Monday, 11 April 2011

Big Ticket Items

The new World Development Report touches on something I've been thinking about for some time: The need to build environments where people and business can flourish, before adding the proverbial cherries on top - infrastructure, education, finance etc.

The report's data shows that fundamental settings matter to progress. No amount of microcredit, health spending or agricultural value chain development matters if there is no peace, as the graph makes clear.

With all our fancy new initiatives that drive business thinking into every livelihood angle we can think of, we seem to have forgotten the basics. Maybe forgotten is unfair - de-emphasised maybe. For me, there are three learnings here: 

1. There are limits to human resilience: This is clearly the cause of violence in the first place; the point the pain of violence comes second to the pain of injustice (although, as the report indicates, people may underestimate the cause of violence). But it also the underlying principle of underachievement in violent states; resilience and ingenuity of people matters not if there is no stability and environment where citizens can "make do".

2. There seems to be a Elementary Hierarchy of Development Needs, which we would do well to remember before designing other well-meaning interventions. I know this is nothing new, but the plethora of conflicts and the increasing issues they generate seem to stem from them seems to indicate that we haven't learned the lesson.
This hierarchy is a key learning I gained from my transition from India (a stable and 'fairly' well functioning environment where the most blatant structural issues have been overcome), to Nigeria (a 'fairly' unstable environment where hardly any structural issues have been dealt with). In India, my work with SMEs, microfinance and other 'social' enterprises, made me feel as though I was adding something to the country. In Nigeria similar, more innovative work (in relation to other stuff that's going on), makes me feel as though I'm running my head into a brick wall.

3. Simple is best: Our apparent preference for micro interventions in recent decades (following years of focus on structural issues), has led to the relative neglect of big issue topics such as corruption and infrastructure development. The WDR reflects this when it mentions the number of laws (244) that the government has had to pass and repeal.

Clearly, where livelihood solutions reduce poverty and injustice they foster peace and thus create a virtuous cycle. Indeed, the report shows clearly that poverty and injustice are the main causes of violence. But people can create livelihood solutions themselves, and too often intervening in/subsidizing those initiatives creates dependencies that then create at least the appearance of injustice. With limited resources at the disposal of development organizations we must concentrate on the big ticket items that can get people to a place where they can determine their own future. This is the same premise the microfinance industry built its reputation on - give people what they need to make their own lives better. Fortunately they can (already do, through loan sharks even where 'modern microfinance' doesn't exist) supply these services themselves. Unfortunately, the cannot do so for structural issues or peace.

NOTE: Neeraj Swaroop, regional chief executive India and South Asia, Standard Chartered Bank maintains that livelihood solutions might have no effect if the underlying requirements aren't there to start with:
"A lot of the accounts are dormant and not activated because there's no credit as those people are really poor," he added. "You can't have financial inclusion go ahead without economic inclusion and if those people don't have access to roads, electricity, [a steady stream of income]."
HT: NextBillion

Thursday, 7 April 2011

Juju in Lagos

Favorite story of the week...
published in Business Day, today

Critical infrastructure

What happens when services provided by private companies become critical to the nation? First off, governments start paying more attention to you. They may monitor and protect your facilities and supply lines, as Wikileaks showed. But companies also stands in the duty to ensure the provision of these services is widely available if required.

Mobile phones are a great example of this. State run telecoms monopolies have been undermined by mobile networks, although some have been reigned back in as the case of pro-Mubarak messages in Egypt showed. Largely they now stand a as a bulwark that allows people to communicate, even if everything else falls apart.

That's if you can get hold of phone credit. Most people who first come to Lagos are astounded by the plethora of recharge retailers that sell their ware for a 3% margin. They are everywhere. However, if there is violence or even war these guys would disappear pretty promptly I'd imagine, or people might not be able to go on the street to buy any for fear of being shot, or they might not be able to afford any because they haven't earned their day wages due to the unrest or there's simply no currency available. These factors certainly seem to be the case in Ivory Coast, even though credit is more desperately needed than before to get in touch with loved ones or update everybody on events (maybe using Twitter). Now, after a campaign started here and promoted here, Orange is the first provider to commit to free credit. According to Ethan Zuckerman, they are:

giving credit of 2000 CFA (a little under $5) to all customers, a week of free calls to a landline number of their choice or an Orange number and a week of free Internet access. Most touchingly, they closed their announcement (posted to their Facebook wall) with this statement:
Par ces gestes de solidarité, Orange Côte d’Ivoire et Côte d’ivoire Telecom apportent leur soutien à tous leurs clients pour leur permettre de garder le lien avec leurs proches en ces moments difficiles.
(Rough translation: With these acts of solidarity, Orange Côte d’Ivoire is providing support to all their customers to help them stay connected with loved ones during this difficult time.)
HT: Ethan Zuckerman