With phones lines down, the omnipresent Internet disconnected and news channels off the air, this Beed enjoyed getting back to basics-reading. And the pick of the season is CK Prahlad's Fortune at the Bottom of the Pyramid.
This book surely has a lot of insight for us Nepalis who are at the junction of events that will direct our nation's future. As your columnist has often repeated, Nepal's problems are economic and not political. Therefore, irrespective of the state of politics, the economics should surely move on. And what better platform for the new finance minister than to take on this challenge.
Fortune at the Bottom of the Pyramid provides an interesting analysis of the people who are at the bottom of (what else?) the pyramid. Those marginalised by all, especially the private sector. The billions that comprise more than 60 percent of the global population are yet to be served and therefore present a tremendous opportunity for business.
The poor are in fact brand conscious and willing to pay. For instance, they pay astronomical rates of interest to moneylenders. Banks can surely gain by servicing these markets. The poor consume a lot, that's why product development and packaging have to be innovative. The success of one-rupee shampoo sachets in India led multinational companies into this segment, as the volume at the bottom of pyramid is always large. Similarly, distribution channels need to be innovative. The traditional distribution channels used to service urban markets may be expensive, so newer ways of getting to the consumer willing to buy the product becomes challenging. The consumer is willing to buy but at a price that is far lower than the prevalent.
This book illustrates through examples innovative efforts that are the mission of 'eradicating poverty through profits'. These range from banks like ICICI in India, e-Choupal initiative of ITC in India to Casas Bahia a retail chain in Brazil and Cemex, a construction service provider in Mexico. All case analyses lead to a single message: there is growth potential if one focuses on the bottom of the pyramid which most companies, especially multinationals ignore.
Nepal can surely replicate these successes. There is much more for the private sector to do than seek protection or lobby against punitive actions for wilful defaulters. This book is also a must-read for people working in development who think that the private sector is always manipulative and anti-poor.
Rather than run more 'social security programs' and use conflict management in all aspects of life, donors would find many answers to their questions here. Students and corporate executives should be motivated to find more ways to 'compete for the future'. Surely, as the book says, our search for economic sustainability is never ending. Insights like these that 'enable dignity and choice through markets' are always welcome.