Helping Poor Countries By Selling Them Cheap Stuff They Really Need

GivingTracker| Risking being called ‘heartless’, many donors to developing countries believe that their money is wasted. There’s a major argument that the world has invested a trillion dollars in aid, and impoverished countries are worse off than ever.

The alternative view to aid is a proposal of management guru CK Prahalad elucidated in ‘The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits’. 

The word ‘profits’ triggers visions of hungry micofinance companies, not satisfied in modeling their best practices and interest rates after those of Nobel Prize winner Dr. Muhammad Yunus and the Grameen Fund.

Take a deep breath, says Wired Magazine’s David Wolman. How about India’s Tata Group?

The same Tata Group that just made a $50 million gift to Harvard University has introduced a water purifier that works without electricity or running water. 200 million people in India alone don’t have access to clean water, part of a total of 900 million worldwide.

“Conventional development economics was always about increasing per capita income to a certain level before people become consumers,” says Vijay Govindarajan, a professor at Dartmouth’s Tuck School of Business. The new view flips that logic on its head: Providing access to modern technologies by creating supercheap products may, in fact, be the best way to improve economic well-being. For entrepreneurs, the race is on to tap that massive population of penny-wielding consumers-in-waiting. Put another way, if Coke and Marlboro can sell to the world’s poor, companies whose products are actually useful should be able to do it, too. via Wired

More reading:

India’s Tata Group Endows Harvard with $50 Million for Business Ethics

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