Monday, March 07, 2005

Making business for the poor

Bangladesh's Financial Express newspaper reports on a UN study of how entrepreneurship can work for squatters. Here's a relevant paragraph:

The private sector is central to the lives of the poor and all poor are consumers. The report says that across the globe poor consumers pay more than the rich. In Mumbai, slum-dwellers in Dharavi pay 1.2 times more for rice, 10 times more for medicine and 3.5 times more for water than do middle class people living at the other end of the city. An innovative private sector can find ways to deliver, low-cost goods and services to demanding consumer across all income ranges.

While it's true that the poor are consumers and are very entrepreneurial (visit your nearest squatter community and you'll see hundreds of small businesspeople buying and selling things every day -- even in communities where people live in mud huts or on the pavement), it's a fantasy to think that multinational corporations, with a little guidance from NGOs, can become benign. It's an outrage that the poor must pay triple the normal price of water or ten times the usual price for medicines, and no tweaking of the supply chain will change that.

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