Portfolios of the Poor

A book review by Dr. Sudhirendar Sharma

Poor know how to survive

Else, there would be no poor in the world. The fact that there are poor and that their number is consistently growing has been systematically diagnosed in Portfolios of the Poor. From household maid to young car washer and from ubiquitous rickshaw puller to malnourished watchman, there are any number of them around us who survive on less than $2 a day and constitute about 40 per cent of the world's poor. The authors contend that if you've never had to survive on an income so small, it is hard to imagine how they do.

Over a period of six years, the authors maintained annual financial diaries of some 300 households in villages and slums in India, South Africa and Bangladesh to unravel the financial complexities of the lives of the poor. The diaries reveal that most poor households do not live hand to mouth because they rarely consume every penny of what they earn, knowing well that they don't literally earn $2 every day.

The book brings out incredible financial wisdom of the poor. Not having enough money may not be bad, not able to manage whatever money they have is worse. The hard evidence collected through diaries dispels several common notions on poverty, mocking at policy planners who do not see poverty beyond the conventional cause-effect paradigm. No wonder, the anti-poverty strategies have rarely worked to alleviate poverty.

Through painstaking research, Daryl Collins, Jonathan Morduch and their co-authors Staurt Rutherford and Orlanda Ruthven provide fresh perspective on looking at poverty alongside new methods to fight it.

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