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Student Profile

Income Generation: A Viable Option for Poverty Alleviation

by Amberly Knight and Jenny Oman

The question of poverty alleviation holds center stage for development theorists and practitioners around the world. They use cooperative, cottage industry, income-generation, microcredit, and macro development schemes to combat this global problem. However, in spite of their efforts to change the economic and social reality of the poor, often it fails to create lasting impact.

Out of all the options for poverty relief, the latest buzzword in development is free-market microcredit, which boasts thousands of loans and little donor investment and provides empowerment through entrepreneurship. Despite these enticing assertions, it has failed to become the panacea to world poverty. While effective in many cases, microcredit has been unsuccessful in others.

For example, it has been disastrous in some rural populations, because it fails to provide the business, distribution, and skill-building support so desperately needed. Critics of microcredit also suggest that it often produces cycles of dependency, rather than the independent entrepreneurs it claims to create. As Kennedy Center graduate students in the International Relations program, we have observed examples of this in our experiences.

While working with microcredit in 1999 in Venezuela, I (Jenny Oman) discovered that although some organizations boasted about many loans to small businesses, a number of those loans were actually hurting the businesses rather than helping them. I (Amberly Knight) observed similar patterns in my work in southern Jordan in 2000. Shopkeepers, who started with a $500 loan three years ago, now owe over $3,000, being trapped in a cycle of loan dependency.

Last fall, we both studied income-generation projects in Jordan. This type of project was once hailed as the model aid enterprise, but in recent years it has been discarded—criticized as being highly subsidized, tightly regulated, and not easily adaptable. However, our findings suggest that income-generation can be an economically viable method of poverty relief and community development. The following two Jordanian projects have been tremendously successful in their ability to provide income to local populations, be financially sustainable, empower the women in the community, and increase the local people’s skill base.

Bani Hamida Women’s Weaving Project

The Bani Hamida is a quasi-settled Bedouin tribe located along the Dead Sea in Jordan’s desolate and arid mountains. This tribe is a particularly interesting case study in light of the fact that it is an extremely rural population. Makawir, the largest village, is 30 kilometers (18 miles) away from its nearest neighbors.

Save the Children began work with the Bani Hamida tribe in 1985 with three separate projects: a health project, an agricultural project, and a cottage industry income-generation project. The latter, a weaving project, is the only one of the original three projects that continues to exist today.

Yarn being dyed on the stove.

This successful project began with a $7,000 grant and thirteen women. Nine years later, in 1994, the project was earning more than $500,000 a year in sales, with about $250,000 going directly to the women—not including the women directly employed as fulltime staff with Save the Children. As the project grew, it also became internationally famous when Architectural Digest displayed a Bani Hamida rug under news magnate Katherine Graham’s coffee table. Despite the project’s impressive impact, in 1996, Save the Children transferred Bani Hamida to a local NGO, Jordan Society for Development—who later moved it to Her Majesty Queen Rania’s Jordan River Foundation—in order to pursue new microcredit ventures.

Fortunately, the project continued to thrive under new management. The weaving project has provided income over $1.5 million for the tribe and has been financially sustainable since the late 1980s. In addition to the funds provided by the project, the community is also receiving indirect benefits, such as increased business in other areas: some community members are building a restaurant and a guest house for tourists who visit the weaving center and shop.

The project also empowered the tribe’s women. When they first began to make money, Field Office Director Rebecca Salti explained, “One woman reported that she spent her money to buy a light bulb and another a pencil. All these women couldn’t read, but they wanted their children to be able to read. Allah (God) sent them schools for the first time in the history of their existence, and now they could pay for some supplies. This project enabled women to solve the simplest problems in their household. Whether it’s to put a piece of chicken on their plate or to buy a light bulb or to get a pencil. If you’ve got women in every household being able to bring home some money and to get something that was very necessary, then you are solving the problems of the community.”

The increase in their weaving and business skills has also been remarkable. Of the young women originally chosen to work as supervisors, many continue working today—now as established women with families. They run all local production operations and have been trained in accounting, production, leadership, and other business skills. Their ongoing personal development is perhaps the most exciting result of the project.

Artisans display their wares.

Halima Qa’edy is a wonderful example of women’s empowerment. One of the original women, she has since become the manager of operations on the mountain. With the money, skills, and confidence acquired from her experience, she has accomplished things tribal women had never done before. One such achievement occurred when Qa’edy became the first woman on the mountain to receive a driver’s license, breaking into a domain that had been previously exclusively reserved for men.

While the Bani Hamida project still faces challenges, overall it is a marvelous success in providing income and empowerment to the tribe. Salti emphasized its effect, “We are liberating women. We are enabling women to solve their problems.”

Dana Jewelry Project

Located in southern Jordan, Dana village sits on a tiny plateau of land attached to the side of a steep canyon that drops into the Great Rift Valley. The Ata’ta tribe, nomads from Palestine, settled there over 400 years ago. About fifty years ago, families moved to the top of the canyon, where they had better access to the benefits of modernization, such as transportation, schools, healthcare, electricity, and sewage systems. Only remnants of the original population—a few farmers and shepherds, the elderly and the very poor—stayed in Dana; most of the village crumbled to ruins.

Great Rift Valley in Jordan.

In 1991, a group of women from Amman, eager to help the suffering citizens of Jordan after the Gulf War, adopted Dana. They raised half a million dollars and used the money to buy food and clothing, rebuild sixty-five homes, remodel the mosque, clean out irrigation channels, and re-pave the main road. They called themselves the Friends of Dana.

In 1993, the government of Jordan declared the surrounding area “protected” and transferred management of it to the Royal Society for the Conservation of Nature (RSCN), an NGO founded by Her Majesty Queen Noor in 1966. RSCN’s slogan is “Helping Nature Helping People.” When developing a protected area, they attempt to integrate and assist the local people. In 1994, they hired Rebecca Salti, based on her excellent track record with projects such as Bani Hamida, to head their socioeconomic division. She began with a silver jewelry project that would employ women to create jewelry with designs inspired by nature.

Because RSCN emphasizes sustainability, they only hire those who are qualified or trainable for the job. When the project began, RSCN management explored the possibility of working with the local jewelry cooperative, but Salti recognized they did not utilize sound business practices. She instead looked to Amman for qualified employees. There she discovered and hired an accomplished designer, Amar Khamash, and a young jewelry worker, Mahmoud Saudi. Although this initially roused local animosity—understandable in a country where connections are often more important than capability—it proved to be one of the key reasons behind the project’s success.

Due to cultural constraints, it was at first difficult to locate women who could participate. Many of the young women only left their homes to shop and most of them did not even have friends outside their immediate family. Additionally, women and men rarely worked in the same building, because it was considered inappropriate. RSCN representatives refused to give up, going door-to-door in the village, inviting women to attend their information meetings. Salti and Saudi officially launched the Dana project in 1995 with eight women.

The jewelry project now employs fifteen local women, who would otherwise not have the opportunity to work. Men and women are paid equally depending on the skill level, and currently women contribute half or more of their income to their families, many of whom are the goat herders who have been restricted by the reserve.

Dana’s silver project success can also be attributed to its solid management principles. In order to capitalize on the economies of scale provided by all of RSCN’s socioeconomic projects throughout Jordan, qualified personnel in Amman handle the administration, bookkeeping, and marketing of the products. Plus, RSCN has discovered the environmental product niche in Jordan that is not currently being filled by other companies. Customers feel they are buying quality goods while also helping nature.

Beyond its financial stability, the Dana silver workshop is a success for having developed the skills and empowering the women who work for it. When Saudi began the project as the manager and trainer, Salti instructed him to stay in Dana until he found and trained a local worker who could replace him. The current manager, Faisa Hamid Na’ana, was among the first eight women in 1995. She began working when she was nineteen. The eldest daughter of impoverished shepherds, Na’ana left school after sixth grade to assist her mother with caring for the sheep and goats. When Salti first met her, Na’ana was searching for old magazines or newspapers so that she would not lose her basic reading skills.

Na’ana attended the first information meeting with a friend and was very interested in the opportunity. Her father was not supportive— being concerned with her reputation—but Na’ana persevered and began to work. She reported that, in the beginning, she never knew whether she would be allowed to go to work the next day. People in the village harassed her for working outside the home. However, over time, her work gained a respectable reputation, and her salary became a huge benefit to her drought-stricken and impoverished family.

Young women artisans in Dana.

Na’ana replaced Saudi (who is now developing another silver project in Wadi Rum) as manager in 1997. Placed in an environment where she had an opportunity to use her natural talents and to learn business management skills, Na’ana became an excellent manager. She never misses deadlines, quietly motivates her employees, and resolves their differences—all while keeping production high. Her attitude has built a safe community among the other employees based on unity, respect, and teamwork. This incubator for personal change has impacted many of the other women in the community as well—the word is out in the community, and Na’ana has over fifty applications for the next available opening.

Na’ana openly expresses how much this opportunity has empowered her. It has helped her to develop confidence, communication and teamwork skills, and has given her a chance to make many friends. She also made a better marriage, because she possessed desirable skills and a position. She feels that many changes in her personality have occurred as she has been able to play the role of a producer, not only a consumer.

Many of the other women report similar changes in their lives and say that they are strengthened through the relationships they build with each other. Additionally, the secure income—base salary with production incentives—is very desirable in Jordanian culture.

This mutually beneficial situation allows the women to gain a very competitive, secure salary, and the chance, through RSCN’s skill-building programs, to develop management and interpersonal skills. RSCN gains through the project’s profits that are cycled back to cover costs of the reserve and to develop additional income-generation projects in other poverty-stricken areas.

The Bani Hamida and Dana Reserve projects demonstrate that income-generation is still a viable option for poverty relief. With careful management strategies and a clear focus on skill building, income-generation can be successful and sustainable, particularly in extremely rural populations where other development strategies have proven to be less successful.