The Policy Agenda

Submitted by Al Hammond on May 4, 2008 - 19:12.

It was sunny, and tempting to sit outside at the University of San Diego to enjoy the weather. Inside, however, a group of global practitioners and scholars - organized by Patricia Marquez of USD and Carlos Rufin of Sussex University and Babson College - were discussing the role of utilities at the Base of the Pyramid. (See 'attachments' at the end of this post, where I have uploaded the meeting's full agenda as a PDF.)

Utilities provide basic services - telecommunications, water, power - that are essential to people's lives and increase their productivity. But a decade ago, many utilities in emerging markets were failing—service to low-income communities was poor, and many of their customers simply didn't pay or acquired the service informally.

The picture that emerged in San Diego, however, was more optimistic. A number of utility companies have engaged BoP communities and increased their willingness to pay, in return for investment that improved service quality. Codensa, a power utility in Columbia with 400,000 non-paying customers (out of a total of 2 million), reduced non-paying customers dramatically. Manuel Bueno has an excellent analysis of the Codensa case in his post, "The Codensa Case: Electricity and Related Services for the BOP in Colombia," from December, 2007. And mobile phone companies improved service and access to service dramatically compared to legacy fixed-line telecom companies (sometimes another branch of the same company).

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Submitted by Rob Katz on April 28, 2008 - 11:04.
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The Science and Technology Division of the Inter-American Development Bank is pleased to announce the launch of its grants program: Innovation for Inclusive Development. The objective of the program is to foster innovation in products, processes, and services and engender solutions that can improve the quality of life of the majority of people in Latin America and the Caribbean, those who are poor and/or excluded.

Up to six grants, ranging from USD 30,000 to 100,000, will be awarded to the selected proposals to develop, test, or pilot innovations in the region. Part of the initiative is funded by the Italian Trust Fund for Information and Communication Technologies for Development.

The initiative is open to all IADB member countries but the innovation must be implemented in Latin America and the Caribbean.

The deadline for the call for proposals is Friday, June 20, 2008, at 5pm EST. Applications should be submitted to innovation@iadb.org

More information is available at the Innovation for Inclusive Development website, including program guidelines and application forms.
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Submitted by Nitin Rao on April 28, 2008 - 06:05.
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India's growth depends on its ability to significantly revamp its dismal education sector, which suffers from problems of outreach and quality. A recent study shows that the public education sector may be beyond saving.

A possible solution comes in the form of sustainable investments in a vast network of private schools delivering standardized, high quality education at an affordable price to the low income mass market (base of the pyramid) customer.

The investments in schools would take the form of financial resources, organizational support and value-added services to help these schools become efficient and effective educational institutions.

Harnessing India's Human Capital Through Educational Opportunities, published in the MIT International Review, presents one possible solution. (Full disclosure - I am one of the paper's co-authors.)

Read the paper at http://web.mit.edu/mitir/2008/spring/harnessing.pdf

(Photo by McKay Savage, used under Creative Commons License.)

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Submitted by Francisco Noguera on April 15, 2008 - 16:58.
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April 15, 2008 - 16:00, Times Online
Food Shortages: Think Big

By Paul Collier

If we're going to solve this global problem, we need more globalisation and less sentimentality

The world price of staple foods has rocketed, almost doubling in the past 18 months. For consumers in the rich world this massive increase in the price of wheat or rice is an inconvenience; for consumers in the poorest countries it is a catastrophe.

Food accounts for around half of the entire budget of most Africans. Of course some poor households sell food, but many are net buyers. Indeed, decades of agricultural stagnation and growing populations have turned many African countries into food importers. The households that are poor and net purchasers of food are concentrated in the urban slums. These slums are already political powder kegs: rising food prices have triggered riots from Ivory Coast to Indonesia, from Burkina Faso to Bangladesh. Indeed they sow the seeds of an ugly and destructive populist politics.

Why have food prices rocketed? Paradoxically, this squeeze on the poorest has come about as a result of the success of globalisation in reducing world poverty. As China develops, helped by its massive exports to our markets, millions of Chinese households have started to eat better. Better means not just more food but more meat, the new luxury. But to produce 1kg of meat takes 6kg of grain. Livestock reared for meat to be consumed in Asia are now eating the grain that would previously have been eaten by the African poor. So what is the remedy?
Submitted by Francisco Noguera on April 14, 2008 - 09:11.
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April 14, 2008 - 08:00, The Wall Street Journal
Food Inflation, Riots Spark Worries for World Leaders

By Bob Davis and Douglas Belkin

WASHINGTON -- Finance ministers gathered this weekend to grapple with the global financial crisis also struggled with a problem that has plagued the world periodically since before the time of the Pharaohs: food shortages.

Surging commodity prices have pushed up global food prices 83% in the past three years, according to the World Bank -- putting huge stress on some of the world's poorest nations. Even as the ministers met, Haiti's Prime Minister Jacques Edouard Alexis was resigning after a week in which that tiny country's capital was racked by rioting over higher prices for staples like rice and beans.

Rioting in response to soaring food prices recently has broken out in Egypt, Cameroon, Ivory Coast, Senegal and Ethiopia. In Pakistan and Thailand, army troops have been deployed to deter food theft from fields and warehouses. World Bank President Robert Zoellick warned in a recent speech that 33 countries are at risk of social upheaval because of rising food prices. Those could include Indonesia, Yemen, Ghana, Uzbekistan and the Philippines. In countries where buying food requires half to three-quarters of a poor person's income, "there is no margin for survival," he said.

Submitted by Derek Newberry on March 28, 2008 - 09:32.
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Saurabh Lall is a Research Assistant with the New Ventures project.

A quick Friday point of interest from the Washington International Renewable Energy Conference that took place at the Convention Center here in DC earlier this month. The WIREC tradeshow showcased the latest developments in renewable energy technology, some of which have proven extremely successful in developing countries.

While the main panels focused largely on the financing and management of large urban renewable energy projects, there were several fascinating side events that discussed innovative, low cost renewable energy issues for the base of the pyramid.

In particular, an event organized by the Stockholm Environment Institute, featuring experts from UNEP, China, Brazil and Ghana, examined how different actors in developed and developing countries can respond to environmental and socio-economic concerns about the impacts of rapid expansion in Biofuels production and trade.

During this discussion, Gail Karlsson from ENERGIA, the International Network on Gender and Sustainability presented a paper "Engaging Women in Small-scale Production of Biofuels for Rural Energy", an interesting case study of how the collection of bofuels resources was creating an important income generating opportunity for women in developing countries.

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Submitted by Francisco Noguera on March 6, 2008 - 12:01.
March 01, 2008 - 08:00, Foreign Affairs
An Empty Revolution: The Unfulfilled Promises of Hugo Chávez

Summary:  Even critics of Hugo Chávez tend to concede that he has made helping the poor his top priority. But in fact, Chávez's government has not done any more to fight poverty than past Venezuelan governments, and his much-heralded social programs have had little effect. A close look at the evidence reveals just how much Chávez's "revolution" has hurt Venezuela's economy -- and that the poor are hurting most of all.

FRANCISCO RODRÍGUEZ, Assistant Professor of Economics and Latin American Studies at Wesleyan University, was Chief Economist of the Venezuelan National Assembly from 2000 to 2004.

Submitted by Derek Newberry on March 4, 2008 - 11:44.
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March 04, 2008 - 11:00, Scoop
Globalization Must Benefit Bottom Billion Of Poor

This year must be devoted to helping the "bottom billion" of the world's poorest to tap into global economic growth, Secretary General Ban Ki-moon told the United Nations Conference on Trade and Development (UNCTAD) today.

"In a globalizing world, we require an international economic environment that fosters development," Mr. Ban said to UNCTAD's Executive Committee, which is gearing up for this April's UNCTAD-XII Conference in Accra, Ghana.

"The Accra Conference can advance this aim by galvanizing support for a more development-friendly global economic, trading and financial system. Accra must also articulate an effective strategy to leverage globalization, trade and investment for poverty reduction and economic growth," he added.
Submitted by Derek Newberry on February 29, 2008 - 09:12.
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February 28, 2008 - 09:00, BusinessWeek
When the Bottom Line Is Ending Poverty

Muhammad Yunus is a humble man who would resist being compared to Mahatma Gandhi. But the two have much in common as campaigners for social progress. While Gandhi's goal was the end of colonialism, Yunus' is just as grand: He means to reform capitalism to make it a tool for ending poverty. Think of him as Gandhi with a BlackBerry (RIMM).

Yunus won the Nobel Peace Prize in 2006 for his work as founder and managing director of Grameen Bank, the pioneering microcredit organization in Bangladesh. He launched Grameen 31 years ago to help poor people start businesses. Since then the microcredit movement has gone global, with copycat organizations springing up in Asia, Africa, and Latin America.

Now Yunus is back in the public eye with a concept he calls social business. This form of capitalism, he believes, can make progress against poverty in ways that governments and traditional charities have not done. He lays out the concept in his new book, Creating a World Without Poverty: Social Business and the Future of Capitalism. It's an inspiring volume, full of practical information for people who are motivated to try out his ideas.
Submitted by Derek Newberry on February 26, 2008 - 11:40.
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In the several days since the news that Yunus' microfinance movement would be coming to the U.S., I've had some time to consider what this says about how we treat the BoP institutionally. To me, the fact that Yunus' forays in NYC are seen as so newsworthy illustrates the "us and them" (or "U.S. and them") mentality we have in dealing with poverty.


By this, I mean that in general, there is a thick barrier separating domestic poverty programs from those that work internationally. Just go to Kiva or Microplace and try to find a U.S. based project to invest in. We at New Ventures don't cross this line either, maintaining ourselves as an internationally-focused organization, and the same principle works for the many poverty-focused organizations that bill themselves as domestic in scope.

Odd that in this age of globalization, goods and capital are increasingly flowing across borders indiscriminately, yet we think that how we impact poverty should be determined and defined by national boundaries?

I remember thinking that Paul Collier was implying as much during a talk I attended a while ago in which he discussed his book The Bottom Billion. To paraphrase, he made the argument that we shouldn't target support for the poor in China or India because those countries' growth rates are high enough, people are reaching the middle-class etc. In other words, unlike the poor in sub-saharan Africa, they're doing just fine.

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Submitted by Rob Katz on February 19, 2008 - 11:17.

Guest blogger Brian Trelstad is the Chief Investment Officer of Acumen Fund, a non-profit global venture fund serving the 4 billion people living on less than $4 a day. Before joining Acumen Fund, Brian Trelstad spent four years at McKinsey & Company as a consultant in the healthcare and non-profit practices and as an editor of the McKinsey Quarterly. Prior to McKinsey, he worked as a case writer at Stanford University's Center for Entrepreneurial Studies and advised a number of early-stage technology companies.

By Brian Trelstad

(This article first appeared on the Acumen Fund blog.)

Yesterday's visit by President Bush to the A to Z Textile Mills factory in Arusha, Tanzania, was a tremendous boost for Africa's fight against malaria and for African economic development. A to Z is now the only manufacturer of long-lasting insecticide nets in Africa, supplying nearly 8% of the continent’s demand for these life-saving products and employing over 5,000 people.


ABE, another local company that we have supported, has a long-term supply agreement to produce Artemisia, and by the end of the year should be producing about 15% of the world's supply. ABE also employs thousands of farmers in cultivating a valuable cash crop.

As we reflect on our experience with these two malaria ventures, we think that the President’s Malaria Initiative could go further in spurring economic development in Africa with a few policy changes in the allocation of funding for malaria prevention and treatment commodities.

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Submitted by Derek Newberry on February 18, 2008 - 17:42.
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The launch of the Tata Nano, the ridiculously low-priced car that could open a floodgate of new drivers in India and elsewhere, is undoubtedly one of the milestone innovations marking the early years of the 21st century. This is not just because of the unprecedented feat of technological and design innovation it represents but because of the huge rift it exposes in the public debate over the linkages between two crucial concepts, poverty and environment.

Will the Nano be a leap forward in quality of life standards for the BoP? Will it be an environmental train wreck of snarling traffic, suffocating levels of air pollution and unsustainable resource use? These questions have made the Nano so much more than a car - it has become a symbol for the collective tension over two trends that will define global growth for the foreseeable future: the impact of unmitigated environmental risks and the steady ascent of millions of people into the global middle class.

And so the story of the Nano begins with a simple car design and ends with a mess of contradictory statistics and competing ideas over what poverty is and how it relates to the well-being of the natural environment. I hardly need to go too in-depth on these narratives* as a simple Google search reveals the sheer number of them colliding and intermingling in the NGO/development space.

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Submitted by Derek Newberry on February 12, 2008 - 08:30.
Position: Communications Officer / Web Editor

Location: Washington, DC

Organization: CGAP (Consultative Group to Assist the Poor) is a consortium of 33 public and private funding organizations - bilateral and multilateral development agencies, private foundations, and international financial institutions - working together to expand poor people's access to financial services.

Position Description: CGAP seeks a Communications Officer with high energy and fresh thinking who can generate innovative ideas for communicating CGAP's work to a wide range of audiences as well as implement these ideas for strategic results. The ideal candidate will be an experienced Web editor with knowledge of Web marketing techniques, the ability to write well and a track record in effective Web campaigns.

For more details or to apply, visit the CGAP website or contact webeditor@collab.cgap.org
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Submitted by Nitin Rao on February 7, 2008 - 12:55.
This year's topic for the St. Gallen's Symposium set me thinking...

Global Capitalism, Local Values
There has been much discussion about Bill Gates' keynote address at the World Economic Forum in Davos, where he pushed for "a creative capitalism" that uses market forces to address the needs of the world's poorest countries. In his keynote, Gates told the audience that, "We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well."

Even as academics such as Prof. C. K. Prahalad at the University of Michigan and Prof. Kasturi Rangan at Harvard Business School write and research extensively on the opportunities at the base of the economic pyramid, does development through enterprise (DTE) remain by and large a Western concept? Is global capitalism a wave that originates from the West and trickles to the developed countries?

Clash in Values
Based largely upon my experiences in the development sector in India, I believe the success of global concepts (spawned in the West) ultimately lies in their implementation at a local level.

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Submitted by Rob Katz on February 7, 2008 - 09:02.

Upon finishing The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World, three words came to mind: it's about time.  Lately, I've felt that the social entrepreneurship movement has grown too large, encompassing too many sub-topics that don't necessarily relate to each other.  With their new book, however, authors John Elkington and Pamela Hartigan manage to unite the wide-ranging discipline of social entrepreneurship, using sharp analysis, compelling anecdotes and an eye towards future study.  Simply put, this book is a must-read for the 'social entrepreneurship' crowd – one that transcends the aforementioned sub-topics.

As I read The Power of Unreasonable People, I decided to mark pages on which something unique appeared.  Rather than summarize the book – go to Amazon for that – my review will concentrate on these unique elements, listed in no particular order.

Page 2: A growing number of companies, like Accenture, say that offering the opportunity to work alongside accomplished entrepreneurs factors into staff retention.  This indicates a new trend among Generation Y employees (those born after 1982) – they want meaningful careers as well as well-paying jobs.  Can’t have your cake and eat it too?  Maybe you can – and companies need to get on board if they are to continue to attract top talent.

Page 11: The Schwab Foundation for Social Entrepreneurship has joined forces with the Lemelson Foundation to establish the Leapfrog Fund, designed to spur the transfer of successful innovations between entrepreneurs in different parts of the world.  I hadn’t heard about this, but it is long overdue.  The tools, models and ideas that work should be replicated – but that requires serious technical assistance and favorable financing.  Kudos to Lemelson in particular for stepping up on this.

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