Internet notebook about my work: deep listening to facilitate positive change

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Friday, 8 June 2007

The bottom of the pyramid

CEPA and poverty.Recently I was asked about the role of CEPA in Biodiversity and Poverty Initiatives and whether the toolkit provided any information. The toolkit in Section 3 on page 35, gives an example from Africa. But the subject is vast and still an area where I feel we have to invest much more and learn from the experiences of the corporate sector in accessing the ‘bottom of the pyramid’.

Consumer markets are often pictured as a pyramid (standing upright), with products for different segments. The real bottom, especially in biodiversity rich countries is often considered as irrelevant, as poor people have no use of the products, no buying power, no knowledge of brands and are difficult to reach. Basic support and key innovations reach some but not all remote areas through NGOs (see the posting Learning the Missing Link). But today there is a huge potential according to Management Experts such as C.K. Pralahad and Stuart Hart. I quote here some examples from their writings.

Many biodiversity rich countries saw during the last decennia some important changes e.g.:
• increased access of the poor to radio, television, mobile phones, internet
• decrease in national and international aid programs
• increased efforts of international corporations to explore new markets
• increased efforts to discourage migration from remote areas to cities

These trends have led to more world brand products and services for the poor. Often smaller quantities per package (fertilizer per kg, washing powder per 100 grams, 5 cigarettes etc.). In Costa Rica, a pilot programme by Hewlett-Packard brought the 21st century to remote towns and villages. HP converted old shipping containers into "digital town centers:" Each container holds a satellite link, several computers with access to Internet and e-mail, educational videos and phone service. The project, known as Lincos, is sold to towns and villages through credit and also creates work.

Free Energy Europe developed cheap solar panels for the remote markets in Brazil, Kenya and Indonesia. Fiat and Tata are developing cheap cars for the Indian market, that will costs 100.000 Rupees (one Lakh Rs is €1.700,-). Unilever developed for the same market Anapurna Salt, salt with jodium, and for the African market Fair & Lovely cream that makes the skin lighter. Grameen Bank and Danone build next year a yoghurt factory in Bangladesh. Small credits will enable poor people to buy a cow and produce milk for the factory.

Hindustan Lever has been investing in a distribution network of women in remote areas to sell soap, toothpaste and washing powder in their villages. After a few months the women earn from their sales 800 Rupees a month (€ 16), which is enough to live on; most double that income after a year. Team members learn in eight weeks how to read and write, as this is needed for their administration.

This is all business, based on mutual benefits. It is not aid, based on what experts 'assume' is good for the poor. E.g. USAID wanted to use the Hindustan Lever network to distribute malaria medicines. Hindustan Lever understood enough about the CEPA basics and end user participation to ask the network first what they needed most. The result: diarrhea was a bigger problem. Now the network distributes also a cheap water purification product, that can deal with 8 -12 liters a day, enough for an average family in the country side.

Access to world brand products also positions and emancipates poor people as critical consumers, strengthens their self confidence, provides opportunities for income generation, access to education and health care. It triggers their own enterpreneurship and creativity and does not make them dependent. Of course other structural measures also are needed to alleviate poverty, but it shows the added value of the private sector in addressing the bottom of the pyramid in the process of positive change towards sustainable development.

What I think we can learn from the corporate sector in dealing with poverty is in the marketing and distribution networking. Here CEPA and biodiversity conservation may find entry points, e.g. to explore what village products are of interest to other markets and what products and services may benefit local biodiversity. More and new joint ventures between conservation and the corporate sector are needed to capitalize on these emerging trends.

1 comment:

Susan, CEC newsletter editor said...

Regarding the discussion of communication, education and poverty, I quote Tommy Garnett of West Africa in an interview published in the IUCN CEC newsletter: “Many people in this region are preoccupied with survival from day to day. Their priority is figuring out how to put bread on people’s tables even at the cost of sustainable development. In the past decade, poverty reduction strategies have been in the forefront of all development-related activities. The environment, per se, has not been of the highest priority.”

“We can’t really talk seriously about Education for Sustainable Development if 70 to 80 percent of the country’s people are illiterate, or if there are not adequate communication avenues to reach the people in charge of natural resources—like the game wardens who live hand-to-mouth.”

There is some good news: “However, some forces are moving ESD forward. Despite the apparent shortage of political will and scarcity of financial and technical resources, people have organized groups and undertaken small-medium scale activities that are yielding positive and inspiring results, which have helped establish a solid foundation for sensible environmental management.”

He pointed to the positive impact of political processes: “The process of preparing Poverty Reduction Strategy Papers (PRSPs) is compelling governments to look at environmental issues. And, on top of that, we have the Millennium Development Goals (MDGs), which highlight environmental sustainability as a goal to aspire to.”

The CEPA Toolkit hooks into these kinds of processes by supporting the day-to-day work of professionals charged with coordinating the National Biodiversity Strategy and Action Plans (NBSAPs) that implement the Convention on Biogical Diversity. Also, I understand that the CEPA Toolkit offers fact sheets, worksheets and examples of use in a wide range of situations.

Link to full interview: http://cec.wcln.org/index.php?module=pagesetter&func=viewpub&tid=1&pid=200

Tommy Garnett is founder of the Environmental Foundation for Africa (EFA), CEC Regional Chair for West Africa, and co-author of the CEPA Toolkit.