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BUSINESS AND POVERTY

Opening markets to the poor

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BUSINESS AND POVERTY:OPENING MARKETS TO THE POOR

These are some of the key

questions addressed in the

forthcoming issue of

Development Outreach,

which examines the

realities of private

sector operations at

the base of the pyramid

and the potential risks

and benefits for local

development. The

special report featured

in Development Outreach

will include an editorial on

business and poverty,

previewed here, and full

articles from the list

of abstracts.

To request a copy of the magazine, visit www.devandbiz.org

or fill out the Subscription Form on the back cover of this brochure.

CAN POOR

PRODUCERS AND

CONSUMERS IN

TURN TRANSFORM

BUSINESS MODELS

AND SHAPE NEW

OPPORTUNITIES

FOR COMPANIES?

HOW CAN THE

PRIVATE SECTOR

HELP TRANSFORM

THE LIVES

OF THE POOR?

BUSINESS

Opening marketsto the poor

POVERTY&

SPECIAL REPORT

DJORDJIJA B. PETKOSKI, V. KASTURI RANGAN, AND WILLIAM S. LAUFERGuest Editorial

UCH HAS BEEN MADE in recent years ofthe successful role that businesses canplay in addressing poverty, especially in

sectors such as telecoms, information technology,and microfinance. Although the spectacular per-formance of these sectors has yielded worthy initia-tives, such as microfinance in urban Latin Americaand wireless telecommunication in Asia, it has alsohad the unintended consequence of creating unreal-istic benchmarks against which a broad array ofcorporate programs are being judged. While busi-nesses have surely made significant contributions insome arenas, in many others they have been unableto move the needle on poverty.1 It is not our inten-tion to place the bulk of the responsibility for reliev-ing poverty on the private sector. Our purpose here

is only to underscore some of the new roles andchallenges that have emerged as a broader set ofbusinesses have taken on engagement with the poor.

In this push for “new solutions” one should notforget the many positive contributions that businesshas already made in addressing poverty and relatedissues.2 There have been quiet but strong linksamong economic growth, innovation, and develop-ment. This special report is not intended to defendonce again the fundamental economic rationale forcapitalism and its potential role in alleviating pover-ty. Rather it is meant to bolster that premise withcurrent examples and practices and to urge busi-nesses to adopt a more proactive role in the development of the markets in which they operateby engaging their consumers—the poor. Such a

M

Opposite page:Tanzanian factoryworkers sewing anti-malarial Olyset Nets in a joint venture between JapaneseMNC SumitomoChemical and local manufacturer A to Z Textile Mills.

Left:Owners of a homenewly completedthrough participationin the progressivehousing program for low incomecommunities,Patrimonio Hoy.

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proactive approach may seem to contradict a company’sshort-term goals of increasing its investors’ wealth, but it isessential in sustaining a long-term perspective of creatingwealth opportunities for the four billion or so people at theBase-of-the-Pyramid (BoP) who make do with incomes ofless than $5 per day, as accounted in the article, The Next 4Billion: Characterizing BoP Markets.

The perspective of the editors of this report is that businessinvolvement in poverty alleviation is best addressed in thebroader context of development. Poverty is an economic, social,cultural, political, and moral phenomenon and it is necessary toaddress these dimensions in an integrated fashion. A develop-ment centered approach to poverty alleviation allows for a larg-er set of the poor’s needs to be addressed simultaneously.Nestle’s Milk District Model illustrates this type of integration.By providing the opportunity for training, education, and asteady income to poor rural farmers in exchange for a consistentmilk supply, Nestle effectively integrates poverty alleviationinto its business model, making it mutually beneficial. Whilethe company has been able to increase its supply of fresh milk,poor communities have benefited from job security, improvednutrition, and an improved standard of living. Such anapproach can help businesses identify the gaps in existing insti-tutions which may be acting as barriers to growth. Identifyingand addressing the missing institutional requirements can helpa company implement market based solutions to these struc-tural challenges. In the process, however, companies must

learn to do their best under a given institutional frameworkrather than passively waiting for the government or civil societyto improve it. This broad approach also helps capture the rich-ness of business engagement in opening markets to the poor,ranging from multinational corporations (MNCs) and localsmall and medium enterprises (SMEs) to corporate founda-tions, business alliances and small entrepreneurs from bothdeveloped and emerging economies.

Business models that engage the poor

N E W B U S I N E S S M O D E L S that have been driven primarily by afocus on addressing unfulfilled demand and or innovations indistribution methods and logistics that reduce cost have over-looked the fundamental need to develop and scale up marketinstitutions. Real breakthroughs toward more productive corpo-rate engagement at the BoP will require a more in-depth under-standing of the meaning of “market based solutions;” clarifica-tion of the types of markets (informal vs. organized markets);and understanding of the role of companies in connecting factorand product markets to reinforce job creation opportunities.

By contributing to the creation of more efficient markets andby complementing market institutions, rather than just sellingproducts to the poor, companies (particularly large ones) canhave a much greater impact on the BoP. In the initial stage of acompany’s engagement, particularly in less developed countries,poverty alleviation should be supported primarily throughwealth creation, including access to jobs, health, education, andvocational training, before providing access to consumablegoods and services that improve the quality of life of the poor. AsUnilever’s experience with the “Shakti Revolution” in Indiaillustrates, helping to empower underprivileged rural women byfostering entrepreneurship and creating income opportunitiescan be more important than sales alone, since it encourages thegrowth of a sustainable consumer base. This experience hasstrengthened Unilever’s commitment to improving the lives andlivelihoods of the poor in India, driven by the recognition that“the health of business is inextricably linked with the health ofsociety.” Of course, both wealth creation and consumption areimportant and complementary, but there is a hierarchy.

Business models need to include mechanisms to deal withthe following challenges:■ Increasing the productivity and real income of the poor.■ Enhancing job creation opportunities through direct

employment or self employment, supported by productsand services that boost productivity.

■ Moving away from the “traditional consumers” concept tothe concept of “productive consumers.” (Developing self-esteem and dignity among consumers should be comple-mented by both creating conditions for employment butalso by paying decent salaries).3

Business responses to these issues depend on many fac-tors, such as industry structure, company vision, size, locationand ownership structure. But even more important is thepresence of conditions that promote good governance. Thefederal and local governments need to have an enlightenedview, if not an active partnership. Ultimately business models

A social marketing campaign for Shoktidoi Yogurt in a small shop inBogra, Bangladesh. Shoktidoi, produced by Grameen Danone Foodsand supported by GAIN, is designed to meet the nutritional needs ofchildren at an affordable price.

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anchored on reasonable returns are the driving force forachieving innovative, sustainable and scalable solutions.

Building a socially responsible businessculture

IT IS CLEAR that buy-in from top level corporate managementis necessary for the poor’s needs to be truly acknowledged inbusiness. Thus far, there have only been limited societalefforts to change the long-existing paradigms and deep-seatedassumptions of business leaders, which are partly caused bycultural distance from and lack of direct interaction with thepoor. To better understand and engage the poor, greaterefforts and more receptive mindsets are needed in learningabout their values and aspirations as well as the contributionsthey can make to value creation for themselves and others.

Incorporating poverty alleviation issues into corporatestrategy always requires internal change in companies, such asstrengthening—or even redefining—organizational values andcultures. These core changes can nurture entrepreneurial spir-it and leadership across the organization, creating clear visionsand a readiness to support new and risky BoP ventures. It isnecessary to go beyond capturing the attention of corporateexecutives and senior managers and to put more emphasis onconnecting business growth and profitability with engaging thepoor. As the case of Sumitomo Chemical illustrates, consistentcorporate backing for BOP ventures can lead its employees toidentify innovative market based solutions. In SumitomoChemical’s case, that solution came in the form of an insecticideinfused mosquito net to protect vulnerable African populationsagainst malaria. The company’s management philosophy,known as the “Sumitomo Spirit,” aims to “generate profit notonly for the company but also for society,” and has helped moti-vate their employees to reach the BoP. Similarly, the multina-tional cement producer CEMEX chose to put an interdiscipli-nary team of its own employees on the ground in Mexico to bet-ter understand the social and home-building practices of low-income communities, and used that knowledge to develop asuccessful product line of housing services just for the poor.

This broader approach to development requires a betterunderstanding of the complementarities between philanthro-py, corporate social responsibility (CSR), and service to thepoor, as these approaches cannot be easily separated.

ZMQ, a medium sized Indian software company, has com-bined its philanthropic commitment (12 percent of its profits)with its core competencies in developing ICT learning tools forsocial development in order to sponsor and create products andtools to bridge the digital divide. In one such venture, the company funded the development of a technology package tobuild the capacity of women in using livelihood-generating technologies. The Global Alliance for Improved Nutrition(GAIN) has formed a Business Alliance to explore the spacebetween philanthropy and strategic private sector interest bydeveloping new business models to fortify food with necessaryvitamins and minerals and make it available and affordable tothe poor. The USAID-funded project Takamol in Egypt has madepublic-private partnerships which emphasize CSR as a core

component of its health sector improvement initiative. Largecompanies, such as Abbott Laboratories, often utilize their cor-porate foundations to explore the complementarities betweenphilanthropy and CSR. Abbott Fund, in partnership with theGovernment of Tanzania, is engaged in a major project that ismodernizing the country’s health system. By improving hospi-tals’ physical infrastructure, training programs and workingconditions, and utilizing the latest IT, the partners are expandingaccess to quality HIV/AIDS testing and health care for the poor.

CSR approaches have recently attracted criticism for beingmerely token philanthropic attempts to address the needs of thepoor. But if such criticisms were taken to heart, and companiesallowed themselves to engage only in activities where businessgoals and poverty alleviation were perfectly synchronized, ourprediction is that there would be fewer, not more, activities atthe BoP. What CSR activities do well is to provide a forum forbusinesses to learn about the needs of the poor. The examplesfrom CEMEX and Sumitomo Chemical illustrate the criticalneed for experimentation and learning at the BoP, which canonly happen with corporate support. Use of market mecha-nisms and the desire for profitability will always be the defaultchoices that hold a company back. CSR engagement provides agenuine laboratory for learning how to bridge the gap betweensociety’s and business’s needs. Moreover, CSR programs pro-vide an avenue for companies to engage employees who are trulytuned in to the environment where the poor work and live.Examples in this report show that businesses with strong CSRactivities are better poised to succeed at the BoP.

Market capacity building

B U S I N E S S E S H AV E D E M O N S T R AT E D their strong capacity to solve corporate problems—and now this needs to be com-plemented by strengthening market institutions. This willhelp ensure that social and environmental value contributingto poverty alleviation is created in the process of profit maxi-mization. In Unilever’s business expansion in India, the com-pany had to work around the many infrastructure and institu-tional challenges, such as poor transport links and high ratesof illiteracy. Unilever developed a new business model toengage local entrepreneurs to set up direct-to-consumerretail operations, with training from the company and supportfrom self-help groups or microfinance banks. In 2007,Unilever’s Project Shakti estimated the empowerment of46,000 entrepreneurs (mainly female) who have reachedmore than three million rural Indian households.

In this context, it is crucial for business to address certainissues that arise around working with the BoP, such as:■ To what extent do “organized or well-developed markets”

capture the costs and benefits of the poor? ■ What access do the poor have to these markets? ■ Why do the poor pay more for the same or similar goods

and services than the rich? ■ How can level playing fields that provide equal opportuni-

ties for the poor be created? These are important issues, because although informal

markets can facilitate trade, they can also be a source of abuse,

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huge income inequality and exploitation, and a barrier togrowth and entry. Examples in this report illustrate how com-panies like Nestle, CEMEX, Unilever and Sumitomo haveovercome the barriers of informal economies and the lack ofinstitutional and physical infrastructure, and ultimatelyhelped the poor integrate in the official economy.

The role of MNCs

T H U S FA R , the discussion about the positive roles played byMNCs in achieving more balanced and sustainable develop-ment has left open some key questions about the readiness ofcompanies to commit to a new level of engagement in poor mar-kets. It is difficult to gauge how many of the 63,000 MNCs4 thatare engines of globalization are actually ready and willing toincorporate poverty alleviation issues into their businessstrategies, and how many of those companies are interested inexpanding their supply networks and creating conditions forcomplementary products to support the growth of domesticbusiness. While the relatively small role of MNC’s in creatinglocal employment has been well documented, their real contri-bution might come from their role as catalysts in setting bench-marks in developing markets. Once established, these wouldbecome the benchmarks under which most local businesseswould have to operate in order to earn their stripes of legitimacyand trust in the communities in which they function.

MNCs need to recognize what they do well and what they dopoorly in BoP markets, as this is critical in making their engage-ments more productive and in avoiding unrealistic expectationsbased on false premises. Individual MNCs must realize that theycannot succeed alone, and must work within the existing marketinfrastructure. Large companies are typically good at integrat-ing the poor into the global production system and facilitatingmarket transactions for increased productivity as part of theirsupply chain,5 but not necessarily at creating jobs throughdirect employment. For example, in the Milk District Model,Nestle’s engagement in the BoP goes beyond sourcing. It alsoincludes providing access to technology, training, and invest-ment, which enables small farmers to produce and sell highquality milk consistently at a competitive price. Through inno-vative solutions, MNCs can shape institutional environments tobe more supportive to job creation, and at the same time buildinnovative partnerships with government, NGOs, internationalfinancial institutions (IFIs), and donor agencies. For example,the International Finance Corporation (IFC), the private sectorarm of the World Bank Group, has been successfully workingwith the private sector to engage local businesses in the globalsupply chain, as illustrated in the articles on its Lighting Africaproject and partnership with BP in Azerbaijan.

The role of local companies

P R O D U C T I V E E N G A G E M E N T with the poor requires newbusiness models that take into consideration both access tolocal knowledge and issues of trust. The focus should gobeyond lowering the cost of doing business at the BoP andimproving access to customer groups. It is also critical to build

legitimacy in the eyes of, and good will from, the poor.Innovative ways of interacting with the poor are needed to tapthe deep local knowledge and social capital so that socialactors can facilitate access, market intelligence, and legitima-cy of engagement. These are areas where local companies havethe potential to do better than (and complement) MNCs. Ofcourse, it is difficult to generalize, as some MNCs, such asNestle and Unilever, have been present in many emergingeconomies for decades, so for all practical purposes theyoperate as local companies. Partnership initiatives, such asGAIN and UNICA, create space for collaborative action. TheGAIN Business Alliance allows both MNCs and local compa-nies to learn from each other, share results, and partner withdevelopment organizations. The Brazilian ethanol industryassociation, UNICA, launched a joint capacity developmentprogram for sugar producing companies from the state of SaoPaulo, which helps individual companies to incorporate socialand environmental issues into their corporate strategy andcontribute to community development.6

Local companies are often much better positioned to pro-vide goods and services to the poor while at the same timehelping MNCs to expand their business at the BoP. For exam-ple, the key to Sumitomo Chemical’s success has been its part-nership with a local Tanzanian company, A to Z Textile Mills,which resulted in technology and quality transfer and creationof local employment for the poor who had no previous experi-ence in manufacturing and wage-based jobs. India’s ICICIBank example is a good illustration of a local initiative whoseapproach holds a host of potential opportunities for the poor.It is based on the assumption that economically viable occu-pations already exist in most regions of India, and that withproper support even the very poor can almost immediatelyengage in them without specialized skills building. The key,they have found, is providing access to finance, which ICICIcreated through partnerships between banks and a network oflocal financial institutions.

However, strengthening the role of local companiesrequires more focus by governments and MNCs on promotingdomestic business, and a more active role by civil society part-ners in transferring knowledge and skills to local entrepre-neurs. This multistakeholder engagement is a precondition forbetter utilizing the potential of local entrepreneurs. TheDEFTA Partners example clearly illustrates that partnershipbetween entrepreneurs from both developed and emergingeconomies can play a critical role in creating innovative devel-opment solutions. DEFTA Partners, in collaboration withBRAC, a local development organization based in Bangladesh,is investing in improving the country’s communication infra-structure, thus providing access to millions of poor people.

Measuring impact

A P R O D U C T I V E WAY of measuring impact is to address pover-ty in the broader context of development, using a blendedapproach to capture economic, social, cultural, and environ-mental impacts. This can also help prevent an anti-businesssentiment when companies engage with the poor. Measuring

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impact should also address issues of profitability and fairness,how to facilitate a proper balance between corporate legal andsocial obligations, and how to create space for competition.The issue of improved transparency and accountability mustalso be addressed, as corruption hurts the poor the most.7

Companies like Unilever, CEMEX and Nestle, through directengagement with the poor, improve transparency and reducethe risk of corruption that affects the poor in their daily busi-ness transactions when operating in informal markets.

Better measures are also needed to capture cross-sectoralinteractions and interventions as well as improvements inmarket institutions. In Nestle’s engagement with poor ruralfarmers in China, for example, the local banking landscapegrew when the company provided its new suppliers with cashpayments, leading to a new customer base for banks in previ-ously low-income areas. More comprehensive measurescould help companies improve their business models andcreate new space for innovative engagement with governmentand civil society and, thus, expand their impact. At the sametime, it is important to better measure social values from thepoor’s perspective, and understand what is important forthem in terms of quality of life, empowerment and security.

Measuring development impact remains one of the keychallenges for the private sector. As Abbott’s case illustrates,although it is evident that economic and health improvementsappear to be inextricably linked, they are not easily quanti-fied. Abbott’s experience has shown that it is difficult to gaina comprehensive understanding of the full economic impactsof health-related activities since they seem to have benefitsbeyond the health sector. There is a growing need for compa-nies, development organizations, and academia to create newmodels that capture the development multiplier effect.

Action agenda for the future

TA K I N G O N T H E C H A L L E N G E of poverty alleviation is daunt-ing for MNCs and local companies, as they try to meet the needsof 4 billion people. Thus, there is a need to sustain successfulmodels and take them to scale. Scaling up and sustainabilityneed to be analyzed not only within existing markets, but alsoacross countries and continents, with an emphasis on South-South cooperation. Companies can play an important role intransferring best practices between countries, as the ZMQ andDEFTA Partners examples illustrate with exchanges from Asiato Africa and within Asia. While businesses operate best in mar-kets with strong institutional foundations, scaling up and sus-tainability must also be achieved in markets without stronginstitutions. Companies such as Nestle, Unilever and CEMEXhave shown that through innovative business solutions they canboth operate profitably within a given (underdeveloped) insti-tutional framework, and simultaneously directly facilitate thedevelopment and strengthening of market institutions.

Poverty alleviation is such an important issue that itrequires collective action by MNCs, local companies, govern-ments, IFIs, and NGOs. Building successful partnershipsrequires addressing many questions, such as who is in chargeof, and in a position to change the rules of engagement with

the poor; how to avoid corporate gaming that accompanies andcontributes to increased poverty and environmental degrada-tion, particularly when institutions are weak; where does theresponsibility and value creating potential lie within variousstakeholder groups; how do we best orchestrate various initia-tives and provide incentives to collaborate in developing morecomprehensive and innovative models of engagement; andwhat are the most innovative ways of complementing theefforts of government, multilateral development banks, anddevelopment agencies.

If implementation is to be successful, the main initiativesneed to come from within developing countries. The issuesare global but most of the solutions are local. New mindsetsand capacity are needed to open dialogue and consultations atthe location where action is going to take place as a basis forcollective action. At the same time, it is critical to be morerealistic about what a company can achieve on its own andwhat is best accomplished through partnerships. We hope thatthe examples presented in this report will contribute toaddressing these questions more creatively. The hope is thatthe examples will be used to help local beneficiaries set theirown agendas and be empowered to define the challenges andimplement the best solutions. This special report aims tobring the dialogue to the next level—implementation.

Djordjija B. Petkoski is Head of the Business, Competitiveness and

Development Program at the World Bank Institute.

V. Kasturi Rangan is Malcolm P. McNair Professor of Marketing and

Co-chairman Social Enterprise Initiative, Harvard Business School.

William S. Laufer is Professor of Legal Studies and Business Ethics,

Sociology, and Criminology, and Director of the Carol and Lawrence Zicklin

Center for Business Ethics Research at The Wharton School of Business,

University of Pennsylvania.

Endnotes

1 V. Kasturi Rangan, John A. Quelch, Gustavo Herrero and Brooke Barton,Business Solutions for the Global Poor, John Wiley & Sons, 2007.

2 Ray Goldberg and Kerry Herman, Harvard Business School Case:Alleviating Poverty and Malnutrition, President and Fellows of HarvardCollege, 2007.

3 Maria Flores Letelier, Fernando Flores, and Charles Spinosa, “Creating and Developing Productive Customers in Emerging Markets”, CaliforniaManagement Review, Fall 2003.

4 UNCTAD. (2000.) World Investment Report, 2000: Cross-Border Mergersand Acquisitions and Development, United Nations, Geneva.

5 Diana Farrell, Jaana K. Remes, and Heiner Schulz, “The Truth about Foreign Direct Investment in Emerging Markets”, McKinsey Quarterly, February 2004.

6 The World Bank, World Bank Institute, UNICA, Corporate SocialResponsibility Program for the Sugar and Ethanol Industry in Sao Paulo,Brazil, Activity Report, 2006.

7 The World Development Report,2004, Making Services Work for The Poor,World Bank Group, 2004.

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THE NEXT 4 BILLION: CHARACTERIZING BOP MARKETSALLEN HAMMOND, ROBERT S. KATZ, JULIA TRAN, ANDCOURTLAND WALKER, WORLD RESOURCES INSTITUTE

Four billion low-income consumers, a majority of theworld's population, constitute the base of the economicpyramid. New empirical measures of their aggregatepurchasing power and behavior as consumers suggestsignificant opportunities for market-based approaches tobetter meet their needs, increase their productivity andincomes, and empower their entry into the formaleconomy. This article is based on The Next 4 Billionreport which utilizes income data from 110 countriesand standardized expenditure data from 36 countriesacross the globe and offers a new and compellingperspective on low-income communities worldwide.

NESTLE’S MILK DISTRICT MODELNIELS CHRISTANSEN, NESTLE S.A.

Investing in the base of the pyramid is not only aboutproviding products and services to the poor, but alsoinvolving them in the process of wealth creation.Nestle’s successful milk district model achieves abalance between meeting the needs of the poor,fostering local economic growth, and expanding Nestle’sown business model. By engaging local partners assuppliers and providing them with more than just steadycash flow, the milk district model shows that aninclusive business approach can have a host of positiveimpacts. Through safety and regulatory training,education and the creation of long-term employmentopportunities with reliable wages, Nestle has gonebeyond providing a quality product. This articlediscusses the deeper implications of the initiative aswell as its scalability to other sectors.

THE SHAKTI REVOLUTION—HOW THE WORLD’SLARGEST HOME-TO-HOME OPERATION IS CHANGINGLIVES AND STIMULATING ECONOMIC ACTIVITY INRURAL INDIAGAVIN NEATH, UNILEVER, AND VIJAY SHARMA, HINDUSTAN UNILEVER

Project Shakti, a micro-enterprise initiative in whichUnilever built a network of women entrepreneurs to runa direct-to-consumer retail operation selling affordableproducts door-to-door, has been both a catalyst for ruralwealth creation and a successful business operation.Working creatively within rural India’s existinginstitutional framework, Project Shakti has overcome

such challenges as poor transportation links and lack ofdistribution networks to reach low-income consumers inaround three million homes. Unilever’s experiencehighlights what can be done by a multinational firm inmeeting both business and social objectives.

SOCIAL ISSUE-ORIENTED BOP BUSINESS AND JAPANESE COMPANIESMARI KOGISO, WORLD BANK GROUP, MIA MATSUO ANDTOKUTARO HIRAMOTO, NOMURA RESEARCH INSTITUTE, LTD.

In a new venture producing chemically treated mosquitonets for Africa, Sumitomo found that by engaging localcompanies in the manufacturing process they couldcapitalize on a business opportunity while providingessential malaria prevention to a larger market. Creatinglocal jobs and reinvesting profits into local productionbases increased local production capacity andemployment, and increased distribution of nets.

LIGHTING AFRICA WITH MODERN OFF-GRID LIGHTING KATIA THERIAULT AND LINDSAY MADEIRA, INTERNATIONALFINANCE CORPORATION

The World Bank Group’s Lighting Africa program wasrecently launched to mobilize support for the globallighting industry to reach over 250 million Sub-SaharanAfricans with affordable, modern, off grid lightingsolutions by 2030. While the private sector can play animportant role in providing African consumers withviable lighting options, a number of barriers preventpotential investors from entering this emergent market.By acting as a facilitator between public, private, andcivil organizations, the World Bank Group is supportingindustry efforts to transform and accelerate the off-gridlighting market, and extend benefits to those living inpoverty. This article describes the program’s innovativeinitiatives to engage the private sector in the Sub-Saharan Africa off-grid lighting market by building aconsortium of local and global businesses andmobilizing the international community.

DEVELOPING THE LOCAL SUPPLY CHAIN FOR THE CONTRACT OF THE CENTURY!IBRAHIM ISMAYILOV AND SAMIR TAGHIYET, BPOLGA GODUNOVA AND FARZIN MIRMOTAHARI , INTERNATIONAL FINANCE CORPORATION

This article summarizes an excellent example of anMNC, BP, leveraging the role of an internationalfinancial institution, IFC, a successful partnership to

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V O L U M E T E N , N U M B E R T W O � J U N E 2 0 0 8

ARTICLES FEATURED IN DEVELOPMENT OUTREACH

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build capacity and engage local businesses. Byproviding access to finance, technical advice, andresource centers, BP and IFC have helped developlinkages between Azerbaijani SMEs and the global oiland gas industry, allowing them to better compete inthe global marketplace and ensuring that smallbusinesses can participate and benefit from the growthof the industry in Azerbaijan.

PATRIMONIO HOY: LOW-INCOME HOUSING THAT IMPROVES QUALITY OF LIFEISRAEL MORENO BARCELO, CEMEX MEXICO

With Patrimonio Hoy, CEMEX's progressive housingprogram for low income communities, the company tooka proactive approach to doing business with the poor. To address the need for improved access to affordablequality housing materials and construction, PatrimonioHoy provides a range of specialized services to lowincome communities, such as free technical advice,micro-financing and guaranteed prices for basicmaterials, and the possibility to buy materials forconstruction over time.

ZMQ ENABLING BOTTOM-UP DEVELOPMENT SUBHI QURAISHI , ZMQ SOFTWARE SYSTEMS

ZMQ Software Systems has shown that even a small tomedium sized local company can make greatcontributions to social development, by combiningphilanthropic efforts with their core competencies totackle the digital divide. The innovative software solutionprovider has dedicated 12% of its profits for developingsocially relevant technology solutions in the form ofinformation and communication technology (ICT)learning, training, and edutainment solutions to addressissues and needs regarding education, health, skilldevelopment, micro-finance and the environment. ZMQ isbuilding on the lessons from its projects in South Asia asit expands its operations targeting social benefits to Africa.

BUSINESS AND MALNUTRITION: OPPORTUNITIES ANDCHALLENGES FOR THE FOOD INDUSTRY TO ADDRESSTHE POOR MARC VAN AMERINGEN AND BERANGÈRE MAGARINOS, GLOBAL ALLIANCE FOR IMPROVED NUTRITION (GAIN) , AND MICHAEL JARVIS, WORLD BANK INSTITUTE

Malnutrition remains a scourge impacting millionsworldwide and yet there are cost effective solutionsavailable and an emerging business case for corporateaction. Food dominates expenditures among those livingin poverty. The Global Alliance is working with industryand partners such as the World Bank Institute toexplore the space between philanthropy and strategicprivate sector interests. New business models are beingtested by both multinational and local firms that help tomake foods, fortified with necessary vitamins andminerals, available and affordable to the poor.

BRIDGING GAPS IN REPRODUCTIVE HEALTH CARE IN EGYPT THROUGH PRIVATE SECTOR INVOLVEMENT ANDY COLE, MOHAMED AFIFI , AND REEM SALAH, TAKAMOL PROJECT

Takamol is a five year USAID-funded reproductivehealth project in Egypt that employs an integratedapproach to increasing the availability and quality ofreproductive health services and empoweringcommunity members to build healthier societies. Paying significant attention to developing strong,sustainable win-win partnerships with private entities,the project has been able to leverage US$1.4 milliontowards improving health care in Egypt.

IMPROVING HEALTH IMPROVES ECONOMIC WELL-BEING: ONE COMPANY’S EXPERIENCECHRISTY L . WISTAR, ABBOTT FUND, TANZANIA

This article explores the positive impacts and unexpectedchallenges of Abbott’s investment in a public privatepartnership to modernize Tanzania’s health systemthrough its Abbott Fund. In this venture Abbott utilized auniquely blended approach, investing not only in physicalassets such as health facilities, but also in advancedInformation Technology and considerable training, thusenhancing staff morale and productivity. Abbott examinesboth the social and economic benefits of the initiative,and emphasizes the need to better capture and measurethe general economic impacts of investing in healthsystems, and the complexity of this undertaking.

ACCESS TO MARKETS AS A STRATEGY TO ADDRESSPOVERTYNACHIKET MOR AND BINDU ANANTH, ICICI FOUNDATION AND IFMR TRUST

This article emphasizes the value of access to financialservices for the very poor as the means to leverageeconomic opportunities, and suggests that such accessis best provided through creative partnerships betweenbanks and a network of local financial institutions.Since it is fundamentally rooted in a commercialproposition both for the participating client as well asfor the service providers, the promise of scalability inthis approach is higher than in traditional grant-leddevelopment programs.

BRINGING BANGLADESH INTO THE DIGITAL AGETHE ALLIANCE FORUM FOUNDATION, AND GEORGE HARA, DEFTA PARTNERS GROUP

In an initiative to reduce poverty in Bangladesh, San Francisco-based DEFTA Partners has led a multi-stakeholder partnership to improve access toinformation and commuication technology (ICT). Thepartnership represents an innovative business model for economic development, which deploys wirelessinfrastructure technology and enables low costbroadband communication to extend access forbusinesses, and enhance health and education servicesin Bangladesh.

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TITLE __________________________________________________________________________

ORGANIZATION __________________________________________________________________

ADDRESS ________________________________________________________________________

________________________________________________________________________________

CITY AND STATE OR PROVINCE ______________________________________________________

COUNTRY __________________________________________________________________________________

ZIP / POSTAL CODE ________________________________________________________________

PHONE ____________________________________________________________________________________

FAX ____________________________________________________________________________

E-MAIL __________________________________________________________________________

Please do not send cash. Make checks payable to Development OUTREACH/WBI.❑ Check no.___________ in the amount of $________ is enclosed.

Mail order to:

Editor, Development OUTREACHThe World Bank1818 H Street, NW, Room J4-108Washington, DC 20433 USA

Online subscription:

www.worldbank.org/devoutreach