A multidimensional approach to poverty that strengthens the Humanitarian-Development Nexus

The recent COVID-19 pandemic and the expected increase in global crises threaten to push millions into poverty. Enhanced collaboration between humanitarian and development actors is critical to responding effectively and holistically to the needs of the world’s most vulnerable persons. As major donors, the G20 should play a pivotal role in strengthening the humanitarian-development nexus by shaping targeting strategies that address both immediate needs and longer-term development goals of crisis-affected populations. This brief provides recommendations for the development of a coordinated and multidimensional approach to poverty alleviation and prevention through livelihood and resilience-based programming.

Challenge

The 2030 Sustainable Development Goals (SDGs) Agenda has called for an “end to poverty in all its forms everywhere”. Despite remarkable gains to alleviate poverty in the last few decades, progress has been uneven and inequalities persist. The World Bank estimates that 10 per cent of the world’s population still live in extreme poverty on less than $1.90 a day, and over 24 per cent live on less than $3.20 (World Bank, 2020a). In addition, more than 40 per cent of the global poor live in economies affected by fragility, conflict and violence. Among the most vulnerable, women, children, the elderly and those with disabilities face particularly severe hardships. The recent COVID-19 pandemic and the expected increase in displacement due to conflict, climate change and population growth threaten to push millions back into poverty (World Bank, 2020b). Those living in the Global South are amongst those most at risk of becoming the “new” global poor in the post-pandemic world.¹

Deteriorating conditions when it comes to the livelihoods and future economic prospects of these vulnerable populations is placing even greater burdens on the humanitarian aid system (Development Initiatives, 2020). In crisis situations, humanitarian organisations traditionally have focused on emergency responses that address the immediate needs of vulnerable populations, mainly through cash-based assistance. However, the volume, cost and length of humanitarian assistance has grown considerably in the last decade, due largely to the increasingly protracted nature of crises along with limited development interventions (UN OCHA, 2017). According to the United Nations (2018), inter-agency humanitarian appeals now last an average of seven years, and the amount requested has almost quadrupled over the past decade. The amount of funding received from the donors has also increased, but it has not been enough to keep pace with the rising needs (UN OCHA, 2019).

At the same time, humanitarian action is unable to sufficiently meet the escalating longterm needs of the most vulnerable. There is a critical need for broader development interventions that focus on building resilience and promoting sustainable livelihoods through project-based programmes that address issues such as education, health, infrastructure and employment, among others. This emphasises the urgency of enhancing collaboration between humanitarian and development actors to more effectively and holistically respond to the needs of the world’s most vulnerable people.

Global efforts to operationalise and strengthen this humanitarian-development nexus have gained momentum in recent years. Among the most prominent multilateral initiatives has been the New Way of Working (NWOW) developed jointly by the UN and the World Bank. NWOW calls on the humanitarian and development actors to work towards a set of “collective outcomes” that contribute to achieving the SDGs (Oxfam International, 2019; UN OCHA, 2017). While international organisations and donors have been largely supportive of this “nexus” approach, more commitment and cooperation are needed to challenge the traditional aid architecture and promote closer alignment of funding and intervention strategies among humanitarian and development organisations. As major donors, the G20 countries can and should play a pivotal role in encouraging strong dialogue and cooperation between agencies to strengthen the synergies between relief and resilience-based support for the most vulnerable of the vulnerable.

Proposal

The G20 countries are the major contributors to humanitarian and development aid. As such, they can have a significant impact on the way aid is coordinated, targeted and delivered. The magnitude of the current and impending poverty crisis calls not only for a more coordinated approach but also for larger overall funding that is more flexible and predictable to enable the design and implementation of short-, mediumand long-term interventions.² With persistent gaps between donors’ contributions and funding requirements to support humanitarian and development efforts, it has become increasingly critical to rely on rigorous targeting strategies that ensure the most efficient channelling of resources. To provide stronger evidence and justification for larger funding appeals, aid agencies need to work collaboratively to better identify who, where and how to more optimally target humanitarian assistance and anti-poverty programmes along with development interventions to prevent rather than simply alleviate immediate poverty. To this end, a multidimensional livelihoods approach is needed to better understand the complex needs of the poor and identify the most appropriate strategies to support them. This approach must include both relief programmes and more sustainable solutions that promote resilience and reduce aid dependency in the long run. This proposal builds on work previously conducted by the T20 under the Japanese and Saudi Arabian G20 presidencies that emphasises the need for a broader multi-faceted approach to improving the livelihoods of vulnerable populations (Lyons and Kass-Hanna, 2020a, 2020b; Lyons, Kass-Hanna, Zucchetti and Cobo, 2019; Lyons, Zucchetti, Kass-Hanna and Cobo, 2019). The following recommendations provide specific actions that the G20 is encouraged to support, which mainly fall within the scope and priorities of the G20’s Development Working Group (DWG).³ These are articulated as a three-step proposal that involves: (1) developing a framework to assess vulnerability and improve targeting; (2) setting goals and benchmarks based on this framework to track progress across countries; and (3) designing programmes that help to achieve these goals.

RECOMMENDATION 1: DEVELOPING A COORDINATED AND MULTIDIMENSIONAL APPROACH TO POVERTY ALLEVIATION AND PREVENTION

The G20 and its DWG working group can and should play an important role in shaping such targeting strategies and encouraging their collective adoption by both humanitarian and development actors. As an initial step, the G20 can encourage the construction of a “multidimensional livelihood” framework and index to assist in the development of more rigorous targeting methodologies that bridge the disconnects between relief and resilience and ensure more efficient allocation of funds. Current measurement and targeting mechanisms mainly focus on identifying “who is poor”, using unidimensional measures (e.g., consumption expenditures per capita) to define and establish thresholds for poverty. These types of metrics are then used to determine who should receive cash-based humanitarian assistance. However, this approach provides insufficient insights into the specific types of deprivation experienced by the poor. It can also fail to fully address their multidimensional needs in the longer run, leading to the misallocation of limited public funds (Alkire et al., 2020; Azeem et al., 2018; Lyons et al., 2021).

The G20 should examine existing frameworks that define and measure multidimensional poverty and socioeconomic vulnerability (e.g., Alkire and Foster, 2011; Alkire and Santos, 2014; Alkire et al., 2020; Lyons et al., 2021; UNDP and OPHI, 2020). These models assess deprivation in different dimensions of human life, such as health, education and living standards (UNDP and OPHI, 2020) and go beyond simply targeting those who are poor with humanitarian aid to recognising where poverty is mostly prevalent. It is then possible to identify the deprivations that are the most salient in these “poor places” so that development actors can in turn determine how to best address them and plan appropriate interventions (Lyons et al., 2021). Multidimensional poverty models can be expanded to include additional dimensions and aspects of deprivation that capture both immediate needs and longer-term vulnerabilities and propensities for future poverty. Traditional dimensions and metrics related to health, education and living standards are still important. However, the recent pandemic and accelerated transition to a digitalised economy and society highlight the growing importance of other dimensions critical to escaping poverty and creating a sustainable livelihood.

The G20 should endorse the construction of a “Multidimensional Livelihoods Index” (MLI) that includes the commonly used dimensions included in multidimensional poverty indices (MPIs), along with others largely documented as being critical to households’ ability to cope with and recover from negative shocks (Khawaja et al., 2020; Lyons and Kass-Hanna, 2020a, 2020b; Lyons et al., 2021). Additional dimensions such as job stability, personal security and environment, social protection, physical and mental wellbeing, digital and technological connectivity, social inclusion, locational conditions and mobility are particularly critical, especially within the context of protracted crisis situations (United Nations Inter-Agency Coordination Lebanon, 2021). Lyons et al. (2021) constructed an MLI to estimate poverty in the context of protracted forced displacement. They expanded conventional poverty indices to include dimensions and aspects of deprivation that are particular to refugee populations. Included in their model were more comprehensive health metrics covering healthcare access, special health needs and food security, along with dimensions for employment, security and social inclusion. Recent models have also taken into consideration metrics that capture perceived deprivations in the human condition such as subjective feelings about the current situation, life satisfaction, well-being and happiness, trust, community and civic engagement (Chan and Wong, 2020; Durand and Exton, 2019; Lyons et al., 2021; Yukio and JICA, 2020).

Figure 1 presents a simplified version of a multidimensional livelihoods index along with potential dimensions and indicators. Constructing an MLI framework that more holistically spans the humanitarian-development nexus helps to better identify who, where and how to target humanitarian aid and development interventions. It also strengthens and guides the coordination of analysis, planning and programming between the different agencies, as well as the coordination of funding appeals.

RECOMMENDATION 2: ESTABLISHING A SET OF SHAREDTARGETING GOALS, STANDARDS AND BENCHMARKS

Currently, there exists no centralised system with a comprehensive and globally agreed upon set of metrics that can be used to consistently measure and track progress when it comes to livelihoods, vulnerabilities to poverty and resiliency. The OECD has developed a few multidimensional indices to measure current well-being outcomes across countries (e.g., the Better Life Index and the How’s Life Well-Being Index). Some countries such as Japan, New Zealand and Bhutan have developed their own indices (Centre for Bhutan Studies and GNH Research, 2016; Durand and Exton, 2019; Lyons and Kass-Hanna, 2020a; The New Zealand Treasury, 2019; Yukio and JICA, 2020). In addition, the UN Sustainable Development Solutions Network (UN SDSN) has launched a global hub for real-time data called SDGs Today, which uses data from several international sources to create mappings that measure country-level progress towards the SDGs. While these models are informative, they are limited in that they do not provide a clear framework for how the data can be operationalised by humanitarian and development actors to measure vulnerability and resiliency so as to directly inform local and national policies and targeting strategies.

The G20 and its DWG working group are well positioned to support and assist in the establishment of a set of shared-targeting goals, standards and benchmarks to measure international progress towards shortand long-term poverty reduction across the humanitarian-development nexus. The G20 can use the MLI framework proposed in Recommendation 1 to inform the construction of the metrics and identify linkages to tangible outcomes and policy goals such as the SDGs. As a starting point, the MLI framework proposed in Figure 1 can be used to identify the key domains of livelihood. A core set of indicators can then be identified for each dimension, along with cutoff points that classify households as vulnerable according to each livelihood indicator. From here, a standardised methodology can be used to construct the MLI to ensure consistency in measurement across and within countries. An approach similar to that used to construct multidimensional poverty indices (MPIs) is recommended (Lyons et al., 2021; UNDP and OPHI, 2020; UNDP et al., 2019). In particular, UNDP et al. (2019) provide a comprehensive handbook that describes the technical process from start to finish of how to build a national MPI and link it to the SDGs. This framework can be adapted to create an MLI for crisis-affected populations.

Once the index is created, countries can collect data⁴ on the respective indicators, where indicators expressed in different units would be normalised and transformed into indices on a scale of 0 to 1, using a min-max method (Lyons and Kass-Hanna, 2020a; OECD, 2008; UNDP, 2019). Once normalised, the indicators would be weighted and aggregated into the key dimensions needed to compute the overall MLI. Households classified as vulnerable for a specified percentage of the indicators would be defined as multidimensionally vulnerable to poverty.⁵ Different schemes are possible for weighting the indicators and dimensions. One option is that the indicators could be equally weighted, where each indicator is assigned the same weight as all the other indicators. Another option is that the dimensions could be equally weighted, such that each dimension would be assigned the same weight and then the weights would be equally distributed across the indicators in that particular dimension. The weights could also be assigned based on the importance and relevance of each dimension to the overall index and a country’s policy priorities.

In this respect, the MLI can be used to make cross-country comparisons and to measure a specific country’s progress over time. Humanitarian and development actors can then use this framework to develop more informed targeting strategies in those dimensions and indicators which exhibit high levels of deprivation. The model would be able to identify which populations are the most vulnerable, and more specifically, where and how they are vulnerable. From here, humanitarian and development organisations can work together to better target existing cash-based resources and design more effective livelihood and resilience-based programming to address longer-term needs. The framework could also be used to set benchmarks and monitor and compare progress in achieving the SDGs, with the elimination of poverty being the prominent goal. This could even entail creating a global “scorecard” or “dashboard” modelled after the OECD’s Better Life Index or the UN SDSN’s SDGs Today, that allows for comparisons across countries and over time and provides data to better inform all humanitarian and development organisations, donor countries, policy makers, and other relevant multilateral organisations and public-private stakeholders.

RECOMMENDATION 3: DESIGNING A LIVELIHOOD AND RESILIENCE-BASED PROGRAMMING APPROACH

The G20 should design a coordinated livelihood and resilience-based programming approach across agencies and organisations, informed and based on the livelihood index, and implemented by humanitarian and development players. This involves designing multi-agency, livelihood-building interventions that apply the modelling and frameworks outlined in Recommendations 1 and 2 to target the most vulnerable via three pillars of action: (1) building human and social capital through digital and human skills training, to bridge the digital divide; (2) creating fair and secure employment opportunities for vulnerable populations, in the online and offline labour market; and (3) connecting underserved and unbanked populations to digital financial solutions, providing them a viable option to engage with the digital economy and society as a whole. Empowering crisis-affected populations with digital skills and solutions is key to ensure that they are not left behind due to the rapid transition to the digital economy and society (Lyons and Kass-Hanna, 2020a). The following sub-sections provide examples on some of the best practices in terms of initiatives adopted to support vulnerable groups, which could be applied or inspire the design of more appropriate intervention programmes.

3.1 Building human and social capital through digital and human skills training

The G20 and its Education Working Group need to encourage and support humanitarian and development organisations’ efforts to accelerate capacity-building strategies that equip crisis-affected populations with the necessary knowledge and skills to actively participate in the new digital labour market and economy. The increasing digitalisation of work has myriad effects on society that present opportunities for crisis-affected populations, especially migrants and forcibly displaced populations (Lyons and Kass-Hanna, 2020a, 2020b). It is generally recognised that these populations are well-suited for digital work and entrepreneurship, given their resilience to social and economic shocks.⁶ However, they are often excluded from key opportunities because of a lack of digital literacy and skills training. In particular, digital skills related to more advanced IT programming and training (such as STEM, coding and computer programming, machine learning, AI and robotics) can be designed to build and improve the employability and entrepreneurial potential of those affected by crises. This programming should include training in both technical skills but also socioemotional skills development that covers topics such as problem solving, critical thinking, communication and collaboration, which are critical to being able to effectively use and apply digital technologies (Lyons, Kass-Hanna, Zucchetti and Cobo, 2019).

A growing number of initiatives provide free digital and soft skills training to vulnerable populations globally. In the private sector, Microsoft recently launched a global skills initiative to offer digital skills training to 25 million people worldwide (Smith, 2020). The programme combines existing resources from GitHub, LinkedIn and Microsoft to offer free online learning courses to prepare persons hardest hit by the pandemic with the digital skills needed to fill the unmet supply of jobs currently available (Smith, 2020). Among best practices in the humanitarian sector is the World Food Programme’s Empowerment in Action Initiative (EMPACT),⁷ which is also a best practice when it comes to the “nexus” approach. This initiative provides digital skills through a tailored, focused vocational training programme, and partners with leading tech firms to connect trainees with online work opportunities. Participants in the programme can learn everything from navigating the Internet, typing skills and annotating images, to dedicated software training in programmes like Microsoft Office and Adobe Photoshop. For more examples of best practices, see previous work conducted by the T20 (e.g., Lyons and Kass-Hanna, 2020b; Lyons et al., 2019a, 2019b).

Also, the portability of skills is critical since crisis-affected populations are highly mobile. Certifications remain a crucial challenge, which entails ensuring high quality trainings and widely recognised certifications that can be broadly accepted by employers across geographical locations. To date, many IT certificates such as those delivered by Microsoft, CISCO and other well-established industry players are too advanced for the most vulnerable. More digital credentialing platforms are needed to assist crisis-affected populations, who often need training at the introductory or intermediate levels of skill building. Humanitarian and development organisations can learn from efforts by recent start-ups to provide innovative solutions that allow for the global portability, recognition and traceability of training certificates. For example, Diwala,⁸ a start-up based in Uganda, uses blockchain to issue and verify the certificates of students attending trainings in recognised institutions. The cryptographically signed and secure credentials issued are then available to employers globally and can be verified digitally. Also, the World Bank recently launched the ID4D Initiative,⁹ which provides technical assistance and advisory services to help countries harness the transformational potential of digital identification systems to achieve the SDGs. These kinds of systems can be adapted for digital credentialing. Digital Credentials Consortium (2020) provides a blueprint that was developed by 12 international universities on how to develop the infrastructure for a digital credentialing system, including how to issue, share and verify digital credentials of academic achievement.

3.2 Creating fair and secure employment opportunities for crisis-affected populations

Unemployment and underemployment are key areas where vulnerable populations are facing large deprivations (Hackl, 2019). COVID-19 and the shift to an online digital labour market has exacerbated this situation, especially for crisis-affected populations. Vulnerable populations are often concentrated in poor-quality informal employment or under-regulated sectors, where they are susceptible to decent work deficits and discriminatory treatment (ILO, 2020).10 An increasing share of crisis-affected persons are now working remotely using digital labour or microtask platforms. However, digital work offered by microwork and the gig economy is often underpaid, unregulated and potentially exposes workers to inappropriate content (e.g., hate speech, pornography, violence), without providing psychosocial support (ILO, 2021). For digital work to become a viable and safe solution for vulnerable populations, the global marketplace and microwork companies need to provide better safety nets and quality control measures for digital work, such as ensuring that tasks which may be psychologically stressful and damaging are clearly marked by platform operators in a standard way, and applying the prevailing minimum wage at the worker’s location (ILO, 2018).

The G20 and its Employment Working Group should endorse online and offline decent employment as an essential part of a comprehensive humanitarian-development response for crisis-affected populations. The increase in the volume of digital work being performed calls for a global position on the application of the ILO Decent Work Agenda¹¹ for online workers, to fulfil the SDG8 mission of decent work and economic growth. This approach sustains the commitment of the G20 to the ultimate goals of alleviating vulnerabilities and reducing social and economic inequalities so that no one is left behind, as well as creating more sustainable, inclusive and resilient communities in general.

Existing frameworks and models are available that can be used as a foundation for addressing decent work issues within the context of online digital work. For example, Fairwork¹² is a research project aimed at setting and measuring decent work standards in the platform economy, together with platforms, workers, trade unions, regulators and academics. The project also evaluates platforms and platform workers’ conditions in a variety of countries, highlighting best and worst practices in the digital economy. The World Fair Trade Organisation (WFTO) also has been certifying digital businesses using fair trade principles, including fair payment, transparency, women’s empowerment and good working conditions (WFTO, 2017). For example, Digital Lions,¹³ a digital outsourcing agency based in rural Kenya and employing vulnerable youth, in 2020 became the first digital service provider worldwide to become a member of the WFTO.

3.3 Connecting crisis-affected populations to digital financial solutions

In recent years, the G20 has made the digital financial inclusion of vulnerable populations, including those affected by crises, a priority and discussed action plans to address main challenges (G20 GPFI, 2016, 2017). The G20 and its Digital Economy Task Force should reinforce their commitment by supporting the efforts of humanitarian and development organisations to connect those excluded from mainstream financial markets to affordable and reliable digital payment, savings, borrowing and insurance solutions. Improving these populations’ uptake and usage of digital financial services (DFS) helps them to meet their financial needs, while also providing opportunities for meaningful and active engagement in the global digital economy. For instance, consider independent contractors and remote employees working from home. In this context, it is not enough to empower these populations through digital training and work opportunities, unless they are able to use DFS, such as PayPal, to digitally receive salary and wages. Among global initiatives to improve access to DFS for unbanked and underserved populations is a joint project called Digital Financial Inclusion and Women’s Economic Empowerment, developed in 2020 by the World Food Programme (WFP) and the Bill and Melinda Gates Foundation and launched in early 2021. This initiative seeks to provide first-time access to bank or mobile money accounts for these segments and their businesses, through both humanitarian cash transfers provided directly by WFP, as well as government-to-person payment schemes.

Efforts to stimulate access to and usage of DFS should go beyond enhancing infrastructure related to connectivity and mobile device access. In fact, other factors have proved to be much more challenging than connectivity and access issues (Lyons and Kass-Hanna, 2020a, 2020b). Among the most critical have been barriers related to the difficulty crisis-affected persons have in proving legal identity to meet “Know Your Customer” requirements. The G20 can foster dialogue within and across governments to encourage flexible regulatory frameworks that can rely on alternative identification approaches such as biometric information and big data collected via mobile phones, geolocators and satellites (Lyons and Kass-Hanna, 2020b). Relaxing legal and regulatory constraints should not overlook consumer protection concerns to ensure safety of funds, transparency, appropriate consumer recourse, as well as privacy and data protection. The G20 should further encourage digital financial literacy programmes to raise awareness about DFS and how to access and use them, as well as how to protect against scams and fraud (ITU, 2017; Lyons and Kass-Hanna, 2020b).

CONCLUSIONS

The G20 countries are the major contributors to humanitarian and development aid. Improving the efficiency of their contributions is key given the increasing needs, which are likely to intensify in the aftermath of the ongoing pandemic and expected natural and manmade disasters. Initiatives that optimise targeting and promote interventions that reduce aid dependency, while providing long-lasting solutions to reduce poverty and inequality, should be among the G20’s highest priorities. The G20, through its various working groups and task forces, can and should play a pivotal role in encouraging strong dialogue and cooperation between humanitarian and development organisations to strengthen the synergies between relief and resilience-based support for the most vulnerable of the vulnerable.

DISCLAIMER

This policy brief was developed and written by the authors and has undergone a peer-review process. The views and opinions expressed in this policy brief are those of the authors and do not necessarily reflect the official policy or position of the authors’ organisations or the T20 Secretariat.

APPENDIX

Figure 1: Suggested Dimensions and Indicators for Inclusion in Multidimensional Livelihood Indices (MLIs)

Sources: UNDP, OPHI and University of Oxford (2019); Lyons, Kass-Hanna and Montoya Castano (2021)

NOTES

¹  In the MENA region, for example, extreme poverty rates have risen sharply, spurred largely by sustained violence and conflict in Syria and Yemen (https://openknowledge.worldbank.org/bitstream/handle/10986/34496/9781464816024.pdf).

²  Addressing the financing mechanisms is an important component to a coordinated approach. Currently, funding for humanitarian purposes is kept separate from funding for development purposes, and this separation of financing often does not correspond to people’s lived experiences. For example, Oxfam International (2019) reported that countries affected by crisis had received far less funding for development than they would have without the crisis. In 2016, countries that had received the largest amounts of international humanitarian assistance received less non-humanitarian development assistance than other developing countries. In other words, when those countries most needed long-term assistance, they received less.

³  https://www.g20.org/italian-g20-presidency/working-groups.html.

⁴  https://sdgstoday.org/.

⁵  Households that are vulnerable for at least one-third of the indicators (> 33 per cent) have been traditionally defined as multidimensionally poor.

⁶  In fact, research shows that crisis-affected populations represent a disproportionately large percentage of business owners (Easton-Calabria, 2019).

⁷  https://innovation.wfp.org/project/empact.

⁸  https://www.diwala.io/.

⁹  https://id4d.worldbank.org/.

¹⁰  Based on a review performed by ILO/PBSO/UNDP/World Bank on employment programmes in fragile situations, including forcibly displaced contexts, three main drivers of conflict were identified that have been linked to unemployment, sense of injustice, insufficient rights and quality of work environment and peaceful coexistence (ILO, 2020).

¹¹  https://www.ilo.org/global/topics/decent-work/lang–en/index.htm.

¹²  https://fair.work/en/fw/homepage/.

¹³  https://digitallions.co.

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