Showing posts with label poor. Show all posts
Showing posts with label poor. Show all posts
Saturday, October 27, 2012
United Nations' Head of FAO blames U.S. for food scarcity in the world
Click here to read this in full @ Business Day Live: http://www.bdlive.co.za/opinion/columnists/2012/10/26/the-worlds-debt-for-food-scandal
Another American factor is energy legislation that requires that nearly half this year’s maize output be devoted to producing ethanol for fuel. Six state governors have formally petitioned the Environmental Protection Agency administrator to implement a full, one-year suspension of the ethanol mandate. The FAO has already pressed the US to suspend its production of biofuel ethanol. Its director-general, Jose Graziano da Silva, says the worst drought in 50 years "is inflicting huge damage on the US maize crop, with serious consequences for the overall international food supply".
Monday, September 1, 2008
WHO SAYS POOR NOT RICH? EARN $ 5 TRILLION
India News & Feature Alliance
By Shivaji Sarkar
New Delhi, August 28, 2008
The world’s poor are emerging as the biggest entrepreneurs, offer a huge market and provide expansion opportunities for the large private sector companies. This is the finding of a United Nations Development Programme (UNDP) report. Entrepreneur
The latest UNDP report --- Business Strategies for Engaging the Poor --- released recently has found that many businesses are including the poor, increasing their profits but market conditions in poor areas can often look bad. The good news is the poor cannot be overlooked.
Of the world’s 6.4 billion people, 2.6 billion live on less than $ 2 a day and at least 75 per cent of them on less than $ 1 a day. And 4 billion people, living on less than $ 8 a day, form small enterprises they operate. Together the report says their combined global income is $ 5 trillion, equaling the gross national income of Japan, the world’s second largest economy.
A successful business model, the report noted, shows that growth and innovation opportunities are emerging on both the demand and supply sides and that business can do much to capture and create these opportunities. Dr Maxine Olson, UNDP India representative asserted, “The private sector has a vital role to play in promoting, sustaining and enabling inclusive markets to bridge between the constraints of today and the promise of tomorrow”.
The private sector is central to the lives of the poor because all poor people are consumers and because most earn income in the private sector, whether working for a business or running one. The private sector is meeting the poor people’s needs in many places, including areas the Governments do not reach. In rural India half of the children use private schools putting it at par with Sub-Saharan Africa. Even in the hi-tech city of Hyderabad, 65 per cent of slum children have access only to low-budget private schools.
The health care in most poor areas are left to the private sector be it in India, Ethiopia, Kenya, Nigeria and Uganda. The business with the poor can be profitable, the report noted, sometimes even more than business with the rich. The Narayana Hrudayalaya hospital group in Bangalore, a cardiac health care provider to the poor earned a 20 per cent profit in 2004, almost 4 per cent more than the country’ largest private hospital. The profit was earned due to a combination of high volume and innovative payment and financing scheme.
The report also cited the instance of the well-known Sulabh International, a low-cost sanitation provider to the poor, which posted a $ 5 million surplus in 2005.
The large base the poor provide for mobile telephony not only increases the business of giant phone companies, but it also improves the profits of the poor and the corporates. The report quoted a study in Kerala by Prof Robert Jensen of the University of Texas which found that mobile phones have helped Kerala fishermen get real time information on supply, demand and pricing. The phone has improved their profits by 8 per cent and reduced prices by 4 per cent, benefiting the poor consumers.
In Tamil Nadu, the Tirupur Local Government entered into a joint venture with the local export association, the Tirupur Exporters Association and a private sector financing organization, IL&FS, to create a water company --- New Tirupur Area Development Corporation --- to tackle the water and sewage problems of the town with a textile-based economy and about 80,000 slum-dwellers. The Corporation improved the water supply to the textile companies and the poor households. The number of connections too has increased to 68,000 from 43,000.
Inclusive business models can increase productivity of the poor through sales of production equipment, financial services and information and communication technology. In Mexico, a company sells small-scale lemon farmers water-efficient drip irrigation systems that offer higher absorption and allow continuous production for 8 to 10 months a year. The company is trying to increase production from 9 tons to 25 tons per hectare. The efforts are likely to triple the farmer incomes. In China, another firm has increased the income of 6000 household engaged in tree farming.
Similar activities have added to the income of poor and also generated business for corporates in Mali, Trinidad and Tobago, Brazil and the Philippines. The private sector generated 1.5 million jobs in Turkey, 16 million more than the public sector; and 12.5 million jobs in Mexico.
Besides, many poor people operate their own businesses. In India, the Khadi and Village Industries sector provides self-employment to about 6 million (60 lakh) rural poor people. In Peru, 69 per cent of urban households that live on less than $ 2 a day operate a non-agricultural business. In Pakistan, 75 per cent of the rural households were self-employed in agriculture, Indonesia 55 per cent and in Nicaragua around 50 per cent.
Despite such activities, the market conditions in poor areas can often look bad for business, the report noted. Market participants have skills, knowledge and access to financial products. But where poverty prevails, most of these factors are lacking thus excluding poor people from meaningful participation in the markets.
There are limitations. These include: businesses know little about poor people, the market of the poor lack regulatory mechanism, has inadequate infrastructure like water and electricity and consumers may not know the uses and benefits of particular products.
Another limiting factor is that the poor producers and consumers cannot finance investments or large purchases. Micro credit is lacking. Financing is expensive. As they lack insurance they cannot protect meagre assets and incomes they may have against shocks, such as illness, drought and theft. As banking services elude them, they face insecure and expensive financial management, often more than that of the largest corporates.
So the poor have to trudge more. The global disparity may not come to an end. But that does not diminish opportunities. The report cited hope quoting Malcolm P McNair, Professor of Marketing at the Harvard Business School, who co-chaired the UN report for Creating Value for All. “The poor have a largely untapped potential for consumption, production, innovation and entrepreneurial activity. The more business models integrate and include the poor, the more likely companies successfully pursuing revenues will help have a better living condition and increase global opportunities to fulfill the objectives of Millennium Development Goal.”---INFA
By Shivaji Sarkar
New Delhi, August 28, 2008
The world’s poor are emerging as the biggest entrepreneurs, offer a huge market and provide expansion opportunities for the large private sector companies. This is the finding of a United Nations Development Programme (UNDP) report. Entrepreneur
The latest UNDP report --- Business Strategies for Engaging the Poor --- released recently has found that many businesses are including the poor, increasing their profits but market conditions in poor areas can often look bad. The good news is the poor cannot be overlooked.
Of the world’s 6.4 billion people, 2.6 billion live on less than $ 2 a day and at least 75 per cent of them on less than $ 1 a day. And 4 billion people, living on less than $ 8 a day, form small enterprises they operate. Together the report says their combined global income is $ 5 trillion, equaling the gross national income of Japan, the world’s second largest economy.
A successful business model, the report noted, shows that growth and innovation opportunities are emerging on both the demand and supply sides and that business can do much to capture and create these opportunities. Dr Maxine Olson, UNDP India representative asserted, “The private sector has a vital role to play in promoting, sustaining and enabling inclusive markets to bridge between the constraints of today and the promise of tomorrow”.
The private sector is central to the lives of the poor because all poor people are consumers and because most earn income in the private sector, whether working for a business or running one. The private sector is meeting the poor people’s needs in many places, including areas the Governments do not reach. In rural India half of the children use private schools putting it at par with Sub-Saharan Africa. Even in the hi-tech city of Hyderabad, 65 per cent of slum children have access only to low-budget private schools.
The health care in most poor areas are left to the private sector be it in India, Ethiopia, Kenya, Nigeria and Uganda. The business with the poor can be profitable, the report noted, sometimes even more than business with the rich. The Narayana Hrudayalaya hospital group in Bangalore, a cardiac health care provider to the poor earned a 20 per cent profit in 2004, almost 4 per cent more than the country’ largest private hospital. The profit was earned due to a combination of high volume and innovative payment and financing scheme.
The report also cited the instance of the well-known Sulabh International, a low-cost sanitation provider to the poor, which posted a $ 5 million surplus in 2005.
The large base the poor provide for mobile telephony not only increases the business of giant phone companies, but it also improves the profits of the poor and the corporates. The report quoted a study in Kerala by Prof Robert Jensen of the University of Texas which found that mobile phones have helped Kerala fishermen get real time information on supply, demand and pricing. The phone has improved their profits by 8 per cent and reduced prices by 4 per cent, benefiting the poor consumers.
In Tamil Nadu, the Tirupur Local Government entered into a joint venture with the local export association, the Tirupur Exporters Association and a private sector financing organization, IL&FS, to create a water company --- New Tirupur Area Development Corporation --- to tackle the water and sewage problems of the town with a textile-based economy and about 80,000 slum-dwellers. The Corporation improved the water supply to the textile companies and the poor households. The number of connections too has increased to 68,000 from 43,000.
Inclusive business models can increase productivity of the poor through sales of production equipment, financial services and information and communication technology. In Mexico, a company sells small-scale lemon farmers water-efficient drip irrigation systems that offer higher absorption and allow continuous production for 8 to 10 months a year. The company is trying to increase production from 9 tons to 25 tons per hectare. The efforts are likely to triple the farmer incomes. In China, another firm has increased the income of 6000 household engaged in tree farming.
Similar activities have added to the income of poor and also generated business for corporates in Mali, Trinidad and Tobago, Brazil and the Philippines. The private sector generated 1.5 million jobs in Turkey, 16 million more than the public sector; and 12.5 million jobs in Mexico.
Besides, many poor people operate their own businesses. In India, the Khadi and Village Industries sector provides self-employment to about 6 million (60 lakh) rural poor people. In Peru, 69 per cent of urban households that live on less than $ 2 a day operate a non-agricultural business. In Pakistan, 75 per cent of the rural households were self-employed in agriculture, Indonesia 55 per cent and in Nicaragua around 50 per cent.
Despite such activities, the market conditions in poor areas can often look bad for business, the report noted. Market participants have skills, knowledge and access to financial products. But where poverty prevails, most of these factors are lacking thus excluding poor people from meaningful participation in the markets.
There are limitations. These include: businesses know little about poor people, the market of the poor lack regulatory mechanism, has inadequate infrastructure like water and electricity and consumers may not know the uses and benefits of particular products.
Another limiting factor is that the poor producers and consumers cannot finance investments or large purchases. Micro credit is lacking. Financing is expensive. As they lack insurance they cannot protect meagre assets and incomes they may have against shocks, such as illness, drought and theft. As banking services elude them, they face insecure and expensive financial management, often more than that of the largest corporates.
So the poor have to trudge more. The global disparity may not come to an end. But that does not diminish opportunities. The report cited hope quoting Malcolm P McNair, Professor of Marketing at the Harvard Business School, who co-chaired the UN report for Creating Value for All. “The poor have a largely untapped potential for consumption, production, innovation and entrepreneurial activity. The more business models integrate and include the poor, the more likely companies successfully pursuing revenues will help have a better living condition and increase global opportunities to fulfill the objectives of Millennium Development Goal.”---INFA
Tuesday, July 29, 2008
Kemal Dervis: Business with the Poor is great business
For too long, private businesses have not been seen as key drivers of human development. Yet as the world becomes more interdependent, doing business with the poor can not only boost firms’ competitiveness, but also help in the fight against poverty.
A UNDP report released on Monday offers compelling examples of opportunities that create value for all: both achieving the Millennium Development Goals that have galvanised unprecedented efforts to address the needs of the world’s poorest, and attracting business returns.
Take the case of Celtel, a pan-African telecommunications group. Celtel began offering mobile-banking in the Democratic Republic of Congo in 2003, when security in that country was still poor and the banking sector debilitated . Celpay, the service they offer, uses encrypted message technology to allow customers to wire funds across the country.
As a result, Celtel now has over two million subscribers, and has created thousands of jobs and trained local technicians and a sales force throughout the country. The innovative financial service it provides has allowed many formal and informal businesses to grow – businesses that were previously hampered by inadequate banking infrastructure.
While such opportunities for inclusive growth are abundant, so are the challenges. Entering into the markets of the poor is uncharted territory for many companies. It is one where tough obstacles remain, including limited market information, underdeveloped regulatory environments, inadequate physical infrastructure, missing knowledge and skills, and restricted access to financial products and services.
These obstacles often translate into a ‘poverty penalty’ for the poor. People in the slums of Jakarta, Manila and Nairobi can pay up to 5 to 10 times more for water than people in high-income areas of those cities—and more than consumers in London or New York.
This ‘poverty penalty’ is similar in credit, health care and electricity supply. Meeting these challenges in ways that benefit the poor takes creativity, and often requires pooling the skills and experience of private companies, donors, policymakers, philanthropists, public service leaders and nongovernmental organisations. It often involves engaging in a policy dialogue, adapting products and services to the needs of the poor and investing in infrastructure or training.
The report contains 50 specifically commissioned case studies by researchers predominantly from developing countries. These case studies show that by adapting to local conditions, entrepreneurs have successfully identified new opportunities, understood complex contexts, and found innovative solutions.
In Mali, for instance, roughly 64% of the population lives below the national poverty line, and only 10% of the country’s 12 million inhabitants have access to electricity . This number drops to only 2% to 3% in some regions of the country – making economic activity much more challenging. Seeing an opportunity, Électricité de France and its partners set up rural energy services companies .
By the end of 2008, these companies will provide electricity to about 5,000 households in more than 20 villages in the southern cotton region. While they are in partnership with European companies, they are truly independent Malian companies, run by local managers and employees.
Their low-cost electricity, based on solar home systems or small low-voltage village micro-networks supplied by diesel generators, led to new income-generating activities, which have in turn improved the quality of health care and education, increased access to clean water, and reduced CO2 emissions by up to 80% to 90% compared with traditional energy sources.
Work in the area of private sector involvement in less developed markets has so far mainly focused on large multinational firms. Certainly with their influence, global reach and resources, multinationals can effectively scale and replicate successful business models. Yet smaller, local or regional businesses also have much to teach us about strategies that work. They create most of the jobs and wealth required to meet the Millennium Development Goals.
Businesses cannot, however, stand alone. The report suggests that business—accompanied by the skills of governments, donors, civil society and the poor—can build the foundations to grow more inclusive markets.
Governments can unleash the power of business by improving market conditions where poor people live and removing barriers to their economic participation. Notfor-profit organisations, public service providers, microfinance institutions and others already working with the poor can collaborate and pool resources with businesses to help seize opportunities. Donor countries can facilitate dialogues between businesses and governments or other partners.
Socially minded investors and philanthropists can supply the funds to make these time-intensive and uncertain ventures possible. Business models that include the poor require broad support, but they offer gains for all.
With strong and effective political and social institutions , entrepreneurs, firms and households will invest and take risks that promote innovation and create decent jobs. Through the flows of income and creative energy that these jobs generate, people can be lifted out of poverty: their productive capacity can be unleashed, their skills enhanced – providing a solid basis for sustainable development.
The poor are not powerless, nor should they pay a poverty penalty on the products and services that we can so easily take for granted. By recognising them as both potential consumers and drivers of growth, inclusive business models can create greater independence and interdependence – to the benefit of all.
A UNDP report released on Monday offers compelling examples of opportunities that create value for all: both achieving the Millennium Development Goals that have galvanised unprecedented efforts to address the needs of the world’s poorest, and attracting business returns.
Take the case of Celtel, a pan-African telecommunications group. Celtel began offering mobile-banking in the Democratic Republic of Congo in 2003, when security in that country was still poor and the banking sector debilitated . Celpay, the service they offer, uses encrypted message technology to allow customers to wire funds across the country.
As a result, Celtel now has over two million subscribers, and has created thousands of jobs and trained local technicians and a sales force throughout the country. The innovative financial service it provides has allowed many formal and informal businesses to grow – businesses that were previously hampered by inadequate banking infrastructure.
While such opportunities for inclusive growth are abundant, so are the challenges. Entering into the markets of the poor is uncharted territory for many companies. It is one where tough obstacles remain, including limited market information, underdeveloped regulatory environments, inadequate physical infrastructure, missing knowledge and skills, and restricted access to financial products and services.
These obstacles often translate into a ‘poverty penalty’ for the poor. People in the slums of Jakarta, Manila and Nairobi can pay up to 5 to 10 times more for water than people in high-income areas of those cities—and more than consumers in London or New York.
This ‘poverty penalty’ is similar in credit, health care and electricity supply. Meeting these challenges in ways that benefit the poor takes creativity, and often requires pooling the skills and experience of private companies, donors, policymakers, philanthropists, public service leaders and nongovernmental organisations. It often involves engaging in a policy dialogue, adapting products and services to the needs of the poor and investing in infrastructure or training.
The report contains 50 specifically commissioned case studies by researchers predominantly from developing countries. These case studies show that by adapting to local conditions, entrepreneurs have successfully identified new opportunities, understood complex contexts, and found innovative solutions.
In Mali, for instance, roughly 64% of the population lives below the national poverty line, and only 10% of the country’s 12 million inhabitants have access to electricity . This number drops to only 2% to 3% in some regions of the country – making economic activity much more challenging. Seeing an opportunity, Électricité de France and its partners set up rural energy services companies .
By the end of 2008, these companies will provide electricity to about 5,000 households in more than 20 villages in the southern cotton region. While they are in partnership with European companies, they are truly independent Malian companies, run by local managers and employees.
Their low-cost electricity, based on solar home systems or small low-voltage village micro-networks supplied by diesel generators, led to new income-generating activities, which have in turn improved the quality of health care and education, increased access to clean water, and reduced CO2 emissions by up to 80% to 90% compared with traditional energy sources.
Work in the area of private sector involvement in less developed markets has so far mainly focused on large multinational firms. Certainly with their influence, global reach and resources, multinationals can effectively scale and replicate successful business models. Yet smaller, local or regional businesses also have much to teach us about strategies that work. They create most of the jobs and wealth required to meet the Millennium Development Goals.
Businesses cannot, however, stand alone. The report suggests that business—accompanied by the skills of governments, donors, civil society and the poor—can build the foundations to grow more inclusive markets.
Governments can unleash the power of business by improving market conditions where poor people live and removing barriers to their economic participation. Notfor-profit organisations, public service providers, microfinance institutions and others already working with the poor can collaborate and pool resources with businesses to help seize opportunities. Donor countries can facilitate dialogues between businesses and governments or other partners.
Socially minded investors and philanthropists can supply the funds to make these time-intensive and uncertain ventures possible. Business models that include the poor require broad support, but they offer gains for all.
With strong and effective political and social institutions , entrepreneurs, firms and households will invest and take risks that promote innovation and create decent jobs. Through the flows of income and creative energy that these jobs generate, people can be lifted out of poverty: their productive capacity can be unleashed, their skills enhanced – providing a solid basis for sustainable development.
The poor are not powerless, nor should they pay a poverty penalty on the products and services that we can so easily take for granted. By recognising them as both potential consumers and drivers of growth, inclusive business models can create greater independence and interdependence – to the benefit of all.
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