As noted by the
IMF’s chief economist, Maurice Obstfeld, China’s economic slow down has had a
ripple effect on investment in emerging economies. Offsetting this economic
slow down will require both official development assistance (ODA) and private
sector investment.
A key
opportunity for aid agencies to foster economic growth in emerging economies is
to work with the private sector to build inclusive business models that address
the bottom of the pyramid- the four billion people living on less than $3,000
per year. Danone has worked with the Grameen Group, a microfinance organization
founded in Bangladesh by Muhammad Yunus, to create an inclusive business model
called a “social business”- a non- loss, financially sustainable businesses created
to address a social problem. The Grameen Danone joint venture is driven by a
social mission: fighting child malnutrition in Bangladesh. Grameen Danone sells
a product called Shokti Doi, a highly
nutritious yogurt designed to address the nutritional deficits of Bangladeshi
children.
Other
multinationals such as Orange, Bouygues Construction, Essilor, Schneider
Electric, Veolia and SC Johnson have followed in the footsteps of Danone in
creating social businesses to address important social issues. The U.S. Agency
for International Development (USAID) has also recognized the potential of
inclusive business models and has partnered with Yunus Social Business to
promote social businesses through the establishment of incubator funds.
By working
collaboratively with the private sector, aid agencies will be able to amplify
their impact and play a more systematic role in helping countries achieve
economic, social and environmental development.
By Trevor S.