’Missing market’ a target for rural growth

Thursday, November 10, 2005

THE UN Commission Report Unleashing Entrepreneurship: Making Business Work for the Poor is a critical first step in identifying the important role that the private sector must play to ensure that business will work for the poor, Foreign Affairs ministry chief executive Isikeli Mataitoga says.

He made the remarks when he launched a Pacific workshop to discuss the report in Suva yesterday.

The Report suggests ways for developing and developed countries to develop partnership through the promotion of entrepreneurship in our respective countries to make the business model in the formal economy also deliver for the poor.

The report also identifies best practices and have made some suggestions for enabling reforms and domestic policies that would be necessary to be put in place.

“This launch is timely in providing us with a clear recommendations on how major actors governments, development institutions, civic societies and the private sector can work together to enhance the ability of the private sectors to further advance the national development processes,” he said.

“In Fiji, the present government, right from?

beginning of its tenure, had adopted the approach that the private sector is the engine for growth in the economy and that government is there to be partner in that role and to provide an enabling environment for positive economic growth.

“Government is ready if, when and where necessary to provide the role of a catalyst to ensure there is balance in the distribution of economic developments and benefits in the country.”

He said the UN Report identifies that that the primary responsibility for achieving growth and equitable development lies with developing?countries. And for the countries in the Pacific Region they must accept this responsibility.

This would mean that at national level, Pacific Islands must put in place policies and economic conditions that would secure the needed financial resources for investment, Mr Mataitoga said.

“It has identified the need to develop partnership at national and international levels that will unleash entrepreneurship in developing countries,” he said.

“The report focuses on the ’missing market’ i.e the small businesses and the informal,village-based micro-enterprises because of their untapped potential to contribute to domestic economic development.”

He said the Report acknowledges that the engine of growth in the formal sector of most economies is the private sector and it is seeking to use this same engine to unleash the entrepreneurship potential for growth in the informal sector through positive engagement with governments and communities in rural areas to address the development needs through micro-enterprise developments.

“The role played by an increasing number of private sector resources hitherto not recordedprivate sector resources hitherto not recorded on the radar screen of the private sector development has challenged the traditional paradigm for economic development model.

“The private sector is realising the vast emerging market at the base of the economic pyramid 4 billion people by a recent UN estimates,” he said.

“As today’s advanced economies become the shrinking part of the world economy, the focus is on emerging markets.

“Many companies are already serving the world’s poor in ways that generate strong revenues and by building businesses that is aimed at the bottom of the pyramid, it provides them with competitive advantage for the future, as well as linking them to the market place for this massive pool of consumers.”

Mr Mataitoga said in the context of the Pacific region, the Report provides for Fiji new potential for economic growth.

He said the concept of the Missing Market that in the region represents 80 per cent of the population that are sidelined by the formal economic sector largely because they are rural dwellers with low income levels.

“The business model of focusing corporate strategy to grow market shares and profits by serving the “missing markets” offers viable business solutions that have strong development and poverty reduction outcomes,” he said.

Last week, the Foreign Affairs organised a workshop on the eight Millennium Development Goals called Developing Global Partnership for Development.

The workshop included participants from government, civic society and the private sector.

It was a first in a series that the ministry will organise to help build in-country partnerships to reach common goals.

Source: Fiji Times Online (link opens in a new window)