Exploring the world of social business and the BoP

Hello everyone,

We learned a great deal from Prahalad about the bottom/base of the pyramid and also remembered what Yunus proposes social businesses to be. What is definitely obvious from both of these thinkers is that there are some very interesting things happening in the world of business as it relates to poverty. There are so many different businesses out there doing interesting things and this is your space to pick your favorite and tell us about it. In addition to that, review the handouts on Prahalad and Yunus' views in order to relate the organization to their ideas.

The following is one that I chose. Make sure to check if someone already has blogged about yours!

Business: A to Z Textile Mills
Where they operate: Tanzania
What they do: produce over 10 million insecticide treated bed nets that last up to 5 years. Employ local people and continue to reduce the costs of producing the nets. They sell directly to the people but also to many NGOs and governments.
Bottom of the Pyramid principles: they meet several, here are three.

• Process Innovation: insecticide in bed net traditionally lasted only 6 months, making them useless for many people who could not retreat them with insecticide.
• Education of Consumers: the nets are distributed mainly through NGOs and governments that also provide education on malaria issues.
• Distribution: this is related to the above, but the biggest innovation was to install the production facility in Tanzania. If the need is in Africa, why not make the product there as well? An obvious question, but one that is not usually asked. They did!
  

Social Business: it is hard to say whether the company is not maximizing profits, or if it is owned by the poor themselves. What is clear is that they focus on social benefit and therefore meet the Yunus definition. To establish in greater detail it seems like one would need to go to Tanzania...anyone want to join me?
What I think is awesome: what attracts me the most about the A to Z idea is that they established the industrial operations in the country. In this way, the dramatic problem of malaria turns into an employment opportunity for the country. This is a very strong example of how you can find opportunities in problems. I'm not saying that people should make money from issues of poverty, I'm saying that people WILL. This is a reality: people need bed nets, someone will need to sell them. It makes so much sense to close this circle and have these economic benefits go to Tanzania and contribute to the development of the country and people. I wonder if there are any other health (or social) needs that can be met in this way as well...

An interesting group discussion topic

Now that we are more than halfway through the semester, which is pretty hard to believe, I am curious as to everyone's opinions about what they have learned throughout our studies of different development models, practices, and outcomes all over the world. It would be great to hear what your opinions were before and whether they have remained the same or changed over the course of the semester. Do you have any different opinions of how the U.S. should act towards other countries in terms of development now? Is there one specific model that strikes you as the most wholesome and balanced, or do you think there are bits from many theories that would work harmoniously together? Will what you have learned in our class change your pursuits in international development in the future? Hopefully we can talk about this in class because I would love to know where everyone stands with the wealth of history, practices, and examples to which we have been exposed.

hello, colli!

Collier, that is. Please excuse the nonsensical musical reference. It's one of those days.

Since I won't be able to make it to class tonight for The Bottom Billion presentation, I thought I'd watch Collier's TED talk about "4 ways to improve the lives of the bottom billion".

First impressions: great stuff. It's interesting to hear about a solution that blends tried and true economic concepts (commodity prices! GDP!) with political elements (democracy! governance! corruption!). To summarize: Collier starts off talking about the Marshall Plan and how U.S. foreign and trade expansion successfully revitalized a broken Western Europe after WWII. He then brings up research on the relationship between rising commodity prices of exports and the growth of commodity-exporting countries. His findings? GDP in those countries goes up in the short-run and things are hunky-dory. But in the long-run, things are hunky-dumpty (his words, not mine).

What does this all mean for the bottom billion? Collier argues that this long-run "curse" that plagues resource-rich commodity-exporting countries is inextricably linked to governance. He presents as a solution the creation of international standards to monitor and harness resource revenues so that they actually benefit the "bottom billion". For him, building a critical mass of informed citizenry is one of the first steps towards making this happen, and he ends his talk by calling on everyone to become informed "ambassadors" of development.

Personally, I found his logic to be extremely compelling. Dude's brilliant and he makes a hella good argument. However, I do have a few bones to pick with him:

1) He seems to be championing global governance (along the lines of the U.N. and IMF) as the solution to helping the bottom billion. While entities like the UN have made epic strides in human rights, development, and the like, its reach only extends so far when pitted against national/regional interests. How will these international standards that Collier proposes be enforced?
2) FOREIGN AID! We meet again, my old friend. Collier doesn't outright present aid as a solution but since he's a big fan of the Marshall Plan, it's probably safe to say that he supports it. I think everyone's familiar with the debate surrounding aid so I won't go into it.
3) The idea of "ambassadors" - I really love calls to action so when Collier threw his out, I was pumped. But then I remembered that he's speaking to TED members, some of the richest and most powerful people in the world. Does calling on the elite to lead the charge only reinforce the hierarchical structures that exist in development discourse?

Just some thoughts...Let me know what you think! Happy Spring Break, to all!!

William Easterly talk

I was curious to hear thoughts from you all about William Easterly's talk last Monday night. I know some of you couldn't make it, but you can probably still have some input on this.

In his criticism of the World Bank and other major aid institutions, Easterly talks a lot about the fact that they lack feedback and accountability.  Therefore, anytime they fund a project that doesn't work, there are really no repercussions for them.  I think Easterly makes a good point here; it would great to see a World Bank type group that is held accountable and thus has more incentive to be very particular about how its aid/loan money is used.

I feel like, though, I haven't seem him make any proposals as to how this would look.  Should the IMF, Bank, USAID, be restructured from the inside?  Should they be done away with started again? How do these institutions go about implementing a reliable source of accountability and a mechanism for feedback? 

I was curious to hear y'all thoughts on this. I know it's a huge question, but I would know what you guys think. Feel free to comment about whether you even agree with Easterly's statement, whether you think it's feasible, how such change would get done, anything. 

Thanks guys and Go Heels on Sunday!