Livelihoods and Capital

A person’s livelihood is their means of securing the necessities of life including:

• food,

• water, 

• medicine, 

• shelter, 

• clothing, 

• and other needs, including income to purchase these necessities. 

An important aspect of someone’s livelihood is the capital they are able to access. There are many different types of capital, not just financial. Capital is sometimes also referred to as ‘capabilities’ or ‘assets.’ For example, a person may use their boat to fish, keep some of the fish to feed their family, and sell the rest of the fish at the marketplace to generate money to pay for food, education, and other necessities. This simple example illustrates all five different categories of capital that communities and individuals can access to secure their means of living. Those categories are described below. 

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• Natural capital is essential for coastal communities who depend on marine resources for their livelihoods. The responsible use of natural capital is essential for conservation.

• Human capital and social capital are needed to convert resources into goods and services and to find markets for them. 

• Infrastructure capital is needed to produce products and get them to market.

• Financial capital is needed to develop and manage individual or community-led businesses.

For example, fishers referred to above use a boat, which they may have had to purchase using financial capital in the form of savings. They can catch fish, using the marine natural capital for which they may have access or use rights. They then take the fish to the marketplace using a road and occupy a stall, thus using infrastructure capital. The fishers may rely on family and friends to help them, and they sell the fish to members of their community, using social capital. They will also have had to invest their time and physical effort as well as their skills, using their human capital. In this way, fishers will have used all five of the types of capital to earn their livelihoods.

Sustainable Livelihoods

So, what makes a livelihood sustainable? Sustainable livelihoods help communities access the income they need to support their needs and to care for their natural resources sustainably. 

In the fishing example used previously, the livelihoods of the fishers and their families would be sustainable if they could rely on the permanent availability of fish, and if they are able to generate some surplus income from bringing their fish to market, beyond meeting their basic needs, so that if they were to become ill or injured and could not work for a period, they would have sufficient financial capital to survive.

The livelihood opportunities that are available to a community depend on the capital available to them. For example, many livelihoods require machinery or technology, such as boats or processing machinery which may require a significant investment of financial capital. Or their infrastructure capital may be inadequate, e.g., lack of roads or boats required to get their products to larger markets. Communities may find it difficult to access financial capital (also referred to as financing) through loans, microfinance, or other means.