Economic Strengthening for the Very Poor (ES4VP)
Economic Strengthening Pathway
One way to reconcile risk-reduction and growth-oriented strategies is to envision livelihood strengthening on an economic strengthening pathway towards increased income and reduced vulnerability. The appropriate intervention entry point depends on where the household is located on this pathway, while the household’s rate of progression along the pathway depends on its asset endowment. Five key livelihood objectives exist on the economic strengthening pathway indicating decreasing levels of vulnerability and increasing levels of livelihood and food security:
These 5 livelihood objectives need to be linked to the five corresponding Livelihood Objectives in the Provision, Protection and Promotion subsections further down.
- Households that have already reached levels of destitution (stage 2 or 3 of loss management) will require direct support to meet basic needs and recover key assets that they have lost.
- For more stable – yet highly vulnerable – households, assistance to develop basic self-insurance mechanisms will strengthen their stage 1 loss-management strategies and improve the way they manage household risk.
- As households are building self-insurance mechanisms, they tend to prioritize improvements in their ability to manage consumption and cash flow over improvements in their income.
- By strengthening loss-management strategies and mitigating risk to consumption, households can more easily invest in risk-sensitive income generating activities.
- Solid self-insurance mechanisms plus reliable and frequent income streams will influence the way households perceive risk and allow them to make riskier investments in higher-return economic activities.
Source (Household Economic Strengthening in Tanzania. Technical Guidance for PEPFAR II Programming, Jason Wolfe, 2009)
 E. Dunn, N. Kalaitzandonakes, and C. Valdivia (1996).