emphasized that we should focus on the family not only because our Constitution establishes that it is the foundation of society (Article 49), but because no one is poor or not poor alone, ​​everything depends on the family one belongs to. He also said that official figures indicate that there are 1,809,053 poor Paraguayans, but this is not true. The truth is that there is more and there is less. “There is more because this amount only refers to income poverty and although those families have resolved this aspect, they have other needs if we measure them multidimensionally. And there are fewer poor people because there are not 7 million Paraguayans, but only 1.6 million families with needs to solve.”.

Change the current approach

The current approach must be changed not only to measure multidimensional poverty, but to overcome welfare without empowerment, and refocus subsidy programs to be trampolines to escape poverty and not traps to remain in it, he said.

He added that with the information generated “from the bottom up” we can better coordinate services between the 13 ministries and 84 public entities in Paraguay and the hundreds of services provided by civil society and private companies so that they can accurately target the “reds and yellows” of each family.

The newly created Ministry of Social Development could be the facilitator of services to families, establishing a single window for this purpose. The thousands of agricultural extension workers, teachers, health officials, Tekoporã, and other social agents could easily be retrained to become family mentors. With their support, each household can have its own “life map” and work to implement it.

To eliminate poverty in the country, we must all get down to work. It is not enough for the government to address the issue alone; we must incorporate the family as protagonist, and bring civil society and the private sector into the effort. And with the Poverty Stoplight, Fundación Paraguaya has a tool that allows it to be part of this global effort, without sacrificing its purpose of generating profit.


*This article was originally published ABC Color.