Weekly Roundup – 5/31/14: Gates reviews Sachs, OPIC’s impact investing tab, Nigeria’s smartphone surge
A bit of a potpourri in the roundup this week.
Global development titans collide. That was my first thought in reading the Bill Gates review of The Idealist: Jeffrey Sachs and the Quest to End Poverty the 2013 book by Nina Munk. OK, so maybe it’s not so much a collision, but an earnest and measured disagreement. (I saw the movie Godzilla this past week and maybe it’s colored my thinking a bit).
Gates explores Munk’s deep dive assessment of the famed economist’s Millennium Villages Project (MVP), “a $120m demonstration project intended to show that it’s possible to lift African villages out of poverty through a massive infusion of targeted assistance.” While praising Sachs’ drive and willingness to take risks, as well as adding the caveats of hindsight being 20/20, Gates nonetheless comes away unimpressed by the results of Sach’s multi-pronged onslaught to address health, education and agriculture ills – all in one go. Key illustration:
“So what went wrong? For one thing, the villages that Sachs picked experienced all kinds of problems — from drought to political unrest. For another, the MVP took an idealistic “Field of Dreams” approach. MVP leaders encouraged farmers to switch to new crops that were in demand in richer countries, and experts on the ground did a good job of helping farmers to produce good crop yields by using fertiliser, irrigation and better seeds.
But the MVP didn’t invest in developing markets for these crops. According to Munk, “pineapple couldn’t be exported after all, because the cost of transport was far too high. There was no market for ginger, apparently. And, despite some early interest from buyers in Japan, no one wanted banana flour.’ The farmers grew the crops, but the buyers didn’t come. Of course, Sachs knows that it’s critical to understand market dynamics; he’s one of the world’s smartest economists. But in the villages Munk profiled, Sachs seems to be wearing blinkers.”
Check out a trailer for the book below.
Screen Time in Nigeria
Mary Meeker is something of an Internet oracle and her annual “The Internet Report” is a strong predictor of where the web is headed. This year’s projection shows two interesting trends in the developing world. The first is that while Internet usage overall has slowed, the fastest growth is happening in the “more difficult to monetize developing markets” of India, Indonesia and Nigeria. Secondly, smartphone use is still growing, though not as fast as in previous years. Setting the pace is China, India, Brazil and Indonesia. Nigerians, meanwhile, spend more time on their smartphones phones than any other country, the report shows.
OPIC’s Curtain Raise
For the first time, the Overseas Private Investment Corp., the U.S. government’s primary development finance institution, has pulled back the curtain to show how much it has placed in the “impact investing space,” during fiscal 2013. The total lump sum, according to OPIC: $222 million.
Such investments are “explicit and inherent intent at startup to address environmental or social issues, as well as a business model with a structure dedicated to achieving both impact and financial returns,” according to a press release which you can check out in more detail here.
We posted Marc Gunther’s article in The Guardian, The base of the pyramid: will selling to the poor pay off? last week in our news section. It highlights the lack of profits reported through mostly multinational interventions to sell to the poor through the, let’s call it, classic view of the base of the pyramid thinking. But I think it deserves more attention and discussion. It echoes some recent critiques of the power of multinationals. But, perhaps, some would argue that the “fortune” at the BoP was a 1.0 version of looking at the paradigm of poverty alleviation and thought/action has moved on to 2.0. Let us know what you think in the comments section.
Design, Innovate, Repeat
Finally, our friends over at Business Fights Poverty have teamed up with iDE UK for an online Design Expo, set for June 9-13. The week-long event will assemble a mix of video interviews and other content from and featuring leaders in co-creation in product/service innovation that have succeeded at scale. Each day of the week will focus on one of five sectors: energy, health communications, livelihoods (including enterprise, finance and agriculture), and water & sanitation. To find out more, and to participate, visit: http://designexpo.businessfightspoverty.org/.
Scott Anderson is the managing editor of NextBillion.net.