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Economic Strengthening for the Very Poor (ES4VP)

Extreme Poverty and Vulnerability

Extreme Poverty and Vulnerability

The development community does not have a common understanding about what is meant by extreme poverty, how it is defined, recognized or measured. The World Bank and many other international agencies define Very Poor as living below US$1.25 a day and estimated that in 2008 1.3 billion people (about one in five) were living on less than US$1.25 a day in 2008.

This internationally comparable and global poverty line is criticized for failing to reflect the multiple dimensions of poverty, including access to education, health, and housing, and is less useful for practitioners than policy makers, and poverty is increasingly recognized as a multidimensional phenomenon that encompasses not simply low income, but also lack of assets, skills, resources, opportunities, services and the power to influence decisions that affect an individual’s daily life. [1]  For more information on multidimensional poverty assessment work click here.

For the purpose of this wiki, the Very Poor are those unable to consistently meet their basic needs and often too vulnerable to engage in income activities. They have very limited physical, human and financial assets and social networks to draw on to mobilize and leverage household and community resources or external assistance. In this wiki they are sometimes also referred to as ‘struggling to make ends meet’.

Ultra Poor or destitute households ‘tend to be food insecure, have poor health, lack education, usually have few or no assets, and are limited in their livelihood options. They also tend to be socially excluded and lack in self-confidence or opportunities to build the skills and resilience necessary to plan their own future’.[2]

Findings indicate that [they] often live in remote rural areas; are more likely to be ethnic minorities; and have less education, fewer assets, and less access to markets. Remoteness, exclusion, and lack of education are especially likely to characterize those living on less than 50 cents a day.[3]

Vulnerability is not the same things as poverty, but refers to susceptibility to a sudden or gradual decline in a household’s ability to secure its livelihood and food security. Both poor and non-poor people may be vulnerable and vice versa. Vulnerability refers to a household’s susceptibility to a future acute loss and its capacity to maintain its livelihood and food security over time. Vulnerability is defined as: “the household’s susceptibility to shocks and stresses that affect the household’s ability to generate sufficient income to earn a livelihood and achieve a threshold level of nutritional requirements for a healthy life both now and in the future. The household’s vulnerability context is influenced by factors both outside of and within its control. Those outside its control include stresses and shocks as well as external structures and processes. Structures and processes include factors like the public and private sectors, civil society, laws, policies, culture, and social institutions that affect how households accumulate and utilize assets”.[4]

A substantial body of research finds that poorer households face greater vulnerability to shocks—such as the sudden illness of an income earner—and are often less able to mitigate potential risks due to inadequate financial or social assets. Their reduced ability to cope with losses creates a relative intolerance for risk.[5]



[1] 6_MaesFoose (also note that this contains references to literature)

[2] Graduation Program FAQs (p. 1) --- this can be directly accessed by hyperlink to graduation website.

[3] The Poorest and Hungry – Characteristics and Causes (p. 107)

[4] LIFT ES Framework (p.11)

[5] PoP Discussion Paper (p.1)