Another failed development policy in the works?

A few headlines regarding the World Bank recently caught my eye, mostly because they are not the usual development headlines I am used to reading.  In the Business Standard‘s “Migration to urban areas is good, says World Bank,” and domain-b.com‘s “India’s rural job schemes are barriers to development: World Bank news,” the focus is on a new World Bank report that encourages a population shift from villages to cities.  More than that, the World Development Report 2009: Reshaping Economic Geography says that current schemes to improve rural life are contrary to development, as pointed out by domain-b.com:

The central government’s National Rural Employment Guarantee (NREGA) scheme and other poverty alleviation schemes act as policy barriers to economic development and perpetual alleviation of poverty, according to the World Bank.

In short, the report encourages the process of rural-urban migration.   This approach seems to be the  opposite of the upswing of efforts to address rural poverty and improve rural life so that the majority of India’s population has the same economic opportunity as in urban areas.  Instead of focus on rural schemes, the report advocates improving infrastructure in cities to boost economic activity.   Here is a quick look at the reasoning, as quoted by the Business Standard article:

“The world’s most geographically disadvantaged people know all too well that growth does not come to every place at once,” said Indermit S Gill, director of the World Development Report (WDR) and chief economist, Europe and Central Asia. “Markets favour some places over others. To fight this concentration is tantamount to fighting prosperity,” Gill added.

What does it mean for India when an international force such as the Bank supports a shift from rural to urban areas?  Will improving basic infrastructure in urban centers really address the pressure of large increases in city population?  While I’m not against migration as a whole, I remain skeptical about putting emphasis on encouraging rural to urban migration and discouraging rural schemes for poverty alleviation.  This debate also points back to an earlier post I wrote on urbanization.  Is this another development report gone bad?

Soundbites from Nancy Barry, former President and CEO of Women’s World Banking

Last night I had the good fortune of sitting in on a talk given by Nancy Barry, a pioneer in the field of creating private, market-based solutions to poverty alleviation for women across the globe. Her talk was very powerful and on many points, spot on accurate in my opinion.

A veteran of the World Bank, she was the second president of of Women’s World Banking from 1990 to 2006. In the fall of 2006, Nancy started launched Nancy Barry Associates–Enterprise Solutions to Poverty, which works with major corporations, emerging entrepreneurs, and leading business schools to build business models that engage low income producers as suppliers, distributors and consumers of products that build income and assets. Simply put, her views come from a career of practice knowledge and her points should be taken with great seriousness.

Below are some highlights from her speech, which was titled “Microfinance and Beyond: Enterprise Solutions to Poverty,” and some of my own disagreements.

From Sex Workers to Successful Entrepreneurs

We reported here on TC-I couple of months back about India’s first sex-workers bank being set up in Mumbai. A group of sex workers in Mysore have gone a step-further and emerged as successful entrepreneurs. Organized under an organization called Ashodaya Samithi, the group of 150 female, male and transgender sex workers have set up a successful community kitchen which sells lunches. The initiative recently won the ‘Development Marketplace‘ competition conducted by the World Bank [via Rediff.com]

The short-listed 75 finalists from among the 1,000 were invited to Mumbai to set up a stall, exhibit and explain their proposal to a team of jurors and convince them on their proposal. A sex worker and Ashodaya secretary Bhagyalakshmi did the promotional work. She convinced the jurors on the innovativeness, replication and sustainability of their project and made Ashodaya qualify to receive the World Bank grant of $40,000 on May 15 in Mumbai from actor and UNICEF envoy Shabana Azmi

Its interesting to note that the theme of the comeptition this year was “Tackling HIV/AIDS Stigma and Discrimination”. For the sex worker community, running a successful business not only provides them a rerliable income opportunity, but also a better chance to tackle stigma and discrimation – a welcoming side-effect.

TC-I Tidbits

• Technology and Education: IIT and YouTube have tied up to post video lectures for undergraduate engineering courses online.
• Health:
  • According to a WHO survey, the Indian workforce is on the whole pretty unhealthy. 47% of workers were overweight while 27% suffered from hypertension.
  • Abhijit Banerjee, an economist from MIT, said that the country’s maternal and child health is worse than that of Sub-Saharan Africa. As a result, nearly half of the country’s children aged below five will suffer from stunted growth.
• Economic Development: A World Bank study revealed that Orissa has made a positive fiscal turnaround in the last six years and lifted 3 million people out of poverty.
• Education: With a view to harness skill potential across the country 1,500 more Industrial Training Institutes (ITIs) and 50,000 Skills Development Centres will be set up under the proposed ‘Skills Development Mission’ of the Government of India. [Source: iGovernment]

Using future markets for social entrepreneurship?

Giulio Quaggiotto at PSD Blog, a World Bank Group blog, highlighted a very intriguing trend that is emerging within governments and companies: the use of prediction markets to help predict customer trends or citizens’ desires. His post brought forth some articles and studies that have recently come out.

• A McKinsey & Co. report on prediction markets quotes James Surowiecki: “I wouldn’t be surprised to see prediction markets used in many more companies than today, not least as a tool to forecast sales. Consumer-facing companies should be particularly interested.”
• Knowledge Management gurus Tom Davenport and Dave Snowden jumped into the fray to cool easy enthusiasm.
• An article in the New York Times introduces the concept of futarchy. According to Robin D. Hanson, an economist at George Mason University and a fan of alternative institutions, futarchy is “a form of government enhanced by prediction markets. Voters would decide broad goals of national welfare, but betting in speculative markets would determine the policy steps to achieve those goals.”

When I read this post, I could not help but wonder if future markets could be applicable to social entrepreneurship. The first bullet point spoke to the use of such markets to predict the changing consumer preferences for companies. It would seem as though such information would be useful for understanding the evolving needs and desires of BoP customers as well. Can future markets be modified to be applicable to the BoP? Or is modification necessary, can we use them out of the box today?

Likewise, for social investors prediction markets could figure out what innovative approaches to specific problems are most likely to be effective and help guide them in their investing decisions. Anyways, just some food for thought. I need to think further about this, but I am sure you will hear more from me about this in the ‘future.’

Headlines Digest

• Food Shortage Crisis: Union Agriculture Minister Sharad Pawar said that the country has sufficient food to feed the people and that prices should reflect that soon. Sending conflicting signals, PM Singh may call a meeting with Chief Ministers on controlling prices. Shockingly, another article highlighted the extremely high amount of crops wasted annually — RS 55,600 Cr!
• Education and Quotas: Fresh off the recent Supreme Court case, the IIT’s have agreed on a plan to accept the 27% quota over three years. With regard to IIT’s, 3 new institutions are slated to open up this year.
• Civil Society, Peace and Rights: A roundtable has been called to increase democratic participation and wrest power away from the military actors in this area. In a related article, Muslims across India have held various forums for public discourse denouncing terrorism and voicing its incompatibility with Islam. In Mumbai, the High Court recognized the right for indigent and poor people to have legal counsel by dismissing the sentence against a man convicted for murder.
• Environment: Environmental groups have begun pressuring the World Bank to delay implementation of a new coal power plant. Also, in Kashmir the Wildlife Trust of India has developed ways to minimize human encroachment on native bears and also encourage greater conservation by residents. Also, five Indian coastal cities have joined Greenpeace’s efforts to call atention to global warming and the climate crisis.
• Health: Global perception of HIV/AIDS victims in the workplace appears to be improving. Along similar lines, the Government of India modified its drug policy focusing on prices and access.

Solid Waste Management – A PPP Opportunity?

Meena Gupta, a secretary at the Ministry of Environment and Forests, claims that the Indian government will soon add amendments to municipal solid waste management regulations, and highlighted the private sector’s role in exploring new projects. Merinews, a citizen journalism news portal, quoted Ms. Gupta as saying:

sustainable waste management could materialise only if service delivery was linked to private sector participation. “It is imperative that the private sector comes forward and enables the public sector stakeholders to devise appropriate frameworks that result in a win-win for both sides,” she said, adding that the private sector could also play an important role in building the capacities of municipal bodies. The municipalities, on their part, need to provide guidance for the selection of appropriate technologies.

Solid waste management, along with recycling, presents plenty of opportunities for partnerships. For example, EXNORA is an NGO in Chennai that focuses on the environment through their SoWAM program, which works in muncipalities throughout Tamil Nadu. An India Together article also provides a good background into the various policies in place, as well as the benefits and drawbacks of private sector participation.

Risks of private sector involvement may include a lack of transparency, a commercial failure that would then lead to disturbance of public services, or low cooperation between stakeholders. A World Bank presentation offers different options for contracting mechanisms and other processes to offset these potential risks, and Vinay previously discussed a primer on PPPs.

The opportunity is there, but is it best for the private sector to get involved in offering what can be considered an essential public good? And do the benefits really outweigh the risks?

Robert Zoellick charts out new direction for World Bank

In a speech yesterday, World Bank President Robert Zoellick looked to take the multilateral organization in new directions in the way it view global issues and development. [Source: Center for Global Development]

Zoellick’s detailed and wide-ranging speech included a proposal for what he called a “one-percent solution” — for sovereign wealth funds to invest one percent of their holdings in equity in sub-Saharan Africa as a way of tapping long-term global liquidity to boost investment opportunities and development. Other issues he discussed included high global food prices and the prospect of shortages; the need for a global trade deal, and efforts to address the so-called “resource curse,” the many problems that face countries that are rich in oil and other high-value commodities.

The speech’s full text can be found here.

Midday Newsfeed

• Renewable Energy: The Ministry of New and Renewable Energy in India has announced a demonstration programme to support mega watt size grid interactive solar power generation projects, up to a maximum capacity of 50 MW, in the country. Similar efforts have been pushed by Himachal Pradesh’s CM, in an effort for more hydel power Public-Private Parnterships with entrepreneurs.
• Insurance: A cashless health insurance program has been unveiled to target those under the poverty line. In a related story, Haryana’s government plans to invest 100RS per month per Anganwari worker for insurance through Life Insurance Corporation of India.
• Microfinance: Lok Capital LLC, an India focused microfinance venture capital fund, has raised its fund size by about 80 per cent to $22 million from $14.5 million. Also, two Indian MFIs have received funding from Oikocredit, a Dutch cooperative fund.
• Food supply and prices: UN report claims that Asia’s poorest being harmed by biofuels with regard to rising food prices. In a related news story, the World Bank has come out to say that the era of cheap food may be over. Bringing this problem home, one final story brings to light the likelihood of a food shortage in India. (this article was in the yesterday’s Evening Edition).
• Human interest/child marriage: 13 year old girl stands up against child marriage.

World Bank Executive Development Program – Inclusive and Sustainable Business: Creating Markets with the Poor

What are the “linkages between corporate strategy and development”?  How can public and corporate sector leaders implement strategies that provide opportunities for the world’s 4 billion people to lift themselves out of poverty?  The World Bank Institute has recently launched an “Executive Development Program” to help company managers and public sector leaders develop sustainable, yet profitable business models in emerging markets:

This unique program offers you insights to build corporate strategies that fight poverty while delivering profits. An innovative learning model will encourage you to learn how your organization can not only meet the bottom line, but develop working business models that include the world’s poor as investors, producers, sellers and buyers. Specifically, you will:

• Gain a unique interdisciplinary perspective on how to align social and environmental issues with corporate strategy and develop successful business models in low income markets.
• Explore how global trends, global imbalances, and global opportunities affect corporate strategy as well as the broader development objective of reaching the “4 Billion” at the base of the pyramid.
• Identify the gaps in existing market institutions which may be acting as barriers to growth and understand how to overcome them.
• Learn interdisciplinary approaches to complex issues including the elements of good governance and accountability, cross-sectoral partnerships, and measuring impact.
• Capture lessons from relevant project experience and corporate initiatives that could be applied within your organization.

The curriculum/program includes topics such as: 1) Global Trends, Imbalances, and Opportunities: Reaching the “4 Billion”; 2) Aligning Corporate Strategy with the Development Agenda; 3) Promoting Good Governance; 4) The Role of Multi-Stakeholder Partnerships; and 5) Measuring Impact.   The “face-to-face” component of the program will be held in Washington, DC from June 9-13, and the “distance learning component” will be held from June 16-30, 2008. 

Want to learn more?  Go here.  Or apply here. 

Source:  World Business Council for Sustainable Development

Super Early Morning Edition

Headlines: 

•  Shrinking Job Market Gives Government the Shivers

The Manmohan Singh government, which is battling inflation, has another worry at hand: a shrinking job market. While the government at the Centre has not been able to rein in prices, it has admitted that rupee appreciation against dollar has resulted in the loss of about 20 lakh jobs.

• Rural Electricity: Sops for Solar Power

In an effort to provide electricity to every rural household in the country the ministry of new and renewable energy has decided to provide a generation-based incentive of Rs 12 per kilo watt hour for electricity generated from solar photovoltaic and a maximum of Rs 10 per kWh for electricity generated through solar thermal power plants and fed to the grid from a grid interactive solar power plant of 1 mega watt and above.

• Progress Slows in Detection of New TB Cases

Progress in detecting new cases of tuberculosis is slowing, threatening to increase the risks of transmitting drug-resistant strains, the World Health Organization said Monday.  India, China, Indonesia, South Africa and Nigeria rank as the top five countries in terms of absolute numbers of tuberculosis cases.  The W.H.O. said there was a shortfall of $2.5 billion of the $4.8 billion needed this year for overall tuberculosis control in low- and middle-income countries.

• Green News: New Pedal Powered Grain Crusher!

A professor, a team of students led by Beena Sukumaran, and an environmental engineering have made new pedal-powered grain crusher that promises to become an effective and cheap food processor unit for the economically disadvantaged communities of the world.  It could help generate income for individuals traveling from village to village.

2008 Global Development Marketplace Competition (DM2008)

The competition’s focus is Sustainable Agriculture for Development. This was brought to our attention by PSD Blog.

Here is the information provided on the competition’s website:

Applications are accepted through March 21, 2008 and will undergo rigorous review by more than 200 development experts. About 100 finalists will be announced in June and will be invited to World Bank headquarters in Washington, DC in late September to vie for grants in person at the DM2008 Marketplace event.

This competition offers a unique opportunity to turn your innovative idea for sustainable agriculture in developing countries into reality. If selected, your idea could receive up to US$200,000 in grant funding for implementation over two years.

Key Dates:

March 21, 2008: Deadline for all proposals

June 23, 2008: Finalists announced

July 28, 2008: Finalists’ proposals due

September 24-25, 2008: Marketplace & Knowledge Exchange

The proposals must address one of three sub-themes, which are after the jump.

Social Capital Index Unveiled by Xigi.net

The other day, we posted an article by PSD Blog suggesting that the new development paradigm still suffers from the same shortcomings of the old guard. Today, we have come across one initiative to help address those concerns, as Xigi.net has released a new Social Capital Index that intends to be a tracking tool for investors to monitor and compare various blended value investments.

We have launched the Social Capital Index, a timely tracking of investments in the social capital market, including social enterprise, (health, education and workforce development) fair trade, digital inclusion, and some clean tech and microfinance investments. Over time we will be able to size the Social Capital market and its growth trajectory in each sector

New Idea, Old Problems

The World Bank’s PSD Blog posted yesterday on how despite the novelty of social entreprenership and its potential to change the way development operates, it still suffers from teh same pitfalls that plague traditional development models. The report cited suggests that we still have some ways to go before we can officially label the emergence of the social investment pardigm as Development 2.0.

However, the analysis of 24 online social markets leads the authors to conclude that, whilst they are “relentless innovators” that succeed in attracting a new donor base, their transformative power is hindered by an all too familiar problem to “old” development players – the lack of reliable performance data and a common reporting framework.

Whilst 83 percent of surveyed markets believed performance data to be important to encourage donations, only 68 percent report on progress of the offerings on a regular basis, and a mere 27 percent provide any kind of formal evaluation. “One searches in vain for well-defined criteria for assessing the performance and impact of the organizations listed in the markets” and “the information available to[…] social investors for making their decisions falls far short of any acceptable standard of systemization.” Perhaps even more tellingly, only 14 percent of the reporting presents some form of beneficiary validation – which, arguably, could be one of the greatest advantages of using interactive media vs. more traditional approaches (think about Amazon-style ratings provided by donor recipients).

The entire report can be found here.