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India's rapid industrialization and urbanization is a boon to the national economy but a serious challenge in terms of an unfettered rise in energy usage and GHG emissions.  So far, India's per capita energy consumption has remained one of the lowest in Asia, because of its vast rural populace with little access to energy infrastructure.

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Guest poster Bal K. Joshi is the co-founder and managing director of Thamel Dot Com, Kathmandu, Nepal. He is also a partner in Thamel International.

By Bal K. Joshi
William Kramer's comments are well taken. His words certainly reflect our belief, that "...economic empowerment is all about choice." However, I would like to add that economic empowerment also includes personal control. Treating remittances as a platform--giving diaspora the choice of directly converting those funds into products and services back in their homeland--allows them to make well informed decisions on the use of their hard-earned dollars. This is not about "top-down" or "North-South" control; it is about value-chain control. The only choice with traditional money transfer services is to remit cash, and the only control is trust and a prayer.

It is important to point out that the transformation in our thinking about remittances and development has been driven from the "bottom-up"; influenced by the stake-holders in the remittance value chain. There are two primary beneficiaries of remittances: beneficiary #1 is the third party (friends or families) receiving the funds (or equivalent); beneficiary #2 is the “remitter” or the diaspora. Both beneficiaries have needs that have to be supported by the remittance platform. It’s a known fact that most of the remittances sent home are used for daily consumption by beneficiary #1. This use of the remittances also meets the needs of beneficiary #2 by providing their desired support for their family. We also agree that the primary developmental impact of this daily consumption is the spending of the money (directly or indirectly) with merchants in the local economy. However, on the ground in Nepal, we see two realities: the massive misuse of remittances by recipients (beneficiary #1); and a strong diaspora (beneficiary #2) interest to invest in SME enterprises.

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Let me add my thoughts to Bal Joshi's fine post of 12/6 and AnnaLee Saxenian's reply of 12/8. I couldn't agree more with most of the points made in both. The notion of remittances as a development platform is just right, in my view, and Ms. Saxenian strikes a fair balance on "good" and "bad" remittance impacts. When remittances become just another form of dependency, they get in the way of real development. I take note, however, of what might be a few hidden traps buried in Bal Joshi's post.

Bal offers three primary justifications for them. First, it reduces costs; second, it increases sender control, "lowering waste and misuse"; third, it offers "the sender more options" for productive use, such as savings, build-up of capital, etc.; and fourth, it fosters creativity in the pipeline. My concern comes in points 2 and 3, as both are, to my perhaps over-sensitized ears, reminiscent of the "top-down" and "north to south" control that has so plagued development policy in the past. A considerable amount of criticism of the BOP agenda (particularly as relates to Prahalad's enthusiastic portrayal of creating the capacity to consume) has revolved around "misuse" of this new-found buying power. This approach can, and often does, take on a moralistic tone; however well intentioned, this kind of guidance is usually counterproductive.  Economic empowerment is all about choice, and yes, some of the choices will be less than fully efficient, or productive, or even healthy.

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Another sustainable company success story to take you into the weekend:  this one starts with a relatively simple concept.  Chinese industry is experiencing plenty of growth right now, and can in many ways be considered the engine driving the country's healthy economy.  But this rapid expansion has brought about significant inefficiencies - 58 percent of energy consumption in East Asia can be attributed to China, and much of this to the industrial sector.  Much of this consumption, up to 60 percent in some facilities, ends up being wasted energy.  Why not turn this incredible output of energy into cost savings?

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Sustainable enterprises in emerging economies take another step forward this month, this time in Brazil. On December 14, New Ventures Brazil will host its 3^rd annual Investor Forum. The new 2006 selection of New Ventures enterprises, including companies from seven states working in clean technology, new materials, organic agriculture and other sectors will be presented at Fundação Getulio Vargas in São Paulo. This was preceded by a separate Investment Forum on December 6-7 hosted by FINEP, Brazil’s Agency for Innovation and Entrepreneurship, which featured New Ventures enterprises among other small businesses presenting their business models to potential investors - check out Linax's great presentation as an example of some of the great material we saw (in portuguese). 

Some may ask what significance this flurry of activity holds. Think-tanks and development organizations seem to constantly be convening forums and conferences around specialized issues, so what is important about small and medium size enterprises (SMEs), and why support them?

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The people of Naini were angry. The primary school in their impoverished Himalayan village had just two teachers for more than 110 children in the first through fifth grades. Their kids spent most of the time working on their own. With so many students per teacher, and each teacher working with five grade levels, one father of two boys, farmer Diwan Singh Rawat, asked: ''How is the teacher going to teach?'' Rawat, who supplements his agricultural income by running a small shop that sells biscuits, candies, and cigarettes, says: ''Even if children go for six months to the government school, they don't learn anything.''

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What do cows and cell phones have in common? Until the advent of microfinance, the answer was not much. Over the past twenty or so years, small loans have enabled thousands of low-income clients to purchase a cow – a story we've all heard before. The client sells milk, making money to re-pay the loan and maintain a steady income. In recent years, microfinance clients in Bangladesh, Rwanda, Uganda, and the Philippines have used their loans to purchase cell phones and service through a project called Grameen (now Village) Phone. These entrepreneurs then re-sell minutes on their phone at a slight mark-up to fellow villagers – just like their predecessors sold (and still sell) milk to generate money.

Grameen/Village Phone – combining innovative technology with microfinance and a good business model – has always been one of my favorite base of the pyramid success stories (WRI published an excellent business case study on GrameenPhone way back in 2001). Despite the project's strength, it hasn't grown much beyond its roots in four countries. Even when you have a good, proven idea, it's hard to expand quickly without local offices and staff in new markets. For Village Phone to work, you need to be able to evaluate clients, manage loans, interface with local phone companies, and keep the phones charged and running. The Grameen Foundation has the staff and expertise to do all this in their four operational countries – but why limit such a good model because of a lack of staff?

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Guest poster Bal K. Joshi is the co-founder and managing director of Thamel Dot Com, Kathmandu, Nepal. He is also a partner in Thamel International.

By Bal K. Joshi
From my perspective, recent public dialogue about the development impact of migrant remittances is a little limited. Traditional cash-to-cash money transfers can lack macroeconomic leverage, especially when the funds are used for consumption rather than investment. However remittances can be more then simply funds transfers. Several years ago, we at Thamel Dot Com (TDC) in Nepal asked ourselves a basic question: Are remittances a "product" or a "platform" for development?

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Two new World Bank policy papers have come out recently reporting on the status of public and private schools in Pakistan (via PSD Blog). The reports show that, contrary to most perceptions, the average private school is affordable even to the poor. These reports focus specifically on Pakistan. But according to a paper written by James Tooley, this phenomenon is occurring in schools in India, China and Africa as well:

The accepted wisdom is that private schools serve the privileged; everyone else, especially the poor, requires public school. The poor, so this logic goes, need government assistance if they are to get a good education, which helps explain why, in the United States, many school choice enthusiasts believe that the only way the poor can get the education they deserve is through vouchers or charter schools, proxies for those better private or independent schools, paid for with public funds.

But if we reflect on these beliefs in a foreign context and observe low-income families in underprivileged and developing countries, we find these assumptions lacking: the poor have found remarkably innovative ways of helping themselves, educationally, and in some of the most destitute places on Earth have managed to nurture a large and growing industry of private schools for themselves.

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This article is re-produced with the kind permission of Russell Southwood, Chief Executive of Balancing Act. Browse this week's edition of their excellent newsletter, or consider subscribing.

The holy grail of cheap computers for emerging markets is producing a sub-$100 laptop for education purposes. One Lap Top Per Child, the initiative launched by MIT's tech showman Nicholas Negroponte took a step nearer last week with its first test production run. But it has a competitor in the shape of a Canadian company producing a similar if
more expensive laptop product called Ink. The road to the holy grail is already littered with the failure of the Brazilian Volks and the Indian Simputer. The Volks never made it into production and the Simputer is under-specified and over-priced. It has had low sales in India and its African distributor closed up shop some while ago. Russell Southwood looks to see whether the latest contenders will overcome the scale of challenges involved in succeeding with low-price computing.

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