In the spirit of the G8 protests, an activist that my friend saw in Boston last week carried a sign that said 'Abolish Poverty.' No explanation on how to do it. Just a call to action.

That sign best describes the G8 protests that I saw in Edinburgh, UK last Saturday. Bob Geldorf expressed the event's basic premise on UK radio when he said, "We've never been wealthier, we've never been healthier," so we must be able to abolish world poverty. Although the organizers of the event had a policy agenda (drop the debt/increase foreign aid/make trade just), they emphasized that simply something must be done, because it is the humane thing to do.

Having been in the UK for the past couple of days, and not reading the American press, I don't know how it is reporting on the events leading up to the G8 meeting scheduled to start July 6 a few miles from here, but I can tell you that it's big news here.  A peaceful march of more than 250,000 followed a few days later by a rather (surprisingly to the authorities and the public) violent protest by several hundred avowed anarchists in the streets of Edinburgh -- right outside the hotel where a meeting on African development we're involved in is to convene tomorrow. 

In fact, the G8 and its attendant issues -- African development, trade, aid, and debt -- are bigger news, if you can believe it, than the question of whether two participants in a British reality TV show did or did not have sex together.  It's neck and neck, but the G8 is undoubtedly the winner.  Like I said, big news. 

Any long-term development plan of a multinational corporation is going to eventually turn to the market at the bottom of the pyramid. How long it will take for this approach to business to become popular is still to be determined, but with increasing globalization and emphasis on developing countries, investment in areas that have been ignored in the past will grow.

Companies investing in developing regions will be forced to engage in responsible behaviors, firstly because of social pressures (if mainstream news sources don't cover ethical violations, the internet is a perpetually-expanding source of news), and secondly, because they will have to in order to survive. The company of the future will not only have to engage in behaviors that are marketable to the public, but also encourage innovation and efficiency.

The conference "Raising Living Standards in Africa: A Role for the G8" began this afternoon in Edinburgh.  The former president of Mozambique, Joaquim Chissano, opened the event.  Mozambique is considered among the 'success stories' of the effectiveness of aid in recent days.  Absolute poverty is being reduced, a peaceful transfer of political power was accomplished, and the growth rate is high.  Peter McPherson, former head of USAID under Reagan, and a principal advisor on the economic reconstruction of Iraq (among his many roles), set the agenda -- charity isn't enough; development must be enterprise-driven, and in the case of Africa, it is African leaders themselves who are leading the way, and their leadership is absolutely critical. 

The Economist: Helping Africa Help Itself, The $25 Billion Question, Doing Business in Africa

In light of the G8 summit, The Economist published several articles related to foreign aid to Africa in this week's edition. One, Helping Africa Help Itself, advocates foreign aid on the basis that it constitutes a relatively small amount of rich countries's GDP, and that a few foreign aid projects, particularly in disease eradication, have had large impacts on the lives of the poor. Another,The $25 Billion Question, includes shocking statistics of the misuse of foreign aid, due to the inability of donors to properly align the incentives of government bureaucrats to ensure that they use the aid as intended by the donors. A third, Doing Business in Africa, describes the healthiness of the business climate in Africa, and the success of large, African firms.

We just finished a "Breakfast Business Discussion" at the Raising Living Standards Conference in Edinburgh.  What struck me most was the consensus set of conclusions and suggestions which characterized seven separate table discussions.  At each table were senior business execs, including the vice chair of Chevron, Peter Robertson (who also appeared at WRI's December 2004 BOP conference in SF); Paul Pressler CEO of Gap, Rob Johnson a SVP at Cargill; Nazeem Sterras, CEO of Capespan in South Africa, Vassi Naidoo, CEO of Deloitte in South Africa; and others, plus a host of civil society leaders -- CARE, Christian Aid, DATA, Save the Children, along with many policy types. 

World leaders gathered in Scotland this week for the G-8 summit are discussing an increase in international aid as a means of reducing poverty and disease in Africa. British Prime Minister Tony Blair has been encouraging other G-8 nations to double monetary aid to the continent by 2010, while the U.S. has favored a more cautious approach. What are the prospects for change in international aid for Africa? How would these funds be used?

Raj Desai, professor of International Development at Georgetown University, will be online Thursday, July 7, at 11 a.m. ET to discuss the G-8 summit and international aid.

In a short cover story in the International edition of Newsweek, dated July 11, the magazine contrasts the promises at the G-8 summit with the entrepreneurial revolution already taking place on the ground in Africa. It's not planned, rather much more spontaneous and bottom-up. But the evidence is that its working in at least 25 of the continent's countries. Even World Bank President Wolfowitz is impressed, according to the magazine.

Before an Africa tour last month, the newly installed World Bank president, Paul Wolfowitz, called corruption "the worst threat to democracy since communism." But after visiting Nigeria, Burkina Faso, Rwanda and South Africa, he was striking a more positive note: "Every—where I found people who had a real willingness to work hard, intelligence, energy and a can-do attitude. Africa is a continent on the move."

Controversy is brewing over U.S. "control" of the internet.  Essentially, the Internet Corportation for Assigned Names and Numbers (ICANN), created by the Clinton Administration, allocates most internet addresses and top-level domains.  While its body is made up of members from diverse countries, developing nations protest that it is too biased toward wealthier nations.  They are calling for the United Nations to be placed in charge of setting internet standards and creating regulations.

NCDO, a Dutch civil society organization, has launched The Business in Development Challenge, a business plan competition for profitable ideas that fight poverty. Although the first competition ended last June, the website claims that the NCDO Director has committed to relaunching the competition. The competition is open to anyone from the Netherlands or a developing country. First prize winners receive € 20,000 to finance a feasibility study/pilot project and € 10,000 in-kind for coaching and for support. Even if you don't have a business plan to submit or are not eligible to compete, the website is worth a visit to read the descriptions of the winning plans.

 

I'm at the BELL Conference at Cornell University, and just came out of the Sustainable Innovation for Incumbents discussion, which addressed the challenges MNCs face when creating sustainable global enterprises, including those that tackle the BOP market.  The two main obstacles identified were:  1) how to change the corporate mindset, and 2) what skills / competencies are required.  Both were discussed in depth by the audience, who gave a variety of perspectives on the issues.

BOP-oriented businesses have the potential to become a powerful transformative force in low-income countries, but businesses have other roles to perform that could both solve social problems and serve their self-interest.

Consider this article from The Economist, “Business and AIDS.” It describes how a civil society organization, Global Business Coalition on HIV/AIDS (GBC), and its local chapters have worked to convince South African businesses to join the fight against the disease. GBC advocates that businesses monitor their workers and provide them with treatment. Initially resistant, because of the time and monetary costs that worker support entails, some South African firms have begun to adopt GBC’s suggestions. This progress appears to result from GBC’s strategies that distribute free treatment kits to South African businesses, and that articulate to businesses how HIV/AIDS treatment improves their bottom line by prolonging the lifespan of infected workers.

From a public health perspective, GBC’s focus on South African businesses makes sense, because businesses have an important leverage point in fighting the HIV/AIDS epidemic: an established infrastructure that employees visit everyday. This greatly simplifies the necessary process to educate workers, to diagnose the infected, and to treat the disease. As a consequence, anti-HIV/AIDS programs that businesses sponsor more easily reach their employees as compared to some public sector programs that lack an established, institutional connection with their target population to administer assistance.

Building entire business models directly oriented to fighting poverty should not limit our thinking about the full social potential of the private sector. BOP-oriented businesses should be only one strategy in a portfolio of approaches that uses the private sector as a force to fight social problems.

A few innovative examples of initiatives providing low-cost housing made their way across my desk in the last 24 hours, which I took as a sign that I should share them with the NB.net community. Some have been shared before, but are worth mentioning again.

The first is a South African company called Moladi, which utilizes a unique plastic injection molded technology to produce cast-in-place mortar structures. The process allows unskilled laborers to use indigenous materials to quickly and cheaply construct high standard permanent buildings that are earthquake, cyclone and tsunami resistant. With the intended purpose of "housing the nations", the construction technology addresses four key challenges embodied in the low cost housing shortages facing developing countries, namely: lack of resources, insufficient funds, shortage of skills, and time constraints.

"The motive of immigrants is to come here, get a job and to work hard and send money back home to support their family"

- Atsumasa Tochisako, the chief executive of Microfinance International Corporation

The New York Times quoted Mr. Tochisako in the article "Entrepreneurs Cater to Immigrants' Financial Needs" yesterday. The piece focused on how not only to decrease the costs that immigrants face when they send money to their countries of origin for their families, but also how to help give those immigrants more control over how their families handle their money.