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Last Thursday, the DC chapter of the International Private Enterprise Group (IPEG) met at the Science Club in downtown Washington, DC. About 30 people were on hand to hear presentations from Aman Bhandari, a postdoctoral fellow at the University of Maryland and Beth Boomgard of AED's Private Sector Health Initiatives group.

Aman has posted a follow-up to the meeting over at his excellent Technology, Health, and Development blog - check it out. In his post, Aman gives us some more data on Aurolab and the Aravind Eye Hospital, about which he presented on Thursday.

In other IPEG-related news, the Aspen Institute and Dalberg - Global Development Advisors recently announced a 'Private Sector in Development Initiative.' One of the founding organizations in the Initiative is Agora Partnerships, whose staff is very active in IPEG (Ben Powell presented at our January meeting).

The next IPEG meeting will be held towards the end of March; stay tuned to NextBillion.net for more details.

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Andrew Leonard, author of Salon.com's excellent "How the World Works" column, continues to track the Fair and Lovely debate between C.K. Prahalad and Aneel Karnani. His latest post, from February 22, is definitely worth reading (sorry I haven't stayed up on this as much as I should have; we've been proofing the final copy for our forthcoming report on the size and scope of BOP markets all week.)

I think it would be more accurate to say "Fair & Lovely would not be a commercial success if it was not advertised." NextBillion's defense of HLL's actions understates the role that corporations play in the manufacturing of desire that is not rational. To say that the market "worked" because after years of struggle two advertisements were banned, long after HLL had generated considerable revenue by pushing the message that lighter skin equals happiness, seems a bit disingenuous.

One of the crucial points of Karnani's critique was to demonstrate that just because there may be opportunities for profit in the poorest sectors of global society does not necessarily mean that corporations are improving the circumstances of the very poor by successfully marketing products to them. The success of an advertising campaign does not equate to rational behavior on the part of a consumer -- it is, instead, a successful seduction of the consumer. And I would think most people who have been around the block once or twice would agree: Allowing oneself to be seduced isn't always an exercise in good sense.

What I found interesting about his latest installment, in addition to the text copied above, were some of the comments posted by Salon.com readers. One reader, Praktik, argues that Fair & Lovely is the outgrowth of rational choice for consumers of all income levels. Read his full comment, but the final thought really sticks out:

The lesson is not that consumerism is manufactured, but that it is an outgrowth of scarcity and status in society. We are all "keeping up with the Jones", even those that loudly proclaim they aren't. Indians can't simply decide not to pay attention to skin tone, its a feature of their society that dictates income, respect and position. There is no way for them to "opt out" of desiring a product like "Fair and Lovely" without the whole structure of society also changing.

The whole debate - between Prahalad and Karnani, with Andrew Leonard and NextBillion.net weighing in, tells me that there's a lot more to learn about the "base of the pyramid" as both a market and as a strategy. There's academic work going on in this area, with Cornell and Michigan leading the way. And our upcoming publication - to be released on March 19 - will hopefully add some empirical levity to the debate as well.

Skin-lightening cream is always going to be controversial, but if a private sector-led solution increases access to healthcare, clean water, energy, transport, and other "basic goods," will the debate persist?

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I just wanted to let the NextBillion community know that our New Ventures India program in Hyderabad is looking for a Senior Manager to assist with program outreach and fundraising. After organizing a successful first Investor Forum, the team has been getting a great deal of attention from the Indian business community as well as national media.

The group is now looking for a talented candidate to help scale up New Ventures activities in-country and continue to increase its presence as a leader in promoting sustainable business. View the full description here.

Over the past ten years, significant progress has been made across the globe with regards to the expansions of mobile telecommunications. This explosive build-out has been the direct result of market liberalization activities launched by a growing number of countries. Today, in most countries in the world, the number of mobile phones is greater than traditional land-line based phones – a statistic that represents perhaps the greatest BOP success story.

According to the World Bank, we are "not far from achieving global connectivity" in terms of mobile phone networks. Yet even with expanded mobile coverage, it is still estimated that world-wide approximately a million remote villages are without connectivity and will be for the foreseeable future. Within these villages live an estimated 1.5 billion people. And this is just for voice. When Internet access is factored in, the gap between developed and developing countries grows, and those living in rural communities are even more marginalized.

Over the past three years the U.S. Agency for International Development (USAID), through its Last Mile Initiative (LMI) has undertaken projects in approximately 30 countries. Out of this collective experience, there are a number of lessons being learned with regards to technology and business models that show significant promise for reaching these remote villages. These incorporate the use of Satellite-WiMAX-WiFi-Internet-VoIP in such a way as to minimize costs, maximize revenue, and provide affordable access.

Last November, we posted a set of preliminary Working Papers developed by Darrell Owen that captured his thoughts and insights on a range of LMI-related topics. With this blog, I am posting a recently completed White Paper by Darrell on the theme of Expanding Rural Access. This While Paper pulls together the earlier materials and experiences into a more cohesive presentation. Further, a complementary PowerPoint slide presentation is also being posted that follows the structure of the White Paper, but drops down in more detail in selected areas, including network diagrams and some photos of the Vietnam LMI project.

These materials lead to a logical position that there is a viable approach for adopting a nationwide initiative that can be successful in reaching virtually all rural communities not simply through a phone or a Telecenter, but through a community-level microTelco that delivers broadband wireless Internet and voice services throughout the community.

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By Nathan Kommers
Nate Kommers is a Press Officer with the World Resources Institute.

Yesterday, the Aspen Institute held a book event in here DC with Nick Sullivan, author of You Can Hear Me Now: How Microloans and Cell Phones are Connecting the World’s Poor to the Global Economy, and Iqbal Quadir, the man behind the GrameenPhone phenomenon in Bangladesh.

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Highlights from the Business, Engineering and Sustainability Workshop

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The DC chapter of the International Private Enterprise Group will hold its February meeting tomorrow, Thursday February 22. We have reserved the second floor of the Science Club (1136 19th Street, NW - between L and M, just a few blocks from DuPont Circle and Farragut Square) from 6:00 - 7:30 pm.

Our panel discussion this month centers on the role of private enterprise in delivering healthcare solutions to the BOP. We're glad to welcome Aman Bhandari, Beth Boomgard, and Wayne Farmer as this month's presenters.

Aman Bhandari is a research fellow at the University of Maryland where his research focuses on pharmaceutical policy, health outcomes and health technology assessment. He is passionate about innovations in health care domestically and globally and runs the Technology, Health & Development blog which focuses on documenting global health solutions. He will be discussing a case study of Aurolab which all IPEG attendees are encouraged to read beforehand.

Beth Boomgard works in the Private Sector Health Initiatives Group at AED, the Academy for Educational Development. Beth's presentation will cover her work with AED in the areas of anti-malarial bed nets, reproductive health products and water sanitation.

Wayne Farmer is Vice President of Next Steps Research. He previously served as the Director of the Sustainable Healthcare Enterprise Foundation, which oversees the development of HealthStore franchises in Kenya. He will be discussing the franchised healthcare delivery solutions.

What: International Private Enterprise Group
When: February 22, 6:00 - 7:30 pm
Where: Science Club, 1136 19th Street NW

Hope to see you there.

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Most schools in developing economies do not offer any financial education. Those who do, offer it as an optional course. Those who do, like India's CBSE offer an overview of financial markets and share capital.

Last year alone, according to Business Today, more than 15 million Indians borrowed about $1.45 billion in micro loans. These numbers will only grow. It occurs to me that even as a micro loan revolution is sweeping emerging markets and indeed, the world, microfinance institutions (MFIs) could be losing out on a massive opportunity.

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I received an e-mail from Ted London, Director of the William Davidson Institute at the University of Michigan, to let me know that the web site for their upcoming conference is up and running. Business with Four Billion: Creating Mutual Value at the Base of the Pyramid will be held in Ann Arbor, Michigan from September 9 to September 11.

Confirmed speakers include:

• C.K. Prahalad (University of Michigan)
  
• Stuart Hart (Cornell University)
  
• Luis Alberto Moreno (Inter-American Development Bank)
  
• Allen Hammond (World Resources Institute)
• Helene Gayle (CARE USA)

For more information, including registration details, visit the newly-updated web site.

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By Allen Hammond, Bill Kramer, and Rob Katz

The recent debate over Fair & Lovely Whitening Cream, both in Aneel Karnani's working paper and in Andrew Leonard's column in Salon, brings up many interesting points. In response to Karnani, who argues that Fair & Lovely "entrenches disempowerment," we suggest that a well-regulated free market may be the best indicator of what works and what doesn't work, for the BOP as well as for other economic strata.

Hindustan Lever and its Fair & Lovely product did not create skin-color bias in India. Indeed, HLL simply responded in a rational manner to the demand for a product that effectively lightens skin. We do not have sufficient information to pass judgment on the way HLL has marketed this product, nor is it our remit. Of course, we condemn discrimination in all its forms, for what that is worth. However, as a Salon commenter notes, when a BOP customer chooses to buy skin cream, it is an aspirational purchase that she would not have had the wherewithal to make in the past. The consumer is making a rational choice, based on the circumstances.

Fair & Lovely would not be a commercial success if it did not work as advertised. Clearly, HLL understands the BOP market better than its competitors and has created a product that is very much in demand. At the same time, when HLL engaged in discriminatory advertising for Fair & Lovely, there was public pressure on them to cease the ad campaign, and backlash against the company in general. The market, in other words, was working.

Understanding market structure and the demand implicit in that structure is key to success for companies--and to meeting the needs of consumers. And while a skin cream may not seem to be a basic unmet need, that is really for consumers to decide. In any event, the same approach is key to dealing with market-based solutions to undeniably basic unmet needs, such as for clean drinking water and for access to health care or financial services.

That's why, next month, WRI and IFC will publish a detailed empirical guide to the size and structure of BOP markets worldwide, along with an analysis of the business strategies that seem to be gaining traction on the ground, sector by sector. The report, to be called The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid, is intended to help both businesses and the development community to engage with the BOP in a more strategic fashion. It will provide, hopefully, a more detailed basis for a discussion of the pros and cons of market-based approaches to poverty alleviation.

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