Synthesis documents

Poverty Reduction through Small Enterprises, ILO 2006

    Two years ago, the ILO's Small Enterprise Development Programme (SEED) initiated a process of internal discussion and review, assisted by outside experts, on the important issue of poverty reduction. This paper is a product of that process. Both the paper and the process complement the larger initiative taken by the ILO to make the fight against poverty a central element of its agenda. Through the Director-General's Report, Working Out of Poverty, and the many initiatives guided by that report, the ILO has joined with its partners in taking up the challenge posed by the most important of the Millennium Development Goals, reducing by half the incidence of world poverty by 2015.

    The paper explores the interesting connections between the ILO's work on developing the small enterprise economy and the task of poverty reduction. Those of us working on small enterprise development have long recognized the existence of these connections. This paper - and the consultations necessary for its preparation - have helped the ILO to probe the connections more deeply. The paper also outlines the international initiatives of the past half-decade which have raised the profile of poverty as the prime issue of economic development and social justice. The increasing importance given to how private sector development can support poverty reduction is also discussed. The paper includes a section on reforming policies, laws and regulations.

    In addition, the paper highlights the difficulties of assessing the impact of enterprise development not just on the enterprises themselves, but on poor workers, entrepreneurs and their families. It is an issue into which the ILO and the international community need to channel more energy. In the fifth chapter, the paper outlines a strategy that SEED might adopt, after further consultation and revision, to focus its programme on poverty.